The Dominican Republic filed a complaint at the World Trade Organization about Australia's tobacco packaging laws on Wednesday, becoming the third country to challenge regulations strongly opposed by big cigarette manufacturers.
Australiaplans to introduce new laws from October 1 which will force tobacco firms to abandon distinctive colourful branding and sell cigarettes in uniformly drab packets. Other tobacco products such as cigars must follow suit by December 1.
"The Dominican Republic has repeatedly expressed its concerns to the Australian government within the WTO and now feels compelled to request consultations to protect this important economic sector," said the Dominican Republic's ambassador to the WTO Luis Manuel Piantini in a statement.
Tobacco accounts for about five percent of the Dominican Republic's total export revenues or around half a billion U.S. dollars each year.
Packaging on Dominican cigars can be ornate such as for the Arturo Fuente brand which features a woman with one breast exposed surrounded by colourful flags and cherubs.
British American Tobacco, Imperial Tobacco and Philip Morris have launched High Court challenges against the laws, saying they infringe their trademark rights.
Australia has said the big tobacco companies are also behind the two legal challenges already mounted at the WTO by Ukraine and Honduras.
Ukraine and Honduras said the Australian laws unfairly restrict trade, even though neither country has a significant share of the Australian market.
COMPLAINTS
Diplomats told Reuters last month that the Dominican Republic was also likely to challenge Australia at the WTO, having complained vocally about the new laws in closed committee sessions of the global trading body.
Piantini added that the Dominican Republic was concerned that Australian rules might also extend to alchoholic drinks.
Trade disputes begin with one country "requesting consultations" with another. If the issue is not resolved across the negotiating table, after 60 days the complainant can ask the WTO to set up a panel of adjudicators to judge the case.
Trade diplomats have said they expect the three complaints against Australia to be bundled together before moving to the adjudication stage, with little expectation of a settlement before then.
Ukraine and Honduras' complaints have attracted a large number of countries as third-party observers, and some diplomats see the dispute as a test case in the struggle by tobacco firms to halt a global tide of regulation that has sharply tightened the rules on cigarette sales over the past decade.
The Dominican Republic's legal challenge centres "on certain measures concerning trademarks, geographical indications and other plain packaging requirements applicable to tobacco products and packaging", the WTO said in a statement./.