Canadian tobacco control measures
Additive Bans
BackgroundBill C-32, An Act to amend the Tobacco Act (also called the "Cracking Down on Tobacco Marketing Aimed at Youth Act" was introduced in the House of Commons on 26 May 2009 and received Royal Assent on 8 October 2009. (Legislative summary) Among the bill's measures was a ban on certain additives in little cigars and cigarettes. The bill drew the ire of U.S. Burley farmers, who campaigned against it during the summer of 2009, as well as campaigns organized by Philip Morris International. U.S. Senator Jim Bunning put pressure on the Obama administration by holding up confirmation of trade officials to protest lack of action against C-32. Concerns about the trade implications of the bill were raised during its Parliamentary passage, and government officials were questioned about its trade coherence during the review by the Senate committee. A month after the passage of C-32, concerns were raised at the WTO TBT Committee meeting in November 2009, as they have been in subsequent meetings. In November 2010, the Fourth Conference of Parties, after a vigorous and contentious debate, adopted guidelines which recommended banning additives which made tobacco products more attractive. In June, 2011, TBT Committee Secretariat reported that Bill C-32 had been raised 5 times in committee, with concerns expressed by 29 members, making it one of the most contentious items reviewed by the committee..
Extract from TBT Committee Minutes
Extract: Minutes of TBT Committee Nov 2009(i) Canada – Bill C-32 amendment to Tobacco Act 8.The representative of Argentina raised a concern regarding Canada's legislation "Cracking Down on Tobacco Marketing Aimed at Youth Act", which had entered into force on 8 October 2009. He stressed that his delegation supported Canada's objective to prohibit the production and marketing of tobacco products which could attract youth. However, he emphasized that this measure was more trade‑restrictive than necessary to achieve Canada's legitimate objective. The representative of Argentina noted that the measure prohibited the use of various additives in certain tobacco products, including cigarettes, cigarillos and blunt wraps. In this regard, he stressed that cigarettes made of several types of tobacco, such as blended cigarettes, contained several additives prohibited by the Canadian regulation. These additives, however, were not used to give a characterizing flavour to the product, rather they were used as an essential component to mitigate the strong flavour of Burley tobacco. A prohibition of these additives could therefore represent a de facto prohibition of blended cigarettes. The representative of Argentina further noted that a ban on the production and sale of products with a certain flavour would represent a less trade-restrictive mean to achieve Canada's objective, and thus be in line with Article 2.2 of the TBT Agreement. He also said that Canada based its legislation on the ingredients contained in a product without considering the effects of such ingredients on the final product, contrary to the obligations under Article 2.8 of the TBT Agreement. The Argentinean delegate noted that Canada had not notified the measure to the WTO. In this regard, he informed the Committee that prior to the adoption of the measure, the Argentinean Federation of Tobacco Producers and the Government of the Province of Salta had sent written comments to the Canadian Ambassador in Buenos Aires expressing their concern. However, these comments had not been taken into account. Finally, Canada was invited to amend this measure according to its obligations under the TBT Agreement. 0. The representative of Mexico supported the comments made by Argentina with regard to the Canadian legislation and regretted that Canada had neither notified the measure to the WTO nor taken into account other Members' views. In this regard, Mexico expressed a systemic concern regarding legislative branches in a number of countries, including Canada, not seeming to see themselves bound by the transparency obligations of the TBT Agreement. 10. The representative of Switzerland shared the concerns expressed by previous speakers. While Switzerland supported the objective of protecting human health, concerns remained that the legislation had not been notified to the WTO. 11. The representative of Colombia echoed the concerns expressed by Argentina, Mexico and Switzerland regarding the new Canadian legislation on tobacco. She believed that the legislation was not consistent with Article 2.2 of the TBT Agreement which stipulated that "technical regulations shall not be more trade-restrictive than necessary to fulfil a legitimate objective". While the legislation had the de facto effect of banning blended tobacco, there was no scientific evidence proving that blended cigarettes were more attractive to youth than traditional cigarettes, which represented ninety-eight per cent of the Canadian tobacco market. Therefore, Colombia invited Canada to consider less trade-restrictive alternatives to achieve its objective and ensure that its measure was consistent with the obligations under the TBT Agreement. The delegation of Colombia further emphasized that, absent such changes, exports of tobacco products to Canada would be seriously disrupted and the development of expansion plans for the growing of Burley tobacco would be negatively affected. 12. The representative of the European Communities[1] joined other delegations in expressing concern regarding Canada's measure on tobacco. In particular, the EC representative reiterated the importance of Members fully complying with their transparency obligations under the TBT Agreement, in particular those related to the notification of technical regulations and conformity assessment procedures. She also noted that this issue had been raised in an EC submission to the Fifth Triennial Review of the Operation and Implementation of the TBT Agreement.[2] The EC representative regretted that the Canadian measure had not been notified to the WTO and recalled that, according to Article 2.9 of the TBT Agreement, Members needed to ensure that draft legislation that could have a significant impact on trade be notified to the TBT Committee at an early appropriate stage when comments could still be taken into account. Therefore, the European Communities urged Canada to postpone the implementation of the legislation and notify the Committee at an early stage any measure which laid out its implementing provisions. 13. The representative of Turkey echoed concerns expressed by others. He emphasized the importance of tobacco exports for the Turkish economy and noted that the measure was currently under consideration by Turkish authorities. Comments on the legislation would be provided in due time. 14. The representative of the United States strongly supported Canada's objective of deterring youth from tobacco use. However, he asked the Canadian delegation to provide further information on the approach taken and on any measures necessary to implement the new regulation. Could Canada confirm when Sections 4 and 5 of the Tobacco Act would enter into force? Could Canada confirm that its Government had the authority to amend the schedule of additives regulated? Was the Government of Canada considering any amendments to the schedule of additives? Could Canada provide further information on the criteria used to develop the list of prohibited additives? Finally, could Canada explain what specific efforts had been made to identify the relationship in general between prohibited additives and products marketed to or that are innately attractive to youth? The United States looked forward to receiving Canada’s responses and improving the US understanding of the measure and its relationship to the TBT Agreement. 15. The representative of the Former Yugoslav Republic of Macedonia (FYROM) supported the comments made by previous delegations with regard to the Canadian legislation and highlighted the importance of the tobacco sector for his delegation's economy. While the Former Yugoslav Republic of Macedonia supported the objective of protecting human health, concerns remained that the regulation could constitute an unnecessary barrier to trade. 16. The representative of Canada explained that the "Cracking Down on Tobacco Marketing Aimed at Youth Act" was designed to address public health concerns by reducing the incentives for young people to smoke. She clarified that the new legislation prohibited, inter alia, the use of various flavours and other additives in certain tobacco products, including cigarettes, cigarillos and blunt wraps sold in Canada. She stressed that the legislation did not ban any type of tobacco or tobacco product. In this regard, it was Canada's understanding that since non-blended Burley cigarettes were currently sold on the Canadian market it was not correct to state that the ban on additives constituted an implicit ban on Burley tobacco. The Canadian delegate assured delegations that Canada's trade obligations had been taken into account in drafting the legislation and that Canada was committed to respecting its international trade obligations while meeting its legitimate public policy objectives. 17. With respect to the allegation on the lack of scientific evidence, Canada believed that the dangers of tobacco use were well documented in scientific and public health literature; indeed there was sound scientific evidence to demonstrate that certain additives, including flavours, increased the attractiveness of tobacco product. In this regard, the Canadian representative explained that some documents produced by the tobacco industries and subsequently made public by courts through litigation, had shown that the use of the additives banned by Canada made tobacco products more appealing to youth. She further noted that several other countries had introduced legislation that aimed at protecting youth from tobacco marketing. However, while the approach of such countries was only limited to banning specific flavours, the approach of the Canadian Government targeted a broader range of additives that were used to make cigarettes and other products more appealing to youth and novice smokers. In particular, the Canadian legislation introduced a list of prohibited additives that included additives with flavouring properties but also other additives such as sweeteners, vitamins, minerals and colouring agents. It was Canada's view that this legislation provided for more precision and certainty and that there was sound scientific evidence for prohibiting the use of such additives. 18. With regard to more systemic concerns about the
non-notification of mandatory measures, the Canadian
representative said that comments would be conveyed to capital
for due consideration. She also reassured Members that any
implementing measure of the tobacco legislation would be
notified to the WTO at an early stage. Extract: Minutes of TBT Committee March 2010(xxii) Canada – Bill C-32 amendment to Tobacco Act 182. The representative from Mexico explained that in October 2009 Canada had adopted a new act to ban tobacco marketing aimed at youth. This act prohibited the manufacture and sale of American blend cigarettes which would give rise to a reduction in imports of burley and oriental tobacco which was used to produce these cigarettes. While the new legislation was aimed at tobacco products with sweet or fruit flavours, the law had proved to be much broader because it prohibited the manufacturing and sale of traditional cigarettes of the so-called American blend which had the taste of tobacco and were not of fruit or sweet in flavours. 183. In Mexico's view, the principle problem of this law was that it focused on specific ingredients which were used in the manufacture of American blend cigarettes, but did not focus on the flavour of the cigarette as a final product. The American blend contained additives and sweeteners, but did not have a sweet flavour. Despite the fact that the Canadian Government had agreed with this statement, it would still ban cigarettes containing these additives. The representative of Mexico argued that for these reasons the new measure was inconsistent with Canada's obligations under the TBT Agreement, specifically, with Article 2.2 which provided that technical regulations should not restrict trade more than necessary to comply with the legitimate public health objective. The representative from Mexico argued that the Canadian law was more restrictive than necessary to ensure compliance with the objective of prohibiting fruit sweet flavoured tobacco products aimed at attracting young smokers. The law prohibited American blend cigarettes even though they did not contain these flavours and Canada had not provided any evidence that would suggest that American blend cigarettes were particularly attractive to young people. 