DISPUTE SETTLEMENT: DISPUTE DS381

United States — Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products


This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

  

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One-page summary of key findings of this dispute
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Current status  back to top

 

Key facts  back to top

Short title:
Complainant:
Respondent:
Third Parties:
Agreements cited:
(as cited in request for consultations)
Request for Consultations received:
Panel Report circulated: 15 September 2011
Appellate Body Report circulated: 16 May 2012
Article 21.5 Panel Report circulated: 14 April 2015

  

Summary of the dispute to date  back to top

The summary below was up-to-date at
See also: One-page summary of key findings of this dispute

Consultations

Complaint by Mexico. 

On 24 October 2008, Mexico requested consultations with the United States with respect to the following measures: (i) the United States Code, Title 16, Section 1385 (“Dolphin Protection Consumer Information Act”), (ii) the Code of Federal Regulations, Title 50, Section 216.91 (“Dolphin‑safe labeling standards”) and Section 216.92 (“Dolphin‑safe requirements for tuna harvested in the ETP [Eastern Tropical Pacific Ocean] by large purse seine vessels”) and (iii) the ruling in Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007). 

Mexico alleged that the measures at issue, which establish the conditions for use of a “dolphin‑safe” label on tuna products and condition the access to the US Department of Commerce official dolphin-safe label upon bringing certain documentary evidence that varies depending on the area where tuna contained in the tuna product is harvested and the fishing method by which it is harvested are inconsistent, inter alia, with Articles I:1 and III:4 of the GATT 1994 and Article 2.1, 2.2 and 2.4 of the TBT Agreement.

On 6 November 2008, the European Communities requested to join the consultations.  On 7 November 2008, Australia requested to join the consultations.

On 9 March 2009, Mexico requested the establishment of a panel.  At its meeting on 20 March 2009, the DSB deferred the establishment of a panel.

 

Panel and Appellate Body proceedings

At its meeting on 20 April 2009, the DSB established a panel.  Argentina, Australia, China, Ecuador, the European Communities, Guatemala, Japan, Korea, New Zealand, Chinese Taipei and Turkey reserved their third-party rights. Brazil, Canada, Thailand and Venezuela subsequently reserved their third-party rights. On 2 December 2009, Mexico requested the Director-General to determine the composition of the panel.  On 14 December 2009, the Director-General composed the panel.  On 15 June 2010, the Chairman of the panel informed the DSB that in accordance with the timetable adopted by the panel after consultations with the parties to the dispute it envisaged to issue its final report to the parties in February 2011.

Following the death of Mr Sivakant Tiwari on 26 July 2010, the parties agreed on a new member of the Panel on 12 August 2010.   

On 24 February 2011, the Chairman of the panel informed the DSB that due to the modification of the timetable required as a result of the unforeseen change in the composition of the Panel, as well as the complexity of a number of issues raised in this case, the Panel expected to issue its final report to the parties by 8 June 2011.

On 15 September 2011, the panel report was circulated to Members.

Summary of key findings

  • This dispute concerns the following measures: (i) the United States Code, Title 16, Section 1385 (“Dolphin Protection Consumer Information Act”), (ii) the Code of Federal Regulations, Title 50, Section 216.91 (“Dolphin‑safe labeling standards”) and Section 216.92 (“Dolphin‑safe requirements for tuna harvested in the ETP [Eastern Tropical Pacific Ocean] by large purse seine vessels”) and (iii) the ruling in Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007). These measures establish the conditions for use of a “dolphin‑safe” label on tuna products. The measures condition the access to the US Department of Commerce official dolphin-safe label upon bringing certain documentary evidence that varies depending on the area where tuna contained in the tuna product is harvested and the fishing method by which it is harvested.
     
  • Mexico's main claims were that the measures were discriminatory, and that they were also unnecessary.
     
  • The Panel first determined whether the US dolphin-safe labelling provisions constitute a technical regulation under the TBT Agreement.  The Panel found that they do, and in particular that the measures are mandatory within the meaning of Annex 1.1 of the TBT Agreement.  One of the members of the Panel expressed a dissenting opinion on this particular issue but sided with the majority for the rest of the report. The Panel then examined Mexico's claims under Articles 2.1, 2.2, and 2.4 of the TBT Agreement.
     
