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WTO dispute settlement as a training exercise?

Monday 14 October, 2013
by Jonathan Liberman

Simon Lacey, a Jakarta-based international trade-law practitioner, writes in the Jakarta Globe that he advised Indonesia to challenge Australia's plain packaging legislation in the WTO because it would be a good opportunity to build Indonesia's WTO dispute settlement experience - particularly because the tobacco industry would be footing the bill. We comment on Lacey's perspective and on his judgment that Australia's plain packaging is ‘almost certainly ... an act of regulatory over-reach' and ‘a silly political calculation'.

In an opinion piece published in the Jakarta Globe last week, Simon Lacey, a Jakarta-based international trade-law practitioner, writes that he was asked to provide a legal opinion on whether Indonesia should challenge Australia's plain packaging legislation in the WTO, and discloses the gist of the advice he gave. 

Lacey writes that he advised Indonesia to bring a dispute ‘not because I think the case is particularly worth fighting or because the claimants have a particularly strong chance of winning, but because I believe Indonesia needs all the practice it can get at asserting its interests at the WTO'. He continues: ‘On Sept. 20, this is precisely what Indonesia did, initiating its own case against Australia on this very issue.'

Lacey expands on his sense of Indonesia's need ‘to get as much practice as it can' in WTO dispute settlement:

My advice to the Trade Ministry to bring the most recent case was based on the fact that Indonesia still has some very important WTO disputes that it must fight in the near future in order to assert its national economic and development interests, the most important of which is arguably going to be a case against either the European Union, the US or both, regarding Indonesian exports of palm-oil biodiesel. In order to take on two of the biggest and most experienced practitioners of WTO dispute settlement, Indonesia needs to get as much practice as it can.

He concludes:

The current dispute on plain-packaging tobacco offers as good an opportunity to do this as any, especially since tobacco companies will be footing the bill.

This perspective will likely surprise many. The legal challenges to Australia's plain packaging legislation and to Uruguay's tobacco packaging laws and to Thailand's tobacco packaging laws and to Canada's tobacco packaging laws and to South Africa's tobacco advertising laws and to Norway's tobacco display ban (and so on and on), and the tobacco industry's endless legal threats to countries across the globe, have forced public health advocates to engage with legal and political concepts and processes that had previously been foreign to them. Lacey's piece will certainly add something to their learning.

In Lacey's view, a view with which we agree, the WTO challenges to Australia's plain packaging laws are likely to fail. Yet, according to him, it is perfectly fine to treat WTO dispute settlement as a training exercise, the WTO as a kind of moot court forum, and one country's public health legislation designed to reduce the number of its citizens dying from a lethal, addictive product as another's moot court problem. Even better, according to Lacey, because the expenses of the side undergoing the training will be paid by the tobacco industry. (Of course, the costs of defending this training exercise will be borne by the Australian taxpayer. And the time and capacity of numerous government officials across different departments will have to be devoted to the defence of this exercise.)

We think there are other, better ways to build WTO dispute settlement capacity and expertise.

Lacey also opines that the Australian Government

almost certainly committed an act of regulatory over-reach and made a silly political calculation when it enacted the plain-packaging tobacco laws. This is because smoking had already been on the decline in Australia for several decades and because you only pick a fight with the global tobacco industry when you absolutely have to.

It's not clear what Lacey would find an acceptable rate of decline, nor what measures he thinks are or would be acceptable (i.e. not ‘regulatory over-reach') to achieve or sustain his chosen rate of decline.

The official Australian target rate of decline is noted in the Explanatory Memorandum to the Tobacco Plain Packaging Act 2011:

Tobacco smoking remains one of the leading causes of preventable death and disease among Australians, killing over 15,000 Australians every year. The social costs of smoking (including health costs) are estimated at $31.5 billion each year. Although the number of daily smokers in Australia has fallen by more than half a million in the last decade, approximately three million Australians still smoke.

The Government is committed to reaching the performance benchmarks set under the COAG National Healthcare Agreement of reducing the national smoking rate to 10 per cent of the population by 2018 and halving the Aboriginal and Torres Strait Islander smoking rate.

We think that this is a reasonable target. Achieving it will require concerted, ongoing efforts, of which plain packaging is one element.

We also see the battle over plain packaging in a larger perspective. WHO estimates that 100 million deaths were caused by tobacco in the 20th century and that if current trends continue, there will be up to one billion deaths in the 21st century.

As we see it, the world is at a critical juncture in global efforts to reduce the harm that tobacco causes, embodied in the WHO Framework Convention on Tobacco Control, a treaty with 177 Parties. The fight with the global tobacco industry has already been ‘picked'. The real questions now are who is going to win it, and how many people are going to die unnecessarily while it is being fought.

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