UNITED STATES – MEASURES AFFECTING THE PRODUCTION AND SALE OF CLOVE CIGARETTES
Document: Request for the Establishment of a Panel by Indonesia
Date: 11 June 2010
Document codes: WT/DS406/2
Complainant: Indonesia
Respondent: U.S.
Third parties: Brazil, Colombia, Dominican, EU, Guatemala, Mexico, Norway, Turkey
Dispute stage: Mutually Agreed Solution
Agreements cited: Art. III:4, XX  GATT 1994Art. 2.1, 2.2, 2.5, 2.8, 2.9, 2.10, 2.12, 2.3  Technical Barriers to Trade (TBT)Art. 2, 3, 5, 7  Sanitary and Phytosanitary Measures (SPS)

UNITED STATES – MEASURES AFFECTING THE PRODUCTION
AND SALE OF CLOVE CIGARETTES

Request for the Establishment of a Panel by Indonesia

 The following communication, dated 9 June 2010, from the delegation of Indonesia to the
Chairman of the Dispute Settlement Body, is circulated pursuant to Article 6.2 of the DSU.

 On 7 April 2010, the Republic of Indonesia re quested consultations with the United States
pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement
of Disputes (DSU), Article XXII of the General Agreement on Tariffs and Trade 1994
("GATT 1994"), Article 11 of the Agreement on the Application of Sanitary and Phytosanitary
Measures ("SPS Agreement"), and Article 14 of the Agreement on Technical Barriers to Trade ("TBT
Agreement") with respect to the measure adopted by the United States banning flavored cigarettes,
including clove cigarettes. The Republic of Indo nesia and the United States agreed to hold those
consultations on 13 May 2010. Unfortunately, consultations did not resolve the dispute.
 The measure that was the subject of consu ltations is reflected in Section 907 of the Family
Smoking Prevention and Tobacco Control Act
1 ("the Act"), which prohibited the production or sale in
the United States of all cigarettes with a "charact erizing flavor" other than menthol or tobacco
beginning 90 days after the Act was signed. Indon esia believes that the measure discriminate against
imported clove cigarettes based on the fact that the cl ove cigarettes that were sold in the United States
were imported (primarily from Indonesia), while virt ually all of the menthol cigarettes sold in the
United States are produced domestically (imports ar e negligible). Indonesia also believes that the
measure creates an unnecessary obstacle to trade in that the United States has available to it less trade-
restrictive means to accomplish the objectives of the Act.

 The Government of Indonesia maintains that banning clove cigarettes in the United States
while exempting menthol cigarettes from the ban is inconsistent with the following provisions of
GATT 1994:

• Article III: 4 of the GATT 1994 because the measure provides treatment to an
imported product, clove cigarettes, that is "less favorable" than that accorded to a like
domestic product, menthol cigarettes.
• Article XX of GATT 1994 because there is no scientific or technical information
indicating that clove cigarettes pose a greater health risk than menthol cigarettes and,
as a result, the measure results in arb itrary and unjustifiable discrimination, a

1 Public Law 111-31.

disguised restriction on trade, and is more trade restrictive than necessary to achieve a
legitimate objective, if one were to exist.
 Indonesia also considers the measure to be inc onsistent with the following provisions of the
TBT Agreement:

• TBT Article 2.1 because the measure results in treatment that is "less favorable" to
imported clove cigarettes than that accorded to a like domestic product, menthol
cigarettes.
• TBT Article 2.2 because there is no scientific or technical information indicating that
clove cigarettes pose a greater health risk th an menthol cigarettes or that youth smoke
clove cigarettes in greater numbers than menthol. As a result, the measure is more
trade restrictive than necessary an d constitutes an unnecessary obstacle to
international trade.
• TBT Article 2.5 because the United Stat es did not respond to questions from
Indonesia seeking an explanation and jus tification for the ban submitted during
bilateral discussions held 27 August 2009 and through the TBT Committee on 20
August 2009 (G/TBT/W/323).
• TBT Article 2.8 because the ban on characterizing flavors is based on descriptive
characteristics.
• TBT Article 2.9 because the United States did not comply with the requirements of
Articles 2.9.1, 2.9.2, 2.9.3, and 2.9.4 when adopting a technical regulation that has a
significant effect on the trade of Indonesia.
• TBT Article 2.10 because in the event the United States believed there was a
justification for not following the procedur es in Article 2.9, it did not provide the
Secretariat with notification of the measure and the urgent nature of the problem.
• TBT Article 2.12 because the effective date was less than six months from the
enactment of the ban.
• TBT Article 12.3 because the ban created an unnecessary barrier to exports from
developing countries.
Should the United States assert that the flavored cigarette ban is an SPS measure, then it is
Indonesia's view that the measure is inconsistent with Articles 2, 3, 5, and 7 of the SPS Agreement.
Additionally, the measure identified in this requ est has nullified or impaired benefits accruing
to Indonesia directly or indirectly under the cited agreements.
Therefore, the Government of Indonesia respectfu lly requests that pursuant to Article 6 of the
DSU, the Dispute Settlement Body establish a panel to examine the matter, with standard terms of
reference, as set out in Article 7.1 of the DSU.