Thursday 21 February 2013

New Zealand's path of least resistance

You may have heard that New Zealand has approved plain packaging in principle. In truth, it's a little more complicated than that. The NZ government has said it will go ahead with the policy if the Australian government wins all of the necessary court cases and gets approval from the World Trade Organisation.

In contrast to the giddy triumphalism of the Australians, the NZ prime minister has been notably circumspect about a policy which, at heart, is only designed to irk the tobacco industry. He says it is “one way of reducing smoking, in my view not the most important” and that “if we can take it we will but ultimately if we can't, we won't.” As 3 News noted, "the man who hits the go button couldn't muster up any fighting talk."

Perhaps this half-hearted decision to follow the Aussies if the Aussies win their battles is, as Angela Harbutt reports, due to the fact that the government only had three options and two of them conflict with New Zealand's trade obligations with Australia under the Trans-Tasman Mutual Recognition Arrangement.

Under option 1: “no change”, the Ministry openly admits that it can’t maintain the status quo:
Option 1 – Impact of maintaining status quo

[17] Maintaining New Zealand’s current tobacco product labelling and health warning regime while Australia introduces plain packaging would create difficulties for Australia under the Trans-Tasman Mutual Recognition Arrangement (TTMRA…In time, Australia would need to seek a permanent exemption from the TTMRA for tobacco products. It would be preferable to align the regulatory regimes to support the principles of a single economic market.

Option 2 (an “upgrade” on current warnings but without going the whole hog on plain packaging) was also is a non-starter for the same reason:

Option 2 - Impact of increased and refreshed health warnings [20] There would still be difficulties under the TTMRA (as for Option 1)

So once you take into account the TTMRA, ruling out option 1 and 2, what is left is option 3, Australia-style plain packaging.

In short, New Zealand has decided to let Australia try to wriggle out of its trade obligations with the rest of the world rather than wriggle out of its own trade obligations with Australia. For the Kiwis, this is the path of least resistance. It's certainly the cheapest path for the time being.

1 comment:

Ivan D said...

Sad isn't it? I mean the fact that a vanity project that has everything to do with a minority group of left wing health zealots "war" on big tobacco and nothing much to do with anything else can cause governments supposedly operating on behalf of the majority to squirm and wriggle.

There are more of us than there are of them. They have virtually no grass roots support for much of what they propose but politicians do not have the guts to say no. The Australian government of course delights in saying yes because it is populated by left wing zealots who need their egos massaging through "victories" over industries that they don't like.