Wed, Apr 14, 2010 - Page 5 News List

Indonesia heads to WTO over US clove cigarette ban

REUTERS , GENEVA

Indonesia is launching a formal dispute at the WTO against the US over a US ban on clove-­flavored cigarettes, an official at Indonesia’s WTO mission said on Monday.

Like many trade disputes, this one involves health standards and whether they are being abused for protectionist purposes. It centers on the clove and tobacco blends known as kretek that dominate the tobacco market in Indonesia, but are little smoked outside the Southeast Asian country.

The US Food and Drug Administration (FDA) banned cigarettes with fruit, confectionery or clove flavors last September, arguing such cigarettes were particularly attractive to children.

However, the US ban does not include flavored cigarettes that are produced widely in the US and smoked by about 19 million Americans.

Indonesia argues that discriminates against foreign producers of flavored tobacco to help domestic manufacturers.

“They have to prove that menthol doesn’t have a bad impact,” said the official, who asked not to be identified.

A spokeswoman for the US Trade Representative’s Office said US officials were studying Indonesia’s request for consultations, which comes as the two countries have been taking steps to boost trade and investment ties.

US President Barack Obama abruptly canceled a trip to Indonesia last month to lobby for healthcare reform, but is expected to visit the country this year.

US tobacco companies told the FDA on March 31 that adding menthol did not make cigarettes more harmful or addictive.

Under WTO rules, the two countries now have 60 days to resolve their differences through consultations, otherwise Indonesia can ask the WTO to create a panel of experts to rule on the issue.

The case is only the fifth brought at the WTO by Indonesia, the world’s 21st-biggest exporter.

Kretek cigarettes account for the bulk of tobacco consumption in Indonesia, the world’s fifth-­biggest tobacco market, although unflavored or “white” sticks are gaining in popularity.

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