US Business Groups Concerned By NZ Tobacco Sales Proposals

April 20, 2012

US Business Groups Issue Statement Expressing Deep Concern Following Announcement by the New Zealand government of a Public Consultation to Review the Mandated Destruction of Trademarks and Branding in the Tobacco Sector

The U.S. Chamber of Commerce, the TransAtlantic Business Dialogue, the Emergency Committee for American Trade, the National Association of Manufacturers, the United States Council for International Business and the National Foreign Trade Council issued the following statement in light of the New Zealand government’s announcement that it is pursuing a public consultation regarding plain packaging for tobacco products:

"It is most troubling that as efforts are underway to deepen the opportunities for economic growth and opportunity between the United States and New Zealand, we now find that the New Zealand government is considering the destruction of an industry's legitimate trademark protection and branding – rights long protected under law and international treaties.

"While there is no question that protecting public health is a legitimate objective, there is also no question that trademarks and other forms of intellectual property stimulate innovation and are essential to building vibrant economies. There is no fact-based evidence which suggests that mandating the destruction of intellectual property (IP) will advance public health. We firmly believe the measure in question could instead undermine public health as a result of unintended consequences, such as an increased influx of counterfeit tobacco products.

"New Zealand has made binding commitments under international obligations to protect IP while it has no such obligation to mandate plain packaging of tobacco products. There are numerous methods to effectively regulate the tobacco industry that do not undermine the protection of IP, do not have such damaging unintended consequences, and are consistent with New Zealand’s international trade obligations. New Zealand, as a world leader in the international trading system, surely recognizes the critical importance of abiding by international trade rules and the value of not undermining that system. We do not believe the current international trading system in any way impedes the ability of governments to regulate in the public interest. But, the mandated trademark destruction through government imposed plain packaging does violate international trade rules.

"New Zealand has long called upon trading partners to avoid arbitrary measures not sufficiently grounded in science when regulating industry. The destruction of branding and the related trademarks of an industry without reliable evidence to support these actions defy these long-held views that science should be the foundation of regulation. This assault on trademark represents a fundamental challenge to the global IP system we have fought hard to build. Although presently this effort is only confined to tobacco products, we see this as a systemic threat to rules which intellectual property and the trading system is dependent upon. We hope the New Zealand government will consider the concerns we have raised for the possible impact on New Zealand exports, such as dairy and wine, should other governments feel emboldened to take similar measures.

"As leading representatives of business, we rely on the rules-based international trade framework to sustain economic growth, employment, innovation and prosperity. We encourage governments, including in New Zealand, to reflect on not only the importance of the rules based international system in their actions, but also the science and evidentiary basis for such an extreme step, and call upon the New Zealand government to place the effort in the well-intentioned, yet ill-advised, category."

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