Bridges Trade BioRes Review • Volume 2 • Number 4 • December 2008

BioRes Interview: Mexico on US dolphin safe labelling policy on tuna products

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On 24 October, Mexico requested consultation under the WTO dispute settlement understanding regarding the legality of “dolphin-safe” labels for tuna products in the US. Mexico says these are construed in a way that effectively and unfairly keeps Mexican producers out of the US market. In order to get a better understanding of the issues underlying the case, BioRes talked to Mariano Gomezperalta Casali, General Counsel for Foreign Trade Negotiations, Secretary of Economy, Mexico.

BioRes: What are the concerns and motivations underlying your request for consultations?

Gomezperalta Casali: The Mexican tuna fleet has incurred enormous expense in paying to have independent observers on board each vessel and taken other actions in the Eastern Tropical Pacific (ETP) to ensure that no dolphins are harmed. No fishing fleet in any other region of the world’s oceans makes such an effort.

The fishing procedures and regulatory oversight established through the International Dolphin Conservation Program (IDCP), under which the Mexican tuna fleet operates, have reduced dolphin mortality in the ETP from over 130,000 per year in the 1980s to virtually none in recent years. The US fleet moved to other ocean regions to avoid the burdens of the IDCP. The Mexican fleet is primarily responsible for the investments and innovations that have largely eliminated dolphin mortalities from fishing in the ETP.

Mexico’s fishing methods comply with the dolphin-protection guidelines accepted internationally, including by the US. The rules imposed by the US in its domestic market are more restrictive than those agreed internationally, are discriminatory, and lack a scientific basis.

BioRes: How does this request for consultations relate to the Tuna-Dolphin cases under the GATT back in the 1990s?

Gomezperalta Casali: This request for consultations addresses different measures than those subject to the 1990s GATT disputes.

BioRes: The request for consultations seems to focus mainly on the US Department of Commerce dolphin-safe label. Is this correct? Reportedly, 90% of tuna importers require the private, Earth Island Institute-run dolphin-safe label. Are you also seeking to target this private label?

Gomezperalta Casali: The request for consultations focuses on the U.S. requirements related to the use of the dolphin-safe label, whether official or alternative.

BioRes: Does this request relate back to discussions in either the Technical Barriers to Trade (TBT) or Sanitary and Phytosanitary Measures (SPS) Committee on private-sector labelling, and different types of eco-labelling specifically?

Gomezperalta Casali: This request is independent from the work conducted by WTO Members on labelling in the TBT and SPS Committee.

BioRes: What systemic implications do you see regarding a possible Dispute Settlement Understanding (DSU) case on labelling?

Gomezperalta Casali: Mexico has initiated this case to address specifically the US law on the use of the dolphin safe label and is not proposing to address labelling systemically.

Background

Spawn of tuna-dolphin

Tuna-dolphin is back. On October 24th, Mexico requested WTO dispute settlement consultations with the US claiming that its tuna exports are being discriminated against by a US government sponsored “dolphin safe” labelling system. In a press release, Mexico’s Economy Minister said the US labelling requirements lacked scientific support and could be in violation of several WTO rules. Mexico’s request revives an issue that has been hotly contested by trade specialists, scientists, and environmentalists since its debut at the landmark tuna-dolphin cases of the GATT era.

Background: Tuna-dolphin, son of tuna-dolphin

The trouble began in the 1950s when fishermen in the Eastern Tropical Pacific (ETP) began encircling groups of dolphins in purse seine nets in order to harvest the tuna that swam below them. This practice depleted dolphin populations to less than 35 percent of pre-purse seining levels according to population studies commissioned by the US Department of Commerce.

In the name of dolphin conservation, The US imposed strict limits on dolphin kill rates for domestic fisheries and banned tuna imports from countries with higher average kill-rates. Furthermore, the embargo extended to tuna products from any intermediary country which imported tuna from a country with higher kill rates than the US.

Mexico, which suffered a major loss to its tuna exports, brought the US to the GATT dispute settlement body in 1991 and accused the US of violating the principals of non-discrimination (Art. XIII) and national treatment (Art. III) while imposing quantitative instead of tariff barriers to trade (Art. XI). Mexico also claimed that the US practice of labelling tuna imports as “dolphin safe” was an illegal discrimination because it was based on process and production methods (PPMs) rather than the product itself. A second case levied by the EU and the Netherlands followed suit in 1994 in which the same charges were made.