  • The Panel rejected Mexico's first claim by finding that the US dolphin-safe labelling provisions do not discriminate against Mexican tuna products and are therefore not inconsistent with Article 2.1 of the TBT Agreement. Despite finding that Mexican tuna products are like tuna products originating in the United States or any other country within the meaning of Article 2.1 of the TBT Agreement, the Panel concluded that Mexican tuna products are not afforded less favourable treatment than tuna products of US and other origins in respect of the US dolphin safe labelling provisions on the basis of their origin.
     
  • With respect to Mexico's claim under Article 2.2 of the TBT Agreement, the Panel found that Mexico had demonstrated that the US dolphin-safe labelling provisions are more trade-restrictive than necessary to fulfil the legitimate objectives of (i) ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins  and (ii) contributing 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, taking account of the risks non-fulfilment would create. The Panel's conclusion was based on the following two findings: (i) the findings that the US dolphin-safe labelling provisions only partly address the legitimate objectives pursued by the United States and (ii) the finding that Mexico had provided the panel with a less trade restrictive alternative capable of achieving the same level of protection of the objective pursued by the US dolphin-safe labelling provisions.
     
  • As regards Mexico's claim under Article 2.4 of the TBT Agreement, the Panel found that the US dolphin-safe labelling provisions are not in violation of such provision, which requires technical regulations to be based on relevant international standards where possible. Despite finding that the standard referred to by Mexico is a relevant international standard for the purposes of the US dolphin-safe provisions and that the United States has not used it as basis for its measures, the Panel concluded that this standard would not be appropriate or effective to achieve the US objectives.
     
  • The Panel declined to rule in addition on Mexico's non-discrimination claims under the GATT 1994 and therefore exercised judicial economy with respect to Mexico's claims under Articles I:1 and III:4 of the GATT.

On 31 October 2011, Mexico and the United States requested the DSB to adopt a draft decision extending the 60-day time period stipulated in Article 16.4 of the DSU, to 20 January 2012. At its meeting on 11 November 2011, the DSB agreed that, upon a request by Mexico or the United States, the DSB, shall no later than 20 January 2012, adopt the panel report, unless the DSB decides by consensus not to do so or Mexico or the United States notifies the DSB of its decision to appeal pursuant to Article 16.4 of the DSU.

On 20 January 2012, the United States notified the DSB of its decision to appeal certain issues of law and legal interpretations developed by the panel. On 25 January 2012, Mexico notified the DSB of its decision to appeal certain issues of law and legal interpretations developed by the panel, and the panel's failure to make an objective assessment of the matter as required by Article 11 of the DSU.

On 20 March 2012, the Chair of the Appellate Body notified the DSB that it would not be able to circulate its report within 90 days due in part to the size of the appeal, including the number and complexity of the issues raised by the participants.  It was also due to the large caseload that the Appellate Body was facing and scheduling constraints resulting therefrom.  The Appellate Body expects that the report will be circulated to Members no later than 16 May 2012.

On 16 May 2012, the Appellate Body report was circulated to Members.

Summary of key findings

This dispute arises out of a challenge brought by Mexico against certain legal instruments of the United States (the “measure at issue”) establishing the conditions for the use of a “dolphin-safe” label on tuna products.  The legal instruments identified by Mexico in its panel request comprised the United States Code, Title 16, Section 1385 (the “Dolphin Protection Consumer Information Act” or the “DPCIA”), implementing regulations, and a ruling by a US federal appeals court in Earth Island Institute v. Hogarth relating to the application of the DPCIA.  The measure at issue does not make the use of a “dolphin-safe” label obligatory for the importation or sale of tuna products in the United States.  The conditions established in the measure at issue vary depending on the area where the tuna contained in the tuna product is caught and the type of vessel and fishing method by which it is harvested.  In particular, tuna products made from tuna caught by “setting on” dolphins (that is, chasing and encircling dolphins with a net in order to catch the tuna associating with them) are not eligible for a “dolphin-safe” label in the United States.  Before the Panel, Mexico alleged that the measure at issue is inconsistent with Articles I:1 and III:4 of the GATT 1994, and Articles 2.1, 2.2, and 2.4 of the TBT Agreement.

