Indonesia May Ask For WTO Help Over Kretek Ban

Trade Minister Mari Pangestu stressed on Friday that Indonesia is actively considering complaining to the World Trade Organization about US legislation that gives the authorities expanded powers to regulate tobacco products, including possible bans on cigarettes flavored with cloves.

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

The legislation, the Family Smoking Prevention and Tobacco Control Act, was voted through by a Senate committee on June 11 and was approved by the House of Representatives and the Senate earlier this month. It offers a concession on menthol, the most popular flavored cigarette in the United States. Mari’s comments reiterated the government’s objections made last month.

“We feel this discriminates against cloves because menthol is not included,” Mari said on Friday.

As the world’s largest maker of clove, or kretek, cigarettes, Indonesia exports about $500 million worth a year, according to Sudjadnan Parnohadiningrat, Indonesia’s ambassador in Washington. About a fifth of the shipments go to the United States, and Indonesian cigarettes supply 99 percent of the US market for the product.

Mari said in May that a ban on kretek cigarettes would hurt clove farmers and violate WTO rules. The country has about four million clove farmers.

On June 11, the US Senate voted 79-17 to send the bill back to the House, which in April passed a similar version. House acceptance of the bill would send it directly to US President Barack Obama, who supports the action and has said he would sign in into law as soon as it reached him.



Bloomberg, JG

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