184. In Mexico's view, alternatives existed which were less trade restrictive. Other countries, such as the United States, France and Australia could serve as a model for Canada, as they simply banned products with fruit flavours or sweet in flavour. Referring to Art. 2.8 of the TBT Agreement, the representative of Mexico recommended that Canada base its technical regulations on the properties of the use of products rather than their design and descriptive characteristics and that Canada simply ban the products with fruit flavours or sweet in flavour. The representative from Mexico argued that Canada had not provided any evidence that the performance based approach, as recommended in Article 2.8 of the TBT Agreement, was not appropriate to address the issue. 185. In addition, the representative of Mexico said that Canada had not complied with its obligations in terms of transparency as set down in Article 2.9 of the TBT Agreement which provides that WTO Members should notify at an early appropriate stage. During the TBT Committee meeting on 6 November 2009, various delegations, including Mexico, had put several questions to Canada, including questions concerning the consistency of this measure with the TBT Agreement, and requested Canada to notify these measures to the TBT Committee. However, Canada had not provided answers to these concerns raised. Mexico was of the opinion that Canada could solve this problem without amending the legislation, as the law allowed the lists of additives and products subject to a ban to be corrected or modified at an administrative level without any need for additional legislation. 186. Mexico was also interested in knowing how the list of banned additives and sweeteners had been established. Mexico asked which scientific evidence had been taken into account by Canada to justify that more than 5000 additives referred to in the list were particularly attractive to young people, regardless of the quantity used in the cigarettes and also regardless whether in part a fruity or sweet flavoured was present in the final product. More specifically, Mexico requested more information whether there was any scientific or technical information used by Canada which justified the ban of sweeteners in the American blend and which showed that American blended cigarettes were particularly attractive to young people. 187. The representative from Argentina shared Canada's public health objective to reduce incentives for young people to start smoking. Nevertheless, the representative reiterated his country's concerns about the new Canadian law approved on 8 October 2009 amending the tobacco act since it imposed a ban on a long list of sweeteners for cigarettes, small cigarillos and small cigarette papers, or blunt wraps. He noted that despite the observations made by Argentina at the last TBT Committee meeting in November 2009, Canada had still not notified the act, thereby failing to comply with the principle of transparency. Furthermore, he indicated that Canada should not only notify the act to the TBT Committee, but also make reference to possible proposals for amendment and draft regulations for implementation. In Argentina's view, Canada had failed to explain before the TBT Committee why it had decided to adopt a measure that was more restrictive than necessary to ensure its objectives as it imposed a complete ban on a list of additives of which probably most did not give a sweet or chocolate flavour to cigarettes. Argentina echoed the questions asked by Mexico and encouraged Canada to notify the legislation as soon as possible 188. The representative of Colombia supported the statements made by Mexico and Argentina. She urged Canada to notify its law which, in Colombia's view, contained elements that were contrary to what Canada had committed itself to under Article 2.2. and other articles of the TBT Agreement. Colombia was of the opinion that protection of public health could be achieved through other measures, as other countries had successfully tackled the problem of an increase in cigarettes with flavours interesting to young people. She recalled that these countries had taken action against particular products which had those flavourings. Canada's approach appeared to be excessively broad as it included a large range of cigarettes which were not attractive to young people or those beginning to smoke. The representative from Colombia argued that Canada had included ingredients which were used in traditional blend cigarettes which had no particular link to the youth population. She emphasized that the possible consequence was a fall in Colombian exports of these products to Canada and a job losses. She invited Canada to submit to the Members the corresponding scientific evidence that justified taking these measures. 189. The representative of Malawi introduced a submission on "The effects of Canada's Tobacco Act on Malawi" (G/TBT/W/329). He expressed his country's deep concern regarding the consequences that the ban on tobacco marketing aimed at youth would have on the economy of Malawi. He explained that Malawi was the largest producer of Burley tobacco in the world with about 700,000 farmers depending on it for a living. Any trade measure that unfairly restricted the manufacture of cigarettes that used Burley tobacco would have a detrimental affect on Malawi's exports and hence very negative consequences on the entire economy of Malawi. Malawi was deeply concerned that the law was inconsistent with Canada's obligations under the TBT Agreement. Malawi's understanding of the purpose of the law was to reduce youth smoking by prohibiting the manufacture and sale of confectionary and fruit flavoured products that were designed to appeal to youth. While the representative of Malawi fully subscribed to this objective, he was deeply concerned that the law was much more trade restrictive than necessary to achieve this objective, in particular, because the law would effectively ban traditional blends of cigarettes. He stated that traditional blended cigarettes were one of the major categories of cigarettes in the world and that they were produced with three types of tobacco, including Burley tobacco, and included certain additives that the law would prohibit. He therefore urged Canada to treat differently additives which were an essential in traditional blend cigarettes. 190. Malawi noted that there existed a less trade restrictive way to deal with the problem, namely to ban only those products with characterizing confectionary or fruit flavours, following other WTO Members, such as France, Australia and the United States. Malawi also had concerns that the regulation would spread to other markets which would have disastrous consequences for economies that were highly dependent on tobacco. Based on the information available, Malawi failed to see how Canada had sought to ensure that the law was not more trade restrictive than necessary to fulfil the legitimate public health objective. He stressed the point that in the current version, the law risked to affect the livelihood of thousands of tobacco farmers in Malaw 191. The representative of Brazil noted that bilateral discussions with the Canadian delegation on the issue had taken place prior to the meeting. He stated that Brazil would continue to monitor the implementation of the measure and would seek clarification on some outstanding issues. 192. The representative of Switzerland expressed concern about the fact that the measure had not been notified. She appreciated the statement by Canada at the last TBT Committee meeting in November 2009 assuring that a notification of the implementing measures would be submitted. The representative of Switzerland reiterated that notifications should take place at an early appropriate stage when it was still possible to introduce amendments and to take comments into account. 193. The representative of the Dominican Republic echoed other delegations that had expressed concerns about the measure at issue. He noted that Canada had not yet notified the measure to the TBT Committee despite the possibly significant trade affects in terms of manufactured cigarettes, particularly comprising Burley tobacco. He explained that the Dominican Republic produced various varieties of tobacco including traditional blended types. The ban would therefore affect the tobacco production in the Dominican Republic and affect the national economy. Tobacco by its nature involved many small producers who were able to distribute income and improve the national economy. He stressed the fact that Canada should have notified this law prior to adoption as provided for in Article 2.9 of the TBT Agreement in order to ensure sufficient time to take into account comments by Members. The Dominican Republic urged Canada to take into account these comments before moving to adoption. 194. The representative from the Dominican Republic also noted that the legislation was intended to prohibit the manufacture and sale of tobacco products including cigarettes, cigarillos and other tobacco products with specific flavours such as confectionary or fruits with the understanding that these were being aimed at young people. The representative of the Dominican Republic agreed with the objective of this legislation, however, found that the way in which the new legislation had been drafted was excessively broad and disproportionate. Rather than prohibiting products with a specific flavour, it prohibited those containing at least one ingredient from a list of more than 5000 ingredients used in the manufacture of various types of cigarettes. As a result, traditional blended cigarettes of various kinds containing additives but without a particular flavour also became prohibited. He noted that in Canada the traditional blended cigarettes accounted for only 1 per cent of the cigarette market. He therefore concluded that the prohibition was not being imposed for public health objectives, but that it constituted an unnecessary technical barrier to trade in violation of a number of provisions of the TBT Agreement, including Articles 2.2 and 2.8. With this in mind the Dominican Republic urged the Canadian authorities to review and amend the above-mentioned law to ensure compliance with its obligations under the WTO TBT Agreement. 195. The representative of the Philippines supported Canada's objective to address public health concerns by reducing the incentives for young people to smoke. In his view, Bill C-32, however, appeared to be more trade restrictive than necessary to achieve Canada's public health objective, as it banned thousands of additives in any amount, regardless of whether or not they imparted a characterizing flavour to finished tobacco products. He emphasized that Canada had not provided any direct evidence that each of those items that were used for advice purposes were specifically utilized to attract the youth and were not related to preference of adult users. In addition, he argued that Article 2.8 of the TBT Agreement also encouraged WTO Members to base technical regulations on performance standards rather than design or descriptive characteristics – it appeared, however, that Canada - through Bill C-32 - sought to regulate the design of the product. The Philippines therefore recommended that Canada adopt a performance based approach by prohibiting tobacco products that existed with characterising fruit or confectionary flavours that were directed to the youth, but allowing those that catered for adult preferences. He noted that Canada had provided no evidence why a performance based approach was not appropriate in this regard. Finally, the Philippines requested Canada to provide the scientific and technical basis for the ban on the ingredients. 196. The representative of Turkey reiterated concerns regarding the Canadian measure at issue. While Turkey supported deterring youth from tobacco use, Turkey had serious concerns about the way in which Canada was attempting to achieve this objective. He argued that by the new measure Canada prohibited the use of various additives in certain tobacco products, including in blended tobacco products. These additives, however, were essential components of blended products and did not give a characterizing flavour, such as chocolate or other fruits aroma, to the product. As a consequence any restriction on these additives would in practice imply a prohibition of all blended products. Moreover, as these types of tobacco products either blended or non-blended would be considered like products, any measure that would result in prohibiting blended tobacco products would be discriminatory. He explained that as 98 per cent of the Canadian market was covered by non-blended tobacco products, any measure targeting to protect youth from tobacco use only including blended tobacco products would be discriminatory. 