Roundup: Indonesia challenges Australia's plain packaging measure on cigarettes

Indonesia is challenging the plain packaging measures on cigarette products applied by Australia through World Trade Organization (WTO) processes, saying that such a policy breaches international trade rules and exacerbates the product's competitiveness.

The WTO was scheduled to deliver its classified interim reports to Indonesian and Australian governments this month, or expected no later than September this year.

The respective countries were eventually expected to file in their responds to the WTO interim reports which would lead to final ruling through the continuing processes.

Indonesia initiated its challenge against plain packaging policy on cigarette products applied by Australia since 2014. The policy aimed at reducing the number of smokers in Australia took into effect since 2012.

"There was no scientific proof that plain packaging would effectively reduce consumption on cigarettes," Director General of International Trade Negotiation at Indonesian Trade Ministry Agus Pambagyo said on Wednesday.

Agus said that WTO members were obliged to assure that technical application of WTO regulations would not limit the trade. "The plain packaging measure may incite the emergence of black market," he said.

Cited the results of a national survey carried out in Australia, Agus said plain packaging does not contribute to the speed of trend on decreasing number of smokers in Australia in the last 22 years.

Indonesia holds on article 20 of WTO agreement that forbids WTO members to apply disguised discriminative measure that leads to difficulties in using trademarks.

Should Australia won in the WTO process, worries about similar measures aiming other products such as alcoholic beverages, sugar and palm oil, may loom in the future.

A senior official at Indonesia's Industry and Trade Chamber (Kadin) said that plain packaging measure on cigarette products would exacerbate the ultimate function of trademark, intellectual rights and most importantly making Indonesian cigarette products hardly able to be differed from others.

"This measure actually is anti-competitive, exacerbates the competitiveness," Kadin International Relations Deputy Head Shinta W. Kamdani said.

She added that cigarette and tobacco industry employed more than 6 million workforces, contributing to Indonesian economy.

Indonesia has more than 3,800 cigarette and tobacco-related product producers, divided in modern plants and traditional producers.

Indonesian government received 111.14 trillion rupiah (about 8.4 billion U.S. dollars) of excise duty from cigarette sector in 2014, higher than 100.7 trillion rupiah (about 7.6 billion U.S. dollars) a year earlier.

Indonesia's cigarette exports stood at 807.7 million U.S. dollars in 2014. Endit