The administration banned chocolate and other flavored cigarettes under a bipartisan 2009 law that gave the Food and Drug Administration authority over tobacco products. The ban currently exempts menthol cigarettes, which are mostly consumed by adults in the United States, prompting Indonesia to complain that it discriminates against Indonesian clove cigarettes.
The administration vowed to maintain the ban.
"The United States is very disappointed with the outcome of this dispute," said Nkenge Harmon, a spokeswoman for the U.S. Trade Representative. "The ban on cigarettes with flavors is part of landmark U.S. legislation to combat the public health crisis caused by tobacco products. The Obama Administration is committed to protecting the public health, and will continue to vigorously pursue public health measures in a way that is consistent with United States trade obligations."
The ruling sparked immediate criticism from public health advocates.
"The Obama administration and Congress must not bow to yet another ruling from a so-called trade agreement tribunal demanding that the U.S. get rid of yet another important health or environmental policy," Lori Wallach, director of Public Citizen's Global Trade Watch, said in a statement.