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Mexican Sanctions Possible After WTO Upholds Ruling Against U.S. Tuna Labeling Rules

Thursday, December 03, 2015
Sandler, Travis & Rosenberg Trade Report

The World Trade Organization Appellate Body has upheld a dispute settlement panel ruling that revised U.S. regulations on dolphin-safe tuna labeling are still unfairly discriminating against Mexico. The decision will enable Mexico, which has been fighting to weaken the U.S. regulations for decades, to seek WTO authorization to impose retaliatory trade sanctions.

The U.S. amended its regulations for labeling imported tuna as dolphin-safe in July 2013 in response to a WTO decision that the previous regulations were not “even-handed” because they focused more on the risks to dolphins posed by purse seine tuna fishing in the eastern tropical Pacific Ocean, where Mexican vessels conduct the majority of their tuna fishing operations, and less on the risks from other fishing methods in other areas. The revised regulations required a certification that no dolphins were killed or seriously injured during any tuna fishing operations, not just those that take place within the ETP. It also changed storage requirements related to dolphin-safe and non-dolphin-safe tuna on board fishing vessels, created new requirements for processors other than canners of tuna product labeled dolphin-safe, and modified the reporting requirements associated with tracking domestic tuna canning and processing operations.

Nevertheless, the Appellate Body concluded that the U.S. has “not brought its dolphin-safe labeling regime for tuna products into conformity” with the dispute settlement panel’s recommendations and rulings and that the U.S. regulations continue to confer “less favorable treatment” to tuna imported from Mexico.

Mexico’s Secretariat of the Economy responded that if the U.S. does not comply with the Appellate Body ruling the Mexican government may initiate actions to suspend commercial benefits for the U.S. That would likely take the form of higher tariffs on imports of U.S. goods, but Mexico has not yet specified the amount of retaliation it may seek or how soon it could be imposed. The amount will likely be associated with the market access Mexico feels it has lost in the U.S. due to the long-standing restrictions. Press reports note that the U.S. imported canned tuna market was valued at about $680 million in 2014 and that Mexico accounted for a 3.5 percent share.

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