TWN Info Service on WTO and Trade Issues (Nov17/03)
2 November 2017
Third World Network
  
Panels rule in favour of US in "dolphin-safe" tuna labelling dispute
Published in SUNS #8563 dated 30 October 2017

Geneva, 27 Oct (Kanaga Raja) - Two compliance panels at the World Trade Organisation (WTO) have ruled that the amended tuna measure adopted by the United States in 2016 is not inconsistent with its obligations under the WTO.

In a ruling issued on 26 October, the panels considered that no recommendation was necessary, and thus made none.

According to media reports, Mexico has said that it will appeal the ruling.

Both the proceedings brought by the United States and those brought by Mexico concern the United States' labelling regime for dolphin-safe tuna products (the 2016 Tuna Measure).

Both the United States and Mexico had sought recourse to Article 21.5 of the Dispute Settlement Understanding (DSU) over the US measures concerning the importation, marketing and sale of tuna and tuna products.

On 11 April 2016, the United States requested the establishment of a compliance panel and at its meeting on 9 May 2016, the Dispute Settlement Body (DSB) referred this dispute to the original panel, if possible.

On 9 June 2016, Mexico requested the establishment of a compliance panel and at its meeting on 22 June 2016, the DSB referred this dispute to the original panel, if possible.

Both the panels comprised the same three panellists.

Earlier this May, the DSB approved the request by Mexico for the authorisation to suspend the application to the United States of tariff concessions and other related obligations in the amount of US$163.23 million per annum. (See SUNS #8469 dated 24 May 2017.)

In a ruling issued on 25 April 2017, an Arbitrator at the WTO had determined that Mexico may request such authorisation from the DSB.

The Arbitrator determined in its proceedings that the measure to which this interpretation directs the Arbitrator is the 2013 tuna measure, and not the 2016 measure (see SUNS #8451 dated 27 April 2017.)

In the ruling issued on 27 October the panels said that after consulting the parties, they had decided to issue their reports in a single document, but with two separate sets of conclusions and recommendations.

On the proceedings brought by the United States, the Panel concluded:

* With respect to the United States' claim under Article 2.1 of the TBT Agreement, the Panel concludes that the 2016 Tuna Measure is not inconsistent with Article 2.1 of the TBT Agreement.

* With respect to the United States' defence under Article XX of the GATT 1994, the Panel concludes that the 2016 Tuna Measure is justified under Article XX(g) of the GATT 1994, and meets the requirements of the chapeau of Article XX of the GATT 1994.

The Panel therefore considers that the United States has implemented the recommendations and rulings of the DSB in US - Tuna II (Mexico) and US - Tuna II (Mexico) (Article 21.5 - Mexico) to bring its measure into conformity with its obligations under the WTO Agreement.

Having found that the United States has not acted inconsistently with its obligations under the WTO Agreement, the Panel considers that no recommendation under Article 19.1 of the DSU is necessary, and makes none.

On the proceedings brought by Mexico, the Panel concluded:

* With respect to Mexico's claim under Article 2.1 of the TBT Agreement, the Panel concludes that the 2016 Tuna Measure is not inconsistent with Article 2.1 of the TBT Agreement.

* With respect to Mexico's claims under the GATT 1994, the Panel concludes that the 2016 Tuna Measure is inconsistent with Articles I:1 and III:4 of the GATT 1994, but that it is justified under Article XX(g) of the GATT 1994, and meets the requirements of the chapeau of Article XX of the GATT 1994.

The Panel therefore considers that the United States has implemented the recommendations and rulings of the DSB in US - Tuna II (Mexico) and US - Tuna II (Mexico) (Article 21.5 - Mexico) to bring its measure into conformity with its obligations under the WTO Agreement.

Having found that the United States has not acted inconsistently with its obligations under the WTO Agreement, the Panel considers that no recommendation under Article 19.1 of the DSU is necessary, and makes none.

A press release issued by the Office of the US Trade Representative said that the WTO has issued "a complete and resounding victory" for the United States in finding that US "dolphin-safe" labelling requirements comply with WTO rules.

"I am pleased that WTO panels have finally agreed with the overwhelming evidence that US dolphin-safe labelling requirements are accurate and fair," said US Trade Representative Robert Lighthizer. "The Trump administration is committed to defending US rights to enforce environmental measures that protect wildlife and facilitate fair trade," he added.

Reacting to the ruling, Ms Lori Wallach, Director of Public Citizen's Global Trade Watch (a US NGO), said the ruling was a welcome if unexpected shift "that may reflect the institution's response to intensive pressure by the Office of the US Trade Representative to reform the WTO's dispute resolution process and President Donald Trump's threats to withdraw from the body."

The WTO, Wallach added, "is a political institution, so this ruling may be motivated by a sense of self- preservation, given that the (Trump) administration has spotlighted how WTO tribunals order countries to gut domestic policies based on unaccountable tribunals making up new obligations to which countries never agreed."

(A full report on the panels' ruling will appear in an upcoming issue.)