Regarding the question of whether the measure at issue constitutes a “technical regulation”, the Appellate Body found that the Panel did not err in characterizing the measure at issue as a “technical regulation” within the meaning of Annex 1.1 to the TBT Agreement.  The Appellate Body noted that the challenged measure is composed of legislative and regulatory acts of the US federal authorities and includes administrative provisions.  The Appellate Body added that the measure sets out a single and legally mandated definition of a “dolphin-safe” tuna product and disallows the use of other labels on tuna products that use the terms “dolphin-safe”, dolphins, porpoises and marine mammals and do not satisfy this definition.  In doing so, the US measure prescribes in a broad and exhaustive manner the conditions that apply for making any assertion on a tuna product as to its “dolphin-safety”, regardless of the manner in which that statement is made. 

With respect to Mexico's claim under Article 2.1 of the TBT Agreement, the Appellate Body reversed the Panel's finding that the US “dolphin-safe” labelling provisions are not inconsistent with Article 2.1 of the TBT Agreement, and found, instead, that the US measure is inconsistent with Article 2.1.  The Appellate Body reasoned, first, that, by excluding most Mexican tuna products from access to the “dolphin-safe” label while granting access to most US tuna products and tuna products from other countries, the measure modifies the conditions of competition in the US market to the detriment of Mexican tuna products.  Next, the Appellate Body scrutinized whether, in the light of the factual findings made by the Panel and undisputed facts on the record, the detrimental impact from the measure stems exclusively from a legitimate regulatory distinction.  In particular, the Appellate Body examined whether the different conditions for access to a “dolphin-safe” label are “calibrated” to the risks to dolphins arising from different fishing methods in different areas of the ocean, as the United States had claimed.  The Appellate Body noted the Panel's finding that the fishing technique of setting on dolphins is particularly harmful to dolphins and that this fishing method has the capacity of resulting in observed and unobserved adverse effects on dolphins.  At the same time, the Panel was not persuaded that the risks to dolphins from other fishing techniques are insignificant and do not under some circumstances rise to the same level as the risks from setting on dolphins.  The Appellate Body further noted  the Panel's finding that, while the US measure fully addresses the adverse effects on dolphins resulting (including observed and unobserved effects) from setting on dolphins in the ETP, it does not address mortality arising from fishing methods other than setting on dolphins in other areas of the ocean.  In these circumstances, the Appellate Body found that the measure at issue is not even-handed in the manner in which it addresses the risks to dolphins arising from different fishing techniques in different areas of the ocean.

Regarding Mexico's claim under Article 2.2 of the TBT Agreement, the Appellate Body reversed the Panel's finding that Mexico had demonstrated that the US “dolphin-safe” labelling provisions are more trade restrictive than necessary to fulfil the United States' legitimate objectives.  In doing so, the Appellate Body reasoned, inter alia, that the Panel had conducted a flawed analysis and comparison between the challenged measure and the alternative measure proposed by Mexico and also noted that the latter would not make an equivalent contribution to the United States' objectives as the US measure in all ocean areas.  On this basis, the Appellate Body reversed the Panel's finding that the measure is inconsistent with Article 2.2 of the TBT Agreement.

Mexico filed a conditional other appeal in the event that the Appellate Body reverses the Panel's finding that the measure at issue is inconsistent with Article 2.2 of the TBT Agreement.  As the condition on which Mexico premised its request was met, the Appellate Body addressed Mexico's other appeal and rejected both grounds of appeal, namely, Mexico's claim that the Panel erred in finding the United States' dolphin protection objective to be a legitimate objective, and Mexico's claim that the Panel erred in proceeding to examine whether there was a less trade-restrictive alternative measure after it had found that the measure at issue could, at best, only partially fulfil the United States' objectives.

