How might the World Trade Organization impact the

 Framework Convention on Tobacco Control?

While it is unclear how the World Trade Organization (WTO) will impact the WHO FCTC, there are a number of possible scenarios based on outcomes of some WTO rulings and/or challenges:

• The goal of the WHO FCTC is to establish global tobacco control standards to address the global tobacco epidemic multilaterally. Given this, the WTO may view the WHO FCTC as THE international standard and therefore strike down any national policies that are viewed as exceeding the international standard. In this case the WTO may force countries to weaken their tobacco control laws to meet the international "standard". This possibility is illustrated by Canada’s current WTO challenge of France’s asbestos law citing, in part, that France’s law exceeds an International Labor Organization-endorsed standard.

• Even global tobacco control standards may be seen as a barrier to free trade for countries to mount a challenge under the WTO. The experience in Guatemala illustrates this concern. Following guidelines from WHO/UNICEF (United Nations International Children’s Emergency Fund) designed to promote breast feeding, Guatemala passed a law banning the use of baby faces on infant formula on the basis that such pictures equate healthy babies with formula fed babies. Despite the fact that the law followed international guidelines, the US threatened to challenge the law under an intellectual property rights rule under GATT (this challenge was made prior to the formation of the WTO and GATT is now under the authority of the WTO). The US argued that the baby face on the Gerber Label was a trademark and that Guatemala’s actions violated Gerber’s intellectual property right. This simple threat of a challenge under WTO forced Guatemala to weaken its law and allow such packaging.

• Another critical area that the WTO may strike down is the provision of price supports or export subsidies for farmers to transition out of tobacco since these types of support violate WTO agreements that call for equal treatment for domestic and non-domestic goods. The ruling in favor of the US’ challenge to the European Union’s (EU) system which preferentially imports bananas from small scale farmers in the Eastern Caribbean over corporations such as Chiquita illustrates this possibility.

• As the WHO FCTC process is meant to be incremental, some countries will choose to enact tobacco control polices beforehand. In the case of tobacco advertising restrictions or warning labels, these local tobacco control policies may also be at risk under the WTO Any change to a trademarked label such as by requiring a large warning label or requiring tombstone advertising could be in violation of WTO intellectual property rights rules. In fact, the tobacco industry previously asserted that the large warning labels required by Canada violated intellectual property protections in international trade agreements.

• The WTO is seen as the avenue by which countries can be forced to open up their markets to tobacco – as is partly the case in China’s ascension to the WTO. An article from the September, 1999, Tobacco Reporter, quotes a Chinese tobacco executive as saying about his country’s inevitable entry into the WTO as saying, "China must open its market and suffer the pain caused by foreign competition." The article goes on to say, "WTO membership requires adherence to the principles of "equal trade, free competition and unprejudiced trade."

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For more information contact the San Francisco Tobacco Free Project,
30 Van Ness Avenue, #2300, San Francisco, California, 94102, USA.
Telephone: 415-581-2448 Fax: 415-581-2492
Email: Mele Lau Email: Susana Hennessey Lavery