UNITED STATES – MEASURES CONCERNING THE IMPORTATION, MARKETING AND SALE OF TUNA AND TUNA PRODUCTS
June 13, 2012
A. REPORT OF THE APPELLATE BODY (WT/DS381/AB/R) AND REPORT OF THE PANEL (WT/DS381/R)
The United States would like to thank the members of the Appellate Body, the Panel and the Secretariat assisting them for their work on this dispute.
This dispute involved U.S. measures – particularly the Dolphin Protection Consumer Information Act and associated regulations – that establish the conditions under which producers may choose to label tuna products as dolphin safe.
Under these measures, producers are not allowed to claim that their tuna product is dolphin safe if the tuna was caught by “setting on dolphins.” Setting on dolphins is a fishing practice that involves intentionally chasing, encircling, and deploying purse seine nets on dolphins in order to catch tuna that frequently swim below dolphins. As the
Panel found, setting on dolphins is not dolphin safe since it results in death and serious injury to dolphins.1
Unlike other fishing operations that have moved away from setting on dolphins, most large Mexican tuna fishing vessels continue to engage in this fishing practice. Nevertheless, Mexican tuna products may be sold in the United States. The measures simply seek to ensure that any claims that tuna products are dolphin safe – whether from Mexico, the United States, or anywhere else – are accurate and not made when the tuna was caught in a way that adversely affects dolphins.
This dispute raised a number of new, significant issues. The United States is pleased that the Appellate Body reversed the Panel’s conclusion that the U.S. measures are “more trade restrictive than necessary” under Article 2.2 of the TBT Agreement. We are particularly pleased that the Panel and the Appellate Body agreed with the United States that the legitimate objectives of the measures are (1) to “ensur[e] that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins,” and (2) to “contribut[e] to the protection of dolphins, by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins.”2 We agree with the Appellate Body that the alternative measure put forth by Mexico based on the Agreement on the International Dolphin Conservation Program (AIDCP) would not fulfill these objectives.
1 See Panel Report, paras. 7.438, 7.493, 7.504, 7.738.
2 Panel Report, paras. 7.413, 7.425, 7.444; Appellate Body Report, para. 325.
Notably, the Appellate Body accepted that some technical regulations can and will involve restrictions on trade. In reviewing those measures, the issue is whether the measures pursue a legitimate objective in a way that is no more trade restrictive than necessary. The United States agrees with the Appellate Body’s analysis and appreciates confirmation that U.S. measures are not unnecessary obstacles to trade.
The United States also appreciates the Appellate Body’s confirmation that the AIDCP has not established international standards on dolphin safe labeling within the meaning of Article 2.4 of the TBT Agreement.
The United States is however disappointed by the Appellate Body’s interpretation of technical regulations and standards as those terms are set out in the TBT Agreement. As the Appellate Body noted, both standards and technical regulations can contain conditions that must be met to use a label, and those conditions can be “compulsory,” “binding,” and “enforceable.” The United States agrees. The United States does not understand, however, why the Appellate Body believes that the factors it relied on to determine whether a measure is a technical regulation or standard in fact distinguish those types of TBT measures.
Indeed, the Appellate Body’s reliance on the concept of “covering the field” or “single set of requirements” is fundamentally at odds with the goal stated in the TBT Agreement of harmonizing standards on as wide a basis as possible. By their nature, standards seek convergence around one particular set of requirements.
Instead, in the context of labeling, the proper distinction between a technical regulation and a standard is whether compliance with the measure is mandatory such that a producer must label its product. If labeling is voluntary in that a producer need not label its product, then the measure in question is a standard.
With respect to Article 2.1 of the TBT Agreement, the United States agrees that a determination of whether imported products are accorded less favorable treatment calls for an analysis of whether the measure at issue modified the conditions of competition to the detriment of imported products. We believe, however, that the Appellate Body misapplied this concept.
