RI Answers US Appeal Against WTO Kretek Cigarette Ruling

24 January, 2012 | Source: ANTARA News

Jakarta (ANTARA News) - Indonesia has submitted a rejoinder to the United States` appeal against a World Trade Organization (WTO) Panel ruling that requires Washington to stop discriminating against `kretek` (clove-flavored)

"We sent our response today in accordance with the WTO`s schedule. In essence, we forwarded our opinion that the Panel`s decision favoring Indonesia was already correct," Director General for International Trade Cooperation Gusmardi Bustomi said here on Monday.


He said the Indonesian government had reaffirmed its stance that the US`s Family Smoking Prevention and Tobacco Control Act had disadvantaged Indonesia.


The act among other things banned the production and sale of cigarettes containing additive materials such as Indonesia`s kretek cigarettes.


The regulation excluded US-made menthol cigarettes and was thus seen discriminating against Indonesia`s kretek cigarettes.


"Besides, based on existing regulations on technical procedures, they should have first notified us, but they did not do it in the first place," Gusmardi said.


He said the Indonesian government would wait for the WTO Appellate Body`s decision on the US government`s appeal against the WTO Panel`s verdict.


"The Appellate Body will basically consider the panel`s decision. So, let`s just wait for the outcome," he said.
The United States government notified Indonesia on January 5, 2012 of its intention to appeal the WTO Panel`s verdict on the kretek cigarettes dispute.


The US asked the Panel to review its conclusion that its Family Smoking Prevention and Tobacco Control Act was not consistent with articles in the Technical Barriers to Trade (TBT) agreement.


It also requested the panel to review its conclusion that kretek cigarettes and menthol cigarettes were similar products.


In April 2010, Indonesia as the biggest kretek cigarette producer in the world, lodged a complaint with the WTO that the US had adopted a technical regulation that was discriminatory against Indonesia`s kretek cigarettes.


The regulation which had led to a ban on kretek cigarette imports in the US since 2009 caused Indonesia to lose US$200 million in income from kretek cigarette exports.


The WTO Panel in its ruling said the US technical regulation was discriminatory because, in its opinion, menthol and kretek cigarettes were similar in nature.

 

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