197. The representative of Turkey reiterated that additives did not give any characterizing flavours to the tobacco product implying that the end-products, either blended or not, had similar tastes. Turkey's concern was that Canada based its decision on the ingredients contained in the product without considering the effects of such ingredients on the final products. Furthermore, for Turkey, there existed no scientific evidence that the additives attracted youth or that blended tobacco products were more attractive to youth then the non-blended ones. Moreover, he argued that when taking into account that the share of blended tobacco products in the Canadian market was only 1 per cent, the taste preferences of Canadian users was clear. She concluded by noting that as the measure would result in prohibiting blended tobacco products from the market, it was obvious that the measure was not proportionate with its objective. She recalled that the TBT Agreement stated that technical regulations should not be more trade-restrictive than necessary to fulfil a legitimate objective. Turkey was of the opinion that there were several other ways to protect youth from tobacco and therefore requested the Canadian authorities to reconsider their decision and amend the measure accordingly. 198. The representative of the European Union strongly supported Canada's objective of protecting human health and, in particular, deterring youngsters from smoking, which was in line with the WHO Framework Convention on Tobacco Control. However, the European Union reiterated its disappointment about Canada's lack of regard for its transparency obligations under the TBT Agreement. As the measure was a technical regulation within the meaning of the TBT Agreement, the European Union considered that it should have been notified to the TBT Committee. Furthermore, in order to ensure that Canada's measures could be accommodated and fully understood, taking account also of Canada's trade obligations, she asked Canada to provide more details on its approach to prevent smoking among youngsters, and to update the TBT Committee with regard to any other measures envisaged in this regard. The European Union requested more information with regard to Canada's approach to ban a comprehensive list of additives, including certain flavours which might be perceived as appealing to youngsters. The European Union also asked Canada to make available the scientific studies or other such information that established a link between the prohibited additives and attractiveness to youngsters. The European Union also asked Canada to provide assurances to the Committee that the measures envisaged achieved uniform levels of protection in relation to all forms of tobacco, regardless of whether it was imported or domestically produced. Finally, the European Union wanted to know which other policy initiatives (such as information and education campaigns) Canada had introduced, or was planning to introduce, in conjunction with Bill C-32 in order to deter smoking among youngsters and increase awareness of tobacco-related risks in this particular population group. 199. The representative of the Former Yugoslav Republic of Macedonia fully supported the statements made by the European Union and other delegations. 200. The representative of the United States hoped to hear from Canada its responses to the questions that his delegation had raised on the subject during the November 2009 TBT Committee meeting. He announced that the US would take account of those answers as well as Canada's responses to comments and questions that other Members had raised in reflecting further on this matter. 201. The representative of Japan echoed other members' concerns. 202. The representative of Zimbabwe supported other Members who had raised concerns on this issue and emphasised that Zimbabwe's situation was similar to the one of Malawi. 203. The representative of Canada said that his Government took seriously its responsibility to regulate tobacco products and to develop and implement initiatives preventing the harm associated with tobacco use. He recalled that tobacco use was a contributing factor to serious chronic diseases such as cancer, respiratory ailments and heart disease that accounted for approximately CAD4.4 billion in direct health care costs each year in Canada. He emphasized that there was sound evidence that certain additives, including flavours, increased tobacco product attractiveness. He explained that the tobacco industry's own documents, made public as a result of litigation, had shown that the use of additives help to make tobacco products more appealing to young people. He stated that the Cracking Down on Tobacco Marketing Aimed at Youth Act responded to an important public health objective of the Government of Canada and applied to cigarettes, little cigars and blunt wraps manufactured or sold in Canada, regardless of their origin. 204. Canada was aware of the fact that tobacco manufacturers in Canada and those located in other countries might be required to reformulate little cigars, blunt wraps and cigarettes in order to continue to sell them in Canada. He stressed that although the Act did ban the use of certain additives, such as flavours that were appealing to children and youth, in little cigars, cigarettes and blunt wraps sold in Canada, he clarified that it did not ban any type of tobacco product or types of tobacco. He assured Members that Canada's obligations under WTO Agreements, including the TBT Agreement, were taken into account during the Bill's development and that Canada was committed to respecting its international trade obligations in meeting its policy objectives. For Canada, the objective pursued by the amended law was important and legitimate. The views expressed by Members during the TBT Committee meeting concurred with this objective. He noted that some Members had concerns on how this new act had been designed to respond to this objective. Canada therefore decided to provide detailed responses to questions posed by the United States at the last TBT Committee Meeting in November 2009. Canada hoped that these responses would answer some of the concerns that had been raised earlier during the meeting. 205. The representative of Canada confirmed that Section 4 (manufacture) of the amended Tobacco Act would come into force on 6 April 2010, while Section 5 (sale) would come into force on 5 July 2010. Second, he clarified that pursuant to Section 9 of the amended Tobacco Act, the Governor in Council had the authority to amend the Schedule by Order. Third, he informed the Committee that no amendments to the schedule of additives were under consideration at this time. Fourth, concerning the information on the criteria used to develop the list of prohibited additives, he explained that the list of prohibited additives comprised additives that either had flavouring properties or enhanced flavour as well as other additives that contributed to reduce the harshness of tobacco smoke or increased the attractiveness of cigarettes, little cigars and blunt wraps, particularly to young people and other first-time smokers. Canada had reviewed a variety of sources, including published literature, industry reports to Health Canada as well as internal industry documents, made public as a result of litigation in the United States. 206. He noted that the flavouring additives were those already identified by the Joint FAO/WHO Expert Committee on Food Additives and those identified by the Flavour and Extract Manufacturers Association (FEMA) Expert Panel. He added that some flavouring additives, such as menthol and citric acid, had been excluded from the list, while other additives that contributed to increasing the attractiveness of cigarettes, little cigars and blunt wraps were added, e.g. caffeine, probiotics, vitamins and spices as well as certain colouring agents. Specifying the list of additives that were banned, added clarity and predictability to the legislative measure, which in turn enabled a more effective and consistent compliance monitoring approach. 207. In response to the question about specific efforts to identify the relationship in general between prohibited additives and products marketed to – or that were innately attractive to – youth he replied that the objective of the amended Act was to protect from inducements to use tobacco products, by addressing in particular tobacco marketing tactics that targeted youth. He recalled that the harm caused by tobacco use was well documented in the medical and scientific literature. There was sound evidence that certain additives, including flavours, increased tobacco product attractiveness. He explained that the tobacco industry's own documents, made public as a result of litigation, had shown the use of additives helped to make tobacco products more appealing to young people. Other government health agency departments, including the US FDA, also shared the same concerns with respect to the use of flavours. 208. In response to Colombia and Mexico's concern on the list of additives being unnecessarily broad, he recalled that the amended Tobacco Act introduced a Schedule of Prohibited Additives that included not only additives with flavouring properties, but other additives such as sweeteners, vitamins, mineral nutrients and colouring agents, as all scheduled additives either had been used or might be used to make tobacco products more appealing to youth and first-time smokers. He clarified that the new legislation was not intended to prevent the use of additives required for manufacturing cigarettes, little cigars and blunt wraps, and that the Act did not ban any type of tobacco products or types of tobacco leaf. He emphasized that the amended Tobacco Act's legislative approach provided for precision and certainty in the market place as to what chemicals would not be permitted for use in the manufacture of cigarettes, little cigars and blunt wraps. This approach was adopted as it was deemed to best fit the Canadian tobacco product market and reflected the Government's policy intent to curb product development and marketing aimed at youth. 209. He noted that some Members had expressed concern on the lack of a notification to the WTO of the new legislation. Without prejudging the status of the new tobacco legislation under the TBT Agreement, he explained that it had been already too late to notify under Article 2.9.2 when Members had raised the issue in the fall of 2009. However, he assured Members that it never had been the intention of Canada to hide the legislation from other WTO Members. Canada had a very transparent legislative process. He underscored that Canada was very mindful of the comments that had been made by WTO Members at TBT Committee meetings. In addition, Canada assured Members that if any implementing regulations were to be considered, these would be notified to the WTO at an early stage. 210. The representative of Canada acknowledged that the new legislation provided for more precision and certainty: it banned a list of precisely identified additives, including additives that had been identified by the FAO, the WHO or other organizations as flavouring agents. Regarding claims that Canada was pushing for a similar ban within the WHO Framework Convention on Tobacco Control (FCTC) working groups, he replied that these issues were better addressed within the FCTC Conference of the Parties. Canada was one of a number of countries involved in working groups to develop guidelines for the implementation of the FCTC. Activities to further the implementation of the FCTC took into account best practices and scientific and medical literature from around the world. Extract: Minutes of TBT Committee June 2010(i) Canada – Bill C-32 amendment to Tobacco Act 181. The representative of the European Union reiterated concerns about Canada's Bill C-32 amending the Tobacco Act, and requested Canada to provide replies to several questions raised by Members at the March 2010 TBT Committee meeting. In particular, the European Union urged Canada to provide some background with regards to its approach to ban a comprehensive list of additives, including certain flavours which might be perceived as appealing to youngsters. Further, the representative of the European Union asked whether Canada could make available scientific studies or other relevant information that established a link between the prohibited additives and attractiveness to youngsters. She also requested that Canada provide assurance to the TBT Committee that the measures envisaged achieved uniform levels of protection in relation to all forms of tobacco, no matter whether imported or domestically produced. Finally, she asked Canada for further detail about any other policy initiatives that it had introduced, or was planning to introduce, in conjunction with Bill C-32 in order to deter smoking among youngsters and increase awareness of tobacco-related risks in this particular population group. Lastly, she noted that the European Union strongly supported Canada's objective of protecting human health and, in particular, deterring youngsters from smoking, which was in line with the WHO Framework Convention on Tobacco Control. 