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No Mexican Sanctions on U.S. Exports as WTO Ends Dolphin-Safe Tuna Case

Thursday, December 20, 2018
Sandler, Travis & Rosenberg Trade Report

The World Trade Organization’s Appellate Body has ruled that U.S. regulations on labeling imported tuna as dolphin-safe do not arbitrarily or unjustifiably discriminate against Mexico. The decision, which brings a decade-long case to a close, precludes Mexico from imposing $163.2 million worth of retaliatory sanctions against U.S. exports.

The U.S. amended its dolphin-safe tuna labeling regulations in July 2013 in response to a WTO decision that the previous regulations were not “even-handed.” Mexico objected to the revisions and took the issue back to the WTO, where the Appellate Body concluded in December 2015 that the rules continued to unfairly discriminate against tuna imported from Mexico. Mexico subsequently sought to impose $472.3 million in retaliatory sanctions but a WTO arbitrator ultimately lowered that amount to $163.2 million (though those sanctions were never imposed).

In the meantime the U.S. made further amendments to its regulations in March 2016 and requested the creation of a WTO panel to determine whether those changes brought the U.S. into compliance with the WTO’s recommendations and rulings. A dispute settlement panel ruled in the U.S.’ favor in October 2017 and the Appellate Body has now upheld that decision.

Specifically, press sources state, the AB agreed that the method of tuna fishing used by Mexican vessels in the eastern tropical Pacific Ocean, which involves encircling dolphins with a purse seine net to catch the tuna swimming beneath them, is likely to harm dolphins even if there is no observable evidence of such injury. As a result, the AB said, it is acceptable under WTO rules for the U.S. to refuse to allow tuna harvested in this manner to be labeled as dolphin-safe.

According to press sources, Mexican officials responded that they will seek to further discuss the labeling issue with the U.S. while also working to increase tuna exports to other markets.

U.S. Trade Representative Robert Lighthizer welcomed the Appellate Body decision, which he said “finally reached the right conclusion” after “more than 10 years and multiple erroneous WTO reports.” However, he also continued the Trump administration’s criticism of the WTO, stating that the organization’s dispute settlement system “should not be used to impose new obligations on WTO members, and it should not encourage countries to use aggressive litigation tactics to attack fair and neutral environmental measures.”

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