Cigarette: The GATT non-discrimination clause Sugiharto Kurniaputra, Halinda Saraswati, Firman Rosdjadi Joemadi, Aluisius Hery Pratono Faculty of Business and Economics University of Surabaya Surabaya, Indonesia hery_pra@staff.ubaya.ac.id Nabbilah Amir Faculty of Law University of Surabaya Surabaya, Indonesia Abstract—This article seeks to understand how dispute occurs between Indonesia and other countries (i.e. Australia and the United States of America) concerning the clove cigarettes, which involves the cigarette company from Indonesia. Using an interpretive-inductive research method, we draw on cases studies from international dispute settlement to understand how the international trade takes place. The results indicate that dispute settlement system allows the developing countries to transform the diplomatic resolution of the case with legal guidance to a quasi-judicialized system to avoid “trade wars”. Keywords—dispute settlement; cigarette; anti-discrimination principle I. INTRODUCTION The tobacco industry does not like to be regulated, primarily the developing countries. The legal and political systems of a country play a pivotal role as large-scale institution, which foster income growth through which this happens is trade and exports [1]. Most of the challenges come informal complaints expressed in the least costly venue, that of the world trade organization (WTO) committees where tobacco industry among the subsistence stakeholders increased [2]. The WTO’s dispute settlement system (DSS) has become a success story from several points of view including the great number of disputes that are brought to the system. This evidence has brought the confidence that members of the WTO have in the usefulness and the efficiency of the system [3]. The traditional focus of the WTO has been on increasing market access and eliminating discrimination in trade [4]. The WTO members would interact within the multilateral framework of international law, commit to dispute resolution procedures, conflict prevention, transparency, and respect for human rights. In fact, global business environment turbulence has brought lack of respect international law, and armed, nonstate actors exert their own influence across national boundaries. The political events of all magnitudes continually impact the world economy [5]. When a country seeks to protect from the international trade, it can choose a number of measures that can be classified as either tariff or non-tariff measures. Technical barriers to trade (TBTs) is a large set of measures including certification guidelines, performance mandates, testing procedures, and labeling requirements designed to contribute to consumer safety, environmental protection, national security, product interoperability, and other goals [6]. Hence, the tobacco industry relies on economic arguments of potential negative impacts of tobacco regulation on international trade to convince governments, primarily in developing countries, against implementation of effective tobacco control measures [7]. The specific factor model demonstrates how a sector-based approach is related to the political economy of international. Both the Heckscher-Ohlin model and its Stolper-Samuelson theorem argue that factors of production such as labor, physical capital, and land can move effortlessly among different sectors of trading economies [6]. While the law guarantees or at least suggests a level playing field in a rules-based trading system, changes in the political landscape of some of the strongest global economic powers are clear indicators that the field may not stay level if indeed it ever was [5]. The WTO dispute settlement system has worked quite well, not least in terms of allowing developing countries to use the system, switching from diplomatic resolution of cases with legal guidance to a quasi-judicialized system, fending off (too much) protectionism and avoiding “trade wars”, less is known about the exact nature of compliance than is usually inferred from official statements. More scholarly work would be welcome to fill this particular gap and allow us to better understand the nuances of the concept of compliance [5]. The question is why capitalists with a capital-abundant country oppose increased trade in violation of the Stolper-Samuelson theorem. [6]. II. RESEARCH METHOD This study used interpretative-content analysis which allows the researchers to interpret the documents that provide the information. The purpose of content analysis is to identify the common knowledge in previous studies and contribute to the understanding of international expansion of firms in developing countries [7]. This approach incorporates coding content into themes similar to how to analysis the interview transcripts [8]. Content analysis in subject matter categories has 1st Social and Humaniora Research Symposium (SoRes 2018) Copyright © 2019, the Authors. Published by Atlantis Press. This is an open access article under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/). Advances in Social Science, Education and Humanities Research, volume 307 437