1 Introduction

The liberalisation of international trade pursuant to the World

Trade Organization (‘WTO’) and preferential trade agreements
(‘PTAs’) offers the potential for con- siderable welfare benefits at
national and global levels, through economic growth, fairer
competition among producers, increased access to a wider range
of better quality products and services, and the transfer of
technology and knowledge.1 But trade liberalisation also has the
potential to increase certain unhealthy habits such as smoking
and over-consumption of alcohol and unhealthy foods, leading to
a corresponding increase in non-communicable diseases
(‘NCDs’).2
A range of measures designed to reduce consumption of these
products may implicate international trade rules. For example,
NCD risk factors may be addressed through: product bans;
packaging and labelling requirements; import tariffs; sales taxes;
subsidies; licences; restrictions on advertising, promotion or
sponsorship; regulation of product content through disclosure or
restriction of ingredients; restrictions on ages of sale or purchase;
exclusion areas (eg no smok- ing or no alcohol areas); and
education. To a greater or lesser degree, each of these measures
could potentially infringe international trade rules and therefore
needs to be crafted with those rules in mind. A key aim of this
chapter is therefore to provide insights for public health officials
and policy-makers in countries around the world on how
regulation of NCD risk factors can be optimised to accord with the
requirements of international trade law without compromising
public health objectives. Despite some problematic examples of
recent clashes between interna- tional trade law and NCD risk
factor regulation (particularly in connection with tobacco), we
firmly believe as international trade law scholars that international
trade law need not impede sound health policy.

At the time of writing, the number of WTO members is 159,3 with

Yemen set to become the 160th member in 2014,4 and 23 other
states and customs territories engaged in the process of WTO
accession.5 PTAs provide preferential treatment – for example,
lower tariffs – to specified countries only, typically with provisions
mirroring and sometimes going beyond WTO law. PTAs that
include a WTO member must be notified to the WTO: 379 PTAs
have been notified to the WTO (or its predecessor the General
Agreement on Tariffs and Trade 1947 (‘GATT 1947’))6
Electronic copy available at: http://ssrn.com/abstract=2664933

International Trade Law 87

and are in force.7 This number has risen exponentially since the
1990s,8 providing one reason for increasing concern about the
impact of international trade law on health policy. Unlike in
international investment law (as discussed in Chapter 6 of this
volume), international trade law does not entail investor-state
dispute settle- ment (‘ISDS’). Thus, only a WTO member (which
would be a state or a state-like entity such as the European Union
or Hong Kong, China) may bring a formal legal dispute against
another WTO member under the WTO dispute settlement system.
Similarly, only a PTA party may bring a formal dispute against
another PTA party to enforce compliance with the international
trade rules of the PTA (although a separate investment chapter
within the PTA might include an ISDS mechanism). Although this
structure precludes direct international trade law chal- lenges to
NCD risk factor regulation by affected industries, those industries
may nevertheless support or lobby their governments to take
action9 and may also form a part of the government delegation in
supporting the claim.10
In Part 2 of this chapter, we outline some of the core obligations of
the WTO agreements and PTAs, which affect the design of NCD
risk factor regulation by WTO members and other PTA parties. In
Part 3, we outline the various forms of ‘flexibility’ that are available
in international trade law to allow public policy measures such as
health regulations even where they may interfere with the usual
trade obligations. We then turn in Part 4 to explore some of the
ways in which international trade law has come to interact with
NCD risk factor regulation to date, drawing lessons for the future
in Part 5 as to how best to minimise potential conflicts and resist
industry calls to retreat from such regulation to avoid costly legal
challenges.
This chapter focuses on two WTO agreements, which are among
the most relevant to this area of regulation: the General
Agreement on Tariffs and Trade 1994 (‘GATT 1994’)11 and the
Agreement on Technical Barriers to Trade (‘TBT Agreement’).12
The WTO’s Agreement on Trade-Related Aspects of Intellectual
Property Rights (‘TRIPS Agreement’)13 is also significant for NCD
risk factor regulation and is separately addressed in Chapter 7 of
this volume. The WTO’s Agreement on Subsidies and
Countervailing Measures (‘SCM Agreement’)14 may also be
relevant to subsidisation of relevant goods, along with the
Agreement on Agriculture,15 which relates to the sub- sidisation
of tobacco16 as well as subsidisation of agricultural products
connected with alcoholic beverages or unhealthy food. Others
have discussed the potential relevance of the WTO’s Agreement
on the Application of Sanitary and Phytosanitary Measures17 for
NCD risk factor regulation.18 Finally, the General Agreement on
Trade in Services19 could be relevant to WTO members’
regulation of NCD risk factors to the extent that such regulation
relates to, for example, advertising services, distribution services,
wholesale services, or retail services.20

Much of the discussion below focuses on WTO rules as

interpreted pursuant to the WTO dispute settlement system,
under which claims are initially heard by a three-person panel
composed on an ad hoc basis,21 and appeals are heard by a
division of three from the standing seven-member Appellate
Body.22 The decisions of panels or the Appellate Body become
binding – only on the parties to the dispute and only with respect
to that dispute23 – upon their adoption by

