Summarizing WTO appellate body decision on U.S. flavored tobacco ban

31/12/2013 12:00 - 1218 Views

Todd Tucker

Abstract

On September 2, 2011, a panel report ruling against the U.S. ban on flavored cigarettes (which are often used to hook teenagers) was circulated to World Trade Organization (WTO) members after Indonesia successfully challenged the measure. The panel found that the ban constituted a mandatory technical regulation that “is inconsistent with Article 2.1 of the [Technical Barriers to Trade] TBT Agreement because it accords to imported clove cigarettes treatment less favourable than that it accords to like menthol cigarettes of national origin…” The panel ruling also created a new WTO requirement that has never been formally approved by Congress, the U.S. or other WTO member countries, which is that there must be a six-month lag between publication and entry into force of regulations. The panel found that because there was only a lag of three months before the ban on flavored cigarettes went into effect, the U.S. had violated TBT Article 2.12. On April 4, 2012, the WTO’s Appellate Body upheld the lower panel ruling on both counts, and on April 24, the Appellate Body adopted both reports.

In nearly 200 rulings over 16 years, this was the first time that the WTO ever found a violation under this article, which has long been of concern to consumer advocates. It was one of the first rulings under the TBT, which is one of 17 agreements administered by the WTO. (The lower panel ruling was quickly followed by two other rulings against two other popular U.S. consumer policies (dolphin-safe tuna labels and country-of-origin labels on meat) under novel interpretations of the TBT. Appellate Body review of these other cases will be circulated in the coming months.) Given the popularity and importance of the tobacco control policy, the U.S. should be poised to maintain the policy and challenge the legitimacy of any sanctions authorized by the WTO’s Dispute Settlement Body (DSB).

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