Article from: TDM 5 (2012), in Editorial
As evidence of tobacco's devastating effect on human health has grown in recent decades, States' regulatory efforts to restrict tobacco use have correspondingly increased. A key international response to the globalisation of the tobacco epidemic has been the World Health Organization's Framework Convention on Tobacco Control ('WHO FCTC'), which opened for signature in 2003 and entered into force in 2005. The WHO FCTC has also influenced the development of domestic tobacco policy, such as Australia's recent passage of the Tobacco Plain Packaging Act 2011 (Cth), and public consultations towards similar mandatory plain packaging schemes in the United Kingdom and New Zealand. At the same time, a perception of tension has arisen between heightened public health regulation in the tobacco sector and States' obligations under international trade and investment agreements. This tension lies very much at the heart of a series of recent and ongoing domestic and international disputes concerning tobacco products. This TDM Special Issue offers a timely look at these issues in the lead-up to the Fifth Session of the Conference of the Parties to the WHO FCTC, to be held from 12 to 17 November 2012 in Seoul ('COP5'). The contributors to the Special Issue discuss a range of disputes and negotiations concerning tobacco control regulation, offering insights into the legal questions at issue, their political ramifications, and their future resolution. The contributions address the broad themes of trade and investment in tobacco, the WHO and the WHO FCTC, plain tobacco packaging, and flavoured cigarettes, as explained below.
The Editors are conducting research in collaboration with the Cancer Council Victoria pursuant to a three-year grant from the Australian National Preventive Health Agency. Professor Andrew Mitchell is also a member of the Australian Government's Expert Advisory Group on Plain Tobacco Packaging. The Editors are not bound to reach any particular conclusion in their research, and their published work reflects their own academic views.
The Editors gratefully acknowledge the expert assistance provided by Catherine Gascoigne, Researcher, Melbourne Law School in editing and preparing this Special Issue for publication.
Selection and Editing of Articles
Pursuant to the usual editorial requirements of TDM, submissions for this Special Issue were welcomed from all sources, regardless of affiliation, in order to reflect a variety of viewpoints. Each contributor was asked to disclose in their paper any conflict of interest or relevant affiliation. The views in this Special Issue are those of the individual authors and do not necessarily correspond to those of the Editors. The editing was also relatively non-intrusive, in order to allow each author to retain their own voice and perspective. The summaries of the papers that appear below, however, reflect the understanding of the Editors of each paper.
International Trade Law
In this Special Issue, three contributors look specifically at the apparent friction between domestic regulation and international trade liberalisation in the context of tobacco. In his article, 'Free Trade and Tobacco,' Simon Lester examines the kinds of trade and investment disputes that have arisen in relation to tobacco generally, before turning specifically to consider the United States' policy stance on tobacco control and the possibility of excluding tobacco from its international trade and investment agreements. Lester concludes that international trade and investment agreements should not countenance protection of domestic tobacco producers but should allow domestic regulation to address health risks associated with tobacco use.
Also focusing on the United States, Jamie Strawbridge discusses the effect of the dispute settlement ruling of the World Trade Organization ('WTO') in US - Clove Cigarettes on recent United States trade policy. According to Strawbridge, US - Clove Cigarettes (a case discussed further below in the section on flavoured cigarettes) puts to the test the capacity of WTO law to accommodate the public health objectives of WTO Members. With this in mind, Strawbridge sets out the context for the United States' proposed 'carve out' for tobacco products in the Trans-Pacific Partnership Agreement ('TPPA') and the potential implications of this carve out for the United States' WTO obligations.
The WHO FCTC and the WHO itself are in many ways a focal point for all legal issues concerning tobacco control. Lucasz Gruszczynski recognises this in his article, 'The WHO Framework Convention on Tobacco Control as an International Standard under the TBT Agreement?'. In this piece, after analysing the WHO FCTC and its Guidelines against criteria developed in recent WTO jurisprudence, Gruszczynski concludes that valid grounds exist for characterising these documents as relevant standards under the WTO's Agreement on Technical Barriers to Trade.
Alberto Alemanno addresses one iteration of litigation by Philip Morris in response to tobacco control regulation. Specifically, Alemanno examines the proceedings brought before the Court of Justice of the European Free Trade Association States ('EFTA Court') against Norway, in response to a measure that bans the display of tobacco products at points of sale. Alemanno concludes that the EFTA Court's judgment is likely to have a significant impact on the development of tobacco controls beyond the European Economic Area and is also likely to affect the ongoing revision of the EU Tobacco Products Directive.
Joël Sollier and Rosella Mangion, of the Office of Legal Affairs within the ICPO - INTERPOL General Secretariat, discuss illicit trade in tobacco products. The authors contend that such trade is growing and that combating it requires collaboration between 'law enforcement and national authorities' and 'the legitimate tobacco industry'. Sollier and Mangion include in their analysis discussion of the Draft Protocol to Eliminate Illicit Trade in Tobacco Products, the text of which will be submitted to COP5, as well as INTERPOL's Trafficking in Illicit Goods Programme.
