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WTO Decision Forces U.S. Hand on Menthol Cigarettes

U.S. will comply with WTO decision by moving to ban menthol additives


GENEVA, SWITZERLAND 24 July – Yesterday the U.S. laid out its plan to come into compliance with a WTO dispute settlement panel finding that the U.S. ban on clove cigarettes violated the trading rights of Indonesia. The ban on clove and other flavorings for cigarettes was part of the landmark 2009 Family Smoking Prevention and Tobacco Control Act, which also gave the Food and Drug Administration (FDA) authority over tobacco products for the first time. But, menthol flavoring was exempted from the ban, in order to give FDA time to consider how best to ban a product used by about 30% of addicted U.S. smokers.

Indonesia, the number one source for clove cigarettes in the U.S. market, filed a complaint with the World Trade Organization in 2010, arguing that the law unjustly discriminated against Indonesia’s products compared with menthol products, mostly produced in the U.S. A WTO dispute settlement panel agreed with Indonesia in 2011, and the decision was upheld on appeal in 2012. July 24th 2013 was set as the deadline for the U.S. to come into compliance with the decision, either by banning menthol or allowing clove cigarettes.

Rather than banning menthol outright, the U.S. announced in Geneva that “the United States has taken and is taking a number of actions in relation to menthol cigarettes.” These actions include a public notice of a proposed rule-making on menthol cigarettes and the release of a scientific report on the issue. The full U.S. statement can be found at https://ash.org/statement-of-the-united-states-on-menthol/.

[Yesterday]’s action by the FDA marks an important next step in addressing the use of menthol in cigarettes,” said Ranking Member of the U.S. Committee on Energy and Commerce, Representative Henry A. Waxman. “Its use in tobacco products is widely believed to make them more tasteful and appealing, often helping to hook our kids to a lifetime of tobacco addiction.”

Of all the options available to the U.S. in light of Indonesia’s successful complaint, this is the best for public health,” said Laurent Huber, executive director of Action on Smoking and Health, an anti-tobacco organization founded in 1967. “It is a shame that U.S. health authorities have not moved more quickly to ban menthol, and a bit of an irony that a trade dispute, filed on behalf of Indonesia’s tobacco industry, is the catalyst to move forward.

The tobacco industry has increasingly used trade law to forestall and roll back tobacco control regulations across the world. Trade disputes are pending against Australia, Uruguay and other countries. The cases are heard in foreign trade courts behind closed doors, and are not subject to review by domestic courts, including the U.S. Supreme Court.

While the cloves case was brought by Indonesia under the rules of the World Trade Organization, modern trade and investment treaties – including the draft Trans-Pacific Partnership Agreement – often give the right to take legal action directly to corporations, without the need for a government sponsor.

It is unacceptable that the U.S. government’s sovereign right to protect public health is threatened by economic treaties negotiated in secret and with little input from elected officials,” said Huber. “Public health should always take priority over corporate profits.”

It is unclear if the U.S. statement will be acceptable to Indonesia. If unsatisfied, Indonesia may go back to the WTO to seek permission to put countervailing duties in place against U.S. imports.