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Australia’s Plain Packaging Victory a Milestone for Public Health

Following a lengthy, nearly $40 million legal standoff, Australia has won a major trade dispute over its tobacco plain packaging law, with WTO judges rejecting a complaint brought by Cuba, the Dominican Republic, Honduras and Indonesia. The ruling comes hot on the heels of another huge victory for the WHO Framework Convention on Tobacco Control (FCTC), in which its long-languishing Illicit Trade Protocol (ITP) was finally ratified and will come into law within 90 days.

The double salvo has been warmly celebrated by stakeholders (including the WHO), who have high hopes that the twin win could spark a domino effect of anti-tobacco legislation around the world – although it will be critical to overcome resistance from the tobacco industry.

An important legal precedent

The Australian law came into force in 2010 but was challenged by the four countries on the grounds that such legislation would facilitate illegal smuggling and violate intellectual property rights, and that there was little or no evidence it would have a positive health impact.

Yet perhaps not surprisingly, given the fact that all four plaintiffs are major tobacco producers, the science contradicts their assertions. An evaluation of 14 studies published in 2015 showed that plain packaging had incentivized 47% of smokers to try quitting, as opposed to only 20% before its introduction. At the same time, the research showed zero evidence that the law had led to a collapse in prices or a surge in the illegal tobacco industry.

Recognizing those facts, the WTO ruled in favour of Australia, spurring what public health advocates hope will be a domino effect for other governments looking to implement similar legislation. To date, a mere seven countries have implemented plain packaging laws, nine more are currently navigating the legal process to bring them in, and 10 other nations and dependencies are formally reviewing the idea.

Arrival of ITP now imminent…

That victory is the second in the space of two days for anti-smoking advocates, following the long-awaited ratification of the FCTC illicit trade protocol. First introduced in 2012, the ITP could not come into force without the final ratification of at least 40 countries. Last month, the UK became the 40th state to give the green light to the protocol triggering the 90 days for it to come into force. Since then, others have followed suit, meaning it now has 45 signatories.

The ITP sets out a framework for controlling and reducing the illegal cigarette trade, which is thought to account for 10% of the global market and thus a critical source of cheap cigarettes. It aims to target three specific areas: the prevention of illicit trade, the enforcement of existing laws and the facilitation of international cooperation. It also calls for the introduction of a global track-and-trace system, which would allow governments to monitor the movements of every tobacco packet from the place of manufacture to the end sale point.

…but WHO must remain wary

That last particular measure will be instrumental in cracking down on illegal trade, but the WHO must be wary of interference from the industry itself. A recent study showed that two-thirds of illegal cigarettes are not actually counterfeit, leading to speculation that Big Tobacco is complicit in the smuggling of its own products to avoid paying high taxes. As recently as 2014, British American Tobacco (BAT) was fined €650,000 by the UK customs authority for flooding the market in Belgium to facilitate smuggling back into the country.

Now there are fears that industry might try to influence the very system put in place to stamp out illegal smuggling of its own assets. In the mid-2000s, Philip Morris International (PMI) set up its own track-and-trace system called Codentify, which it shared with its competitors and promoted to governments. Under the ITP’s own terms, any regulatory system cannot be “delegated to the tobacco industry,” prompting PMI to sell off parts of the company to tech firm Inexto to try to comply with the regulations. Crucially, however, the new owners are controlled by former tobacco executives, fueling fears that Big Tobacco is still pulling all the strings.

Industry won’t be throwing in the towel

Even if they are unsuccessful in their attempts to foist Codentify upon the ITP, there are no signs that the industry will be letting up in their efforts to undermine anti-tobacco legislation any time soon. Last summer, a major exposé from Reuters revealed that PMI has been using a wide range of tactics to hinder WHO efforts to reduce smoking, including diluting the number of health delegates at FCTC meetings with finance-focused representatives and effectively using Vietnamese delegates as proxy PMI shareholders to voice their concerns in meetings to which their entry is barred.

Most recently, the industry has also tried to put the buffers on the introduction of plain packaging legislation in Canada. Announced last month and scheduled to come into effect next year, the law will, among other things, require manufacturers to revert to “slide and shell” packaging in favour of more modern designs. The industry has isolated this clause as particularly troublesome, claiming the equipment used to make such boxes is outdated and now almost exclusively the remit of smugglers, though their protests are just one more effort to slow the ITP down.

One step closer to a tobacco-free world

Notwithstanding the inevitable and unrelenting pushback from the industry, the two gains made last month should be celebrated as such. With the ITP now set to come into force in under three months, other nations can look to Australia’s victory as proof that they, too, can prevail against the colossal resources of Big Tobacco.

In particular, developing countries (who have been increasingly targeted by a tobacco market edged out of the Western world) should take heart from the WTO ruling. A smoke-free tomorrow might still be some way off, but stubbing out the habit once and for all just got two steps closer.