Electronic copy available at: http://ssrn.com/abstract=2664933

88 Regulating Tobacco, Alcohol and Unhealthy Foods

the WTO’s Dispute Settlement Body,24 which comprises

representatives of all WTO members.25 These decisions do not
contain authoritative interpretations of the WTO agreements
(which can be made only by the WTO’s Ministerial Conference or
General Council)26 and cannot ‘add to or diminish the rights and
obligations’ in the WTO agreements.27 Nevertheless, panels are
generally expected to follow the reasoning of the Appellate
Body,28 and adopted panel and Appellate Body reports are
routinely referred to in subsequent cases and are seen as
persuasive or offering relevant guidance,29 particularly given the
need for security and predictability in international trade.30

2 Core obligations of international trade law

Several core obligations of international trade law are important in
understand- ing the relationship between NCD risk factor
regulation and international trade law. These obligations are found
in a variety of contexts in international trade law, with the
examples below focusing on their reflection in the GATT 1994 and
the TBT Agreement. Health advocates and policy-makers can
learn to be alert to proposed regulatory measures that contain
factors that may raise difficulties under international trade law by
understanding the nature of these kinds of core obligations. Below
we discuss in turn: (i) tariff bindings, which relate to trade in
goods; (ii) import bans and other trade-restrictive measures,
which relate to both goods and services and extend to packaging
and labelling requirements; and (iii) non-discrimination, which
takes the primary forms of the ‘national treatment’ and
‘most-favoured-nation treatment’ obligations, which appear in a
range of WTO agreements including others not discussed here,
such as the TRIPS Agreement. These obligations are subject to
specific and general exceptions, according to which members
may be able to retain measures inconsistent with the core obliga-
tions, as discussed further in Part 3 of this chapter below.

2.1 Tariff bindings

Under the GATT 1994, each WTO member must refrain from
imposing tariffs (that is, customs duties) on products imported
from other WTO members in excess of those set out in the
importing member’s GATT schedule.31 Tariffs are not to be
confused with ‘internal’ taxes such as goods and services taxes or
sales taxes, which are imposed after a product has crossed the
border and must be applied on a non-discriminatory basis as
discussed further below. Tariff bindings presently apply only to
physical goods.32 The effect of a tariff is typically to increase the
price of the imported product, because the amount of the tariff is
incorporated into the price paid by the consumer,33 thereby
reducing the competitiveness of the imported product in
comparison to local (ie domestically produced) prod- ucts. Thus,
one way of reducing consumption of unhealthy products might be
to increase tariffs on imports of such products. However, if
consumers respond simply by purchasing cheaper local versions
of the same unhealthy product, from a health perspective nothing
has changed.

International Trade Law 89 2.2 Import bans and other

trade-restrictive measures

Under the GATT 1994, WTO members are generally precluded

from imposing

prohibitions or restrictions other than duties, taxes or other

charges ... on the importation of any product of the territory of any
other Member or on the exportation or sale for export of any
product destined for the territory of any other Member.34
Essentially this means that WTO members cannot ban the
importation of par- ticular goods or impose quotas on such
imports (although either might be possible under an exception
such as those discussed below).

Under the TBT Agreement, art 2.1 provides (‘[w]ith respect to ...
central government bodies’)35 that:

Members shall ensure that technical regulations are not prepared,

adopted or applied with a view to or with the effect of creating
unnecessary obstacles to international trade. For this purpose,
technical regulations shall not be more trade-restrictive than
necessary to fulfil a legitimate objective, taking account of the
risks non-fulfilment would create. Such legitimate objectives are,
inter alia: ... protection of human health or safety ... In assessing
such risks, relevant elements of consideration are, inter alia:
available scientific and technical information, related processing
technology or intended end-uses of products.36

A ‘technical regulation’ for the purposes of this provision and the

TBT Agreement as a whole (in contrast to a ‘standard’ as
discussed in section 5.2 of this chapter below) is defined as a:

[d]ocument which lays down product characteristics or their

related processes and production methods, including the
applicable administrative provisions, with which compliance is
mandatory. It may also include or deal exclusively with
terminology, symbols, packaging, marking or labelling
requirements as they apply to a product, process or production
method.37
Accordingly, in preparing mandatory product characteristics (eg
content require- ments) or packaging or labelling regulations with
respect to tobacco, alcohol or unhealthy foods, states need to
bear in mind the requirements of the TBT Agreement. In
particular, in order to ensure compliance with TBT art 2.2, states
should be wary of NCD risk factor regulations that create
‘obstacles to interna- tional trade’ or are ‘trade-restrictive’.38
States should be clear about the precise objective of the measure
(with ‘protection of human health’ being explicitly recog- nised as
a ‘legitimate objective’ in art 2.2), the relationship between the
measure and the objective, available scientific information about
the two and any alterna- tives that could be used.

