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The result was Bill C-32, officially titled The Cracking Down on Tobacco Marketing Aimed at Youth Act -- a misnomer if ever there was one. Today, a year later, what Mr. Harper's Conservatives have delivered instead is an over-the-top law that threatens a global trade war and another bonanza for Canada's already out-of-control contraband cigarette market.
The trade-war potential gathered momentum earlier this month when, according to Inside US Trade, the United States joined Argentina, Mexico, Switzerland, the European Union and other nations in opposition to Ottawa's new anti-bubble-gum tobacco law. At a meeting in Geneva, the nations said Canada's law would restrict trade in regular tobacco products to the benefit of Canadian tobacco producers.
The more immediate impact of the law, however, is a ban on the sale in Canada of virtually all brands of U.S. cigarettes. Guess where that leads? The logical result of a ban on legal imports of Marlboros and Winstons is new demand for illegal supplies through the burgeoning Native-dominated contraband market, a tax-evading multi-billion-dollar industry that already accounts for between 33% to 50% of the Canadian cigarette market. . . .
While this may look like another case of unintended consequences run amok, it more likely is part of deliberate scheming by Health Canada officials and others who are consciously using fruit-flavoured smokes to create a global tobacco trade bomb against the U.S. and tobacco industries in Europe, South America and Asia. . . .
Still, Bill C-32 became law, even though Senator Segal abstained over the trade issue. As a result, Mr. Harper's opportunistic election gimmick, aimed at curbing the use of flavoured tobacco to children, will do nothing to protect children. By further enhancing the power and scope of the contraband market, it will only increase the supply of illegal cigarettes, a prime source of tobacco to the young. At the same time, the government has launched a protectionist scheme that threatens a trade conflict.
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FDAImports.com reports: the U.S. government is a house divided. While some government officials are fighting for greater restrictions on the sale of tobacco products, others are fighting to prevent any more restrictions and balking at the restrictions that other nations have implemented on tobacco sales. Does the right hand know what the left hand is doing?
On November 6, FDA posted a special update on its web site, highlighting what its Center for Tobacco Products has done to implement the Family Smoking Prevention and Tobacco Control Act. On the list was the statutory ban on cigarettes containing certain characterizing flavors (other than menthol) that went into effect on September 22, 2009. FDA stated that it is also exploring options for regulating both menthol cigarettes and flavored tobacco products other than cigarettes, in efforts to reduce smoking in America; particularly youth smoking. FDA also established mechanisms for the public to report information about possible violations of the law, and has issued Warning Letters to firms who appear to be in violation of the ban.
Meanwhile, at a World Trade Organization meeting last week, U.S. members joined Mexico and 5 other countries in the Committee on Technical Barriers to Trade in opposing Canada's ban on flavored tobacco products. These members voiced concerns that the ban was too restrictive, since it bans all tobacco products with even one of the listed additives, and that it would impact various countries' exports. U.S. Senator Jim Benning (R-KY) is using political means to pressure President Obama to fight the Canadian law -- by placing a hold on the nomination of Miriam Shapiro to be deputy trade representative.
PHILIPPINE and Thai negotiators late last week resumed their second hearing on an ongoing trade dispute over cigarette duties, the Manila delegation said in a statement over the weekend.
The dispute process had been held up when the World Trade Organization (WTO), which arbitrates the case, had to make way for the resumption of talks seeking to forge a global trade pact.
The Philippines, at the hearing last Nov. 4-6, reiterated claims that Thai tax policies on foreign-made cigarettes violate WTO rules as they unfairly favor domestic industry, the statement read.
A ruling from an international panel led by Brazil WTO representative Roberto Acevedo is expected early next year, the statement read further.
Burned by the recent US ban on kretek cigarettes, Trade Minister Mari Pangestu said government officials would soon meet with their US counterparts in an effort to alleviate smoldering tension over the issue.
Kretek cigarettes were banned by the US Food and Drug Administration on Sept. 21 on the grounds that their sweet flavor encouraged young people to take up smoking.