Particularly concerning is that the Appellate Body ignored the fact that at the time the measures were adopted, Mexican and U.S. tuna product producers were in the exact same situation: Both fished the same ocean for tuna and both set on dolphins.3 Any adverse effects that accrued to Mexican tuna products vis-à-vis those of the United States resulted from the private choices individual producers made: Producers from the United States
3 See Panel Report, para. 7.320.
In this light, the Appellate Body reviewed the Panel’s assessment of whether the U.S. measures were properly “calibrated” to reflect risks to dolphins resulting from different fishing conditions and environmental factors across the world’s oceans and found the evidence on the record did not justify the distinctions drawn by the measures. Thus, even though the difference in treatment of Mexican tuna products was incidental to their origin, the Appellate Body considered the measure discriminatory.
This raises a number of significant concerns. Panels may now need to review the calibration of the measure to risk, cost, and benefit, even if in the end the difference in treatment is not related to origin. Members have nowhere agreed that panels or the Appellate Body should conduct such an inquiry.
Nor are panels and the Appellate Body equipped to conduct such an inquiry and second- guess the myriad regulatory issues involved. Indeed, in this case, the Panel faced a complex scientific record that, it felt compelled to note, involved an area “in which the collection and analysis of information is inherently difficult.”5 A preferable approach to reviewing national treatment claims under Article 2.1 would be a return to determining whether a measure at issue accords less favorable treatment that is related to the origin of the product. In this regard, the United States recalls that when, before a GATT panel, Mexico brought similar claims against U.S. dolphin safe labeling provisions under the almost identically worded provision of the GATT 1947, the panel rejected those claims.
4 See Panel Report, paras. 7.320-7.334.
5 Panel Report, para. 7.504.
The United States is also disturbed by the Appellate Body’s finding that WTO committee decisions can be subsequent agreements that must be “read into” the covered agreements. The United States does not believe that Members have considered or given their approval to decisions taken by WTO committees to be subsequent agreements with interpretative effect. This contravenes Article IX of the Marrakesh Agreement and circumvents the protections negotiated there. Furthermore, at a time when Members have reemphasized the value of the WTO committees, this finding risks making the approval and adoption of committee decisions significantly more difficult.
On a procedural matter related to Article 17.5 of the DSU, the United States notes that this report was issued 116 days after the notice of appeal was filed. While the United States and Mexico agreed that the appeal would exceed the 90 day period set out in the DSU, we remain disappointed that the Appellate Body did not provide transparency about the parties’ agreement in its 60-day notice to Members and in its report. We thank Mexico for agreeing to circulate our joint letter agreeing that the parties would deem today’s report to be an Appellate Body report for purposes of DSU Article 17.5 in order to provide transparency to all Members. We continue to urge the Appellate Body to provide Members with the level of transparency it provided in proceedings exceeding 90 days prior to 2011.
Finally, the United States would like to recall for Members that on March 24, 2009, the United States invoked Article 2005(4) of the North American Free Trade Agreement. In that provision, the NAFTA parties agreed that certain disputes which pertain to matters arising under both the WTO Agreement and the standards-related provisions of the NAFTA, and which concern human, animal or plant life or health or the environment and raise factual issues concerning the environment or conservation, would be heard – at the responding party’s option – solely under the NAFTA’s dispute settlement procedures. This dispute meets the criteria set out in that NAFTA provision. We regret Mexico’s decision to continue with WTO dispute settlement in disregard of its obligations.
In closing, the United States would like to reiterate its commitment to fulfilling the legitimate objectives of the Dolphin Protection Consumer Information Act.
Thank you Mr. Chairman for your attention to our statement today.
With respect to Mexico’s comments on the characterization of certain facts in this dispute, at this time the United States would simply point out that we will have a copy of our statement available after today’s meeting, which includes citations to specific findings in the Panel and Appellate Body reports, so Members can check for themselves
what has been debated today. And finally, with respect to NAFTA panel composition, this is an issue we have discussed with Mexico in the past, and we would look forward to doing so again.