The deadline for the US Government to implement the WTO dispute panel’s recommendations fell on last Wednesday, 24th July 2013.
The panel found that the US violated of Article 2.1 of the Technical Barriers to Trade (TBT) Agreement because Section 907 of the Family Prevention and Tobacco Control Act was discriminative towards clove cigarettes by banning them but not banning menthol cigarettes, which have been confirmed by the WTO to be “like products”.
The US Government claims to have taken steps to come into compliance with the recommendations of the panel. However, in reality discriminative treatment is still maintained to clove cigarettes. The US Government merely campaigning the dangers of menthol cigarettes, without banning menthol cigarettes while keeping the ban on clove cigarettes. This shows discriminative action by the US government and clearly violates of WTO disciplines. Besides violating Article 2.1 of the TBT Agreement, the US’ Policy is also in violation of Article 2.12 of the same agreement because the ban on clove cigarettes was enforced without allowing an interval of no less than six months between the publication of the ban and its entry into force.
Further, the implementation of the policy is also considered to be in violation of Article 2.9.2 of the TBT Agreement, which requires the US to notify all WTO Members through the Secretariat.
Director General of International Trade Cooperation of the Ministry of Trade, Iman Pambagyo, stated that, “It's baffling how the US, which is always demanding other countries to abide by WTO Disciplines and Regulations, is now unable to correct its policy, which is clearly in violation of WTO Provisions. We do not dispute the evidence that smoking is unhealthy in fact it is dangerous to our health. What we cannot accept is the fact that clove cigarettes are being banned while menthol cigarettes are not as if clove cigarettes are dangerous to our health while menthol cigarettes aren’t,”. Further, he added that as an economy in transition, Indonesia has worked hard to create a rules based economy. “It's hard to fathom that the US Government, which often questions other countries policies as being not in compliance with the Disciplines of the WTO, now in fact is ignoring its WTO obligations”.
The Indonesian Government, in this case the Ministry of Trade, will continue to pursue legal actions through the WTO in order to ensure that its rights are respected and its interests are protected.