YOGYAKARTA - On June 22, 2009, the U.S. government officially issued a public law "Family Smoking Prevention Tobacco Control Act of 2009", Public Law 111-31. Point 907 of the Law says the United States imposes restriction on cigarettes that contain flavors, except for menthol cigarettes. This rule took effect 90 days after the date of signing of this legislation.
This rule prohibits the production as well as the sale of cigarettes that contain some contents, including clove cigarettes, in the United States. Strangely, this rule does not apply to cigarettes that contain menthol. However, most all cigarettes are imported from Indonesia. "The implementation of this rule has a negative effect for Indonesian export. Discriminatory treatment of Indonesian clove cigarettes is seen as non-tariff barriers," Michelle Ayu Chinta Kristy, a junior researcher of Center for World Trade Studies (PSPD) UGM, said in a discussion Trade Dispute between the United States and Indonesia in Clove Cigarettes Case, Friday (15/ 10).
Ayu added that menthol cigarettes are mostly produced domestically, while there is very minimal import of menthol that may be detrimental to Indonesia, which exports many goods to the U.S. This withdrew the attention of Indonesia related with the suitability of the application of non-discrimination principle in the WTO. "Prohibition against clove cigarettes can be considered as a prohibition of a product and can be absolute or conditional," she added.
The application of this ban is alleged to provide protection for domestic products (American menthol cigarette). Both menthol and clove cigarettes are considered as 'like products'. Therefore, the principle of National Treatment in GATT Article III has been violated in this case.
The U.S. government argues that if violation of Article III of GATT, Article XX of GATT is indeed proven, it could be applied in this case (emphasis on public health point) as an exception to the principle of National Treatment.
Previously, the U.S. government said that flavored cigarettes, including clove cigarettes, have a great attraction to young Americans to smoke while the ban on the production and sale of flavored cigarettes is valid for all countries, not only Indonesia, so there is no discrimination.
The US imports $15.2 million of clove cigarettes, of which almost entirely are from Indonesia. Before the ban on clove cigarettes, only 0.1% of American smokers smoked menthol cigarettes. Based on data from Indonesia, as many as 28% of American smokers opt for menthol cigarettes of the total cigarette’s consumption.