International Investment Law
The first section of this Special Issue touches on international investment while focusing on international trade. In this second section, five contributors address the potential impact of international investment agreements on State regulatory autonomy with respect to tobacco control. Valentina Vadi contends that public health protection is 'intrinsic to the regulatory power of states', echoing sentiments raised by Lester. Vadi surveys the decisions of various adjudicative fora relating to tobacco control and, adopting a comparative public law perspective, attempts to distil common elements from the jurisprudence. She calls for further c omparative public law analysis to establish benchmarks for assessing domestic regulations against investment law provisions.
Josef Ostøanský further grapples with this tension between regulatory autonomy and investment agreements in his article, 'How can states use exceptions in treaties to defend tobacco control legislation?'. Ostøanský concludes that public health justifications for tobacco control measures potentially fall within a number of available exceptions. He cautions against arbitral tribunals 'second-guessing' States' policy choices in the light of scientific uncertainty, democratic legitimacy and community proximity.
Co-authors Faraz Rojid, Junianto James Losari and Alberto Madero argue that international investment agreements must not accord greater rights to foreign tobacco companies than those enjoyed by domestic tobacco producers. Determining that States' policy space with respect to tobacco control is not fully accommodated by existing agreements, they assess three ways of redressing the problem: recrafting individual standards of protection in international investment agreements; including a general exceptions clause; and excluding tobacco from investor-state dispute settlement mechanisms.
Luke Nottage analyses the current Philip Morris Asia v Australia arbitration (examined further below in the context of plain packaging) and its implications for investor-state arbitration policy and practice. Nottage counsels against Australia's policy decision to avoid such arbitration in future investment treaties, offering suggestions for preserving the benefits of investor-state arbitration while providing sufficient scope to address public health objectives. Although Nottage takes a specific arbitration and jurisdiction as his point of departure, his conclusions in relation to investor-state arbitration have broader significance.
Locknie Hsu takes us from Australia to Singapore, investigating the implications of the various legal claims against plain packaging on Singapore and the Association of Southeast Asian Nations ('ASEAN'). She suggests that developments in litigation beyond Singapore and its ASEAN neighbours may provide important lessons for these countries in their pursuit of enhanced tobacco control measures. Within the context of the TPPA, Hsu recommends that Singapore pursue an explicit health exception for tobacco regulation.
Many of this Special Issue's main themes regarding States' regulatory sovereignty with respect to public health protection in the context of international trade and investment law are brought together in this section, which scrutinises the specific case study of flavoured cigarettes. Todd Tucker's piece takes a detailed look at US - Clove Cigarettes and the implications of the decision for the ability of WTO Members to address public health problems. In that dispute, Indonesia challenged a United States prohibition on the use of certain additives and flavours in cigarettes, on the basis that menthol cigarettes (primarily domestically produced) are exempt from the ban while clove cigarettes (primarily imported from Indonesia) are caught by it. Indonesia's claim succeeded in part. Tucker highlights alleged weaknesses in the reasoning of the WTO Panel and Appellate Body with respect to empirical evidence and textual analysis of the TBT Agreement, leading him to question the capacity of the WTO to adequately balance competing interests in such sensitive public health contexts.
The Editors have also included in the Special Issue two of their own previously published pieces examining this dispute before and after the WTO rulings.
Plain Tobacco Packaging
This TDM Special Issue then turns to address mandatory plain tobacco packaging, which was in many ways inspired and prompted by the WHO FCTC. Several commentators examine the legal implications of such a scheme, particularly with respect to intellectual property-related obligations in the WTO and international investment agreements. The section begins with a prescient 2004 article by Benn McGrady on 'TRIPS and Trademarks', followed by an update by McGrady concluding that plain packaging remains consistent with WTO Members' legal obligations, including Article 20 of the WTO's Agreement on Trade-Related Aspects of Intellectual Property Rights ('TRIPS Agreement').
Within the international investment law context, Mark Davison conducts a detailed analysis of the ongoing arbitration launched by Philip Morris Asia Limited against Australia's plain packaging legislation. In assessing the strength of the investor's claims, Davison draws on the reasoning by Australia's highest court, which in August 2012 upheld that legislation against a constitutional challenge by several tobacco companies.
Moving away from Australia, Peter Henning and Leonid Shmatenko consider plain packaging in the context of the European Union. Examining the legal competence of the European Commission and Parliament to introduce plain packaging, the authors conclude that such a measure would need to meet the tests of suitability, necessity and proportionality under European Union law. This article offers just one example of the potential for plain packaging in jurisdictions outside Australia. As noted above, several other countries are considering such an approach and its legal implications within their particular systems.
This section of the Special Issue concludes with primary materials on plain packaging in three jurisdictions: the Australian legislation, and the consultations in the United Kingdom and New Zealand.
 Appellate Body Report, United States - Measures Affecting the Production and Sale of Clove Cigarettes ('US - Clove Cigarettes'), WT/DS406/AB/R (circulated 4 April 2012, adopted 24 April 2012).