Indonesia and Australia Disagree over Tobacco Packaging

Source from:  Asian Correspondent 10/21/2013

Australia's tough new tobacco packaging policy, which allows for no logos or brand imagery, is facing tough going in Indonesia, which has joined four other nations in challenging Australia's plain-packaging policy for tobacco in the World Trade Organization as a restraint of trade.

However, Indonesia may have found a friend in Tony Abbott, who during his election campaign said Labor's tax hike on cigarettes was unfair to smokers and, in 2011, suggested reviewing allowing foreign companies to be able to sue the Australian government over trade disputes. Indonesia would rather try the Australian courts than taking the dispute to the WTO.

It is tobacco control more so than beef exports and asylum seekers, both of which were discussed during Abbott's recent trip to Jakarta, that could create complications for the two countries. Tobacco is one of Indonesia's economic mainstays, but control measures generate black market enterprise, another form of corruption and criminality to add to Indonesia's woes and Australia's vexation.

Australia's ever tougher policies on tobacco, and Indonesia's ever more stubborn resistance to its control, are examples where the policies of both nations produce ripple effects for each other, and a situation where the relationship is tested. Under Australia's law, which went into effect in September, cigarette packets can't show logos, brand imagery or promotional text as well and restrict the color, size, format and packaging. All tobacco products must be labelled with new and expanded health warnings saying tobacco can kill.

"The plaintiff countries maintain that Australia's law breaches international trade rules and intellectual property rights to brands — arguments rejected by Canberra and which also failed to convince Australia's High Court in a case brought by tobacco firms," the Jakarta Globe said in a recent editorial. Enditem