Thursday, April 12, 2012

In Tuna II, WTO grapples with how to balance economic growth & sustainable development

(My thanks to IntLawGrrls for the opportunity to contribute this introductory post)

Finding common ground between the need for sustainable development and economic development is no easy task. What is the connection between tuna, dolphin, and climate change mitigation? Connecting the dots in the context of environmental labeling schemes is a World Trade Organization panel report, US—Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (US-Tuna II) (September 2011), now on WTO appeal.
As described here, this WTO case, brought by Mexico against the United States, concerns the safety of dolphins that suffer from purse-seine fishing of tuna in the Eastern Tropical Pacific region, off the western coast of Mexico and Latin American countries. This is a form of fishing, used in the Eastern Tropical Pacific region, that consists of placing nets over the areas where tuna swim. Dolphins tend to swim near the school of tuna and get caught in the nets. Dolphins suffer as a result, and the mortality rate is high.
The U.S. government, in response to consumer outrage with these methods, has tried to deal with this problem since the late 1980s. The United States and Mexico attempted to resolve their differences, after an earlier WTO dispute concerning tuna fishing and dolphin safety, through the Agreement on the International Dolphin Conservation Program,initiated by the Inter-American Tropical Tuna Commission. The U.S. government also implemented a dolphin-safe label to be placed on tuna products sold in the United States.
The Dolphin Agreement, which entered into force in 1999, has its own labeling scheme. It is considered less stringent than the U.S. scheme (right), since it does not focus on the setting on dolphins method but rather on the injury impact to dolphins. (image credit) After much litigation and the 2007 decision of the U.S. Court of Appeals for the Ninth Circuit in Earth Island Institute v. Hogarth, vacating the Department of Commerce finding that the Dolphin Agreement standard would meet U.S. objectives, the U.S. government retained its more stringent labeling scheme.
The U.S. label is not a required label in order to sell tuna products, including imports, in the United States. However, the majority of the large U.S. distributors of tuna products do require the use of the label in order to sell their own tuna products. According to Mexico, this practice has affected the ability of Mexican tuna producers to sell their products in the United States and is in turn, trade restrictive and in violation of the General Agreement on Tariffs and Trade, and the Agreement on Technical Barriers for Trade. The latter agreement specifically deals with domestic regulations intended to protect human health, animal or plant life, as well as the environment.
In its 2011 Tuna II report, the WTO panel, while recognizing the U.S. legitimate objectives of dolphin protection and providing consumer information in this regard, decided for Mexico. It found that the U.S. dolphin-safe label was more trade restrictive than necessary to pursue the U.S. objectives.
Several interesting legal issues are raised by this case:
► First, the WTO panel, in one of its first adjudications of a labeling scheme under the Agreement on Technical Barriers for Trade, found that the U.S. labeling scheme, though its use was not required, was still a mandatory obligation, making it a “technical regulation” under the Agreement on Technical Barriers for Trade.
This raises issues as to the extent to which any state action becomes a mandatory technical regulation as opposed to a standard, which is voluntary with more flexible requirements under the Agreement Agreement on Technical Barriers for Trade. In finding a technical regulation, though, the Panel concluded that the U.S. labeling scheme did not discriminate against Mexican tuna products.
► Second, this case suggests that non-product related process and production methods could come under the scope of the Agreement on Technical Barriers for Trade, a debatable and controversial issue for the WTO but with important ramifications for future climate change policies.
► Third, this panel, in recognizing the Dolphin Agreement as an “international standardizing organization,” opined that environmental regulations comporting with relevant international standards from such organizations could in fact be viable under WTO covered agreements. However, the panel muddied the waters as to what constitutes an “international standard” under the Agreement on Technical Barriers for Trade.
► Finally, the panel concluded that the U.S. regulation may in fact undermine dolphin safety and that Mexico had met its burden to show that the U.S. regulation alone did not meet its own legitimate objectives. Rather, the Panel concluded that a domestic regulatory measure that also incorporated a relevant international standard (such as the Dolphin Agreement standard) may in fact be legitimate under the Agreement on Technical Barriers for Trade.
► One unique move by the WTO panel in this case was its consideration of the information of a non-party amicus curiae brief, by Humane Society International and American University Washington College of Law, Program on International and Comparative Environmental Law.
Many of the legal issues raised above have been appealed by the United States, Mexico has counter-appealed, and another amicus brief has been submitted to the WTO Appellate Body, which should issue its report very soon.
This is an important case regarding environmental labeling schemes and the Agreement on Technical Barriers for Trade.
In particular, US-Tuna II, about which I recently wrote an ASIL Insight, makes us reconsider the role of state and non-state actors in establishing, monitoring, and enforcing labeling schemes concerning process and production methods. It also reminds us of the difficult balance between sustainable development and economic development, especially with respect to developing nations that tend to distrust environmental regulations for fear they will be trade restrictive and impede their access to markets in industrialized countries. The issues in US-Tuna II are at the forefront of debates around the relationship of climate change, energy, and trade.

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