American Journal of Law & Medicine

Tobacco Control and Beyond: The Broader Implications of United States - Clove Cigarettes for Non-Communicable Diseases


As implementation of the World Health Organization (WHO) Framework Convention on Tobacco Control (FCTC) accelerates and states seek to address risk factors for non-communicable disease more broadly, tension has increased between the law of the World Trade Organization (WTO) and public health. For example, Indonesia recently brought a successful claim against a U.S. law that prohibits cigarettes with a characterizing flavor other than menthol or tobacco. (1) Indonesia succeeded in arguing that the regulation discriminates against clove-flavored cigarettes of Indonesian origin in favor of menthol-flavored cigarettes of U.S. origin. (2)

Also in the WTO context, the Dominican Republic, Honduras, and Ukraine have challenged an Australian law prohibiting the presence of branding on tobacco packaging other than product and variant names in a standardized location, font size, and style. (3) This regulation, commonly referred to as "plain packaging," is the first of its kind and may represent a turning point in the regulation of tobacco packaging. (4)

More broadly, the tobacco industry has launched a new wave of international litigation. (5) Outside of the WTO, Philip Morris has also been active in using trade and investment agreements to challenge tobacco control measures directly. In 2010, Philip Morris launched a challenge to Uruguayan tobacco packaging measures under a bilateral investment treaty (BIT) between Switzerland and Uruguay. (6) In 2011, the company launched a similar challenge to Australia's plain packaging legislation under the Australia-Hong Kong BIT. (7) In 2012, Philip Morris lost a claim in Norwegian courts that challenged a prohibition on the display of tobacco products at the point of sale under the European Economic Area Agreement. (8)

This resistance to regulation comes at a time of heightened concern about risk factors for Non-Communicable Diseases (NCDs), as reflected in the recent Political Declaration of the High-Level Meeting of the General Assembly on the Prevention and Control of NCDs. Increasingly, states are also using the lessons learned in tobacco control to address other risk factors for NCDs, such as harmful alcohol use and poor diet. Some of these efforts, such as a move to graphic warning labels on alcoholic beverages in Thailand, have also proven controversial under WTO law.

This Article builds on earlier analysis of the implications of WTO law for regulations to address NCDs. (9) More specifically, this Article examines the implications of United States--Clove Cigarettes and subsequent technical barriers to trade (TBT) disputes for tobacco control and control of NCDs associated with alcohol and poor diet. Part II of this paper describes the limited scope of the Agreement on Technical Barriers to Trade (the "TBT Agreement"), which may prove to be an important caveat to the implications of United States Clove Cigarettes and other TBT disputes. Part III examines the principle of non-discrimination as applied in TBT disputes and the possible effects of this approach on domestic regulatory autonomy in the context of NCDs. Part IV examines how application of principles governing necessity may affect the issues.


The two provisions of the TBT Agreement most relevant to regulations addressing NCDs are Articles 2.1 and 2.2, which govern non-discrimination and necessity respectively. (10) Before discussing these provisions in further detail in parts II and III of this paper, it is important to note that those provisions apply only to technical regulations. (11) Accordingly, it should not be assumed that the law as developed in United States--Clove Cigarettes and subsequent TBT disputes will affect all measures to address NCDs.

The phrase "technical regulation" is defined in Annex 1.1 of the TBT Agreement as a:

   Document which lays down product characteristics or their related
   processes and production methods, including the applicable
   administrative provisions, with which compliance is mandatory. It
   may also include or deal exclusively with terminology, symbols,
   packaging, marking or labelling requirements as they apply to a
   product, process or production method. (12)

The heart of the definition is such that the document in question must lay down product characteristics in order to be a technical regulation. These characteristics may be in a negative form, such as a prohibition, or in a positive form, such as a compulsion. (13)

In the tobacco control context, there is a limited range of measures that constitute technical regulations. The most obvious examples are packaging and labeling requirements and requirements concerning the constituents of tobacco products. The TBT Agreement does not, however, ordinarily apply to taxes or to restrictions on marketing that are commonly used to reduce tobacco consumption but that do not lay down product characteristics. (14)

In the contexts of alcohol and diet, the question of scope is more complex. Article 1.5 of the TBT Agreement provides that the agreement does not apply to measures falling within the scope of the Agreement on the Application of Sanitary and Phytosanitary Measures (the "SPS Agreement"). (15) The SPS Agreement applies to a broad range of measures, including any measure "to protect human or animal life or health within the territory of the Member from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs." (16) The types of measures covered are described in the following way:

   Sanitary or phytosanitary measures include all relevant laws,
   decrees, regulations, requirements and procedures including, inter
   alia, end product criteria; processes and production methods;
   testing, inspection, certification and approval procedures;
   quarantine treatments including relevant requirements associated
   with the transport of animals or plants, or with the materials
   necessary for their survival during transport; provisions on
   relevant statistical methods, sampling procedures and methods of
   risk assessment; and packaging and labelling requirements directly
   related to food safety. (17)

Accordingly, most product regulations in the food context, and food labeling measures, will fall within the scope of the SPS Agreement rather than the TBT Agreement. (18)

In the alcohol context, some measures fall outside the scope of the TBT Agreement and others fall within the scope of the SPS Agreement. Regulations governing the constituents of alcoholic beverages in order to reduce toxicity would appear to fall within the SPS Agreement. This includes bans on methanol and other substances that are widespread and have not proven controversial under WTO law.

