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As Nations Try to Snuff Out Smoking, Cigarette Makers Use Trade Treaties to Fire Up Legal Challenges

Andriy Skipalskyi was feeling proud, even triumphant, when he arrived last March at the World Conference on Tobacco or Health in Singapore.

Ukraine’s parliament had just voted to approve a public smoking ban, and its president had just signed a bill to outlaw tobacco advertising and promotion. These were revolutionary steps in chain-smoking Eastern Europe.

But Skipalskyi, a leading Ukrainian anti-smoking activist, heard little praise for his country from other delegates. As he told FairWarning: “Everyone was talking about Ukraine as the bad actor in the international arena in tobacco control.”

The reason was a bewildering move by Ukraine’s trade ministry. Within hours of the historic steps to curb smoking at home, the ministry, prodded by the tobacco industry, contested a tough anti-smoking law half a world away in Australia.

In a complaint to the World Trade Organization, Ukraine challenged the law, due to take effect December 1, that will ban distinctive logos and colors and require cigarettes to be sold in plain packs. Despite Ukraine having no tobacco exports to Australia—and therefore no clear economic interest—the trade ministry branded the law a violation of intellectual property rights under trade agreements Australia had signed.

Following Ukraine’s lead, Honduras and the Dominican Republic soon joined the attack on Australia, filing similar complaints with the WTO.

The case, which will be decided by an arbitration panel, signals an emerging pattern in the global tobacco wars. As top cigarette makers lose clout with national governments, countries around the world are adopting increasingly stringent rules to combat the public health burdens of smoking. To strike back, tobacco companies are increasingly invoking long-standing trade agreements to try to thwart some of the toughest laws.

The WTO case is only part of a three-pronged legal assault on Australia, aimed both at reversing the plain packaging law and warning other countries of what they might face if they follow its lead.

Public health advocates fear the legal attacks will deter other countries from passing strong anti-smoking measures. The “cost of defending this case, and the risk of being held liable, would intimidate all but the most wealthy, sophisticated countries into inaction,” said Matthew L. Myers, president of the Campaign for Tobacco-Free Kids in Washington D.C.

The dispute underlines broader concerns about trade provisions that enable foreign companies to challenge health, labor and environmental standards. Once a country ratifies a trade agreement, its terms supersede domestic laws. If a country’s regulations are found to impose unreasonable restrictions on trade, it must amend the rules or compensate the nation or foreign corporation that brought the complaint.

Advocates say countries should be free to decide how best to protect public health, without being second-guessed by unelected trade panels. Moreover, they argue, tobacco products, which kill when used as intended, should not be afforded the trade protections of other goods and services.

Worldwide, nearly 6 million people a year die of smoking-related causes, according to the World Health Organization, which says the toll could top 8 million by 2030. With fewer people lighting up in wealthy nations, nearly 80 percent of the world’s 1 billion smokers live in low-and middle-income countries.

Countries have been emboldened to pass more stringent measures by the Framework Convention on Tobacco Control. In effect since 2005, the treaty has committed about 175 nations to pursue such measures as higher cigarette taxes, public smoking bans, prohibitions on tobacco advertising, and graphic warning labels with grisly images such as diseased lungs and rotting teeth. (The U.S. has signed the treaty, but the Senate has not ratified it. The U.S. Food and Drug Administration has ordered graphic warnings for cigarette packs, but an  industry court challenge on 1stAmendment grounds has stalled the rule.)

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