Ukraine, Honduras revive tobacco dispute with Australia at WTO

By Tom Miles

GENEVA, Sept 13 (Reuters) - Ukraine and Honduras are reviving a dispute at the World Trade Organisation (WTO) challenging Australian laws that impose uniform drab green packaging and large graphic health warnings for cigarettes, diplomats said on Friday.

The move sets the wheels in motion on a legal dispute widely seen as a test case for tobacco control around the world, with health ministries pitted against cigarette firms such as British American Tobacco, Imperial Tobacco (LSE: IMT.L - news) , Philip Morris and Japan Tobacco (Other OTC: JAPAF - news) .

Tobacco firms say the Australian rules, which outlaw logos, infringe their trademarks. The WTO complainants say the rules create illegal obstacles to world trade.

The World Health Organization sees Australia's campaign, which has so far defeated the tobacco industry's legal challenges, as heralding a "brave new world of tobacco control". Other countries are lining up to follow Australia.

Six million people die every year from smoking and the toll is projected to rise to eight million by 2030, according to the WHO, a United Nations agency waging war on "Big Tobacco".

The complaints against Australia at the WTO were in limbo after Ukraine and Honduras both effectively suspended the process of setting up a WTO panel to adjudicate on the dispute late last year, around the time the Australian laws came into force.

Ukraine had asked the WTO to adjudicate, but then asked for the process to be suspended in November 2012. At the same time, Honduras declined to tick the final bureaucratic box that would have triggered WTO adjudication.

It has only now signalled it plans to go ahead, asking for a WTO meeting on Sept 25 to set up a panel of adjudicators, according to an agenda of the meeting.

Ukraine has also reactivated its request within the past month, diplomatic sources said.

Many governments may decide whether to press ahead with their own measures to discourage tobacco use only after seeing the outcome of the WTO case.

Two other countries, Dominican Republic and Cuba, launched similar WTO disputes against Australia, but their complaints remain at an earlier stage and neither has tabled a request for WTO adjudication at the Sept 25 meeting.

Nobody at the WTO missions of Australia or Honduras was available to comment on the dispute on Friday.