Mexico appeals WTO compliance report in tuna labelling dispute

16 July 2015

Mexico has asked the WTO’s highest court to review certain aspects of an earlier panel’s findings over whether a revised version of the US’ “dolphin-safe” tuna labelling policy is in line with global trade rules, citing questions regarding facts of law and legal interpretation.

The move comes after the US filed its own appeal in the case, challenging a compliance panel’s findings that the revised Washington scheme had not been sufficiently changed to comply with WTO rules. While both appeals were filed in June, Mexico’s became publicly available in early July. 

The high-profile dispute dates back several years, with the WTO’s Appellate Body finding in 2012 that the original US dolphin-safe labels for tuna discriminated unfairly against imported tuna from Mexico. The US revised the regulations in 2013, in light of the ruling. However, Mexico then challenged that these changes were insufficient to remove the scheme’s problematic elements. 

The revised US regulations modified the requirements for tuna to qualify for a dolphin-safe label. Under the changes, all tuna, regardless of where it is caught or the nationality of the fishing vessel, must obtain a certification proving both that no nets were intentionally “set” on dolphins and that no dolphins were killed or seriously injured through “setting.”

In comparison, the previous policy had distinguished between tuna caught in different areas, with tuna caught inside the Eastern Tropical Pacific (ETP) not being eligible for the label. However, with regard to required documentation, tracking, and verification requirements also involved in obtaining the dolphin-safe label, the regulations still differ depending on whether the tuna was caught inside or outside the ETP.

Mexican fishermen predominantly fish for tuna in the Eastern Tropical Pacific, using purse-seine nets which are temporarily set on dolphins to attract the tuna that swim below. However, Mexico’s tuna fleet has been found to comply with international standards, including the Agreement on the International Dolphin Conservation Program.

Following a challenge from Mexico over whether the US’ changes were enough to bring the measure in line with WTO rules, a compliance panel said this past April that the Appellate Body’s 2012 ruling confirmed the US’ ability to treat fishing methods differently, given the varying levels of harm these methods cause dolphins. According to this panel, this meant the US could exclude tuna caught by setting from the label.  

Nevertheless, the same panel found that aspects of the amended regulations, particularly the remaining differences in the certification, tracking, and verification requirements, still discriminated unfairly against Mexican tuna. 

Mexico’s appeal

In its notice of appeal, Mexico has cited specifically the panel’s findings under two WTO agreements – the General Agreement on Tariffs and Trade (GATT) and the Technical Barriers to Trade (TBT) Agreement – as those which it would like the Appellate Body to review.

For one, Mexico City has specifically taken issue with the panel’s finding that only parts of the amended regulations on tuna were inconsistent with the trade rules, arguing that the US measure in its entirety is WTO-illegal.

Regarding the WTO-consistency of disqualifying tuna caught by setting from accessing the label, Mexico disagreed with the panel’s finding that the Appellate Body had previously ruled on this issue, and that these eligibility criteria were applied even-handedly.

Mexico argues that the panel failed to make an objective assessment in reaching its factual findings on the injury dolphins suffer from setting and other fishing methods, as well as these methods’ relative level of harm. These findings were used in affirming that the US is entitled to disqualify tuna caught by setting from receiving the label.

In turn, Mexico has requested the Appellate Body to find that that the detrimental impact of the amended tuna measure does not stem from only a legitimate regulatory distinction, and the policy violates the non-discrimination requirements outlined in the TBT Agreement.

In a separate part of the appeal relating to the eligibility criteria, Mexico has also asked the Appellate Body to find the amended tuna measure failed to pass the chapeau test of GATT Article XX, namely that the label is applied in a manner which would constitute “a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail” or is “a disguised restriction on international trade.”

The GATT Article XX exceptions outline a set of justifications under which WTO members may enact measures that would otherwise be illegal under international trade rules so long as these are used to fulfil greater public policy objectives. These policies must meet the requirements outlined in the “chapeau” mentioned above, and include, among others, policies deemed necessary to protect human, animal, or plant life or health, as outlined under paragraph (b), or for natural resource conservation, under paragraph (g).

Certification questions

In its appeal, Mexico has also raised questions over two of the panel’s factual findings regarding the US measure’s requirement that independent observers certify tuna caught inside of the ETP, while not requiring the same for tuna caught outside that area.

Mexico argues that having captains self-certify whether tuna is dolphin-safe outside of the ETP might not be a reliable method, due to a potential “economic conflict of interest.”

Mexico also claims that the panel should not accept US’ justification for differing requirements on the basis that the dolphin-tuna association in ETP is unique, arguing that this association also happens elsewhere, such as in the Indian Ocean.

Therefore, Mexico City is asking the Appellate Body to revise the panel’s earlier reasoning to include the above-mentioned issues, in finding that these varying certification requirements create gaps in the dolphin-safe designation and are not applied in an even-handedly manner, thereby violating the TBT Agreement’s non-discrimination requirement.

Next steps

The Appellate Body generally reviews questions relating to law or legal interpretation and not the factual findings in panel rulings. The two parties in the case have already committed to help WTO judges circulate their report within 90 days from the notification of an appeal.

ICTSD reporting.

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