182. The representative of Indonesia (G/TBT/W/332) responded to the communication to the TBT Committee by Malawi dated 23 March 2010, on the effects of Canada's Cracking Down on Tobacco Marketing Aimed at Youth Act on Malawi's exports of burley tobacco (G/TBT/W/329). In this communication Malawi had expressed concerns that Canada's law was inconsistent with Canada's obligations under the WTO TBT Agreement. In particular, Malawi was concerned about the consistency of the law's prohibition on the manufacture and sale of cigarettes, little cigars, and blunt wraps containing certain flavourings and additives enumerated in a Schedule to the law with Articles of 2.2 and 2.8 of the TBT Agreement. In its comments, Malawi compared the approach Canada had taken to reduce youth smoking in its law to similar laws of other countries, such as France, Australia, and the United States. Malawi implied that the regulatory approach taken by these other countries, which banned only products with characterizing confectionary or fruit flavours, was less trade-restrictive than Canada's law and therefore somehow consistent with the TBT Agreement. 183. In addition, the representative of Indonesia objected to any suggestion by Malawi or any other WTO Member that the manner in which the United States had restricted certain flavoured cigarettes was consistent with GATT 1994, the TBT Agreement or other WTO agreements. Indonesia noted that it had requested that the Dispute Settlement Body establish a panel to hear its dispute with the United States regarding a measure in the Family Smoking Prevention Tobacco Control Act of 2009 that banned the production and sale of clove cigarettes, but allowed the sale of other cigarettes, including menthol cigarettes (WT/DS406/2). He clarified that Indonesia did not disagree with Malawi that reducing youth smoking was a legitimate health objective, or that limiting a ban to "characterizing flavours" was a more precise approach to discourage youth smoking than limiting all flavourings and additives. However, Indonesia argued that an even more targeted ban must be non-discriminatory, based on scientific and technical evidence, and at a minimum, cover those characterizing flavours shown to attract youth smokers. Indonesia maintained that the ban on the sale of clove cigarettes in the United States was inconsistent with various US obligations under the relevant WTO rules and principles, and should not be viewed as a "model" for regulations in other countries intended to restrict the production and sale of flavoured cigarettes arguably designed to attract youth. 184.
The representative of Mexico expressed his disappointment about
the answer by Canada at the last TBT Committee meeting on its
intention not to notify the law C32 from the parliament.
For Mexico, it constituted a dangerous precedent, which cast
doubts on the seriousness with which Canada assumed its
international commitments. Mexico was still awaiting a
specific response to the questions put at the last TBT Committee
and described in paragraph 185 in G/TBT/M/50. Mexico
supported the objective of protecting human health, however it
questioned the way in which this objective was being approached
in Canada and in particular the lack of transparency. 186. Furthermore, Kenya held the view that the proposed legislation was inconsistent with other provisions of the TBT Agreement namely Articles 2.2, 2.8, 2.9 and 12.3. Although the proposed law was intended to address a specific concern, it was unnecessarily trade restrictive. In the opinion of Kenya the issues in the legislation could easily be resolved through other equally effective means that were less trade restrictive and consistent with Canada's obligations under the TBT Agreement. The representative asked Canada to answer three questions: First, on what basis had the additives been included in the schedule, and how were they particularly appealing to the youth. Second, would Canada consider amending the schedule of products and additives affected by the ban to ensure that the ban only applied to cigarettes exhibiting discernible confectionery or fruit flavour. Third, what specific evidence had Canada relied upon in relation to its claims that blended tobacco products were more toxic, more addictive and more attractive to youth. 187. The representative of Turkey reiterated his delegation's concerns regarding the measure at issue and referred to comments made by Turkey in previous TBT Committee meetings. While fully supporting the objective of the legislation, Turkey was of the opinion that the current legislation was more trade restrictive than necessary. By means of this measure, Canada prohibited the use of various additives in certain tobacco products. As these kinds of products, either blended or non-blended, were like products, any measure that would result in favour of prohibiting blended tobacco products was discriminatory in nature. He added that the additives did not give any characterizing flavours to the tobacco product and the decision was made without considering their effects on final products. In addition, there was no scientific evidence and the measure was not proportionate with its objective. Turkey therefore requested Canada to provide responses to Turkey's comments and urged Canada to reconsider its decisions and amend the measure in accordance with their TBT commitments. 188. The representative of Chile supported the concerns raised by other delegations. Chile had sent a letter expressing its concerns to the Canadian embassy in Chile and was still awaiting a formal response. In this letter, Chile supported the objective of the law and the Canadian authorities in their attempt to reduce smoking among young people. However, in Chile's view, the scope of the law was much broader than that and it de facto prohibited the import, manufacturing and marketing of American blended tobacco and cigarettes. Chile therefore supported the comments made by other Members and regretted that the measure by Canada had not been notified to the WTO in accordance with transparency guidelines and particularly with Article 2.9 of the TBT Agreement. Notification would have been necessary because the measure would affect products being marketed, including in Chile. Furthermore, Chile held the view that the Canadian measure was not consistent with the obligations stipulated in Articles 2.2 and 2.8 of the TBT Agreement. Chile's concern was that the law was going to have a negative impact on the trade of the tobacco products concerned. Chile was a Burley tobacco producer and Burley tobacco was used in American blended cigarettes. She explained that Chile had about 2,400 hectares of this crop and its cultivation crop employed approximately 1,000 workers. Tobacco companies had more than 25 per cent of its total production exported to over 15 countries worldwide, including Canada. Chile therefore urged Canada to take its position into account with a view to reaching an understanding on this issue. 189. The representative of Tanzania endorsed the statements made by the preceding delegations. As others, Tanzania supported the legitimate objective of the measure; however, in Tanzania's view, the bill, as currently drafted, was overly broad and violated Canada's trade obligations as a Member of the WTO and could impose serious and unnecessary economic and social hardships on Tanzania's tobacco producers, and affect long term development prospects. Tanzania was not opposed to the purpose of the Canadian Bill C-32 in as far as it aimed at reducing the number of young people smoking, however, the extent of the contribution of the measure to the objective, its trade restrictiveness, and the importance of the values and interests at stake needed be balanced. 190. The Canadian Bill C-32 banned the use of a long list of different types of ingredients which were used in the production of many tobacco products, as well as in food, including natural components of the tobacco leaf. He noted that the ban applied regardless of the amount used or their effect on the flavour of the finished product. Tanzania's concern was that the Canadian Bill C-32 would effectively place a total ban on traditional blended cigarettes, one of the two major categories of cigarettes in the world. He explained that traditional blended cigarettes were produced with three types of tobacco, namely Burley tobacco, Virginia tobacco and Oriental tobacco. Many of the ingredients banned under Bill C-32 were critical components of traditional blended cigarettes sold throughout the world. Their use helped blend the three different types of tobaccos and comprised elements of manufacturers' brand recipes. The type and the amount of ingredients used in traditional blended cigarettes did not impart and/or exhibit any discernible fruity, confectionery, or other flavour that might be perceived as attractive to young people. He concluded that there was an absence of scientific evidence presented by Canada as to how the "attractiveness" of tobacco products could in fact be assessed on any scientific basis. 191. Tanzania's concern was that Bill C-32 established a dangerous precedent and could have a devastating impact on Tanzania's tobacco leaf export interests, tobacco products trade, and long term tobacco crop development prospects. In particular, it was noted that Tanzania exported significant quantities of tobacco leaf around the world with an approximate annual crop volume of 79 million kilos of which over 90 per cent of that volume constituted Virginia flue cured tobacco. He explained that approximately 98,000 farmers grew tobacco in Tanzania of which 91,000 farmers grew Virginia flue cured tobacco, making tobacco the leading agricultural cash crop generating more than US$ 160 million per annum. Tanzania feared that demand for Virginia flue cured tobacco leaf was likely to fall if manufacturers were unable to use ingredients to manufacture traditional blended cigarettes. Such adverse consequences were avoidable by using less trade-restrictive measures consistent with WTO. 192. The representative Tanzania continued explaining that the Bill C-32 contravened various articles of the TBT Agreement. Article 2.2 of the TBT Agreement prohibited Members from adopting technical regulations that had the effect of creating "unnecessary obstacles to trade". In particular, it required that "technical regulations should not be more trade-restrictive than necessary to fulfil a legitimate objective, taking account of the risks non-fulfilment would create." It further stated, "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." For Tanzania the relevant legal question was therefore whether the ban was more trade restrictive than necessary to meet the stated objective. Furthermore, Article 2.8 of the TBT Agreement stated that "wherever appropriate, Members shall specify technical regulations based on product requirements in terms of performance rather than design or descriptive characteristics". In Tanzania's view, it was possible to achieve the same objective of reducing the perceived attractiveness of some tobacco products to young people in other non trade-restrictive ways. Other WTO Members had adopted a performance-based standard to regulate tobacco product ingredients. Tanzania was of the opinion that Canada was in violation of Article 2.8 of the TBT Agreement, as Canada had regulated the design of the product, in the form of its composition, without regard to how the ingredients affected the performance of the tobacco product in the form of its characteristic flavour. The "performance-based" approach appeared to be in line with the TBT Agreement, was more precise and more proportionate than an approach banning a long list of ingredients in any quantity and without considering their effect on the flavour of the final tobacco product. Tanzania therefore urged Canada to consider adopting a similar performance-based approach. 193. Furthermore, the representative of Tanzania noted that Bill C-32 was not in line with Article 2.9 of the TBT Agreement. Because of lack of a relevant international standard on the production of tobacco products, and because of the significant trade impact of the Canadian Bill C-32, prior to signing the Bill, Canada should have published a notice at an early and appropriate stage, in such a manner as to enable interested parties from other Members to become acquainted with the proposed Bill. Canada should also have notified other Members at an early and appropriate stage, through the WTO Secretariat, of the products to be covered by the proposed bill together with a brief indication of its objective and rationale. Referring to Article 2.10 of the TBT Agreement, he noted that if Canada had considered the sale of flavoured cigarettes as an urgent problem of safety, health, environmental protection or national security, Canada should have notified immediately other Members through the Secretariat of the presence of Bill C-32 and the products covered, with a brief indication of the objective and the rationale of the said Bill, including the nature of the urgent problems. 194.
