A new U.S. tobacco law that prohibits the production or sale of cigarettes containing certain additives, such as clove, is being challenged at the World Trade Organization (WTO) by Indonesia, which claims that the new restrictions violate U.S. trade obligations.
Although Indonesia has not yet filed a formal WTO complaint, it posed a list of questions to the United States in a recent submission to the WTO's Committee on Technical Barriers to Trade.
The law in question is the Family Smoking Prevention Tobacco Control Act of 2009, signed into law in June 2009, which bans all flavored cigarettes except for menthol cigarettes. The ban will become effective in mid-September. Indonesia's questions focus on why clove and menthol cigarettes are treated differently by the Act, when both are considered to be natural or artificial flavors. Indonesia alleges that all clove cigarettes sold in the United States are imported, while virtually all menthol cigarettes are produced domestically. According to Indonesia, the differential treatment of menthol and clove under the Act violates several WTO agreements, including the GATT 1994, the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS), and the Agreement on Technical Barriers to Trade (TBT).
Indonesia's questions highlight the increasing importance of the SPS and TBT agreements in WTO jurisprudence, as well as countries' increased focus on using those agreements to challenge potential trade barriers. Should Indonesia decide to proceed to a full WTO challenge, it would raise interesting questions about the balance between public health legislation (such as the Tobacco Control Act) and the rights of trading partners that are potentially affected by such legislation.