Indonesia, the leading producer of clove-flavored cigarettes, is considering submitting a complaint to the World Trade Organization regarding a regulation implemented by U.S. Food and Drug Administration banning clove cigarettes, but not covering mentholated products.
According to Mari Pangestu, Indonesia’s Foreign Trade Minister, they consider that the ban discriminates the national Indonesian products in favor a local product, and as it is a discrimination of international trade laws, it is in the competence of the World Trade Organization.
The case could force legislators to select between threatening trade relations with Indonesia that account for $22 billion per year or revising the controversial provisions of Tobacco Control Act, signed into law last June.
In conformity with the 2009 Tobacco Control Act clove cigarettes as well as other flavored cigarettes are banned across the USA, while the menthol-flavored cigarettes were not covered by the ban. Menthol cigarettes represent 25% of 370-billion-a-year cigarette market in USA. Figures provided by Specialty Tobacco Council, a tobacco industry expert group, show, that clove flavor was the second most-popular flavor in cigarettes, accounting for 0.9% of the local market.
Indonesia manufactures 99 percent of clove cigarettes selling in the U.S. market before the ban took effect; the country claims clove cigarettes were discriminated benefiting to menthol cigarettes, produced in the USA.
In case Indonesia submits a protectionist complaint to the WTO, the U.S. lawmakers would be forced to provide sufficient evidence proving that clove cigarettes were prohibited for public health reasons, as they increase additive properties. If the United States could not prove it, the ban would be considered a violation of international trade laws.
The law which was adopted by the Congress last year unanimously bans the sales of all flavored cigarettes, excluding menthol flavor, the most popular and widely-used cigarette flavor across the U.S. Indonesian Foreign Trade Minister named this concession as protectionism and discrimination of foreign-made product.
She said that they consider the ban on flavored cigarettes’ sales a discrimination and violation of trade agreements, since menthol cigarettes, manufactured within the US are not covered by the ban, which according to U.S. Health Officials is aimed at preventing children from getting hooked on sweet-flavored cigarettes.
Pangestu added that the ban on clove cigarettes has hurt especially hard the Indonesian agriculture, and particularly, those farmers that grow clove, violating the WTO laws. Indonesia, a country in Southeast Asia is home to approximately 4 million of clove farmers.
Sudjadnan Parnohadiningrat, Ambassador of Indonesia in the United States, declared that Indonesia exports approximately $500 million worth of clove-flavored cigs, better-known as kreteks, annually. Almost 20 percent of the exportations went to the U.S. market, through the company PT Djarum, the largest importer of kreteks to United States.
Kreteks, originated in Indonesia, are manufactured from tobacco and natural flavoring agent of clove, a spice received dried buds of an endemic Indonesian tree. The cigarettes are commonly named as kreteks because of the crackling sound produced while burning cloves.