Cigarette packaging and international trade – a warning

European Union Substance abuse

The government’s failure to implement the plain cigarette packaging legislations in the UK reveals a much larger issue to do with international trade and the restrictions it will put on democratically elected governments. When will the UK start putting the health of its citizens first again?

Proposed Australian plain cigarette packs
Proposed Australian cigarette packs

The government’s failure to push ahead with promised plain cigarette packaging has been treated by the British press as a national issue, with the key point of contention being how far Tory election strategist Lynton Crosby influenced Cameron’s decision, while the much broader international trade context and the implications for future legislative deterrence have escaped public attention.

On December 1, 2012, Australia introduced the world’s first legislation requiring tobacco products to be sold in olive-coloured plain packaging (Australia’s Tobacco Plain Packaging Act 2011).

Before the legislation came into force, British American Tobacco and Japan Tobacco International, supported by Phillip Morris International, brought a case against the Australian government. The High Court there judged in favour of the Australian government.

Immediately following that judgement, the Ukrainian government raised a dispute against Australia at the World Trade Organisation, on the basis of Australia’s failure to meet its commitments under the WTO TRIPS (Trade-Related Intellectual Property Rights Agreement).

As WTO disputes have to be state-to-state and the Ukraine has had no tobacco trade with Australia since 2005, the issue arose as Phillip Morris subsidiary based there, employing a large number of people. According to Ukrainian officials, the decision to pursue the dispute by their government was made secretly within the Ministry of Economics and – in spite of their President’s attempts to deter the high level of smoking in the Ukraine – the letter was not shown the Ukrainian Ministry of Health. Australia has rejected the dispute once, but will be forced to respond when the Ukraine reapplies.

In July, the UK government shelved legislation similar to that introduced by Australia on the grounds of ‘wait and see the health effects in Australia’. The discussion has been drawn out as anti-tobacco health groups have not let go on such an important issue. But, still conveniently for the British government, the discussion has been limited to national level. This is definitively, however, an international trade issue.

The UK is always completely committed to ‘free trade’, mostly on behalf of global finance interests in the City of London, making it the main neoliberal proponent within the EU. The UK could not and would not make a move that is counter to ‘free trade’, especially at a point in time at which it would effectively be supporting Australia in this dispute.

Rather than someone ‘influencing’ David Cameron’s decision, surely this was a case of someone reminding him to join the dots. Lynton Crosby’s lobbying firm for instance, has a contract with Phillip Morris International, though he is refusing to say how much it is for.

As well as this monumental betrayal in regard to the nation’s health, this event is an indication of the likely trade agenda effects on all future UK legislation, on health and much more. Due to the direction of EU trade commitments, the UK will be far more vulnerable than Australia.

The EU is now including Investor State Dispute Settlement in all its trade deals including the big US/EU Transatlantic Trade and Investment Partnership (TTIP). ISDS allows corporations to sue governments directly in international trade dispute jurisdictions of the corporation’s choosing, i.e. not at the level of the host country’s legal system, for any loss (or ‘expropriation’) of anticipated profits.

Australian PM Julia Gillard refused to include ISDS in Australia’s trade deals (I hope her displacement doesn’t see any backtracking on this), hence only the national and WTO legal arenas could be used to attack the Australian legislation.

With ISDS, the UK’s policy space to legislate will be far more restricted. What ISDS does is prevent any backtracking of trade commitments, which, in the EU, are made without our knowledge anyway.

Although these dimensions were not recognised in the UK public sphere, the cigarette packaging issue is an indication of how the UK government will be positioned on any future health issue, because trade rules are now at the core of health legislation. For anyone concerned about our health system, this is necessary knowledge.

World Health Organization: “Tobacco is the only legal consumer product that kills when used exactly as intended by the manufacturer.”

This article was first published by Open Democracy and is reproduced with permission