Tanzania was of the opinion that the implication of Bill C-32
was also inconsistent with Canada's obligations under NAFTA.
Article 904(4) of NAFTA stated, in part, that "No party may
prepare, adopt, maintain or apply any standards related measure
with a view to or with the effect of creating an unnecessary
obstacle to trade between parties". In the context of Article
2.2 of the TBT Agreement, Bill C-32 created an unnecessary
obstacle to trade within the respective region, and brought to
issue Canada's consistency under international trade law and
further raised concerns on equitable treatment of Members.
Finally, referring to Article 12.3 of the TBT Agreement, he
recalled Tanzania's status as a Least Developed Country (LDC)
and requested that Canada adapt its domestic objective of
reducing the appeal of certain tobacco products to young people
with a less trade restrictive approach. 196. The representative of Zambia supported the concerns raised by other Members on the Tobacco Act in Canada. He noted that Bill C-32 banned the use of different types of ingredients including those which were essential component of traditional blended cigarettes. The use of some of the banned ingredients helped blend the three types of tobacco (i.e. Virginia, Burley and Oriental) and also helped to replace many of the natural components of the tobacco leaf that the curing method destroyed in some tobacco types. He noted that blended cigarettes were one of the major categories of cigarettes in the world and therefore the ban of these ingredients also effectively banned traditional blended cigarettes, despite the fact that the type and the amount of the ingredients used in the traditional blended cigarettes did not impart any specific fruity or confectionary flavour that might be attractive to young people. In Zambia's view the measure was an unnecessary obstacle to trade in tobacco products and Zambia urged Canada to adopt a less trade restrictive measure to address their legitimate concern. 197. The representative added that in the current form, Bill C-32 would not only negatively affect tobacco producing countries such as Zambia, but also affect their future development prospects. Zambia had been making efforts to diversify the economy and part of these efforts had been to increase production and exports in agricultural products, which included tobacco. He informed the Committee that 20 per cent of Zambia's agricultural exports were tobacco of which more than 60 per cent was auctioned in Malawi. The auctioned tobacco was used to produce traditional blended cigarettes amongst other types of cigarettes by adding some of the banned ingredients and re-exported to other countries, including Canada. Therefore, Bill C-32 had the potential of negatively affecting Zambia's tobacco leaf exports and the livelihood of hundreds of farmers. 198. The representative of Uganda (G/TBT/W/331) shared the concerns raised by other Members. He explained that Uganda was one of the major tobacco growing countries in Africa and was thus concerned about the effects of Canada's measure on its tobacco leaf manufacturing and exports. He noted that the law prohibited the manufacture and sale of cigarettes, little cigars and blunt wraps that contained any of the flavourings and additives listed in a schedule appended to the law. Uganda was deeply concerned that this law was inconsistent with Canada's obligations under the TBT Agreement and would have a negative effect on Uganda's long term economic prospects. 199. Whereas Uganda fully supported the objective of Canada to reduce the incidence of youth smoking, however, Uganda was concerned that the law was far too restrictive to trade than was necessary to achieve this objective. Specifically, Uganda was concerned that the law effectively banned traditional blended cigarettes, which were one of the two major categories of cigarettes in the world. Traditional blended cigarettes were produced with three types of tobacco (Virginia, Burley and Oriental tobacco) and blended with certain additives that the law sought to prohibit, but which were an essential component of traditional blended cigarettes. The additives were applied as manufacturing aids to blend the three different types of tobaccos and as flavourings to confer on each brand its unique tobacco taste. Additives in traditional blended cigarettes did not lend a characterizing fruit or confectionary flavour to the end product. Thus, by banning the additives, the law effectively banned traditional blended cigarettes, even though such cigarettes did not exhibit any discernible confectionary, fruit or other flavour that was particularly attractive to youth. 200.
He informed delegations that Uganda was a significant producer
of tobacco leaf in the world, with an approximate annual crop
volume of 37 million kilograms of which over half of that volume
constituted burley tobacco. He reported that approximately
76,810 farmers grew tobacco in Uganda of which about 36,000 of
these farmers grew Burley tobacco. Over 95 per cent of Uganda's
total annual tobacco crop was exported to cigarette
manufacturers worldwide generating annual revenue of US$ 66
million. Measures which restricted blended cigarettes would,
therefore, have a detrimental impact on Uganda's tobacco
production and tobacco exports which had been the leading export
cash crop for several years. 202.The representative of Jordan explained that his delegation fully supported the objective of Canada's tobacco act, namely to reduce youth smoking. However, Jordan was concerned that the law was overly trade restrictive in proportion to the objective it sought to achieve. Jordan therefore supported the concerns raised by other Members and urged Canada to respond to these concerns. 203.The representative from the Former Yugoslav Republic of Macedonia supported the statements by other Members and reiterated concerns with the proposed bill. As a producer of traditional tobacco, the Former Yugoslav Republic of Macedonia held the view that there was a way to find a better balance between the obligations which arose from the Framework Convention of Tobacco Control (FCTC) and economical aspects of the tobacco producers which had great social and economic impacts in developing country and developed country. He urged Canada to consider all questions and concerns from the Former Yugoslav Republic of Macedonia. 204.The representative of Egypt echoed the concerns raised and sought clarification from Canada on how the amended tobacco act was consistent with Canada's obligation under WTO/TBT agreements. 205.The representative of Ecuador recalled that the Canadian Bill C-32 had the effect of prohibiting the import of the type of cigarettes known as American blend or traditional blend, which was the type of cigarette that blended Oriental, Virginia and Burley tobacco and which was produced and exported by Ecuador. Ecuador recognized Canada's right to pursue a legitimate objective by reasonable measures, however, Ecuador was concerned that Canada had failed to meet the obligations of Articles 2.2, 2.8 and 2.9 of the TBT Agreement. Ecuador was of the view that the measure seemed to be an unnecessary obstacle to international trade because it failed to take into account the need for technical regulations to be based on the performance of products rather than the design and product characteristics. The representative of Ecuador informed the Committee that given the trade effects that the act would have, it could potentially affect the economy of Ecuador since about 1,500 Ecuadorian families, (about 6,000 workers), were dedicated to producing Burley tobacco and its blend, which were marketed in Europe and North America. Ecuador asked Canada to provide an answer to the question how their legislation would affect the domestic production in Canada and thus the importation of tobacco from abroad. 206. The representative of Honduras expressed his concerns about the implications of the amended tobacco law for its tobacco exports to Canada. While Honduras shared the legitimate objective of the Government of Canada to protect the health of young people, Honduras considered the way in which it sought to achieve this objective as excessive because it created barriers to trade that were more restrictive than necessary. Along the same lines as other Members, Honduras remained concerned about the compatibility of this law with Canada’s obligations under the TBT Agreement, and the negative impact that this would have on long term economic prospects. Honduras therefore requested Canada to explain how it had taken into account the special needs of Honduras in drafting and applying the prohibition on use of additives as stipulated in Article 12.3 of the TBT. Furthermore, Honduras raised the question how Bill C-32 was compatible with Article 20 of TRIPS, which stipulated that the use of a trade or service mark in commercial operations with special requirement should not be unjustifiably complicated. 207. The representative of Guatemala expressed serious concerns about Bill C-32 which had entered into force in Canada on 8 October 2009, and supported fully the comments made by other Members, especially by Mexico, Chile and Kenya. He explained that the concern of Guatemala with respect to this law was twofold. The first had to do with the transparency obligations under the TBT Agreement, under which all Members had to notify and provide sufficient time to other Members to submit their comments for draft technical regulation which could in one way or another affect legitimate commercial interests. For Guatemala, it was a matter of serious concern that Canada had adopted and implemented the bill which had commercial implications without having provided the necessary notification and without taking into account comments by other Members. 208. Although Guatemala shared the objective pursued by Canada under this legislation, Guatemala was of the view that the manner to achieve this objective was excessive and created hidden barriers to trade which was incompatible with Article 2.2 of the TBT Agreement. Furthermore, the new law discriminated against different types of tobacco which indirectly affected Guatemalan tobacco producers. He reminded delegations that although the Canadian legislation prohibited the use of any additives, it was indirectly prohibiting the tobacco blends and particularly the American blend, which created a precedent globally. As Guatemala was a Burley tobacco producer which was used in these blends, Guatemala was very much concerned about the trade implications of the new law. Guatemala shared Canada's objective to seek to protect the help of young people; however, since Canada did not have any scientific evidence that the use of all additives created flavours which could make the tobacco more attractive for certain parts of the population, Guatemala's view was that the measure was excessive and in violation of Article 2.2 of the TBT Agreement. Guatemala urged Canada to review the regulations under Bill C-32 taking into account the comments made by Members to date as well as respecting the transparency obligations under Article 2.9 of the TBT Agreement. 