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Hidden Hand of Big Tobacco Leads to WTO Challenge

BIG tobacco has opened a new front in its war against Australia’s plain packaging law.

The World Trade Organisation has revealed that within hours of the government’s victory in the High Court, Ukraine upgraded to formal a complaint against Australia’s law and demanded the establishment of a disputes panel.

Australia will have to argue its case before the WTO in a hearing and appeals process that could take up to 14 months.

“It’s a remarkable coincidence,” the Trade Minister, Craig Emerson, said. “Ukraine was engaged in informal talks with us up until the High Court win, and then went formal.”

Asked if he thought the big tobacco companies were behind Ukraine’s decision, Dr Emerson said that he was “not aware of tobacco being a big industry in Ukraine, so one would wonder why it would have a big interest in this”.

Ukraine, once a substantial tobacco grower, now imports tobacco to manufacture cigarettes for export, mainly to Europe.

An adverse finding would put Australia in breach of WTO rules requiring compensation or a backdown.

A recent finding on quarantine rules led to this country opening its market to apples from New Zealand for the first time in 89 years.

“Members usually abide by the umpire’s decision,” Dr Emerson told the Herald, “but we do not expect to lose. The WTO rules allow us to regulate for health.”

The hearing will not prevent Australia withdrawing branded cigarette packets from sale on December 1 as planned and allowing only the sale of cigarettes in plain olive-green packets until the dispute is resolved.

The government is battling big tobacco on a second front in negotiations on the Trans-Pacific Partnership agreement (TPP) encompassing Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam.

At the behest of tobacco companies, including Philip Morris International, the US is demanding that the agreement includes a so-called investor state dispute settlement mechanism, which would allow firms such as Philip Morris to appeal to an outside body about sovereign decisions it did not like. The provision goes further than anything in the existing Australia-United States Free Trade Agreement.

”This is being pushed by US representatives. Australia is saying ‘no’,” Dr Emerson said.

Labor and the Coalition combined in the Senate on Thursday to vote down a Greens resolution that would have required Australia to make public its negotiating position in the TPP.

”The negotiations are being conducted in secret,” the Greens spokesman on trade, Peter Whish-Wilson, said. “While draft texts of the agreement were provided to AT&T, Verizon, Cisco, the Motion Picture Association and other industry lobbyists, advocacy organisations and other citizens are denied access.”

Dr Emerson said there was no point in publishing draft negotiating positions because they “shifted around”.

By Peter Martin

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