The World Trade Organisation is to rule on a dispute between Indonesia and the United States over a US ban on clove-flavoured cigarettes, trade sources said on Tuesday, Reuters reports.

Indonesia says the United States is abusing health regulations to shut out clove cigarettes, known as kretek and very popular in the southeast Asian country, while allowing US manufacturers to continue to market menthol cigarettes. US officials say that flavoured tobaccos risk attracting young people to smoking, and that the ban applies to clove cigarettes from all countries and so is not discriminatory. A meeting of the WTO's dispute settlement body agreed to set up a panel to rule on the dispute, the sources said. The US had blocked a previous request for a dispute panel by Indonesia but under WTO rules could not stop it a second time.
Indonesia told the meeting its clove cigarettes had been shut out of the market since September last year. It said it had been trying to resolve the issue with the United States for several years, and could not wait for US health officials to complete a review of menthol cigarettes, expected by March 2011. The United States imported USD 15.2 million of kretek cigarettes, almost all from Indonesia, in 2008, and the clove sticks accounted for less than 0.1 per cent of consumption before the ban, according to Indonesian data, which show menthol cigarettes making up 28 per cent of US consumption. (pi)