209. The representative of the Dominican Republic supported other Members that had expressed and reiterated their concerns regarding the adoption by the Government of Canada of Bill C-32 which prohibited the manufacturing and sale of traditional blended cigarettes. She informed the Committee that Canada had not yet notified the measure to the TBT Committee, despite the fact that it could have an important impact on the sales of cigarettes, in particular of cigarettes produced with Burley tobacco. The Dominican Republic cultivated different types of tobacco that constituted the traditional blends. The Canadian law would undermine the tobacco production in the Dominican Republic having an impact on the national economy and creating social difficulties and loss of jobs. As stated in the last TBT Committee meeting, she noted that Canada should have notified the measure before adoption as stipulated under Article 2.9 of the TBT Agreement. She recalled that the measure should have been debated and commented on by Members. 210. The Dominican Republic observed that the law aimed at prohibiting the manufacture and the sale of tobacco products which included cigarettes, small cigars and other tobacco products with certain characteristics such as confectionary fruit or fruit flavours. Although the Dominican Republic understood the objective of this measure, the way in the which the measure had been drafted was overly broad and out of proportion: instead of prohibiting products with specific flavour, it prohibited products that contained at least one of the ingredients in the list of more than five thousand ingredients, which were necessary for the manufacturing of cigarettes made up of the three main types of tobacco. Taking into account the drastic effect that the prohibition of such blended cigarettes with additives without any specific confectionary or fruit flavours, and that the traditional blend only represented one per cent of the total cigarette market, for the Dominican Republic the prohibition on ingredients did not appear to pursue a public health objective, but constituted an unnecessary technical barrier to trade, in violation of various provisions of the TBT Agreement, such as Articles 2.2 and 2.8. Therefore the Dominican Republic urged the Canadian authorities to revise and amend the bill in question. 211. The representative of Burundi stated that although Burundi understood the legitimate health concerns of Canada in establishing the Bill C-32, Burundi expressed deep concerns regarding this act and associated itself with the statements made by other Members. The proposed amendment to the Canada tobacco act would not only affect Burundi as a tobacco producing country but also was more trade restrictive than necessary. He noted that Kenya, Tanzania and Uganda were partner states in the East African Community and contributed therefore to the regional integration and development efforts of this region. In this regard, Burundi was also affected when those countries were affected. Burundi urged Canada to provide a justification of the act in light of the relevant provisions of the TBT agreements and to take into account all concerns raised in this regard by other WTO Members. 212.
The representative of Malawi stated that his delegation remained
deeply concerned about the new regulation by Canada
(G/TBT/W/329). As Malawi was the largest producer of
tobacco and that tobacco was the leading cash crop in the
country. Malawi recommended Canada to consider reviewing
the regulation taking into account the questions raised by
Malawi and other Members. 224. The representative of Croatia stated that the Amendment to Tobacco Act would effectively ban the manufacture and sale of traditional blended cigarettes and would thereby significantly reduce imports of the burley and Oriental tobacco used in such cigarettes. Since most of Croatian cigarette production was from the blended tobacco and half of Croatia's production was exported, Croatia perceived this measure as trade discriminatory and echoed the concerns raised by other delegations. 225. The representative of Mozambique joined other Members in expressing its concerns about Canada's Bill C-32. As a tobacco growing country, Mozambique was concerned about the possible effects of Canada's act on its tobacco leaf exports. Like others, Mozambique fully supported the objective of Canada's law aimed to reduce the incidence of youth smoking by prohibiting the manufacture and sale of confectionary and fruit flavoured tobacco products that were designed to appeal to youth, however, Mozambique was concerned that the law effectively banned traditional blended cigarettes produced with Virginia, Burley and Oriental tobacco, of which two types were grown in Mozambique. He informed the Committee that tobacco was one of the five main export commodities of Mozambique and that Canada's law would have a negative effect on Mozambique's export revenues and economic development. Mozambique therefore appealed to Canada to avoid negative effects that would damage economic prospects of countries depending on tobacco exports. 226. The representative of Zimbabwe shared the concerns raised by other delegations regarding the impact of the Canada Bill C-32. As a grower of tobacco and manufacturer of tobacco products, Zimbabwe remained concerned about the likely negative consequences of the amendment to the livelihoods of the numerous small tobacco farmers in many of the concerned Members' economies. Had a thorough study been undertaken, including an analysis of the performance aspects of the tobacco products, alternative, less trade restrictive ways to deal with the young smokers problem would have been found to address the concerns of Zimbabwe as well as other Members, while still meeting Canada's objectives to address the health concerns of its citizens. Zimbabwe hoped that Canada would take into account the comments made. 227. The representative of Canada explained that the Cracking Down on Tobacco Marketing Aimed at Youth Act responded to an important public health objective of the Government of Canada. It applied to cigarettes, little cigars and blunt wraps manufactured or sold in Canada, regardless of their origin. She informed the Committee that the act received Royal Assent on 8 October 2009, and most of its measures had already come into force. The section that prohibited the sale of tobacco products containing prohibited additives would come into force on 5 July 2010. Among others, the new act banned the use of certain additives which contributed to making tobacco products more attractive to youth, in little cigars, cigarettes and blunt wraps sold in Canada regardless of their origin. She highlighted that the act did not ban any type of tobacco product or types of tobacco. The government of Canada had made these changes to the Tobacco Act to protect young people from marketing practices that encouraged them to smoke. She stated that Canada's obligations under WTO Agreements, including the TBT Agreement, had been taken into account during the Bill's development. Canada was committed to respecting its international trade obligations in meeting its policy objectives. 228.
The representative informed the Committee that at the last TBT
Committee meeting in March 2010, numerous questions had been
posed by intervening Members. In answering these questions,
Canada had grouped the responses into different themes. She
noted that several questions had already been answered by Canada
in the March 2010 TBT Committee meeting, and were therefore
referred to as March 2010 TBT Committee meeting minutes
(document G/TBT/M/50). 230. In response to questions received from multiple Members regarding the scientific evidence used to develop the list of prohibited additives, she noted that Canada had provided a response at the March 2010 TBT Committee Meeting. In summary, this response had stated that there was sound evidence that certain additives, including flavours, did increase tobacco product attractiveness. The tobacco industry's own documents, made public as a result of litigation, had shown that the use of additives helped to make tobacco products more appealing to young people. In addition, Canada had prepared a list of references of the numerous publicly available studies that had examined the use of additives that increased the appeal of tobacco products. This 14-page list of references was available for interested Members as a Room Document. 231. In response to questions received from multiple Members regarding the relationship of additives to tobacco product types targeted in the schedule, she reiterated that there was sound scientific evidence that additives, including flavours, were used by tobacco manufacturers to make their tobacco products, including cigarettes with blended tobacco leaves, more appealing. Canada's Act was aimed at prohibiting the use of additives in all cigarettes, little cigars and blunt wraps manufactured in, or imported into, Canada that contributed to making these products more attractive. To respond to the questions by the European Union and other Members on the treatment of domestic and imported tobacco products, she clarified that the measure achieved uniform levels of protection in relation to all forms of tobacco, no matter whether imported or domestically produced. 232. In response to Malawi's question regarding the possibility of amending the list of prohibited additives of targeted products, she noted that pursuant to Section 9 of the amended tobacco act, the Governor in Council had the authority to amend the schedule by order; however, no amendments were under consideration at this time. With respect to flavours, limiting the restrictions to confectionary or fruit flavour would only, in Canada's view, not address the problem of attractiveness. For example, Canadian smokers could find that other types of flavour might also make cigarettes more attractive, such as butter flavour. 233. To respond to a question posed by Argentina during the March 2010 TBT meeting regarding the development of the list of excluded additives including menthol in the schedule of prohibited additives, she noted that this list had been refined during the hearings held by the House of Commons (Canadian Parliament). During these sessions Members of the public, government officials, health advocates, tobacco retailers and tobacco manufacturers had been asked to comment on the schedule of prohibited additives. Typically, except for menthol, l-menthol and l-menthone, the 21 chemicals excluded from item 1 of the schedule "Additives that have flavouring properties" were not expected to either impart or enhance flavour. She informed delegations that the minutes of all deliberations in the two chambers of the Canadian Parliament on the Cracking Down on Tobacco Marketing Aimed to Youth Act, including discussions on how the list of excluded additives had been developed, were available to the public online (www.parl.gc.ca). With respect to the exclusion of menthol, menthol cigarettes were used by only 2 per cent of smokers in Canada and their sales had been declining for several years. The Cracking Down on Tobacco Marketing to Youth Act had been designed to protect youth from those additives that increased the appeal of cigarettes, little cigars and blunt wraps. 234.