Recent WTO cases on the TBT Agreement offer some comfort to

WTO members concerned about ensuring sufficient policy space
with respect to their

90 Regulating Tobacco, Alcohol and Unhealthy Foods

NCD risk factor regulations under that agreement. The cases
demonstrate that the mere existence of some
trade-restrictiveness arising from a particular measure is
insufficient to demonstrate its violation of TBT art 2.2.39 Indeed,
while discrimi- nation was found contrary to TBT art 2.1
(discussed further below), in none of the recent cases did the
complainants succeed in establishing a violation of TBT art 2.2.40
These outcomes arguably demonstrate the significant degree of
deference that WTO panels and the Appellate Body are likely to
show under TBT art 2.2 towards WTO members’ legitimate policy
objectives in constructing technical regulations.

2.3 Non-discrimination
The principle of non-discrimination in international trade law is
most often given effect through the twin obligations to provide
‘national treatment’ and ‘most- favoured-nation’ (‘MFN’) treatment.
These obligations are reflected in various WTO agreements in
different ways. In the GATT 1994, the national treatment
obligation essentially precludes WTO members from imposing
higher internal taxes or other internal charges on products
imported from another WTO member compared to those imposed
on ‘like’ products that are domestically produced,41 or from
according less favourable treatment to such imported products
through regulations affecting sale, purchase, transportation,
distribution or use.42 The MFN obligation in the GATT 1994
essentially precludes WTO members from providing products
imported from or exported to any country with an advantage –
with respect to tariffs or regulations affecting importation,
exportation, sale, purchase, transportation, distribution or use –
unless that advantage is also given to ‘like’ products imported
from or exported to all WTO members.43 In addition to other
general exceptions discussed in Part 3 below, exceptions to the
MFN obli- gation apply for PTAs allowed under GATT art XXIV44
and for tariff preferences granted to developing countries
pursuant to the WTO’s ‘Enabling Clause’.45

The obligations to accord national treatment and MFN treatment

are also contained in TBT art 2.1, which states:

Members shall ensure that in respect of technical regulations,

products imported from the territory of any Member shall be
accorded treatment no less favourable than that accorded to like
products of national origin and to like products originating in any
other country.
The meaning of ‘like products’ under the national treatment and
MFN treatment obligations in the GATT 1994 varies but takes
account of factors including: (i) the products’ properties, nature
and quality; (ii) end-uses; and (iii) tariff classification; as well as
(iv) consumer tastes and habits.46 These traditional criteria are
also likely to be used in determining whether products are ‘like’ for
the purposes of TBT art 2.1.47 Under both the GATT 1994 and
the TBT Agreement, the question of likeness focuses on the
‘competitive relationship’ between the products and not on the
regulatory purpose of the challenged measure,48 except to the
extent that

International Trade Law 91

this purpose impacts on the traditional likeness criteria or

otherwise affects the products’ competitive relationship.49
Accordingly, in devising NCD risk factor regulations, WTO
members must attempt to ensure that products treated in dif-
ferent ways under the regulations are not the same, for example,
in their nature and the way they are used, or in the sense that a
consumer would be likely to substitute one for the other.
Assuming that two relevant products are ‘like’ (be they an
imported product and a domestic product, or two imported
products), the basic question arises in assessing an allegedly
discriminatory regulation whether the regulation treats one
product less favourably than the other. The recent TBT cases
have made clear that, at least with respect to TBT art 2.1, the fact
that a regulation oper- ates ‘to the detriment of the group of
imported products’ from the complaining WTO member does not
necessarily mean that the regulation violates the non-
discrimination obligation.50 If the ‘detrimental impact ... stems
exclusively from a legitimate regulatory distinction’ then the
regulation does not entail less favoura- ble treatment contrary to
TBT art 2.1.51 Thus, although regulatory purpose is not directly
relevant in assessing product likeness, it is central in assessing
less favour- able treatment. This approach enhances the
possibility for WTO members to highlight their health objectives in
targeting NCD risk factors through regulation.
The Panel Report in the recent case against the European
Union’s seal product ban suggests that the approach taken to
assessing less favourable treatment under TBT art 2.1 will not be
replicated in subsequent cases concerning the national treatment
or MFN treatment obligations in the GATT 1994. Rather, less
favour- able treatment under the GATT 1994 may be shown
simply by demonstrating a detrimental impact on the group of
imported products.52 This distinction is based on the fact that the
GATT 1994, unlike the TBT Agreement, contains an express
exception for public health measures,53 as we discuss in the
following section. That Panel Report is likely to be appealed, and
the Appellate Body may shed further light on this matter in due
course.

3 General exception for health measures

The GATT 1994 contains an exception for health measures that is

often duplicated in PTAs.54 GATT art XX(b) provides:

Subject to the requirement that such measures are not applied in

a manner which would constitute a means of arbitrary or
unjustifiable discrimination between countries where the same
conditions prevail, or a disguised restriction on international trade,
nothing in this Agreement shall be construed to prevent the
adoption or enforcement by any Member of measures: ...

