Info Service on WTO and Trade Issues (May16/13)
18 May 2016
Third World Network
Compliance panel set to study US's own measures on tuna
Published in SUNS #8239 dated 12 May 2016
Geneva, 11 May (Kanaga Raja) -- The WTO Dispute Settlement Body (DSB)
on Monday (9 May) agreed to establish a compliance panel, at the request
of the United States, to examine its own measures adopted earlier
in March to bring itself into compliance with the rulings and recommendations
of the DSB in its dispute with Mexico over the US ‘dolphin-safe' labelling
regime for tuna products.
This was a second-time request and panel establishment was automatic.
The European Union, Guatemala, Australia, Canada, Brazil, China, Japan,
India and Norway reserved their third party rights to the dispute.
The US move has come even as the issue has been referred to arbitration
over the level of authorization to be given to Mexico against the
US over non-compliance, long after the expiry of the reasonable period
of time given to the US to comply with the rulings and recommendations
of the DSB in this ‘dolphin-safe' labelling dispute.
The arbitration panel is to rule on the level of retaliation to be
allowed over a request by Mexico for authorisation to retaliate to
the tune of $472.3 million annually in its dispute with the United
States on its ‘dolphin-safe' labelling regime for tuna products.
The US move for a new compliance panel in the dispute, when the level
of authorization to be given is before an arbitrator, is unprecedented.
Some trade observers see it as part of a delaying tactic, in the US
presidential election year, when all candidates, currently engaged
in party primaries, have adopted an anti-trade (plurilateral or multilateral)
posture, and US- Mexico relations have also become an issue (see SUNS
#8221 dated 14 April 2016).
In its communication to the DSB, the US had said that on 22 March
2016, it revised the amended tuna measure and brought the dolphin-safe
labelling measure subject to the recommendations of the DSB into compliance
with the Technical Barriers to Trade (TBT) Agreement and the GATT
Specifically, the US National Oceanic and Atmospheric Administration's
National Marine Fisheries Service (NMFS) issued an interim final rule
(2016 IFR) that revised the amended tuna measure.
According to the US, the 2016 IFR rectifies the inconsistencies of
the amended tuna measure with the TBT Agreement and the GATT 1994
as found by the DSB in the proceeding under Article 21.5 of the DSU.
The 2016 IFR amends the dolphin-safe labelling regulations and brings
the dolphin-safe labelling measure subject to the DSB recommendations
into compliance with the TBT Agreement and the GATT 1994 by rectifying
the inconsistencies of the amended tuna measure with those agreements
as found by the DSB in the earlier proceedings under Article 21.5
of the DSU.
Among other changes, it revises the design of the determination provisions
and certification, tracking, and verification requirements such that
any detrimental impact stems exclusively from legitimate regulatory
distinctions, for purposes of the second step of an analysis under
Article 2.1 of the TBT Agreement, and that the measure meets the requirements
of the chapeau of Article XX of the GATT 1994, said the US (see SUNS
#8229 dated 26 April 2016.)
In its statement at the DSB on Monday, the US said that as discussed
at the April meeting of the DSB, the rule issued by the US National
Oceanic and Atmospheric Administration (NOAA) directly addresses the
DSB's findings on the US dolphin-safe labelling measure, and brings
the US into compliance with its WTO obligations.
The US maintained that despite discussing this rule with Mexico on
a number of occasions, Mexico continues to indicate that it is not
prepared to refer the matter of compliance back to a compliance panel.
Rather, said the US, Mexico continues to insist that the arbitration
under Article 22.6 of the DSU to review Mexico's request for authorisation
to suspend concessions must move forward immediately. At the DSB meeting
on 23 March, Mexico went so far as to say that it considered that
the US compliance action was not legally pertinent for the arbitration.
The US said that Mexico appears to be pursuing a course of action
that would have the DSB ignore that the measure at issue is changed
and that Mexico can require the WTO to act to authorise suspension
of concessions even if the US has come into compliance.
"That is not correct," the US argued.
As a result, it added, the US respectfully requests that the DSB establish
a compliance panel pursuant to Article 21.5 of the DSU to confirm
that the US has brought its measure into compliance with the DSB's
recommendations and rulings.
In its statement, Mexico said that the US has not requested consultations
in this new request for the establishment of a compliance panel, and
in Mexico's view this is not proper.
Even if a panel is established today, in due time it will be shown
that this panel establishment is not correct, said Mexico.
Citing some previous disputes such as the 2001 Mexico corn dispute,
in which the US requested a compliance panel and the Appellate Body
had dealt with the matter, Mexico believes that this gives solid ground
to its position.
Mexico informed the DSB that it is going to request the establishment
of its own compliance panel including formal consultations.
In an intervention, Chinese Taipei, recalling that many delegations
had reflected their views on this issue at the previous DSB meeting,
said that it agrees with Mexico, Guatemala, Australia and certain
other delegations that in the absence of an agreement between the
parties, the pending Article 22.6 arbitration should not be suspended
simply because of declaration of compliance by the Member concerned
or the second establishment of a compliance panel under Article 21.5.
"We find no legal basis for such suspension," said Chinese
In addition, Chinese Taipei said that it is its understanding that
if the Article 21.5 compliance panel is established today, it should
be carried out in parallel with, and independently from the pending
Article 22.6 arbitration, unless the parties agree otherwise.
It noted in particular that paragraph 8 of the US and Mexico's sequencing
agreement provides that the parties will cooperate to enable the arbitrator
to circulate its decision within 60 days, that is, the 22nd of this
On the other hand, the panel established today will have at least
90 days to review the compliance dispute.
Chinese Taipei was of the view that neither period should be compromised
for the other if there is no agreement between the parties.
It agreed with the other delegations that the most effective solution
to the complex issue is an agreement between the parties. It may be
further mediated by the arbitrators or the panellists, it said.
In other actions, the DSB adopted the Appellate Body and panel reports
in the Argentina-Panama dispute over financial, taxation, foreign
exchange, and registration measures imposed by Argentina on services
and service suppliers from countries "not cooperating for tax
transparency purposes". (For details of the AB ruling, see SUNS
#8223 dated 18 April 2016.)
Meanwhile, the Dispute Settlement Body in Special Session, where negotiations
are held on improving and clarifying the DSU rules, also met on Monday,
where a new Chairman, Kenyan Ambassador Dr Stephen Ndungu Karau, was
elected to replace former Costa Rican Ambassador Ronald Saborio.
According to trade officials, Ambassador Karau said that he will start
exploring how to proceed and will initiate a consultation process
with members to decide on the way forward. +