New Zealand Parliament is preparing for the first reading of a bill forcing tobacco firms to sell their cigarettes in plain packaging. But the government has previously said it will not take any further action unless the legal challenge in Australia has come to an end.
Tobacco companies claimed the ban as illegal. They have the support of influential trade organizations, including the U.S. Chamber of Commerce, National Foreign Trade Council and the U.S. Association of Manufacturers.
The cigarette companies were "deeply disturbed" by the government's decision to push through with the plain packaging bill as it removes the use of trademarks. In a joint statement on Feb. 10, tobacco companies said the new legislation will breach the international trade obligations of New Zealand while encouraging counterfeiting and illicit trade.
The companies have recognized the right of the country to act on the benefit of public interest but they said the plain packaging bill was a wrong approach.
Associate Health Minister Tariana Turia reacted to the statement saying she doesn't believe the proposed legislation will break the rules of the World Trade Organization.
New Zealand Prime Minister John Key decided not to take a chance in breaking any trade rule. In December 2013, he remarked it would be too expensive for New Zealand to face a legal challenge from tobacco companies like the British American Tobacco New Zealand.
The Smokefree Environments or Tobacco Plain Packaging Amendment Bill is expected to have the support of all parties, except for the Act Party and New Zealand First. Business groups in the U.S. had anticipated the first reading of the bill and warned the government to stop the "unwise" legislation since it would eliminate the company's trademarks.
The government will have to defend the scheme in court. Key said Parliament will have to wait for Australia to resolve its legal challenges before passing the plain packaging bill.
New Zealand's plain packaging bill will remove the tobacco company logos, colors and other ads designed to make smoking cigarettes glamorous in the eyes of the consumers.
Turia said this was an important step to reduce the number of smokers in the country.
If the plain packaging bill is passed into law, New Zealand will be the second nation in the world to support plain packaging aside from Australia. Ireland and the UK are also considering the legalization of plain packaging on tobacco.