A number of other alcohol control regulations would appear to lay down product characteristics and thereby fall within the scope of the TBT Agreement. Labeling measures are one example. Other examples include measures that prohibit the sale of "alcopops" (pre-mixed drinks targeted at young people) and regulations that prohibit pre-mixed drinks containing caffeine or other stimulants. In the case of pre-mixed alcopops, it might be argued that restrictions are aimed at addressing the risks associated with additives, such as flavorings and mixers. At their core, however, it appears such bans are not applied to address risks arising from additives but are more concerned with the attractiveness of the end product to specific groups. It is less clear whether the same can be said for drinks with caffeine or other stimulants. In the case of the United States, for example, the U.S. Food and Drug Administration (FDA) referred to caffeine as an additive so as to permit invocation of FDA regulatory powers. (19)

Notwithstanding the ordinary wording of the definition of SPS measures, in practice WTO Members have tended to raise concerns relating to measures affecting alcoholic beverages through the TBT Committee, suggesting that most Members view the TBT Agreement as being the applicable agreement. (20) This past practice also suggests that restrictions on alcopops, caffeinated beverages and alcoholic energy drinks are likely to be notified to and discussed in the TBT Committee. (21)

Despite the limitations on the scope of the TBT Agreement, it is worth noting that WTO case law tends to seek consistent approaches to interpreting rules restricting regulatory autonomy across different WTO covered agreements. (22) Accordingly, the TBT disputes may still be relevant to interpretation of other agreements, including the SPS Agreement. This issue is discussed in Part III.


In 2009, the United States prohibited cigarettes containing a constituent that is a characterizing flavor of tobacco or tobacco smoke, other than menthol or tobacco. (23) Indonesia brought a WTO complaint, which alleged the law violates Article 2.1 because it treats Indonesian clove flavored cigarettes less favorably than like U.S. menthol flavored cigarettes. (24)

Article 2.1 of the TBT Agreement provides that: "Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country." (25)

Indonesia argued that although the technical regulation did not discriminate against imported products on its face, the effect was nonetheless discriminatory. (26) Indonesia's argument was based on the fact that clove cigarettes consumed in the United States prior to implementation of the law were predominately Indonesian in origin, whereas menthol cigarettes consumed in the United States are predominately of U.S. origin. (27) The United States argued that the regulatory distinction drawn between clove and menthol cigarettes was based not on the foreign origin of clove cigarettes, but on the fact that clove cigarettes are a "starter product" used disproportionately by youth. (28) That is, youth and adults consume menthol cigarettes in similar proportions, whereas clove cigarettes were consumed predominantly by youth. (29)

To establish that a technical regulation violates Article 2.1 on national treatment grounds, a complainant must establish that the products in question (clove and menthol cigarettes) are like products and that the imported products (clove cigarettes) are treated less favorably than the products of national origin (menthol cigarettes). (30)

Prior to United States--Clove Cigarettes, the approach to be used in determining whether products are like under the TBT Agreement was not clear. The panel examined whether clove and menthol cigarettes were like in regulatory terms. (31) That is, the United States was pursuing the objective of reducing youth smoking and in this light the panel examined whether clove and menthol cigarettes were like in terms of their effect on youth smoking. (32) On the facts, the panel found the products to be like. The panel found that each type of cigarette imparts a characterizing flavor that reduces the harshness of tobacco, and that each is attractive to youth. (33)

On appeal, the Appellate Body clarified that whether product categories are to be considered like is "a determination about the nature and extent of a competitive relationship between and among the products at issue." (34) Under this approach, the fact that products may pose divergent risks to health will not in and of itself mean that they are not like products, but may be relevant to the question of competitiveness. (35) Despite interpreting the likeness test differently from the panel, the Appellate Body upheld the panel's finding that clove and menthol cigarettes are like for purposes of this dispute. (36) The Appellate Body also noted that it is sufficient for a sub-group of the population (in this case youth) to treat the products as competitive in order for likeness to be established. (37)

On the question of less favorable treatment, the panel sided with Indonesia. (38) On appeal, the Appellate Body sought to clarify the meaning of less favorable treatment. The Appellate Body clarified that mere detriment to some imported products will not satisfy the requirement. (39) The Appellate Body stated, "Article 2.1 should not be interpreted as prohibiting any detrimental impact on competitive opportunities for imports in cases where such detrimental impact on imports stems exclusively from legitimate regulatory distinctions." (40) To determine whether a detrimental impact stems exclusively from legitimate regulatory distinctions, a panel must scrutinize "the design, architecture, revealing structure, operation and application of the technical regulation at issue, and, in particular, whether that technical regulation is even-handed." (41)

After elaborating this test, the Appellate Body upheld the panel's finding that less favorable treatment had been established. (42) In doing so, the Appellate Body relied on the fact that the prohibited products were primarily clove cigarettes from Indonesia, whereas the permitted products (menthol cigarettes) were primarily domestically produced. (43) The Appellate Body stated that it was not persuaded that the detrimental impact on competitive opportunities for imported cigarettes stemmed from a legitimate regulatory distinction. …

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