(b) necessary to protect human, animal or plant life or health ...55

The so-called ‘chapeau’ to GATT art XX, preceding paragraph (b),
incorporates the principles of non-discrimination and limiting
trade-restrictiveness found in the core obligations discussed in
Part 2 above. Accordingly, a WTO member

92 Regulating Tobacco, Alcohol and Unhealthy Foods

will have difficulty in justifying under GATT art XX(b) a health

measure that discriminates in law or fact against or between
imported products. In addition, the word ‘necessary’ in paragraph
(b) requires a respondent WTO member to demonstrate that no
less trade-restrictive alternative was reasonably available that
could have made a contribution to the member’s health objective
equal to that of the contested measure.56 The exception
therefore does not give WTO members free rein in devising their
NCD risk factor regulations. As already noted above, careful
attention must be paid to the contribution the measure makes to
its objective, the evidence supporting that objective and its
relationship to the contribution, any discriminatory aspect of the
measure and whether alternatives exist that would impose less of
a burden on international trade.

4 Existing interaction of international trade law with NCD risk

factor regulation

4.1 Current tobacco disputes in the WTO

Two high profile disputes have arisen in the WTO in recent years
in connection with tobacco control and have been subject to
extensive discussion elsewhere. In the 2012 case of United
States – Measures Affecting the Production and Sale of Clove
Cigarettes (‘US – Clove Cigarettes’),57 the United States’ tobacco
flavouring ban was found consistent with TBT art 2.258 but
inconsistent with TBT art 2.1 because the ban extends to clove
cigarettes (primarily imported from Indonesia) but excludes
menthol cigarettes (primarily domestically produced).59 This case
remains in dis- pute regarding the United States’ implementation
of the WTO ruling against it.60 An obvious means for the United
States to bring its flavoured cigarette ban into conformity with
WTO law would have been to remove the exemption for men-
thol, although this would not have benefited the complainant
Indonesia and would likely have been difficult politically.
Alternatively – worse from a public health perspective – the
United States could have repealed the flavoured cigarette ban
altogether. Either approach would have ended the less favourable
treatment of imported clove cigarettes. Instead, the United States
alleges that it has implemented the adverse ruling by taking steps
such as further investigation of the health impact of menthol
cigarettes in comparison to other cigarettes through the United
States Food and Drug Administration.61 Jamie Strawbridge
characterises this approach to implementation as strengthening
rather than weakening the United States’ law.62
During 2012 and 2013, five countries initiated complaints against
Australia regarding Australia’s introduction of laws standardising
tobacco product packaging.63 The so-called ‘plain’ packaging
laws preclude the use of promotional colours, graphics and logos
on tobacco products and allow the identification of brand and
variant only in a standardised font, colour and size. The majority
of the package is taken up with graphic and textual health
warnings against a specified ‘drab dark brown’ colour
background.64 These laws apply on a non-discriminatory basis to
all tobacco products from all countries including Australia. The
staggered timing of the complaints and differences between them
have created procedural

International Trade Law 93

difficulties as the case slowly proceeds.65 Although some debate

exists over the legality of the Australian laws (particularly under
the TRIPS Agreement),66 we have previously expressed our view
that Australia will prevail in these disputes.67

4.2 Alcohol disputes in the GATT 1947 and the WTO

A number of disputes concerning alcohol have been decided
since the establish- ment of the WTO in 1995, but these have
generally related to discriminatory taxes and have not been
focused on health objectives.68 Some GATT 1947 cases were
similarly not focused on health.69 However, two cases brought
under GATT 1947 related more explicitly to public health. One
1998 case found GATT- inconsistent import restrictions and
protection akin to tariffs in the administration of Canadian
provincial marketing boards for alcoholic beverages,70 despite
the inclusion of health among the objectives of these
monopolies.71 This case may be instructive for states that
maintain monopolies on the sale or distribution of alcohol or other
health-damaging products. Additional WTO rules apply to these
kinds of bodies.72
In the 1992 case of United States – Measures Affecting Alcoholic
and Malt Beverages,73 a GATT Panel found several federal and
state measures of the United States inconsistent with the national
treatment obligation in GATT art III because they were
discriminatory, eg offering exemptions or preferential tax
treatment to domestically produced but not imported products.74
However, the measures chal- lenged also included the application
by certain states of ‘restrictions on points of sale, distribution and
labelling based on the alcohol content of beer above 3.2 per cent
by weight’.75 The United States argued that ‘states encouraged
the consump- tion of low alcohol beer over beer with a higher
alcohol content specifically for the purposes of protecting human
life and health and upholding public morals’.76 Although Canada
disputed that argument,77 the Panel found that ‘low alcohol
content beer and high alcohol content beer need not be
considered like products in terms of Article III:4’78 and that ‘the
alcohol content of beer has not been singled out as a means of
favouring domestic producers over foreign producers’.79 While
the United States was successful in relation to the alcohol content
meas- ures, this decision reinforces the need for WTO members
to be able to justify distinctions drawn between similar products
on health grounds.