The Appellate Body did not disagree with the Panel's conclusion that the US measure at issue is not inconsistent with Article 2.4 of the TBT Agreement.  The Appellate Body reversed however the Panel's intermediate finding that the “dolphin‑safe” definition and certification developed within the framework of the Agreement on the International Dolphin Conservation Program (“AIDCP”) is a “relevant international standard” within the meaning of Article 2.4 of the TBT Agreement.  In particular, the Appellate Body concluded that the Panel erred in finding that the AIDCP, to which new parties can accede only by invitation, is “open to the relevant body of every country and is therefore an international standardizing organization” for purposes of Article 2.4 of the TBT Agreement.

The Appellate Body found that the Panel acted inconsistently with Article 11 of the DSU in exercising judicial economy with respect to Mexico's claims under Articles I:1 and III:4 of the GATT 1994.

At its meeting on 13 June 2012, the DSB adopted the Appellate Body report and the panel report, as modified by the Appellate Body report.

 

Reasonable period of time

At the DSB meeting on 25 June 2012, the United States said that it intends to implement the DSB recommendations and rulings in a manner that respects its obligations and that it would need a reasonable period of time to do so. On 17 September 2012, the United States and Mexico informed the DSB that they had agreed that the reasonable period of time for the United States to implement the DSB recommendations and rulings shall be 13 months. Accordingly, the reasonable period of time expired on 13 July 2013.

 

Implementation of adopted reports

At the DSB meeting on 23 July 2013, the United States noted that on 13 July 2013 it had made effective a final rule that amended certain dolphin-safe labelling requirements and had brought those requirements into compliance with the DSB recommendations and rulings. The final rule brought the United States into compliance with the DSB recommendations and rulings within the reasonable period of time.

On 2 August 2013, Mexico and the United States informed the DSB of Agreed Procedures under Articles 21 and 22 of the DSU.

 

Compliance proceedings

On 14 November 2013, Mexico requested the establishment of a compliance panel. At its meeting on 25 November 2013, the DSB deferred the establishment of a panel. At its meeting on 22 January 2014, the DSB agreed to refer to the original panel, if possible, the matter raised by Mexico. Canada, China, the European Union, Guatemala, Japan, Korea, Norway and Thailand reserved their third-party rights. Subsequently, Australia and New Zealand reserved their third-party rights. On 27 January 2014, the compliance panel was composed. On 16 April 2014, the Chair of the compliance panel informed the DSB that the compliance panel expects to issue its final report to the parties by December 2014, in accordance with the timetable adopted after consultation with the parties.

On 14 April 2015, the compliance panel report was circulated to Members.

Summary of key findings

In response to the panel and Appellate Body reports issued in the original proceedings, the United States modified certain of the regulations that were part of the original tuna measure. These amendments required that all tuna sought to be entered into the United States as “dolphin-safe”, regardless of where it was caught or the nationality of the fishing vessel, must be accompanied by a certification that (a) no nets were intentionally set on dolphins in the set in which the tuna was caught; and (b) no dolphins were killed or seriously injured in the sets in which the tuna was caught. However, other documentation and tracking and verification requirements continued to differ depending on where the tuna was caught. Additionally, the measure continued to bar tuna caught by setting on dolphins from being labelled as “dolphin-safe”. The regulations as amended, together with the unamended enabling legislation (the Dolphin Protection Consumer Information Act) and the 9th circuit decision in Earth Island Institute v Hogarth, were referred to by the panel as the “amended tuna measure”.

Mexico complained that the amended tuna measure did not bring the United States into compliance with its obligations under the WTO Agreement. In particular, Mexico argued that that amended tuna measure violated:

  1. Article 2.1 of the TBT Agreement;
  2. Article I:1 of the GATT 1994; and
  3. Article III of the GATT 1994.

The United States argued that the amended tuna measure brought it into conformity with the rulings and recommendations of the DSB in the original proceedings. Additionally, the United States argued that certain aspects of Mexico's complaint were outside the panel's terms of reference because they related to aspects of the measure that were unchanged from the original proceedings.

Article 2.1 of the TBT Agreement

The panel rejected Mexico's claim that the amended tuna measure was inconsistent with Article 2.1 of the TBT Agreement because it barred tuna caught by setting on dolphins from accessing the “dolphin-safe” label. The panel accepted that this aspect of the measure had a detrimental impact on the competitive opportunities of Mexican tuna and tuna products in the United States. However, in the panel's view the Appellate Body had already found, in the original proceedings, that the different harms caused by setting on dolphins on the one hand and other tuna fishing methods on the other hand justified the United States' decision to treat those fishing methods differently. In the panel's view, none of the new evidence submitted by Mexico raised doubt about this Appellate Body conclusion. 

