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Mayer Brown, a leading global law firm, secured a significant victory on behalf of Indonesia when the Appellate Body of the World Trade Organization (WTO) upheld an earlier WTO ruling that United States legislation restricting the production and sale of certain flavored cigarettes is discriminatory. With the ruling, the WTO demanded that the US drop or amend a ban against clove cigarettes enacted pursuant to the 2009 Family Smoking Prevention and Tobacco Control Act (the “Act”).

As the world’s leading producer of clove cigarettes, Indonesia had challenged the ban in 2010, arguing that it unfairly discriminated against clove cigarettes produced in Indonesia in favor of menthol cigarettes produced and sold in the US, which were exempted from the ban. Indonesia also challenged the short period of time between enactment of the Act and its effective date. In a ruling issued in June 2011, a WTO panel held in Indonesia’s favor. Before the Appellate Body, Indonesia won on all issues.

“This is an important case because it’s really the first time the WTO has been called upon to interpret and apply the provisions of the WTO Agreement on Technical Barriers to Trade,” said Duane Layton, a Mayer Brown partner and leader of the firm’s Global Trade practice. “There are more so-called ‘TBT’ cases in the pipeline. As a result, the Appellate Body looked at this case very carefully, and it generated a great deal of interest among other countries that belong to the WTO.”

In addition to Mr. Layton, the Mayer Brown team included Global Trade practice associate Margaret Rose-Sales and senior policy advisor Tiffany Smith (both Washington, DC) and associate Leticia Lizardo (Brussels).