Bridges

The US' "dolphin safe" labelling practice for tuna products have been deemed WTO illegal, according to a ruling issued on Thursday 8 September. The panel ruled that the label - which is meant to inform consumers on the use of dolphin-friendly fishing practices - was unnecessarily trade restrictive. However, the three-member panel disagreed with the complainant Mexico that the label also discriminated against Mexican tuna on the basis of nationality.

News of Mexico's victory was leaked in July (see Bridges Weekly, 28 July 2011), but the details of the ruling were not available until now.

The global trade body's ruling on the subject had been the subject of much anticipation, given the current backdrop of product labels' growing importance for issues such as biofuels, fair trade commodities or low-carbon intensive appliances. Notably, the panel's take on whether the US label was a mandatory regulation - which it confirmed - rather than a voluntary standard - which it denied - had been considered crucial for the future of labelling standards.

"The WTO ruling is a crushing blow to the label ‘dolphin-safe'," Mexican Economy Secretary Bruno Ferrari said in a first statement to Associated Press.

"It opens the way for Mexican producers to enter the US market without restrictions, as is their right."

Those plans, however, may have to be put on hold as the US retains its right to appeal the decision.

"We do not exclude the possibility of an appeal," Andrea Mead, spokeswoman for the US Trade Representative's (USTR) office, commented in an initial statement. If Washington chooses to appeal, then it would need to be submitted within the next two months; a final ruling would then be issued late in the first quarter of 2012.

"Dolphin-safe" attacked on multiple levels

At the core of the dispute is the US policy of disallowing "dolphin-safe" labels on tuna caught in the eastern Pacific Ocean with "purse-seine" nets - encircling nets which can frequently ensnare unwanted marine life such as dolphins in addition to those targeted - which are used by Mexican fisheries.

Mexico claimed that the labelling practice has the effect of blocking Mexican tuna from the US market. Washington, in turn, has rejected the claim, stating that its labelling rules do not discriminate against Mexican products, as the label is available to all tuna products independent of their origin (see Bridges Trade BioRes Review, Volume 5, Number 1, April 2011).

Mexico City also argued that the label was unnecessarily trade restrictive and that the US failed to comply with relevant international agreements.

Mexico's tuna fleet continues to use purse-seine nets, but is nonetheless compliant with international standards - most notably the Agreement on the International Dolphin Conservation Program (AIDCP). Mexico, the US, and others had negotiated AIDCP in response to an earlier international trade dispute between the countries over a similar issue.

The international standard follows a "non-injury" rather than a "finishing-method" approach, meaning that tuna caught with purse-seine nets can qualify for dolphin-safe labels, provided that independent veterinarians certify that no dolphins were injured.

The panel sided with the US in deeming the labelling policy non-discriminatory, concluding that the measure did not favour US tuna products or those of other origins over those from Mexico.

The panel also backed the US claim that the AIDCP international label standard did not constitute an effective and appropriate means of fulfilling legitimate US objectives. This was because, in the opinion of the panel, the standard failed to guarantee the level of dolphin protection pursued by the US. The AIDCP standard only informs consumers whether dolphins were killed or seriously injured by the fishing method, but fails to inform consumers of other adverse impacts caused by the fishing methods, the panel concluded.

Nevertheless, the panel found that the US dolphin-safe labelling provisions were more trade-restrictive than was necessary for informing consumers and protecting animal health, and were thus inconsistent with the WTO's Agreement on Technical Barriers to Trade (TBT).

The TBT Agreement requires that technical regulations "are not prepared, adopted or applied with a view to, or with the effect of, creating unnecessary obstacles to trade." According to the panel, the "dolphin-safe" label only "partly" fulfilled the objective of dolphin protection, as it did not address the observed mortality caused by other tuna fishing methods outside the eastern Pacific Ocean.

Environmentalists lash out against ruling

The ruling has quickly drawn public attention, with a number of consumer and environment groups harshly criticising the decision.

"A WTO tribunal is telling American consumers that having the product labels that we rely on to make sure that our shopping and dining choices do not result in dolphins being killed is a WTO violation," said Lori Wallach from the Washington-based consumer rights advocacy group Public Citizen in a press release. "It makes very real the threats these overreaching ‘trade' pacts pose."

The ruling marks the third time the WTO and its predecessor, the General Agreement on Tariffs and Trade (GATT), have gone against American policy on dolphin protection.

The decision comes only weeks after another dispute panel had ruled a US trade ban for flavoured cigarettes, including clove cigarettes which are exclusively produced in Indonesia, WTO illegal (see Bridges Weekly, 7 September 2011). The ban had been introduced as part of a legislation aiming to prevent minors from smoking, posing the argument that minors often get introduced to tobacco through such flavoured products. Menthol cigarettes, however, which are equally dangerous but are produced exclusively in the US, were exempted from the ban.

Both decisions - Tuna and Clove Cigarettes - have been criticised heavily by consumer advocacy, environmentalist, and public health groups in the US. Online discussions in relevant forums and media responses suggest that these two defeats could hurt the US public's perception of the WTO even more.

An ICTSD dialogue on the case, held in parallel with the WTO Public Forum, suggested that the case, along with the panel's approach and analysis, would continue to garner attention both for its specifics as well for the systemic implications.

ICTSD reporting; "WTO panel rules US tuna labels too restrictive," ASSOCIATED PRESS, 16 September 2011.