4.3 Unhealthy foods in WTO disputes and WTO accession

International trade law is not simply a barrier that public health
policy needs to overcome. As we have discussed elsewhere,
legal challenges to the subsidisation of unhealthy food products
have already been made in the WTO,80 demonstrating the
possibility of using international trade law to combat unhealthy
diets around the world by addressing the artificially low prices of
such products.81

Nevertheless, WTO law may appear to pose some challenges to

members’ policies in combating unhealthy food and obesity. For
example, when Samoa acceded to the WTO, under pressure from
existing WTO members, Samoa

94 Regulating Tobacco, Alcohol and Unhealthy Foods

agreed to remove its ban on the importation and distribution of
turkey tails and turkey tail products,82 which are high fat products
that are relatively cheap and therefore popular in Samoa.83 Some
commentators have promoted these kinds of bans on the grounds
of health,84 and Samoa explained during the accession pro- cess
that the ban was designed ‘to help curb the rise in diseases such
as diabetes, high blood pressure and heart and kidney failure’.85
In response to other mem- bers’ concerns, Samoa indicated that it
was developing ‘a public education plan to combat bad dietary
choices that promoted obesity and its attendant problems of ill
health and disease in Samoa’86 and that Samoa would seek
assistance from ‘the World Health Organization and other
development partners ... to undertake a detailed study ... of
practical and realistic options to combat Samoa’s health
problems’.87 Samoa also agreed to a transition period of three
years: in the first 12 months, the ban on imports would be revoked
and replaced with import tariffs of 300 per cent; and after an
additional two years the ban on domestic sales would be
‘eliminated and replaced with an import duty of 100 per cent or
other tax regulation, and the recommendations from the study’.88
The impact of Samoa’s accession to the WTO on its policy
regarding turkey tails might be seen as an indictment of
international trade law and, specifically, WTO law and its
accession process. On the other hand, the ability of Samoa to
convert its import ban to a high tariff (as occurred generally in the
creation of the WTO, in a process known as ‘tariffication’)89 and
to consider the availability of non-discriminatory measures such
as education and evidence-based regula- tion may also be seen
as confirmation that health objectives can be optimally addressed
through regulation that also happens to comply with the
obligations of international trade law. Putting political
considerations to one side, just as a non-discriminatory approach
to regulating flavoured cigarettes would arguably best serve both
health and trade goals in the United States, so too may removing
the import ban (often identified as the most trade-restrictive
measure possible)90 prove appropriate in Samoa.

5 Promoting optimal health regulation

5.1 Pursuing evidence-based policy

Chapter 3 of this volume provides valuable analysis of the
relationship between research and evidence on the one hand and
policy development on the other. Evidence can clearly enhance
the effectiveness of health policy, including in facing new health
challenges or in developing new policy responses, for example by
analysing the causal relationships between different kinds of
behaviours, or by assessing strategies after their implementation.
Evidence can equally enhance the legality of health policy in
international trade law, for example by supporting a state’s
assertion of the legitimacy of its health objectives, the connection
between its health objectives and its chosen regulations or the
connection between its NCD risk factor regulations and consumer
behaviour. Evidence could also be used to confirm that a
regulation that distinguishes between different products does so

International Trade Law 95

on health grounds rather than as a result of discrimination against

or between imported products. Relevant evidence need not be
created specifically by the state for the purpose of devising or
testing its regulatory proposals; rather, evidence from other
countries or from international organisations may provide a basis
for local health policy. By relying on a broad, international
evidence base, states with fewer resources may be able to obtain
support for their measures without having to engage directly in
lengthy and expensive research.
In the WTO, the Appellate Body has accepted that both
quantitative and qualitative evidence may be used to justify a
given measure (in the context of GATT art XX)91 and that some
problems are best addressed through a series of complementary
measures operating together over an extended period of time:

We recognize that certain complex public health or environmental

problems may be tackled only with a comprehensive policy
comprising a multiplicity of interacting measures. In the
short-term, it may prove difficult to isolate the contribution to
public health or environmental objectives of one specific measure
from those attributable to the other measures that are part of the
same comprehensive policy. Moreover, the results obtained from
certain actions – for instance, measures adopted in order to
attenuate global warm- ing and climate change, or certain
preventive actions to reduce the incidence of diseases that may
manifest themselves only after a certain period of time – can only
be evaluated with the benefit of time.92
This recognition by the Appellate Body is particularly significant
for NCD risk factor regulation, which may precisely target
unhealthy behaviours that may not give rise to NCDs for several
years or even decades. States may continue to edu- cate WTO
panels and the Appellate Body on the limits and various forms of
rel- evant evidence, for example through the provision of technical
or expert evidence in their written or oral submissions or pursuant
to a request by a panel.93 In US – Clove Cigarettes, the United
States seemed to have insufficient evidence to support its
distinction between menthol cigarettes and other flavoured
cigarettes on the grounds of health, and in the absence of such
evidence the Appellate Body drew its own conclusions about the
likely effect of including menthol in the flavouring ban. Additional
evidence indicating a health basis for that distinction might have
pre- vented the finding of a violation on the basis of discrimination
as discussed above. Further evidence specifically on tobacco
control is likely to arise in the ongoing WTO disputes against
Australia,94 should they proceed to a panel hearing.

5.2 Supporting multilateral guidelines and standards

The development of multilateral guidelines and standards,

whether through or in association with treaties such as the WHO
Framework Convention on Tobacco Control (‘WHO FCTC’)95 or
through independent instruments, may assist in defending NCD
risk factor regulations in international trade law fora. Article 2.4 of
the TBT Agreement creates a general obligation to use relevant
standards:
Regulating Tobacco, Alcohol and Unhealthy Foods

Where technical regulations are required and relevant

international stand- ards exist or their completion is imminent,
Members shall use them, or the relevant parts of them, as a basis
for their technical regulations except when such international
standards or relevant parts would be an ineffective or
inappropriate means for the fulfilment of the legitimate objectives
pur- sued, for instance because of fundamental climatic or
geographical factors or fundamental technological problems.