In both cases the US claimed that if it had inhibited free trade, it was justified in the name of environmental concerns, an exception outlined in Article XX of GATT. These cases were the first to test the legitimacy of using Article XX to defend restrictive trade measures.

In both cases the panel ruled against the US and the article XX exception was not upheld. However, the panel declared that the US practice of labelling tuna as “dolphin safe” was justified since any competitive advantage it gives to US fisheries depends on consumers.

The panel rulings were never formally adopted. Instead, the US “settled out of court” with Mexico in bilateral negotiations over NAFTA. The embargos were eventually dropped in lieu of a US government sponsored “dolphin safe” labelling system that excludes tuna caught in purse seine nets.

Protectionism or conservation?

But since the early days of tuna-dolphin, the US definition of dolphin safe seems more and more arbitrary. Through international agreements like La Jolla (1993), the Panama Declaration (1995), and the Agreement on the International Dolphin Conservation Program (1999), all of the countries that fish the ETP have taken measures to substantially reduce their dolphin kill rates to levels approaching zero.

A large part of Mexico’s fishing fleet still uses purse seine nets but new nets have been developed to allow dolphins to easily escape, and which are less likely to entangle dolphins. Mexico now requires independent onboard observers to verify that no dolphins are killed or injured during purse seine fishing expeditions. Since it can verify that no dolphins are killed, Mexico’s tuna exports qualify for an internationally agreed-upon dolphin safe label established by the Agreement on the International Dolphin Conservation Program (AIDCP). The US is a member of this agreement yet still does not allow a dolphin safe label to be used on any tuna imports caught using purse seine nets, even if no dolphins are killed.

Mexico argues that this is an unfair distinction, and that national origin is the real target of the discrimination. All of the major US tuna processors buy only dolphin safe tuna products and Mexico claims that because of its inability to label its tuna as dolphin safe in US markets, it has lost more than a third of its tuna fleet.

Science and politics

As party to the Panama Declaration, the US obligated itself to change its labelling system to include tuna caught by purse seining as long as independent, onboard observers verify that no dolphins have been killed or injured on that expedition. However, under US law, implementation of these changes is dependant upon the final findings of a study to determine if dolphin populations in the ETP are recovering. To the dismay of both politicians and dolphin lovers, the study’s findings were ambiguous: The study found that dolphin populations remained depleted at less than 35 percent of pre-purse seining levels, even though the reported kill had fallen below 0.1 percent for each dolphin stock. But without more evidence, scientists could not conclusively say why. Stress related harm done to dolphins through purse seining was just one suggested explanation, as well as the possibility of mother-calf separation. It was also suggested that observers might not be reporting all dolphin kills.

The secretary of the Department of Commerce, in attempt to make good on the US promise to adopt international dolphin safe standards, declared that the study provided sufficient evidence that purse seining does not hurt the dolphin population. Under US law, this statement would have allowed the label criteria to be changed. But environmental groups cried “nay”.

After 2 years of lawsuits brought by environmental groups, U.S. District Court for the Northern District of California rejected the attempt to weaken the dolphin safe standard. In his 24 years on the bench, US Federal Judge Thelton Henderson claimed he had “[never] reviewed a record of agency action that contained such a compelling portrait of political meddling.” The court found that the secretary’s final finding ignored the best scientific evidence available. The case was appealed and failed as recently as March 2007, rendering it impossible to loosen the labelling requirements under current US law.

Private labelling schemes

Since the perceived threat to the integrity of the US government label, the tuna industry has seen a proliferation of private labelling schemes. In their public awareness campaigns environmental groups have attacked the government label for attempting to compromise its standards while at the same time developing their own certification and monitoring schemes. The largest tuna brands, including Starkist, Chicken of the Sea, and Bumble Bee, have declared that they would not buy purse seine tuna products even if the government labelling requirements were changed to include them. The Earth Island Institute reports that 90 percent of the world’s tuna canners hold similar convictions, refusing to sell tuna that has been caught using purse seine nets. Some experts wonder what Mexico’s purse seine fisheries hope to gain from a favourable WTO ruling considering that public opinion is already firmly set against them. While uncertainty looms about the future of EPT dolphin populations, Mexico’s purse seine fishing industry will have a difficult time gaining US market share no matter how the case concludes.