“We will arrange a meeting and will be having consultations to seek a fair solution to this matter,” Mari told the Jakarta Globe on Tuesday.
The discussions, Mari said, are a preliminary response, but if no solution is found, then “at the end, it will be taken to the World Trade Organization.”
Mari said previously that the ban was highly detrimental to this country’s clove farmers and was in breach of WTO rules. . . .
Kretek International is apparently not going to take the issue lying down and is now seeking a declaratory ruling from the US District Court in Washington that its cigars are not cigarettes and can therefore be freely sold.
In its petition, it accused the FDA of “deliberately obfuscating” the definition of cigarette,” adding that “If a product is a cigar, it is not a cigarette, and vice versa.”
Philip Morris International joined with U.S. tobacco industry groups on Thursday to ask President Barack Obama's administration to challenge Canada's new law banning flavored cigarettes and small cigars.
Their request comes even as the administration takes its own steps to ban candy, clove and other flavored cigarettes.
"Canada's ban on blended cigarettes violates its WTO (World Trade Organization) obligations and could impose serious economic hardship on U.S. growers of burley tobacco," Roger Quarles, president of the Burley Tobacco Growers Cooperative Association, said in a statement.
"We are asking USTR (U.S. Trade Representative) to review our arguments and to take a strong stand for U.S. burley growers and American jobs," he said.
Philip Morris, which markets its tobacco products in approximately 160 countries, joined the burley growers and several other tobacco associations in asking USTR to press Canada on the issue at a WTO meeting on "technical" trade barriers next week in Geneva.
The Canadian government is being targeted in a new U.S. advertising campaign that alleges Ottawa's latest anti-smoking law violates international trade agreements by discriminating against U.S. cigarette imports.
In newspaper ads that will run next week in two widely read Capitol Hill newspapers, Kentucky's burley-tobacco growers say they've been side-swiped by legislation that bans candy-flavoured products marketed to youth.
Burley tobacco is air-cured tobacco used primarily for cigarette production. Its growth is centred in Kentucky.
The farmers also are preparing a World Trade Organization complaint that contends provisions in Bill
C-32, which received royal assent Oct. 8, unfairly outlaws the sale in Canada of U.S.-style cigarettes blended with burley.
Indonesia, the largest maker of clove cigarettes, may complain to the World Trade Organization about U.S. legislation that gives regulators expanded powers to regulate tobacco products, including possible bans on flavors made from the tropical spice.
“We’ll be having consultations,” Trade Minister Mari Pangestu said today in an interview on Bloomberg Television. “If we feel that this is treated discriminately, we’ll of course take it to the normal processes in the WTO.”
The legislation, which was approved by the House of Representatives and Senate earlier this month, offers a concession on menthol, the most popular flavored cigarette in the U.S. Pangestu’s comments reiterate Indonesian objections made last month.
“We feel this is discriminating against cloves because menthol is not considered,” Pangestu said today from Jakarta
The World Trade Organisation (WTO), acting on a complaint from the Philippines, on Monday set up a panel to investigate whether taxes affecting foreign cigarettes in Thailand violate global trade rules.
In submissions to the trade watchdog, Manila argues that imported cigarettes are subjected to unfair taxation and other measures in the Thai market, which is dominated by the Thailand Tobacco Monopoly.
"The playing field on which imported and domestic cigarettes compete is uneven," the Philippines said in a submission to the WTO's Dispute Settlement Body (DSB).
Thailand responded by saying its customs and fiscal laws were fully consistent with WTO rules, and it hoped to resolve the matter through bilateral talks.