In addition, pursuant to TBT art 2.5, a technical regulation that is

‘prepared, adopted or applied for one of the legitimate objectives
explicitly mentioned in [art 2.2], and is in accordance with relevant
international standards’ is ‘rebuttably pre- sumed not to create an
unnecessary obstacle to international trade’ (ie presumed not to
violate TBT art 2.2).

Lukasz Gruszczynski has argued that the WHO FCTC or its

related imple- menting guidelines could constitute an ‘international
standard’ for the purpose of the TBT Agreement.96 Further
insights into this question may be offered in the plain packaging
case against Australia in the WTO,97 if Australia raises such
docu- ments as a defence to the claims of violation of the
non-discrimination obligation in TBT art 2.1. In any case, the
following criteria for establishing the existence of a relevant
international standard are worth keeping in mind as international
health law evolves in connection with NCD risk factors, in case
opportunities arise to develop such a standard to support states’
health goals.
The TBT Agreement does not define the term ‘international
standard’ but specifies in annex 1.2 that a ‘standard’ is a:

Document approved by a recognized body, that provides, for

common and repeated use, rules, guidelines or characteristics for
products or related pro- cesses and production methods, with
which compliance is not mandatory. It may also include or deal
exclusively with terminology, symbols, packaging, marking or
labelling requirements as they apply to a product, process or
production methods.

The explanatory note to this provision makes clear that a standard

for the purpose of the TBT Agreement is voluntary rather than
mandatory and that it need not necessarily be ‘based on
consensus’.

According to the WTO Appellate Body, a standard has to be

adopted by an ‘international standardizing body’,98 which is ‘not
necessarily ... an organisation’99 but is a body:

(a) ‘that has recognized activities in standardization’;100 and

(b) ‘whose membership is open to the relevant bodies of at least

all [WTO]

Members’101 on a non-discriminatory basis throughout the

development of the standard.102

96
International Trade Law 97

The Appellate Body has explained that the requirement of having

activities in standardisation ‘does not necessarily imply that a
body is, or has been, involved in the development of more than
one standard ... [A] body simply has to be “active” in
standardization in order to have “activities in standardization”’.103
The require- ment that these standardisation activities be
recognised involves both ‘factual’ and ‘normative’
considerations.104 The ‘factual dimension ... would appear to
require, at a minimum, that WTO Members are aware, or have
reason to expect, that the international body in question is
engaged in standardization activities’.105 In this regard, ‘evidence
of recognition by WTO Members as well as evidence of rec-
ognition by national standardizing bodies would be relevant’.106
The ‘normative dimension’ would be more easily satisfied to the
extent that the body ‘complies with the principles and procedures
that WTO Members have decided “should be observed” in the
development of international standards’,107 which are contained
in a decision by the WTO’s TBT Committee.108 That decision
includes principles such as:

All essential information regarding current work programmes, as

well as on proposals for standards, guides and recommendations
under considera- tion and on the final results should be made
easily accessible to at least all interested parties in the territories
of at least all WTO Members ...109
Any interested member of the international standardizing body,
includ- ing especially developing country Members, with an
interest in a specific standardization activity should be provided
with meaningful opportunities to participate at all stages of
standard development.110

Consensus procedures should be established that seek to take

into account the views of all parties concerned and to reconcile
any conflicting arguments.111

Impartiality should be accorded throughout all the standards

development process ...112

Whenever possible, international standards should be

performance based rather than based on design or descriptive
characteristics.113

[I]nternational standards ... should not distort the global market,

have adverse effects on fair competition, or stifle innovation and
technological development .114

Cooperation and coordination with other relevant international

bodies is essential.115

Constraints on developing countries, in particular, to effectively

participate in standards development, should be taken into
consideration in the standards development process.116

98 Regulating Tobacco, Alcohol and Unhealthy Foods

In summary, in order to maximise the likelihood of a particular
body being recognised as an international standardisation body,
or a particular document being recognised as a standard, for the
purposes of the TBT Agreement, states and international bodies
would need to promote – in the course of standardisation-type
activities – principles of non-discrimination, openness to new
members, transparency and fairness in decision-making,
recognition of the particular needs of developing countries and
coordination with other relevant international bodies including the
WTO. Consistency with these principles may enable relevant
health-related or NCD-related documents to be recognised as
international standards in appropriate circumstances, supporting
the defence of a regulation concerning NCD risk factors under the
TBT Agreement when necessary.

5.3 Crafting international trade agreements

The progress made as part of the WTO’s Doha Development
Agenda in Bali, Indonesia, in December 2013117 may
foreshadow future positive steps being taken in this round of WTO
negotiations (which have dragged on since their com- mencement
in 2001),118 meaning that the WTO may be reinvigorated as a
locus for international trade activity beyond the dispute settlement
realm.119 Further amendments and agreements reached in the
WTO may affect NCD risk regula- tion directly or indirectly. WTO
members should therefore keep their health ministries informed of
likely developments and seek input from them early enough to
ensure that the negotiations do not unintentionally hinder health
regulation. Coalitions of governments on health-related issues, as
already exist in various forms within the WTO,120 may further
assist particularly those members that may have limited presence
at the WTO in Geneva or limited resources or expertise to devote
to these issues.

