99 Pct of Clove Cigarettes Sold in US Imported from Indonesia

Jakarta, Indonesia (News Today) - Indonesia’s cigarette exports to the US has continuously dropped as of 2007, according to the trade ministry. In a press statement issued on Saturday, the ministry said exports of various kinds of cigarettes to the US in 2007 reached US$11,165,432 and dropped to US$9,703,991 in 2008 and US$8,338,419 in 2009.

The realization of exports of the product from January to March 2010 reached US$2,531,317 higher than in the same period last year that was recorded at US$2,531,989. During the period however no exports of cigarette tobacco that include clove cigarettes were done. This happened following the implementation of the Family Smoking Prevention and Tobacco Control Act as of September 2009.

The law prohibits sale of all kinds of flavored cigarettes including clove cigarettes in the US except menthol cigarettes. The Indonesian government considers the law running against the World Trade Organization regulation because it exempts menthol cigarettes while menthol and clove cigarettes are like products according to Article 2.1 of the Agreement on Technical Barriers to Trade or TBT Agreement, the release says.

Around 99 percent of clove cigarettes sold in the US are imported from Indonesia while all menthol cigarettes are produced in the US and because of that, according to the Indonesian government, the US implicitly bans imports of clove cigarettes. The government considers the ban discriminative. As a member of the WTO, it says, the US must have carried out its international obligation as mentioned in the TBT Agreement and the General Agreement on Tariff and Trade or GATT of 1994.

Based on that the Indonesian government had filed complaint to the Dispute Settlement Body (DSB) at the WTO. The director general of international trade cooperation of the ministry of trade, Gusmardi Bustami, said the move was the last resort.

He said the government has already expressed its opposition to the regulation while it was still being discussed at the US Congress. Indonesia, he said, has also conveyed its complaint in various bilateral forums at senior official and ministerial levels for more than four years but it had come to no avail.

"This is about principles. There has been discrimination," Gusmardi said.

In the DSB WTO meeting on June 22, 2010 in Geneva, the Indonesian delegation conveyed reasons and legal basis for the need to form a panel to deal with the problem. He said Indonesia has asked the panel to investigate the violation by the US against Article III of the GATT of 1994 and the use of Article XX of GATT 1994 without providing scientific evidence and meeting the provisions in a number of articles in the TBT and Sanitary and Phythosanitary Act (SPS).

In the meeting the US delegation expressed disappointment over the Indonesian move. The US has asked Indonesia to reconsider its request for the establishment of a panel to investigate the case.

Gusmardi said the rejection by the US was common, had often happened in a DSB meeting because the US as a disputed party has a right to block the move on the first occasion in line with the WTO’s provision on Dispute Settlement Understanding (DSU). In the next meeting however the US would not have a right to challenge it.

Source : kompas

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