WTO: 2012 NEWS ITEMS

DISPUTE SETTLEMENT

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NOTE:
This summary has been prepared by the WTO Secretariat’s Information and External Relations Division to help public understanding about developments in WTO disputes. It is not a legal interpretation of the issues, and it is not intended as a complete account of the issues. These can be found in the reports themselves and in the minutes of the Dispute Settlement Body’s meetings.

DS381: United States — Measures Concerning the Importation. Marketing and Sale of Tuna and Tuna Products

Speaking as the complainant, Mexico noted that the panel and Appellate Body reports in this dispute provided a better understanding of the duties and obligations contained in the Agreement on Technical Barriers to Trade (TBT Agreement) and would contribute to eliminating the negative opinions on Mexico’s fishing methods.  In Mexico’s opinion, the reports had also correctly considered that the “dolphin safe” labelling was a technical regulation as per the TBT Agreement.  With regard to non-discrimination, Mexico welcomed the Appellate Body’s reversal of the panel’s finding that the US measures were not inconsistent with Article 2.1 of the TBT Agreement.  The Appellate Body found that the US measures were inconsistent with Article 2.1 as they granted Mexican tuna products less favourable treatment to that granted to like products originating in the US and other countries.  With regard to Article 2.2 of the TBT Agreement, Mexico was disappointed with the Appellate Body’s reversal of the panel’s finding that the US dolphin safe labelling provisions were more trade restrictive than necessary to fulfil the US legitimate objectives.  With regard to the Appellate Body’s conclusion that the dolphin safe definition and certification developed within the Agreement on International Dolphin Conservation Program (AIDCP) was not a “relevant international standard” within the meaning of Article 2.4, Mexico noted that the standard was relevant when the US had tried to modify its legislation to allow the AIDCP dolphin safe labelling.  Mexico hoped that the US would implement the DSB’s recommendations.

The US stated that this dispute involved US 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. The US welcomed the Appellate Body’s reversal of the panel’s conclusion that its measures were “more trade restrictive than necessary” under Article 2.2 of the TBT Agreement.  The US also welcomed the Appellate Body’s confirmation that the AIDCP had not established international standards on dolphin safe labelling within the meaning of Article 2.4 of the TBT Agreement.  However, the US was disappointed with the Appellate Body’s interpretation of technical regulations and standards.  In its view, the proper distinction between a technical regulation and standard was whether compliance with the measure was mandatory - if labelling was voluntary then the measure in question was a standard.  With regard to Article 2.1, the US agreed that to determine whether imported products were accorded less favourable treatment would require an analysis of whether the measure at issue modified the conditions of competition to the detriment of imported products.  However, the US was of the view that the Appellate Body had misapplied this concept and had ignored the fact that the Mexican and US tuna product producers were in the same situation and the adverse effects resulted from the private choices made by the individual producers.  The US was also concerned about the Appellate Body’s finding that WTO committee decisions can be subsequent agreements that must be read into the covered agreements.  The US regretted Mexico’s decision to continue with the WTO dispute settlement given that NAFTA parties had agreed that certain disputes involving both the WTO Agreement and the standards-related provisions of NAFTA would be heard solely under NAFTA’s dispute settlement procedures.  With respect to procedure, the US noted and expressed its disappointment that the Appellate Body had issued its report outside the 90-day period as stipulated in Article 17.5 of the DSU. The US reiterated its commitment to fulfilling the legitimate objectives of the Dolphin Protection Consumer Information Act.

The EU, as a 3rd party, welcomed the Appellate Body’s clarification and interpretation of the term “technical regulation”.  The EU also welcomed the Appellate Body’s clarification on the proper interpretation of the less favourable treatment test in Article 2.1 of the TBT Agreement and its interpretative analysis of Article 2.2 on the factors to be taken into account when assessing whether a measure is more trade restrictive than necessary to achieve the legitimate objective.

Australia, as a 3rd party, welcomed the adoption of the reports and noted that the Appellate Body Report had given members a better understanding of the precise meaning and interpretation of their obligations under the TBT Agreement.  However, Australia was concerned that the Appellate Body had provided a relatively limited analysis with regard to the characterisation of the measure as a technical regulation.  Australia would have preferred a more detailed explanation particularly with respect to the difference between “mandatory” in the case of a technical regulation and “not mandatory” in the case of a standard.  Australia was also concerned that the Appellate Body report was circulated outside the 90-day period stipulated in Article 17.5 of the DSU.

Japan, as a 3rd party, made preliminary but detailed observations on a number of the Appellate Body’s analysis and findings including on the meaning and ambit of “treatment no less favourable”; the complainant’s burden of demonstrating a technical regulation’s inconsistency with Article 2.1 of the TBT Agreement; assessing whether the detrimental impact reflects discrimination; and the need to inquire the measure’s “even-handedness” in the analysis of no less favourable treatment requirement under Article 2.1.   Japan also expressed concern about the circulation of the Appellate Body Report outside the 90-day period.

Argentina, as a 3rd party, was pleased that the reports had ruled that the US measures were found to be technical regulations and inconsistent with the TBT Agreement.  Argentina was also pleased with the Appellate Body’s finding that the AIDCP was not a “relevant international standard” within the meaning of Article 2.4 of the TBT Agreement.

In response to the US statement regarding NAFTA’s dispute settlement procedures, Mexico said that the US had refused to have panellists sit in disputes and this was a technically complex dispute requiring a detailed analysis.  Mexico noted that the US itself had brought a previous dispute (Mexico-Corn Syrup) to the WTO and thus found the US behaviour contradictory.  The US said that it had previously discussed NAFTA panel composition with Mexico and looked forward to discussing it again in the future.

The DSB adopted the Appellate Body Report (WT/DS381/AB/R) and the Panel Report (WT/DS381/R), as modified by the Appellate Body Report.

 

Next meeting:

The next regular meeting of the DSB is scheduled for 25 June 2012

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