The panel then recalled that, in the original proceedings, the Appellate Body had found that the tuna measure was inconsistent with Article 2.1 of the TBT Agreement because it imposed a discriminatory burden on certain tuna depending on where it was caught. The panel then turned to consider whether this discrimination had been removed in the amended tuna measure.

The panel agreed with Mexico that the amended tuna measure remained inconsistent with Article 2.1 of the TBT Agreement because it imposed different certification and tracking and verification requirements depending on the fishery where the tuna was caught. These differences de facto discriminated against Mexican tuna and tuna products by subjecting such tuna to additional burdens not faced by tuna caught by other Members. In particular, tuna caught in the Eastern Tropical Pacific (ETP) large purse seine fishery, where most of Mexico's fleet fishes, could be labelled as dolphin safe only if both the captain and an independent observer certified that the tuna was caught without harming dolphins; whereas tuna caught in all other fisheries required only a captain certification. Additionally, the tracking and verification requirements for tuna caught in the ETP large purse seine fishery were more onerous than those imposed on tuna caught in other fisheries. The panel found that these differences modified the conditions of competition to the detriment of Mexican tuna and tuna products. Additionally, the panel concluded that this detrimental treatment did not stem exclusively from a legitimate regulatory distinction and was not even-handed. This was because, in the panel's view, the United States had not discharged its burden of explaining how these different regulatory requirements were related to or justified by the policy goals of protecting dolphins and providing consumers with accurate information.

One panelist did not agree that the amended tuna measure violated Article 2.1 of the TBT Agreement because it required independent observer certification for tuna caught in the ETP large purse seine fishery but not in other fisheries. According to this panelist, this distinction was justified on the basis that setting on dolphins consistently involves a higher degree of risks to dolphins than other fishing methods. However, this panelist agreed that the different tracking and verification requirements violated Article 2.1.

Article I:1 of the GATT 1994

The panel found that the amended tuna measure made access to the “dolphin-safe” label for tuna caught in the ETP large purse seine fishery conditional upon certain additional requirements that were not imposed on tuna caught in other fisheries. As such, the panel found that the measure was inconsistent with Article I:1 of the GATT 1994.

Article III:4 of the GATT 1994

The panel found that the amended tuna measure modified the conditions of competition in the United States market to the detriment of Mexican tuna and tuna products. The measure denied access to the “dolphin-safe” label to tuna caught by setting on dolphins, Mexico's primary fishing method, and also imposed additional, burdensome certification and tracking and verification requirements on tuna caught in the ETP large purse seine fishery, where most of Mexico's fleet fishes. Accordingly, the measure was inconsistent with Article III:4 of the GATT 1994.

The United States' defence under Articles XX(b) and (g)

The United States argued that, to the extent the amended tuna measure was inconsistent with the GATT 1994, it was justified under Article XX(b) or Article XX(g).

The panel agreed with the United States that the barring of tuna caught by setting on dolphins from accessing the label was justified under Article XX(g) and was not applied in a manner that constituted arbitrary or unjustifiable discrimination or a disguised restriction on trade. This aspect of the amended tuna measure was therefore justified under subparagraph (g) and the chapeau of Article XX.

The panel agreed with the United States that the different certification requirements “related to” conservation within the meaning of Article XX(g). However, a majority of the panel held that these requirements were applied in an arbitrarily discriminatory manner, in contravention of the chapeau. One panelist disagreed, and felt that the different certification requirements were consistent with the chapeau.

Finally, the panel held that the different tracking and verification requirements “related to” conservation within the meaning of Article XX(g). However, the panel held that these requirements were applied in a manner that constituted arbitrary or unjustifiable discrimination, and accordingly were inconsistent with the chapeau of Article XX.

The panel exercised judicial economy with respect to the United States' defence under Article XX(b) as it did not consider it necessary to make a ruling under this provision in order to resolve the dispute.

 

 

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