Latest Procedural Developments Related to the WTO Dispute US – Clove Cigarettes

Extract

On 13 August 2013, the Government of Indonesia requested a special meeting of the WTO Dispute Settlement Body (hereinafter, DSB) in order to obtain authorisation to suspend concessions or other obligations (i.e., to ‘retaliate’) against the United States (hereinafter, the US). This request stems from the US alleged failure to comply with the rulings and recommendations of the WTO DSB in the dispute US – Measures Affecting the Production and Sale of Clove Cigarettes (hereinafter, US – Clove Cigarettes). In that dispute, the WTO dispute settlement organs found that Section 907(a)(1)(A) of the Federal Food, Drug, and Cosmetic Act (hereinafter, the FFDCA), introduced by Section 101(b) of the Family Smoking Prevention and Tobacco Control Act discriminated against Indonesian clove cigarettes in favour of ‘like’ domestic menthol cigarettes, in a manner which was inconsistent with, inter alia, Article 2.1 of the WTO Agreement on Technical Barriers to Trade (hereinafter, TBT Agreement). The DSB recommended that the US bring its legislation relating to the ban on flavoured cigarettes into conformity with its obligations under the WTO. On 22 August 2013, the US objected to the level of suspension of concessions proposed by Indonesia and requested that the matter be referred to arbitration. Following such request from the US, the DSB agreed that the matter be referred to arbitration and informed WTO Members that arbitration would be carried out by the original panel.