In response to multiple Members' statements related to concerns
that Canada's list of prohibited additives was too broad or that
Canada should adopt similar approaches used by other countries,
she noted that Canada's response was in the record from the
March 2010 TBT Committee meeting (document G/TBT/M/50). In
summary, she stated that the Canadian approach had been deemed
to be the best fit to address the public health problem faced by
Canada. 236. In response to several Members' questions regarding the notification of the legislation, she referred to Canada's response at the March 2010 TBT Committee Meeting during which Canada noted that when Members had made Canada aware of the lack of notification of Bill C-32, it had already been too late to notify under Article 2.9.2 of the TBT Agreement. She, however, underscored that it had never been the intention of Canada to hide the legislation from other WTO Members and that Canada had a very transparent legislative process. She emphasized that Canada was very mindful of the comments that had been made by WTO Members at the TBT Committee. In addition, if any technical regulations were to be considered to implement this tobacco legislation, they would be notified to the WTO at an early stage. Finally, she informed the Committee that Canada had taken note of all the statements that had been made during that day, including comments from Tanzania on the NAFTA Agreement, and that the questions would be sent back to capital. Extract: Minutes of TBT Committee Nov 2010(i) Canada – Bill C-32 amendment to Tobacco Act 203. The representative of Mexico said her delegation shared Canada's commitment to protect human health and recognized the impact of smoking in this regard. Mexico was making efforts to discourage smoking among its population. The representative said Mexico was concerned at Canada's non-compliance with Articles 2.2, 2.9 and 2.9.4 of the TBT Agreement. Specifically, Canada had not notified Bill C-32 to the Committee and therefore had not provided WTO Members opportunity to make comments. The representative recalled that Mexico's concerns were shared by many other Members. 204. The representative of Mexico reiterated that the measure was unnecessarily restrictive as there existed other ways to meet the objective without prohibiting the use of taste enhancers. In other countries where additives to tobacco had been regulated, only the quantity had been limited. Mexico noted Canada's commitment to reduce tobacco consumption among its population, especially among youth, but claimed the measure was restrictive and contrary to Canada's obligations under the TBT Agreement. Mexico requested information on the status of the Bill and asked if Canada intended a revision to take into account comments made by Mexico and others. The representative of the European Union requested further clarification from Canada on the scientific rationale behind Bill C-32, in particular given the European Union's own work in investigating the link between additives and addictiveness and attractiveness of tobacco products. At the June 2010 TBT Committee meeting, Canada had made available a room document with selected references that had been considered in the development of the amendment of Canada's Tobacco Act - some 170 publications and other information providing "evidence that additives are used to make tobacco products more appealing to youth and novice users". However, the selected references offered no details with regard to the content of the studies therein, or their conclusions. In this context, the European Union asked Canada to provide information as to which studies from the list specifically dealt with the impact of additives on addictiveness and/or attractiveness, in particular in children and youngsters, and also provide the TBT Committee with a short summary of their conclusions. 205.
The representative of the European Union noted that the Schedule
of the Bill provided for an exemption of certain additives
including benzoic acid, citric acid, guar gum and menthol from
the prohibition. The European Union asked Canada to
provide more details as to the scientific rationale for the
exemptions since, in particular in the case of menthol, several
scientific studies had postulated that menthol could act as an
indirect enhancer of nicotine addictiveness and could also help
boost tobacco products' attractiveness, by providing tobacco
with a more pleasant, cooling taste. 208. The representative of Turkey reiterated his country's concern with Canada's Cracking Down on Tobacco Marketing Aimed at Youth Act. Turkey supported Canada's objective of deterring youth from tobacco use, but was seriously concerned at the way Canada sought to achieve this objective. The representative reiterated concerns that the Canadian measure was more trade restrictive than necessary as it prohibited the production, sale and distribution of tobacco products containing additives that not only provided a characterising flavour to the product, but that were also used during the blending process of burley and oriental tobacco. He noted that some of these additives were vital and indispensable components for blending Burley and Oriental tobacco (American blend), that these additives did not give a characterising flavour to the end product that could result in attraction, and there was no scientific evidence confirming that Burley and Oriental blends were more appealing than non-blended tobacco. The representative said blended and non-blended tobacco products were like products and were substitutes; any measures resulting in the prohibition of one would favour the other. Turkey asked Canada to reconsider the Act based on its TBT Agreement commitments and requested further information on the exclusion of traditional flavours such as menthol from the coverage of the Act. The representative of Chile stated her delegation's support for the initiative of Canada towards preventing consumption of tobacco products which may be attractive to young people. She reiterated concern that the coverage of the measure was broad since it imposed a de facto prohibition on the import, manufacturing and marketing of American blended tobacco in cigarettes. Chile supported concerns raised by other Members in this regard, reiterating that the measure prohibited additives and taste enhancers in specific tobacco products such as cigarettes and cigars, and as a consequence the measure would inhibit traditional tobacco products. Chile was of the opinion that the measure would close the Canadian market to these products but not to other types of tobacco which did not use these types of ingredients, creating discrimination. The representative cited examples of alternative regulations seeking the same objective in the United States and France. She reiterated that the Canadian measure had not been notified to the WTO and was more trade restrictive than necessary to achieve its objective. Article 2.8 of the TBT Agreement stated that Members should base their technical regulations on the use of products instead of their descriptive characteristics. In this regard, Canada could adopt an approach based on performance. 211. The representative of Zambia reiterated its concerns that the Canadian measure created an unnecessary obstacle to trade and Canada had failed to notify it to the TBT Committee. Article 2.9 of the TBT Agreement required Members to publish, at an early, appropriate stage, the proposed technical regulation, whenever such technical regulation was not in accordance with the technical content of relevant international standards, and if it had a significant effect on trade. Notification was to enable interested Members to become acquainted with the regulation and submit comments in writing, and for the notifying Member to take into account the results of such consultation. Zambia was concerned that Canada had introduced its measure without due regard to its notification obligations. 212. The representative of Zambia said that for many sub-Saharan African countries tobacco production and trade accounted for a large proportion of rural income. The measure introduced by Canada would have a direct impact on the lives of these rural communities whose livelihood revolved around tobacco production. The tobacco industry accounted for 20 per cent of Zambia agricultural exports. In the light of the trade impact of the measure, Zambia urged Canada to reconsider its position and take into account concerns raised. 213. The representative of Ecuador repeated his country's concerns with respect to the Canadian law. In the view of his delegation, the measure would result in a de facto prohibition against the importing and marketing of American blend cigarettes, which Ecuador exported. While Ecuador did not object to the legitimate policy objective behind Canada's measure, they did question the process and measures Canada adopted; these had established standards which did not comply with Articles 2.2, 2.8 and 2.9 of the TBT Agreement. The representative observed that any measure seeking to promote a legitimate policy objective, such as protection of human health, should be reasonable and proportionate of the objective and should not create unnecessary technical barriers to trade. Also, the Canadian measure did not give due consideration of the TBT Agreement provision that technical requirements be based on performance rather than the product's design or descriptive characteristics. 214. The representative of Jordan reiterated his delegation's support for the objective of Bill C-32 amending the Tobacco Act. However, in the view of his delegation, the measure was more trade restrictive than necessary. 215. The representative of the Dominican Republic explained that, in her delegation's view, the Canadian law to discourage tobacco marketing directed at youth would effectively prohibit the manufacture and sale of traditional blended tobacco. Canada should have provided notification, as required by Article 2.9 of the TBT Agreement, so WTO Members could have debated and commented on the law. The representative recalled her country's previous statements that the law could have important effects on the market for cigars and cigarettes, especially with respect to the Burley tobacco market. As a result, the Bill could have serious adverse effects on tobacco production and the national economy in the Dominican Republic, resulting in social problems due to job losses amongst tobacco harvesters. 216. The representative of the Dominican Republic observed that the law was aimed at prohibiting the manufacture and sale of tobacco products, including cigars and cigarettes, with characteristic flavours such as sweeteners or fruit. While the Dominican Republic shared the objective of protecting human health, the way the Canadian law was drafted was too broad and disproportionate. 217. The representative of the Philippines reiterated that Bill C-32 appeared to be more trade restrictive than necessary as it banned many additives regardless of whether or not they imparted a characterizing flavour to the finished tobacco product. 218. The representative of Uganda said his delegation was still awaiting a response from Canada to questions raised by Uganda at the June 2010 meeting of the TBT Committee concerning Bill-32 amending the Tobacco Act. 219. The representative of Kenya said her delegation shared concerns raised by other Members. The regulation appeared to be more trade restrictive than necessary to fulfill a legitimate objective, contrary to Article 2.2 of the TBT Agreement. Nor had the measure been notified to the TBT Committee as required by Article 2.9 of the TBT Agreement. Pursuant to Article 12.3 of the TBT Agreement, which required WTO Members to ensure their technical regulations did not create unnecessary obstacles to exports from developing country Members, and given Kenya's developing country status and heavy dependence on tobacco growing, manufacture and export, the representative requested Canada consider adopting a less trade restrictive approach. 