Bridges Weekly Trade News Digest • Volume 16 • Number 3 • 25th January 2012

US, Mexico to Fight Another Round in Tuna Dispute

Discuss this articleShare your views with other visitors, and read what they have to say

The United States on Friday filed an appeal in its WTO dispute with Mexico over “dolphin-safe” labelling for tuna products sold in the US (DS381). The 20 January decision came only two days before the final appeal deadline; a counter-appeal is expected from Mexico City before the week’s end.

Washington’s decision to appeal “demonstrates the commitment of the United States to our dolphin-safe labelling measures,” said Andrea Mead, Press Secretary for the US Trade Representative. “[The labels] provide information for American consumers as they make food purchasing decisions for their families.”

Following the US decision, the Mexican Ministry of Economy released a statement announcing that it will file a counter-appeal in the coming days. The counter-appeal will address issues that the panel did not resolve in Mexico’s favour, including the arguably discriminatory aspects of the dolphin-safe label.

“This measure affects Mexico more than any other exporter,” the Mexican Ministry explained in its announcement.

Circulated in September 2011, the original WTO panel ruling was seen as a mixed victory for Mexico (see Bridges Weekly, 21 September 2011). Mexico City ultimately prevailed, with the panel finding that the US measures were a governmental regulation that was unnecessarily trade restrictive, and thus in violation of the Agreement on Technical Barriers to Trade (TBT).

The panel, however, also sided with Washington on some aspects of the case, notably Mexico City’s claim that the measure was discriminatory. The panel ultimately ruled that the labelling policy did not favour US tuna products or those of other countries over those from Mexico.

Washington, Mexico City both find fault with ruling

The panel finding from September is set to meet challenges from both parties involved in the case, albeit for different reasons.

The US is challenging the panel’s findings on several grounds. First, the US will seek to establish that labelling laws are indeed voluntary, since they “need not be met to place tuna products on the US market.” This challenges the panel’s finding that the label was de facto mandatory.

This had been a major point of contention in the case, as the label is not legally required for importation or marketing. However, since the measure prohibits all alternative labels that use a different standard, it regulates consumer information in a compulsory fashion. This, the panel found, makes the measure as such de facto mandatory.

The voluntary versus mandatory distinction is important, as it forms the sole basis for classifying a country’s law as a standard or technical regulation under the TBT. Since the US labelling law was characterised as a technical regulation by the panel, the US regulations were subject to provisions of the TBT that required the measures to not be more trade-restrictive than necessary to fulfil their objective.

The labelling requirements’ inconsistency with this provision ultimately won Mexico the case.

Washington also disagrees with the panel’s finding that the US labelling provisions were more trade restrictive than necessary to inform consumers and protect animal health. In its appeal, the US claims that the panel failed to objectively assess the evidence that the US measures do indeed fulfil legitimate objectives.

Furthermore, Washington argues that the panel erred in concluding that the Agreement on the International Dolphin Conservation Program (AIDCP) labelling scheme was a reasonably available, less trade-restrictive alternative that could fulfil the objectives at the same level as the labelling law currently in place.

Even though the panel did not require the US to use the AIDCP “dolphin safe” definition, it suggested that both labelling schemes could “coexist” on the US market and provide the necessary information to consumers.

Washington further argues that that the AIDCP is not an international standardising body capable of preparing and adopting international standards under the TBT, as the panel had concluded.

Mexico, which heralded the panel decision as a success for its country and fishing industry, will focus on the discrimination issue in its counter-appeal. Verification by independent observers that no dolphins were killed or seriously injured during a specific catch is sufficient to get the US dolphin-safe label for countries fishing outside the Eastern Tropical Pacific (ETP). For Mexico, considerably higher requirements apply. The panel had dismissed Mexico’s argument that this resulted in a de facto discrimination on the basis of nationality.

In accordance with WTO rules, the Appellate Body will only examine issues of law covered in the panel report and legal interpretations developed by the panel. Matters of fact may not be re-examined, nor may the Appellate Body engage in legal discussions that the panel had not examined in the first instance. Normally an appellate report shall be issued no more than 90 days after the appeal. However, the panel in this dispute had already exceeded the given timeline by more than two years.

More information

For more analysis of the panel’s legal findings, see Bridges Trade BioRes Review November 2011.

ICTSD reporting.