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Ukraine attacks Australia's plain packaging l -

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Ukraine has requested a consultation at the World Trade Organisation on Australia's plain cigarette
packaging law, although the tobacco growing country has no trade with Australia.

Transcript

EMMA ALBERICI, PRESENTER: Big tobacco began its fight against the Government's plain packaging laws
for cigarettes in the High Court today, but the proposals aren't only facing a challenge at home.

Two countries have now officially requested consultations on the law at the World Trade
Organisation.

One is major tobacco producer Honduras, the other is Ukraine - a country with no tobacco trade at
all with Australia.

Anti-smoking activists there say there's something Ukraine does have, and that's powerful tobacco
companies and a government willing to do their bidding.

Russia correspondent Norman Hermant travelled to Kiev to explore the challenge to Australia's plain
packaging plans.

NORMAN HERMANT, REPORTER: In Ukraine, these are big business. For much of the last decade this
country had one of the highest per capita cigarette consumption rates on Earth. More than 2,500
sticks per year for each person.

The cigarettes made here are sold all over the world but none are exported to Australia, which is
why Ukraine's move to challenge Australia's cigarette plain packaging law at the World Trade
Organisation has not only Australians confused.

Everyone from health advocates here to members of the Ukrainian parliament are demanding answers
from the government.

LESYA OROBETS, UKRAINIAN MP: When I first read about the position of the government it seems to me
a joke, because we have a zero trade exchange between Australia and Ukraine of any tobacco goods.

NORMAN HERMANT: Ukraine's challenge is no joke. It's demanded consultations at the WTO over the
plain packaging law, arguing, amongst other points, that "the measures are more trade restrictive
than necessary to achieve the stated health objectives".

In Kiev's sprawling outskirts, at the offices of the Ministry of Health's Tobacco Control Unit,
there's little surprise over the Government's move, but there is disappointment.

KONSTANTIN KRASOVKSY, UKRAINE TOBACCO CONTROL UNIT HEAD: It's actually a shame for us that it was
Ukraine is stupid enough to do it, because absolutely sure the tobacco industry ask government in
many, many countries to do the same, but most of the countries refused to do it.

NORMAN HERMANT: But Ukraine's tobacco industry is especially powerful. Conglomerates like Japan
Tobacco International - JTI - and Philip Morris surged in after the collapse of the Soviet Union
and production soared, peaking at more than 130 billion cigarettes four years ago.

It's been an open secret that nearly a quarter of all sticks made here are smuggled out of the
country, most to the European Union. For its part, JTI have words of support for Ukraine's WTO
challenge: "We can understand why the Ukrainian government is challenging Australia on this issue.
It simply won't work and would also have ramifications far beyond the tobacco sector. Put simply,
if this measure is passed, Australia will be saying to the rest of the world, "We're not open for
business"."

But all is not rosy for Ukraine's tobacco giants. Smoking rates have been falling, and so has
production as taxes on cigarettes went up and laws were passed limiting advertising.

Things for Ukraine cigarette makers are about to get even tougher. After years of foot-dragging the
government has finally passed laws that will make it illegal to advertise where cigarettes are
sold, health warnings on packs are going to get bigger, and there will also be the nightmarish
smoking damage pictures now so familiar to many countries in the West.

In fact, many anti-smoking activists say there's a straight line connecting the tough new laws and
the WTO challenge.

ANDRIY SKIPALSKYI, SMOKE-FREE UKRAINE CHAIRMAN: Of course it's a payback, because they're not
sitting quiet. They're trying to find the loopholes, they're trying to find the ways; they have
teams of lawyers that are working full time every day. We don't have these lawyers but they do.

NORMAN HERMANT: Activists here still hope they can change the government's mind and stop the
process before Ukraine requests a formal WTO ruling. They also say they expect more fight from the
tobacco industry.

KONSTANTIN KRASOVSKY: If tobacco industry tried to scream that, "Don't do it, it won't work", it's
100 per cent it works. With plain packages the scream test is so loud that it's 1,000 per cent
guaranteed it works.

NORMAN HERMANT: And that, apparently, is what the Ukrainian government is afraid of.