406. The Government of the Dominican Republic understands that the Governments of the United Kingdom ("UK") and Ireland continue to consider plain packaging of tobacco products. On 21 January 2015, the UK Public Health Minister, Ms Jane Ellison, announced the Government's support for plain packaging and its intention to present the plain packaging regulations for Parliamentary vote before the election in May of this year.7 The Irish Minister for Children and Youth, Mr. James Reilly, welcomed the news "that [its] nearest neighbour is likely to join [Ireland] in the move to bring in plain packaging" and explained that plain packaging is under further consideration in the Irish parliament.8
407. As my Government has expressed on various occasions in the past, the Dominican Republic is seriously concerned about proposals to introduce plain packaging of tobacco products.9 Similar measures have been in place in Australia since 1 December 2012. My Government, together with those of Cuba, Honduras, Indonesia, and Ukraine, is currently challenging Australia's plain packaging measures before the WTO dispute settlement system on the grounds that they are inconsistent with WTO Members' obligations under the TRIPS Agreement and the TBT Agreement.
408. Plain packaging has become a highly controversial issue among the WTO membership. Some WTO Members – like the UK and Ireland – are actively considering plain packaging, while others – including the Dominican Republic – are very concerned about the WTO compatibility of plain packaging, as well as about the risk that plain packaging could be extended to other products deemed harmful to health.
409. In light of this controversy, the Dominican Republic is pleased that the WTO has an independent dispute settlement system in place, with WTO panels mandated and equipped to make an objective assessment of the WTO compatibility of challenged measures. The panel in our complaint against Australia will be able to reach an independent and objective assessment based on an interpretation of the relevant WTO provisions and in light of the evidence presented by all parties and third parties, including evidence related to the operation of the plain packaging measures in the years it has been applied.
410. One point in the debate over plain packaging seems uncontroversial. By stripping all design elements from tobacco packaging and standardizing other packaging features, plain packaging measures undermine the basic features of trademarks and geographical indications ("GIs") as protected under the TRIPS Agreement. In many respects, plain packaging is the antithesis of trademark and GI protection. First, while trademark and GI protection is built on the premise that differentiation between competing products is essential for an orderly and fair competitive environment, and to promote competitive opportunities in international trade, plain packaging aims at eradicating differentiation between competing products as far as possible. Second, trademarks and GIs can only perform their function of differentiating between competing products if they are actively used in the market place. Without use, these trademarks and GIs are meaningless. While plain packaging measures ostensibly "allow" tobacco trademarks and GIs to remain on the register, this is a hollow right because the trademarks and GIs cannot be used and cannot, therefore, fulfill their basic function. Third, every aspect of trademark and GI protection under the TRIPS Agreement – ranging from acquisition, to enforcement, regulation and (possibly) revocation of any rights – is based on an individual assessment of the features of each trademark and GI. Again, plain packaging deviates fundamentally from this core principle as it simply assumes that all design features of all tobacco trademarks and GIs are problematic and should therefore be banned. The draft plain packaging regulations in the UK suggest such an individual assessment approach for some tobacco products, like cigars, that would not be subject to plain packaging. The Dominican Republic fails to understand why a similar approach is not being applied to all tobacco products as an alternative to plain packaging.
411. In fact, plain packaging undermines the very essence of trademark and IP protection, while generating no countervailing benefit in terms of contributing to legitimate health objectives. To be absolutely clear, the importance of these health objectives is not disputed and is, indeed, pursued in my country by my Government. However, the real-world empirical data emerging from Australia confirm that – contrary to the optimistic predictions by plain packaging proponents – plain packaging has failed to reduce smoking rates among the population in general and among youth in particular.
412. Instead, as confirmed by the same real-world empirical data, plain packaging has undermined the vital differentiating role played by trademarks and GIs in promoting competitive opportunities in the marketplace. Market diversity is replaced by commoditization and price becomes the only meaningful factor that can be used to compete. We are seeing the detrimental impact of this in Australia, as consumers have increasingly shifted to cheaper low-end licit and illicit tobacco products. This is particularly harmful to the competitive opportunities of our premium tobacco producers, which can no longer signal the unique quality and reputation they have carefully built over decades of investment.
413. Finally, WTO Members are mandated to regulate in the least restrictive manner possible, and to refrain from adopting measures that are unduly restrictive regarding intellectual property rights and trade. Plain packaging is unduly restrictive as there are several alternative means that would effectively reduce smoking prevalence, without radical interfering with intellectual property rights. My Government urges the UK and Ireland to actively consider alternative measures that provide certain health benefits – unlike plain packaging – without violating WTO rules. In particular, we suggest raising the minimum legal purchase age to 21 and increasing taxes on tobacco products. Further, rather than adopting a blanket ban on all design features of all trademarks on all cigarette products, the UK and Ireland should also consider a pre-vetting mechanism that would require the individual features of retail packaging to be approved before they are placed on the market. Such a measure would achieve the same objectives as plain packaging – eliminating pack features, if any, that induce young people to smoke – but in a manner that respects the individual character of trademark and GI protection.
414. For all these reasons, my Government respectfully urges the UK and Ireland– at the very least –to delay consideration of proposals for plain packaging until the WTO has ruled on our complaint against Australia.