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Australia demands opponents stop stalling WTO tobacco case

By Tom Miles

GENEVA (Reuters) - Australia asked five countries challenging its tobacco policies on Wednesday to stop delaying the progress of their cases at the World Trade Organization and took the unusual step of speeding up one of the complaints against itself.

Indonesia, Ukraine, Cuba, Honduras and Dominican Republic have all launched complaints at the world trade body to try to overturn Australia's "plain packaging" laws on tobacco.

Australia hopes the stringent packaging laws will reduce smoking and improve public health, and other countries around the world have said they may follow suit, based on the WTO case, raising the stakes for a speedy resolution.

An Australian diplomat told the WTO's dispute settlement body that the uncertainty of the proceedings and the failure to move towards a settlement was having a "regulatory chilling" effect on other countries thinking of putting their own tobacco rules in place, and said there could be a "human cost" of delays.

"Australia does recognize that there may be circumstances where prolonging formal dispute processes might be justified," the diplomat said, according to a copy of Australia's statement provided to Reuters.

"But it is not the case here. Not one of the parties has approached Australia to resolve the case through a mutually agreed solution," the diplomat said.

Many countries demand tobacco products carry graphic health warnings. But Australia has gone much further, banning flashy logos and distinctive colors in favor of drab olive packets that look more like military or prison issue, with brand names printed in small standardized fonts.

Tobacco firms say the rules infringe their trademarks. The WTO complainants say they create illegal obstacles to trade.

SPEEDING UP THE PROCEDURE

Plain packaging is seen by public health advocates as the dawn of a new era of restrictions on unhealthy products, and many observers expect a similar campaign against marketing of alcohol and unhealthy foods if the anti-smoking drive succeeds.

The plain packaging rules have been in force since December 2010 and had been well publicized several years before that, so other countries had plenty of time to get their complaints in order, Australia told the WTO meeting.

It added that WTO members should not launch disputes and only later decide if they have a chance of winning them, and noted the WTO dispute settlement system was already stretched.

To underline its willingness to get to litigation underway, Australia accepted Indonesia's request on Wednesday to set up a panel of adjudicators to rule on the dispute, waiving its right to delay the setting up of the panel, a tactic that is routinely used in WTO disputes.

Indonesia's request for a panel is the third, after similar moves by Ukraine and Honduras. Australia said that over the past two years, Ukraine had asked it to delay setting up a panel to allow Honduras and Dominican Republic to catch up.

Honduras took 10 months to request a panel and immediately suspended the process, while Dominican Republic took 16 months before asking to join talks on setting up a panel, without saying when it would move to that stage, Australia said.

Ukraine asked WTO Director General Roberto Azevedo earlier this week to nominate panel members, and Australia said it would ask Azevedo to do the same for Honduras and join the two cases together.

Despite the change of government in Kiev, Ukraine's representative at the meeting said it remained "actively committed to proceed" with the dispute.

(Reporting by Tom Miles; Editing by Tom Heneghan)

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