The 2009 Family Smoking Prevention and Tobacco Control Act banned the sale of all flavored cigarettes, except menthols, in the United States. Indonesia successfully challenged that part of the law at the World Trade Organization as disguised protectionism—the banned products were clove cigarettes from Indonesia and the exempted menthols are made in the United States. The U.S. government tried to claim that the distinction was justified because kids like smoking cloves more than menthols. They failed to convince the trade court, because that’s ridiculous.
The time given the United States to bring its measure into compliance with WTO law has now elapsed. Instead of changing the law to allow cloves or to ban menthols, however, the United States has claimed that issuing a report and thinking about what to do about menthol cigarettes is enough to bring it into compliance. Indonesia understandably disagrees and is seeking permission to retaliate against U.S. imports.
To stave off retaliation, the U.S. government has now decided to defend the clove cigarette ban by arguing that it was completely ineffective. As reported by Inside U.S. Trade ($)(emphasis added):
Read the rest of this post →The U.S. is … claiming that, even if it is found not to have complied with the ruling, Indonesia is not entitled to retaliation because the country’s exports have not been nullified or impaired by the U.S. ban on clove cigarettes.…
Specifically, the U.S. points out that the Indonesian industry has repackaged clove cigarettes into clove cigars, which unlike their counterparts are not banned. Therefore, the U.S. maintains, Indonesia’s clove exports have not suffered as a result of the ban.