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Geneva. A global treaty to halt smuggling and counterfeiting of tobacco products, which costs governments up to $40 billion a year in lost taxes, is bogged down over ways to trace products, officials said on Friday.

The agreement would ban duty-free sales of cigarettes, popular with international air travelers, but which health campaigners claim are often diverted into illicit trade.

The aim is to reach agreement in Geneva by Sunday ahead of a meeting in November in Uruguay where the pact could be adopted. But by Friday, debate had not even begun on duty-free sales.

Campaigners have accused multinational tobacco companies and duty-free lobbyists of trying to derail the week-long negotiations being held among officials from 168 countries under the auspices of the World Health Organization. “There is a consensus that track-and-trace measures are needed to combat traffic in illicit products,” said Vijay Trivedi, policy advisor to the WHO Framework Convention on Tobacco Control secretariat.

The closed-door talks have stumbled over discussions of details, mainly a “tracking-and-tracing” system for tobacco products at the heart of the new treaty, formally a protocol to the 2005 Framework Convention on Tobacco Control.

The draft treaty would require countries to license tobacco manufacturers and retailers and set up the tracing regime with a global data base.

Within three years of adoption, all unit packets of cigarettes would have to be marked with unique serial numbers.

Philip Morris International, which sells Marlboro cigarettes and is the world’s largest non-state-owned tobacco firm, and British American Tobacco, the world’s second-biggest cigarette maker, say that they would back a protocol with effective measures against illicit trade.

But they say that a tracking system must cover all countries and producers and warn its costs will be passed on to smokers.

“I would say it would cost hundreds of millions of dollars for the industry to implement,” said Pat Heneghan, global head of anti-illicit trade at BAT. “There are also physical challenges to get the code on every pack.”



Reuters