TWN Info Service on WTO and Trade Issues (Apr16/10)
19 April 2016
Third World Network

US files dispute against itself over its 'dolphin-safe' regime?
Published in SUNS #8221 dated 14 April 2016

Geneva, 13 Apr (Kanaga Raja) -- The United States has requested a compliance panel to examine the measures that it had adopted earlier in March this year to bring itself into compliance with the rulings and recommendations of the Dispute Settlement Body (DSB) in its dispute with Mexico over the US ‘dolphin-safe' labelling regime for tuna products.

The US move has come even as the issue has been referred to arbitration over the level of authorization to be given to Mexico against the US over non-compliance, long after the expiry of the reasonable period of time given to the US to comply with the rulings and recommendations of the DSB in this ‘dolphin-safe' labelling dispute.

The US move for a new compliance panel in the dispute, when the level of authorization to be given is before an arbitrator, is unprecedented, and some trade observers see it as part of a delaying tactic, in the US presidential election year, when all candidates, currently engaged in primaries, have adopted an anti-trade (plurilateral or multilateral) posture, and US-Mexico relations have also become an issue.

This last has arisen over the views and proposals of the leading contender for Republican Party nomination, Mr. Donald Trump, voicing his intention, if nominated and wins the Presidency, to erect a wall along the border and making Mexico pay for it.

The US move for a new compliance panel deals one more blow to the credibility of the WTO as a rules-based multilateral trading system with rules applying in the same way to the powerful as the weakest!

At the WTO, the US has a record of having the largest number of dispute rulings and DSB recommendations against it, some stretching back to a few years, yet to be complied with.

And while trade officials go around the world promoting the US trade agenda, there is a virtual conspiracy of silence on this US record.

The US compliance panel request under Article 21.5 of the Dispute Settlement Understanding (DSU), in the "Tuna-2" dispute, was notified to the WTO Secretariat on 11 April.

The dispute with Mexico over the US dolphin-safe labelling regime in now at the arbitration stage in terms of Article 22.6 of the DSU.

In terms of this provision, the arbitrator is called upon to hand down the arbitral award within 60 days.

The reference to the arbitration came about following an objection by the US on 22 March to the level of suspension of concessions or other obligations under the GATT 1994 that was sought by Mexico, and the matter was automatically referred to arbitration as per Article 22.6.

The arbitration panel is to rule on the level of retaliation to be allowed over a request by Mexico for authorisation to retaliate to the tune of $472.3 million annually in its dispute with the United States on its ‘dolphin-safe' labelling regime for tuna products.

Mexico has sought the authorisation of the WTO over the US failure to implement the DSB's adopted panel rulings and recommendations on this issue.

The US-Mexico tuna dispute had featured at a meeting of the DSB on 23 March under the agenda item of US measures concerning the importation, marketing and sale of tuna and tuna products - recourse to Article 22.2 of the Dispute Settlement Understanding (DSU) by Mexico.

Mexico had informed that DSB meeting that it is going to pursue its arbitration proceedings despite an announcement by the US National Oceanic and Atmospheric Administration (NOAA) on 22 March that the US would be further amending the ‘dolphin-safe' regulation to comply with the WTO ruling.

Mexico said that it is still carrying out a full analysis of the announcement by the NOAA.

[A DSU Article 21.5 Appellate Body report of 20 November 2015, on US compliance with the adopted rulings/ recommendations in this dispute, had found that the US had not brought its dolphin-safe labelling regime for tuna products into conformity with the recommendations and rulings of the DSB.

[A compliance panel under Article 21.5 had earlier on 14 April 2015 largely ruled that an amended measure instituted by the US concerning the importation, marketing and sale of tuna and tuna products from Mexico is inconsistent with its WTO obligations. (See SUNS #8141 dated 24 November 2015).

[On 3 December 2015, the DSB adopted the Appellate Body and compliance panel reports in the dispute, and on 11 March 2016, Mexico sought authorisation from the DSB to suspend the application to the US of tariff concessions and other related obligations in the goods sector under the GATT 1994 in the amount of $472.3 million annually (see SUNS #8209 dated 29 March 2016).]

According to trade officials, the request for a compliance panel by the US now is with respect to its own new NOAA measure published on 23 March and outlined in "Enhanced document requirements and captain training requirements to support use of the dolphin-safe label on tuna products."

A post by Simon Lester on the US request for a compliance panel at the International Economic Law and Policy (IELP) blog, says: "I'm assuming it will be the same people serving on the 21.5 compliance panel and the 22.6 arbitration panel. How will they coordinate these processes in terms of timing?"

(The post can be found at: http://worldtradelaw.typepad.com/ielpblog/2016/04/tuna-compliance-update.html)

If this does happen, this would mean that the arbitration has run into the problem raised by the US that its latest measures comply with the ruling and DSB recommendations, but adjudicating on this new US claim being beyond the arbitrator's remit, this manoeuver is being resorted to. +