E-drug: 1990 Thai Tobacco case - as precedent for WHA resolution
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1990 Thai Tobacco case --- as precedent for WHA resolution
Catherine Gavin and Cecile Crettol have kindly put the GATT/US/Thai
tobacco case on the web. This decision is a good read for anyone who is
trying to understand how trade disputes involving health are resolved,
and also, why it may be useful to get a WHO resolution that provides a
role for the WHO in consulting on such disputes, particularly if the
resolution clarified the primacy of public health over commercial
interests. It also illustrates the benefits of having consultations on
a broader range of issues than pharmaceuticals or intellectual property
issues only. The entire decision, which is long and complex, is at the
URL given below. Here are a few key parts.
jamie love <love@cptech.org>
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Thailand - Restrictions on Importation of and Internal Taxes on Cigarettes, a
GATT decision - November 7, 1990
Editor's note:
The Gatt decision in the 1990 Thai tobacco case is important for several
different reasons. The GATT ruled against the Thai efforts to ban imports of
cigarettes. However, the GATT did establish a precedent by consulting with
the World Health Organization (WHO) on a trade issue involving public
health, and it did indicate that a ban on the advertising of cigarettes,
while potentially harmful to the interests of importers who were not well
known, was justified for public health reasons.
The entire opinion is given below. As an introduction, here are a few key
parts.
From paragraph 27
Since the health consequences of the opening of cigarette markets
constituted one of the major justifications for Thailand's cigarette import
regime, Thailand deemed it necessary that the panel consult with experts
from the World Health Organization (WHO) on recent experience in countries
which had been made to open their markets for cigarettes. This showed that
once a market was opened, the United States cigarette industry would exert
great efforts to force governments to accept terms and conditions which
undermined public health and governments were left with no effective tool to
carry out public health policies.
Advertising bans were circumvented and modern marketing techniques were
used to boost sales. Hence, Thailand was of the view that an import ban was
the only measure which could protect public health. Any other measure which
allowed imports in any amounts would not be effective.
From paragraph 34
Since May 1989 Thailand had resisted bilateral pressures, under Section
301 of the US Trade Act, to open its market for cigarettes, and faced the
imminent threat of retaliation against Thai exports to the United States,
valued at US$166 million. Even though exports were the linchpin of
Thailand's economic success, such considerations had given way to health
concerns. In the course of these bilateral pressures, the United States had
made it clear that its objectives were not limited to market opening and
national treatment on internal
taxation but covered other areas, such as a unilateral reduction of
Thailand's import duty on cigarettes to zero, a low specific rate of excise
tax on cigarettes (which when converted to an ad valorem basis, would work
to the advantage of higher-value American cigarettes) and the right for
manufacturers
of foreign cigarettes to advertise and conduct point-of-sale promotion even
though such a right was denied to manufacturers of domestically-produced
cigarettes. Thailand therefore sought from the Panel a recommendation as to
whether Thailand was required by GATT provisions to grant such concessions
to the United States.
Such a recommendation was necessary to protect the credibility of the
multilateral dispute settlement mechanism. Thailand also sought from the
Panel confirmation of its understanding that, in the event of its market for
cigarettes being opened, its obligations with regard to the pricing,
distribution, advertising, promotion and labelling of cigarettes were
limited to
providing national treatment for foreign cigarettes.
From paragraph 62
The United States also stated that the 1989 Report of the United States
Surgeon General had concluded that there was no scientifically rigorous study
available to the public that provided a definitive answer to the basic
question of whether advertising and promotion increase the level of tobacco
consumption and that the extent of the influence of advertising and
promotion on the level of smoking was unknown and possibly unknowable.
("Surgeon General, Reducing the Health Consequences of Smoking"
512-12(1989).) . . . .
From paragraph 78.
A ban on the advertisement of cigarettes of both domestic and foreign
origin would normally meet the requirements of Article III:4. It might be
argued that such a general ban on all cigarette advertising would create
unequal competitive opportunities between the existing Thai supplier of
cigarettes and new, foreign suppliers and was therefore contrary to Article
III:4 [2]. Even if this argument were accepted, such an inconsistency would
have to be regarded as unavoidable and therefore necessary within the
meaning of Article XX(b) because additional advertising rights would risk
stimulating demand for cigarettes.
Cecile Crettol, Catherine Gavin
The entire opinion see:
http://www.cptech.org/ip/health/country/gatt-thai.html
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James Love, Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
202.387.8030; f 202.234.5176
http://www.cptech.org, mailto:love@cptech.org
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