The WTO Agreement, for example, calls for foreign products to be treated in the same way as domestic goods. The Agreement on Agriculture, which covers tobacco, calls on countries to reduce trade distorting subsidies and the Trade-Related aspects of Intellectual Property (TRIPs) agreement protects trademarks. This is just one serious problem associated with the trade in illicit tobacco. A trade which is already a global problem and set to grow from $2m to $ 21 billion within 80 years at the cost of lives of many millions. WTO is not just about liberalizing trade, and in some circumstances its rules support maintaining trade barriers, for example to protect consumers, prevent the spread of diseases or protect the environment. But on the contrary WTO is creating a sort of cold war of slow poisoning either to kill energetic people or make them weaker and weaker by toxin of tobacco or chemical pesticides of agriculture to kill not only pest but human beings too by slow poisoning by traces of pesticides which use such inorganic foods.
The government has warned the United States Trade Representative against violating a WTO agreement if the U.S. decides to adopt a ban on the sale of clove cigarette.
The protest will be conveyed in a letter signed by Trade Minister Mari Elka Pengestu which will be sent Thursday, according to Halida Miljani, an advisor on international cooperation to the Trade Ministry.
"The content of the letter is generally the same as our previous complaint on the discrimination of the bill," Halida told The Jakarta Post Wednesday . . .
"Our formal opinion stands clear. We have no issue with other kinds of flavors. However, there is no ground for exempting menthol from the ban. Such discrimination violates the agreement on sanitary and phytosanitary agreements under the WTO."
The bill, which is currently undergoing the legislation process in the U.S. Senate, would require the U.S. Food and Drug Administration to restrict tobacco advertising, regulate warning labels and remove hazardous ingredients.
It would also adopt a ban on clove-flavored cigarettes and other types of flavor including strawberry, grape, orange, cinnamon, pineapple, vanilla, coconut, licorice, cocoa, chocolate, cherry or coffee, but exempted menthol from the list. . . .
In Indonesia, after acquiring a majority of stakes in one of Indonesia's cigarette giants, PT HM Sampoerna, in 2005, Phillip Morris recently launched a clove-flavored cigarette product called Marlboro Mix 9.
"Foreign players can trade freely here. So we expect the same kind of fairness," Ismanu said.
America's open market remains a key engine of global economic growth, but the United States runs the risk of a backlash at home in favor of protectionism, the World Trade Organization said in a review of U.S. commerce policy.
The report, a copy of which was obtained Tuesday by The Associated Press, suggested the United States reduce government spending, cut the budget deficit and work on persuading other countries to buy more American goods as a way of preventing "possible protectionist sentiment. . . .
The cigarette marketing system in China has been undergoing profound changes in keeping with a fundamental structural reform of the tobacco industry over recent years, particularly since China's entry into the World Trade Organization in 2001. . . .
Since China's WTO entry in 2001 and along with the development of the system of a socialist market economy in China over recent years, the system of State tobacco monopoly in the country has been in a situation of gradual weakening. Under such a situation, the tobacco industry of China is facing serious challenges in maintaining a firm control over existing marketing resources.
The cigarette retail trade in China has undergone drastic changes over recent years, particular since China's entry into the World Trade Organization (WTO) in 2001 that has triggered a fundamental structural reform of China's tobacco industry, and that has enabled foreign tobacco companies to gain greater market access in China.
As the final link in the supply chain of the tobacco industry, retail is a crucial part of commerce decisive to whether the value of tobacco products as special goods can be eventually realized. Over recent years, transnational retail giants have gained market access in China one after another, contributing to turning competition within the retail trade all the more intense.
The escalating competition within the retail trade has impacted the development of other links in the supply chain of the tobacco industry.
The Ministry of Health (MoH) is drafting a decision that will demand cigarette packets dedicate at least 30% of their space to printed warnings of the dangers of smoking.
The MoH move aims to limit consumption of cigarettes in compliance with the Framework Convention on Tobacco Control, to which Vietnam has become a member.
Simultaneously, the Ministry of Finance (MoF) is preparing to adjust Special Consumption Tax on locally produced cigarettes in a bid to complying with WTO requirements.
Under the plan, the taxes will be levied at 65% on locally produced cigarettes. Currently three different tax rates are levied, at 25%, 45% and 65% depending on the content of local tobacco.