Special 301: NFTC puts plain packaging policies of Australia, EU, Thailand, UK, Ireland and New Zealand under the spotlight

The National Foreign Trade Council (NFTC) submission (7 February 2014, Docket USTR-2013-0040) to USTR’s 2014 Special 301 Review contains a section on plain packaging policies in the context of the protection of trademarks. These comments come at the heels of five separate WTO dispute settlement proceedings initiated against Australia by WTO members (Ukraine, Honduras, the Dominican Republic, Cuba and Indonesia) because of its plain packaging policies; please see DS434, DS435, DS441, DS458, DS467 for further details.

Reproduced below is the NFTC language on plain packaging:

Australia, European Union, Israel, Thailand, UK, Ireland, Scotland, and New Zealand

“Plain packaging:” In 2012, the Australian Government implemented legislation that mandates the “plain” packaging of all tobacco products. Several other countries have contemplated new government policies to reduce or eliminate the ability of manufacturers to distinguish products from those of competitors.

Last year, the EU Parliament considered a new Tobacco Products Directive, which removed an earlier provision on EU-wide plain packaging, but would still permit member states may still be able to adopt such measures individually. In Israel, the Economic Committee in the Knesset has advanced a provision that could enable the Ministry of Health to adopt plain packaging on tobacco products. Thailand’s Ministry of Public Health is currently considering a plain packaging law and in New Zealand’s House of Representatives a bill has been introduced that would mandate plain packaging. Recently, the UK government announced that it will consider the evidence for plain packaging of tobacco products. Scotland also indicated it would be consulting on plain packaging legislation in 2014 and the Irish government has approved hearings by the Parliament on a plain packaging bill.

These measures have potentially far-reaching implications for global brands well beyond any particular industry. Mandating the elimination of trademarks of American businesses would violate international trade obligations and threaten to undermine the rules-based international trading system.

Trademarks play a central role in the global economy and are often a company’s most valuable asset. They are not merely “logos and designs” as one Trade Minister suggested. Regardless of the current intention or product, destroying a product’s identity and a company’s accumulated value would set a damaging precedent with potentially far-reaching implications for trade and investment in a wide variety of sectors, and would provide a precedent for other countries to violate established trade rules in other areas.