[Intl-tobacco] Resend: Philip Morris Threatens Canada Over Ban on Light and Mild

[Robert Weissman]

The earlier post of this important story failed to note that it was
published in the Globe and Mail.

Tobacco firm warns 'mild' cigarette ban may violate NAFTA
By STEVEN CHASE
Globe and Mail
Saturday, March 16, 2002 – Print Edition, Page A6

OTTAWA -- Tobacco giant Philip Morris International has warned the federal
government that Ottawa will violate NAFTA and global trade rules if it goes
ahead with a proposal to ban the use of the words "light" and "mild" on
cigarette labelling in Canada.

A Philip Morris spokesman said the cigarette maker, which owns a significant
stake in Canada's Rothmans Benson & Hedges Inc., has not ruled out suing
Ottawa under the North American Free Trade Agreement if the ban is enacted.

"I wouldn't rule out any options," said Mark Berlind, a lawyer with Philip
Morris Management Corp., a Philip Morris affiliate company.

Former federal health minister Allan Rock announced last August he would
begin proceedings to ban terms such as "light" and "mild" from cigarette
labels because the words deceive smokers into believing such products are
safer.

Mr. Rock's bid came after an effort to get tobacco companies to remove the
terms voluntarily failed. A spokesman for newly appointed Health Minister
Anne McLellan said her department is reviewing feedback from consultations
and deciding how to proceed.

NAFTA's controversial Chapter 11 section allows foreign companies to sue
Ottawa for compensation if their investments in Canada have been hurt by
Canadian laws or regulations.

In a submission to Ottawa about the proposed ban, Philip Morris
International, Philip Morris Cos. Inc.'s international tobacco subsidiary,
warns Canada that it considers any ban expropriation, a measure that NAFTA
rules say demands compensation.

"Under NAFTA . . . Canada must compensate foreign investors when measures
expropriate, or are tantamount to expropriation of, investments in Canada,"
the company told Ottawa.

Mr. Berlind said Philip Morris would prefer to work with Ottawa on
regulations to govern how terms describing cigarettes are used, including
disclaimers.

The company said tobacco firms developed low-tar yield cigarettes in the
1970s with the encouragement of the government, a move that led to a
significant market developing for consumers who preferred the
lighter-tasting brands.

"The ban would be tantamount to an expropriation of tobacco trademarks
containing descriptive terms, as well as of the substantial investment in
and goodwill associated with those marks and the brands they represent."