Health ministries must also remain abreast of negotiations

towards PTAs, whether bilateral or plurilateral. The increasing
number of PTAs includes ‘next generation’ agreements such as
the Trans-Pacific Partnership Agreement (‘TPP’),121 which may
present novel negotiating approaches and ambitions for
liberalising trade and therefore potentially invasive commitments
from a health perspective. In order to retain sufficient regulatory
autonomy in connection with NCD risk factors, states should be
aware of the range of mechanisms available to address health in
trade and investment treaties, including:

a) mention of importance of health objectives in the preamble and

in any provi- sions regarding legitimate objectives or public policy;
b) exclusions or ‘carve-outs’ of particular unhealthy products – as
we have discussed elsewhere in relation to the proposed
exclusion of tobacco from the TPP,122 these must be carefully
examined on a case-by-case basis, taking account of the likely
implications of the exclusion of one product for other products and
for other treaties (eg WTO agreements, PTAs or bilateral
investment treaties as discussed further in Chapter 6);

International Trade Law 99

c) exceptions from all obligations or from key obligations for

measures that are related to, designed to protect or necessary for
public health or for human life or health (taking account of the
different implications of these various formulations); and

d) side letters dealing with specific products or issues such as

health, noting that health objectives and health measures are
generally better dealt with in the main text to avoid ambiguities
about the relationship between the main text and the side letter or
the legal significance of the side letter.

In addition to these discrete strategies for addressing health in

international trade agreements, states should maintain awareness
of the possibilities under treaty law to advance health through: (i)
declining to negotiate new agreements where the benefits would
not outweigh any costs to health; (ii) promoting the interpretation
of existing agreements so as to allow legitimate regulation on
health grounds; and (iii) modifying or terminating existing
agreements to better accord with health goals.
The customary rules of interpretation of treaties under public
international law are largely codified in the Vienna Convention on
the Law of Treaties (‘VCLT’).123 Article 31(1) of the VCLT
requires a treaty interpreter to consider not only the ‘ordinary
meaning’ of treaty terms but also their ‘context’ and the ‘object
and purpose of the treaty’, both of which may be reflected in the
preamble to the treaty or other treaty provisions. In addition,
under art 31(3)(c) of the VCLT, a treaty interpreter should take
account of ‘any relevant rules of international law applicable in the
relations between the parties’. In a dispute arising between the
two parties to a bilateral PTA, the PTA would therefore need to be
interpreted taking account of other treaties to which the PTA
parties are party, such as the WHO FCTC. In the context of a
WTO dispute, art 31(3)(c) of the VCLT might be understood as
referring to relevant rules of international law applicable between
all WTO members (which would include, at least, customary
international law but not the WHO FCTC, to which most but not all
WTO members are party), rather than rules applicable between
the parties to the dispute. However, this matter remains
unresolved at the WTO.124 In any case, the WHO FCTC or other
relevant WHO guidelines or other documents might be relevant
aids to interpretation of a PTA or a WTO agreement in identifying
the ‘ordinary meaning’ of a treaty term pursuant to VCLT art 31(1)
or as factual references similar to other evidence even if not
falling within VCLT art 31(3)(c).125 The Panel and Appellate Body
in US – Clove Cigarettes referred to the WHO FCTC and WHO
respectively in these kinds of ways.126
The VCLT also contains rules on modifying and terminating
treaties. Subject to the rules within the treaty itself, the parties to a
treaty such as a PTA may agree to amend127 or terminate128
the treaty. This provides additional options for states to consider
in reviewing their existing suite of PTAs for compliance with health
policy objectives. The WTO agreements have their own provi-
sions on amendment,129 which is extremely difficult to achieve.
For example, an amendment to enhance access to medicines
under the TRIPS Agreement

100 Regulating Tobacco, Alcohol and Unhealthy Foods

has still not yet secured sufficient acceptances (the required
two-thirds of the WTO membership)130 to enter into force
following its approval at the end of 2005.131 However, other
possibilities for reform exist within WTO law to ensure sufficient
autonomy in the area of NCD risk factor regulation, should this be
required. For example, WTO jurisprudence may evolve through
the resolution of WTO disputes regarding health or other
measures, as has happened to pro- vide greater nuance in the
interpretation and application of the general excep- tions in GATT
art XX or the non-discrimination obligation in TBT art 2.1. The
WTO Ministerial Conference and General Council also have ‘the
exclusive authority to adopt interpretations’ of the WTO
agreements, and the Ministerial Conference may ‘[i]n exceptional
circumstances ... waive an obligation imposed on a Member’.132
Although interpretations and waivers are also subject to a high
threshold (requiring agreement by three-quarters of the WTO
members), these mechanisms do provide additional avenues for
states to consider should health- related reform be necessary.