220. The representative of Croatia supported the purpose of the Canadian law, but reiterated his delegation's concern that the law was too restrictive. 221. The representative of Cuba supported the objective of protecting human health, particularly the health of young people. As a country producing and exporting cigarettes and tobacco, Cuba was concerned at how the measure would prevent the marketing of certain tobacco products and cigarettes. She asked Canada to provide more information on this Law. 222. The representative of Canada recalled that the TBT Agreement required that regulations be notified if they may have a significant trade impact. Consideration was given to the commercial impact of the Canadian measure as it was being developed and analysis of the market for consumption of tobacco products in Canada showed that less than one per cent of the market consumed the type of tobacco product that Members had characterized as being American style or American blend. As a result, less than one per cent of the total Canadian market for cigarettes was expected to be impacted. Given the interest in the measure expressed at past TBT Committee meetings, Canada had been carefully following the impact of the measure. To date, Canada was not aware of any American style brands which had been withdrawn from the Canadian market since the measure had come into force. 223. The representative of Canada said the measure became law on 9 October 2009 and that the final additive prohibition came into force on 5 July 2010. Since then, there had been no impact on the cigarette market in Canada. Canada was of the view that because less than one per cent of the market was affected and because there had been no initial impact after introduction of the measure, it did not appear the measure was likely to have a large impact. Canada understood the interest of tobacco exporting Members in the impact of this type of measure if implemented in various markets. But its implementation in the Canadian market did not look like it would have a significant impact. 224. The representative noted from trade figures that many delegations that had intervened in the present or past TBT Committee meetings had either no trade or no recent trade with Canada. This meant WTO Members were looking at the measure as a systematic concern. The representative said Canada was willing to engage with Members bilaterally. He suggested as well that in some cases Members' concerns were not of a TBT nature but were more of a general policy nature. Canada would pay close attention to the concerns of Members and was taking note of their interventions. 225. The representative spoke to the context in which the measure was developed and its health policy objective. He noted that each year 37,000 premature deaths occurred in Canada as a result of the consumption of tobacco products. Tobacco use was estimated to be responsible for nearly four and a half billion dollars in direct healthcare costs in Canada. This represented a very serious situation. The Canadian approach had been deemed to be the best fit to address the public health problem Canada was facing. The representative reminded the Committee that more information on this subject had been provided by Canada at the March 2010 session of the TBT Committee. 226. The representative commented on studies and scientific documentation that had been examined in the development of the Canadian measure, noting that Canada was of the view that there was sound evidence that certain additives, including flavours, increased product attractiveness of tobacco products. The references included documentation from the tobacco industry itself, which had become available as a result of various litigation exercises, showing that the use of additives help to make tobacco products more appealing to young people. The representative noted that Canada had previously made reference documents available. By showing a sample of some of the documents that had been looked at, Canada hoped to raise awareness of the information available on the topic. Canada was open to further bilateral discussions on concerns in this area. 227. Regarding concerns that the measure established a de facto ban of certain types of tobacco products, including reference made to cigarettes that contain Oriental and Burley tobaccos, the representative said analysis carried out prior to the implementation of the measure showed the market in Canada was already next to non-existent for this product. Over a long period of time, consumer taste had not flavoured that particular product. 228. The representative emphasised that the measure had been developed for the Canadian context, where consumers had particular tastes and habits, and that Canada was not suggesting other Members adopt precisely the same model should they choose to address the same public health objective. Canada did not believe all of the concerns raised by Members actually played out when the trade data was looked at. Should Members have further questions or seek further information, Canada was ready to discuss bilaterally Extract: Minutes of TBT Committee Mar 2011(x) Canada – Bill C-32 amendment to Tobacco Act 215. The representative of Mexico noted that a bilateral consultation with Canada had taken place, that Mexico intended to continue addressing its concerns regarding this Bill, and would therefore pursue additional bilateral consultations. 216. The representative of Turkey restated concerns expressed at the last Committee meeting, supporting the Bill's objective, but believing it to be more trade-restrictive than necessary. She explained that the restriction on the use of certain additives in effect banned certain types of cigarettes, as these additives are essential components of traditional tobacco blends. She argued that these additives do not give any characterizing flavours to tobacco products and that the decision had been taken without consideration of their effects. She added that blended and non-blended tobacco were like products, and any restriction on additives would constitute de facto prohibition of blended tobacco. 217. She said that no scientific evidence supports either the suggestion that additives used in blended tobacco were attractive to consumers, or the view that blended tobacco products were more harmful to health and more addictive. She viewed the measure as disproportionate, and hoped that the Canadian authorities would reconsider their decision and move towards a less-restrictive measure in accordance with TBT commitments. 218. The representative of Honduras shared concerns of other Members, citing Canada's obligations under the TBT Agreement and the impact that this measure has had on Honduran tobacco exports to Canada. Though accepting the legitimacy of the policy objective, she argued that the goal had been pursued through an overly restrictive measure. She asked how the special needs of Honduras were addressed within the framework of Article 12.3 of the TBT Agreement when preparing and applying the prohibition on additives, and how the measure was compatible with Article 20 of TRIPS – the use of a trademark within the framework of commercial operations with specific demands, such as the use of an example that would undermine the capacity to distinguish between the goods and services of one company and another. 219. The representative of the Dominican Republic reiterated earlier interventions, again voicing concern over the adoption of this measure, which effectively prohibited the manufacture and sale of traditional blend cigarettes. She appreciated the legitimacy of the aim but shared the view that the application was too broad and disproportionate, given the coverage of the preparation of products with a special flavour. She argued that many components are used in producing the three main types of tobacco, and that prohibition resulting from the Bill had significant impact given the use of blends of tobaccos to provide different flavours. She repeated her previous request for Canada to revise its law in compliance with the framework of the TBT Agreement. 220. The representative of Jordan restated comments from previous meetings, supporting Canada's objective of protecting health but questioning the existence of scientific evidence supporting the ban on the additives listed in the Bill. He also argued that no scientific evidence indicated that additives used in the production of tobacco made the product more attractive than other types of cigarettes. He viewed the measure as inconsistent with Canada's obligations under the TBT Agreement. 221. The representative of Cuba shared the concerns raised in the preceding interventions. He considered the Canadian measures to lack scientific basis, as some banned components did not contribute any characteristic flavour to cigarettes. He explained that Cuba considered the measure to be overly restrictive for the stated objective and hoped for a re-evaluation that would ultimately result in a less restrictive measure. He argued that the measure should not be based design characteristics, and pointed to measures adopted by Members that prohibited different highly aromatised products as examples in line with Article 2.8 of the TBT Agreement. 222. The representative of Colombia reiterated its position on the issue, particularly the need to discuss these measures in relevant and specialised fora, and avoid discriminatory measures defending a type of tobacco produced by a country. 223. The representative of Chile supported the aim of reducing tobacco consumption and protecting the health of young people, but underlined concerns that the measure was more restrictive than necessary. She suggested the various guidelines of the World Health Organization (WHO) to be worthy of consideration, underscoring the necessity of scientific evidence. Furthermore, she noted that the Canadian measure concerned only one type of tobacco (Burley tobacco), placing it at a clear disadvantage compared with Virginia tobacco. She sought clarification of Canada's intentions regarding the measure, as it was not notified to the TBT Committee, specifically if a revision or modification of the Bill was planned, as Members did not have the opportunity to comment prior to its application. 224. The representative of Ecuador restated previous systemic and commercial concerns regarding the measure, in particular that it constituted a de facto prohibition of the import and commercialization of Burley tobacco cigarettes. He stated that the measure was more restrictive than necessary and undermined Articles 2.2 and 2.8 of the TBT Agreement. 225. The representative of the Philippines reiterated previous concerns on the measure. 226. The representative of Canada explained that C-32 had been Canadian law since coming into effect on 5 July 2010. No modifications were planned, but the concerns expressed by Members at all TBT Committee meetings had been noted. In response to questions, he observed that a number of questions had been answered in previous sessions and referred to the minutes of previous meetings for elaboration upon Canada's views on the scientific basis of the Bill and why it offered the best solution to the stated public health objective. He explained that the intent of this legislation had been to ban the use of certain additives which contribute to making tobacco products more attractive to youth. He noted that he was unaware of any cigarette brands having been withdrawn from the market as a result of the measure since the last provision of this amended Act came into force, and no Members had raised specific concerns regarding bilateral trade. 227. He emphasised that the Act prohibited the use of certain additives which contributed to making products more attractive to youth regardless of their origin and did not ban any type of tobacco or tobacco product. He informed the Committee that Canada had met with a number of Members bilaterally during the past week, and over several preceding months; he offered to continue to do so and invited communications on any specific concerns.
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