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Australia Blocks Call for WTO to Probe Tobacco Packaging

Australia blocked a request by Honduras for World Trade Organization judges to investigate the legality of an Australian law that prohibits the display of tobacco companies’ logos, labels and trademarks.

Honduras challenged the Australian ban on April 4, saying it violates global rules on intellectual property. The Geneva- based WTO agreed on Sept. 28 to examine a similar Ukrainian complaint against the plain-packaging rules. Australia won’t be able to block a second Honduran request for judges to rule.

As of Dec. 1, cigarettes in Australia will have to be sold in dark brown packets, with no symbols or images and the same font for all brands. Global tobacco companies on Aug. 15 lost a legal to challenge to the law, the first requiring cigarettes to be sold in uniform packages, after Australia’s top court ruled the government didn’t benefit from the removal of trademarks.

Philip Morris International Inc. (PM), Imperial Tobacco Group Plc (IMT), British American Tobacco Plc (BATS) and Japan Tobacco Inc. (2914) had claimed the government illegally seized their intellectual property by barring the display of trademarks.

Smoking kills 15,000 Australians annually and costs about A$31 billion ($32 billion) in yearly health and workplace expenses, the government says. With 15 percent of the population age 14 or over smoking daily, it’s the country’s top drug and a preventable health issue, Australian officials say.

Honduras and Ukraine say the law is based on insufficient scientific evidence and that the plain-packaging rules will unnecessarily restrict trade because Australia’s public-health goal can be met by other means.

Dominican Republic

The Dominican Republic said on Nov. 9 said it will also ask the WTO to investigate its complaint against the Australian plain-packaging law in its first challenge at the trade arbiter. The request will be included on the Dispute Settlement Body’s Dec. 17 agenda, the Dominican Republic said in a statement.

“These unprecedented measures will undermine the Dominican Republic’s tobacco industry, in particular its premium cigar sector,” according to the statement. “By prescribing standardized plain packaging, the tobacco market will be driven towards commoditization, with declining prices, and increasing - - rather than falling -- consumption and illicit trade.”

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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