5.4 Resisting regulatory chill

Defending regulation in international litigation is likely to impose
heavy resource burdens on governments. Countries might
therefore back down from a proposed regulation in the face of a
formal legal complaint. Regulatory chill may also arise in the
absence of formal dispute settlement proceedings. Countries
might simply choose to regulate tobacco, alcohol and processed
foods less intensely rather than risk a legal challenge in the WTO
or through investment treaty arbitration. Informal complaints or
media statements by particular countries (or companies) might
also dissuade a country from adopting a novel public health
measure. For example, WTO members may impose pressure on
governments by expressing concerns in the TBT Committee, as
several governments have done in relation to Thailand’s proposed
pictorial warning labels on alcoholic beverages,133 Canada’s
restrictions on tobacco flavouring134 and proposed Brazilian
measures limiting additives in tobacco products.135

Increasing the expertise that governments may draw on in

relevant legal areas, including international trade law, will assist in
enabling countries to assess objec- tively the potential for a
successful international legal claim being brought against a given
health measure designed to combat NCD risk factors. That
increased expertise need not come at great expense, although it
is likely to require a com- mitment of time and energy. Aside from
formal legal qualifications or expensive training courses,
governments may be assisted by:

a) various NGOs, such as the Union for International Cancer

Control, the Framework Convention Alliance for Tobacco Control
and the Campaign for Tobacco Free Kids;
b) the World Health Organization and the Convention Secretariat
of the WHO FCTC, which have been providing technical support
to WHO member states specifically in relation to trade-related
tobacco control issues;136

International Trade Law 101

c) the Advisory Centre on WTO Law, which is funded by 11

developed country members of the WTO and provides services to
its 31 developing country members and all least-developed
country members of the WTO;137 and

d) the WTO Secretariat, which offers technical cooperation

services to WTO members pursuant to art 27(2) and (3) of the
WTO’s Understanding on Rules and Procedures Governing the
Settlement of Disputes (‘DSU’)138 and the Doha Development
Agenda.139

Institutional and scholarly publications such as the present

volume are also increas- ingly available to provide insights into
the intersection between international trade law and regulation of
NCD risk factors.140
Compliance with trade or investment rulings may also weaken
regulation of NCD risk factors, whether or not the challenged
measure was initially directed at public health. For example, WTO
rulings against discriminatory taxation of imported alcoholic
beverages may be expected to lead to lower taxes on those
products in order to cure the discrimination, rather than increased
taxes on domestically produced alcoholic beverages, because the
domestic industry would object to such a change.141 However, as
discussed elsewhere, a review of three key WTO cases against
Chile, Korea and Japan142 in respect of alcoholic bever- age
taxation indicates that countries may find feasible and politically
acceptable ways of raising taxes on domestic alcoholic beverages
in some circumstances.143 The United States’ implementation of
the adverse ruling against it in US – Clove Cigarettes, although
still the subject of dispute as discussed above, may also confirm
the ability of WTO members to reconcile health and trade
objectives even in the face of political controversy.
The sources of expertise listed above may similarly assist in
determining how best to comply with an adverse trade or
investment law ruling against an NCD risk factor regulation while
maximising the achievement of health objectives. A whole of
government approach will also be essential, meaning that health
ministries must remain engaged with the regulation and other
relevant minis- tries during the implementation of the regulation
and in the course of any legal defence. In most cases the ideal
solution from the perspective of both health and trade will be
non-discrimination against or between imports or foreign produc-
ers, although this may be difficult to achieve in practice as
demonstrated by the WTO dispute in US – Clove Cigarettes. In
that case, more creative solutions may be required rather than
simply abandoning a valued health measure due to its
imperfections. The continuous development of the evidence base
for a particular measure, as discussed above, may also assist in
justifying any distinctions drawn on health grounds between
different products or suppliers.

6 Conclusion

International trade law presents a complex web of obligations and

exceptions that can be difficult to navigate, even for the seasoned
international trade law scholar. Yet the complexity and ambiguity
of this area of law should not be allowed to

102 Regulating Tobacco, Alcohol and Unhealthy Foods

undermine the objectives of states in regulating NCD risk factors
on the basis that such regulation cannot be crafted in a manner
consistent with international trade agreements. On the contrary,
WTO panels and the Appellate Body have shown an ability to
understand the importance of health objectives (indeed,
describing them as ‘vital and important in the highest degree’)144
and of the impossibility of regulating all health problems through a
single measure or expecting an imme- diate health benefit from a
given regulation.145 The field of international trade law becomes
even more variable and uncertain if the continuing proliferation of
PTAs is taken into account. Nevertheless, this chapter has offered
suggestions for enhancing the likelihood of compliance between
NCD risk factor regulation and international trade law, by
highlighting the importance of evidence and multilateral
instruments, as well as the need for increased awareness of the
details of international trade law and its impact on health
regulation. Perhaps the most important lessons for states
engaged in NCD risk factor regulation in the face of potential
international trade law challenges is to minimise discrimination
against or between imports to the greatest extent possible, and to
ensure that measures are buttressed by comprehensive research
of their contribution to the stated health objective and their
superiority to available alternatives.

by the Agreement on Agriculture, as stated in its annex.