The WTO ruling on the United States’ flavoured cigarettes ban

Abstract

The ‘legalisation’ of international affairs has attracted significant scholarly attention over the last several decades. This chapter highlights a ‘counter-legalisation’ problem: some legalised regimes couple high levels of delegated authority with high treaty imprecision. This empowers international regimes to fill in textual gaps in ways that states did not intend and do not control. Over time, these regimes increasingly refer to their own case law and logic, but as a consequence may create resistance to compliance. But this does not make ‘legalised’ entities irrelevant. Their formal determinations continue to exist, serving as a justificatory resource for domestic groups interested in aligning local policy with global determinations. The result is a potential ‘legalisation pendulum’. This chapter argues that public interest advocacy (such as efforts to regulate tobacco) is particularly susceptible to being curtailed by these pendulum effects. It explores a case study of this effect. In 2011 and 2012, a WTO Panel and the Appellate Body (‘AB’) ruled against aspects of the US Family Smoking Prevention and Tobacco Control Act (‘FSPTCA’). Indonesia successfully argued before the WTO that the US policy of banning clove (mostly imported from Indonesia) as a characterising cigarette flavour — while allowing (mostly US-produced) menthol flavourings — constituted discrimination under Article 2.1 of the WTO’s Agreement on Technical Barriers to Trade (‘TBT’). Commentators have noted that two compliance options would be either to weaken the FSPTCA by allowing cloves or to eliminate differential treatment by banning menthols. Many observers and US policymakers — who appeared to engage in a prolonged balancing act of competing interests to pass and implement the legislation — have responded by criticising the WTO decisions for being out of step with health and regulatory prerogatives. As a consequence, the prospect for near-term US compliance to Indonesia’s satisfaction appears to be remote. I argue that these outcomes should not be surprising. The lack of strong principal-agent controls by states on WTO adjudicators leads to overreaching decisions. As a result, powerful states simply cannot comply when they lose to weaker states and do not wish to change challenged policies. However, tobacco regulations — public interest regulations with a weak and dispersed base of domestic support — are the type of policy that we might expect to be vulnerable to legalised regimes like the WTO over the longer term.