596. Honduras shares the concerns expressed by Ukraine and others that other WTO Members may seek to follow Australia's example in adopting plain packaging measures for tobacco products. As Members are aware, Honduras is currently challenging Australia's plain packaging measures together with four other complainants. On 8 October 2014, Honduras and other complainants filed their first written submissions to the panel. Honduras has clarified that the dispute is not about whether smoking is dangerous, nor whether it affects public health. Honduras regulates tobacco and shares the goal of reducing tobacco consumption.
597. An unprecedented instrument, Australia's plain packaging measure removes brand imagery and registered trademarks from a legally sold product. Honduras has submitted expert evidence and empirical data from the Australian market confirming that plain packaging is an experiment that has failed to change consumer behaviour. The data show that plain packaging has not reduced smoking, but has led to a so-called 'downward substitution' effect, meaning that consumers replace higher-price brands by cheaper brands. The removal of trademarks and the resulting downward substitution breaches the TRIPS Agreement, particularly with respect to producers of high-price products that have invested significant resources into building up trademarks.
598. Honduras fully shares Australia's objective to reduce smoking prevalence. However, Honduras considers that the plain packaging measure is more trade restrictive than necessary to fulfil this legitimate objective, in violation of its obligations under the TBT Agreement, since less trade-restrictive alternatives are available.
599. Honduras notes that the panel needs to deliberate upon the arguments and evidence submitted by the co-complainants, and eventually by Australia, in order to make its decision whether Australia's measure complies with its WTO obligations. Honduras urges other WTO Members not to consider adopting plain packaging for tobacco products while the panel is still considering the WTO consistency of such a measure.
