Indonesia May Complain to WTO About U.S. Tobacco Legislation

Indonesia, the largest maker of clove cigarettes, may complain to the World Trade Organization about U.S. legislation that gives regulators expanded powers to regulate tobacco products, including possible bans on flavors made from the tropical spice.

“We’ll be having consultations,” Trade Minister Mari Pangestu said today in an interview on Bloomberg Television. “If we feel that this is treated discriminately, we’ll of course take it to the normal processes in the WTO.”

The legislation, which was approved by the House of Representatives and Senate earlier this month, offers a concession on menthol, the most popular flavored cigarette in the U.S. Pangestu’s comments reiterate Indonesian objections made last month.

“We feel this is discriminating against cloves because menthol is not considered,” Pangestu said today from Jakarta, the Indonesian capital. Cloves, native to Indonesia, are a spice taken from the dried flower buds of a tropical tree.

Indonesia exports about $500 million worth of clove cigarettes, known as kreteks, a year, according to Sudjadnan Parnohadiningrat, Indonesia’s ambassador in Washington. About a fifth of the shipments go to the U.S., and Indonesia says its cigarettes make up 99 percent of the U.S. market for the product.

Pangestu said in May that a ban on kreteks would hurt Indonesian clove farmers and violate WTO rules. The Southeast Asian nation has about 4 million clove farmers.
© Copyright: Bloomberg

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