The Appellate Body made three key findings in its May 16, 2012 opinion, formally entitled: United States-Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, AB-2012-2. First, the Appellate Body found that the U.S. labeling program constituted a “technical regulation” and was, therefore, subject to the TBT Agreement. The TBT Agreement defines a “technical regulation” as a “[d]ocument which lays down product characteristics or their related processes and production methods . . . with which compliance is mandatory.” Such a regulation can “include or deal exclusively with . . . labelling requirements as they apply to a product, process or production method.” While the United States challenged the lower WTO Panel’s September 2011 finding that the scheme was “mandatory,” contending that tuna exporters were free to sell their product in the United States without the “dolphin safe” label, the Appellate Body rejected this argument. Instead, it determined that the U.S. program was “mandatory,” reasoning that the U.S. measure “sets out a single and legally mandated definition of a ‘dolphin-safe’ tuna product and disallows the use of other labels on tuna products that do not satisfy this definition.”
Second, the Appellate Body reversed the lower WTO Panel’s finding that the labeling provisions were not inconsistent with Article 2.1 of TBT Agreement, which requires that WTO Members must treat all other Members’ exports no less favorably than “like products” of national origin (National Treatment) and “like products” originating in any other country (Most Favored Nation). The Appellate Body reasoned that by excluding most Mexican tuna products from access to the label while granting access to most U.S. tuna products and tuna products from other countries, the “dolphin safe” measure modifies the conditions of competition in the U.S. market, negatively impacting Mexican exports. The Appellate Body rejected the United States’ argument that the impact on Mexican exports resulted solely from consumer choice and concluded that the measure was not calibrated to the risks to dolphins arising from different fishing methods in different areas of the ocean. Mexico had contended that imports of tuna products produced from tuna harvested outside the Eastern Tropical Pacific can be labeled as “dolphin safe” even though there are no protections for dolphins outside the Eastern Tropical Pacific. The United States countered that there is currently no fishery outside of the Eastern Tropical Pacific causing regular and significant mortality or serious injury to dolphins. The Appellate Body agreed with Mexico, however, based on its finding that risks to dolphins in other ocean areas are not insignificant. Further, the Appellate Body observed that the U.S. labeling measure “fully addresses the adverse effects on dolphins resulting from setting on dolphins in the Eastern Tropical Pacific” by prohibiting tuna caught by such methods from carrying the “dolphin safe” label, but that the measure does not address risks to dolphins from tuna fishing outside that region using other methods. The Appellate Body noted that the measure allows all such tuna to carry the “dolphin safe” label without certification that dolphins were not injured or killed. Consequently, it found that the impact on Mexican tuna products did not stem “exclusively from a legitimate regulatory distinction” and, therefore, discriminated against Mexican imports.
Third, the Appellate Body agreed with the lower WTO Panel’s conclusion that the measure is consistent with Article 2.4 of the TBT Agreement. Article 2.4 states that where “relevant international standards” exist WTO Members shall use them as a basis for their technical regulations except when such standards would be ineffective. The Appellate Body, however, reversed the lower WTO Panel’s finding that the “dolphin safe” definition and certification developed within the AIDCP framework qualifies as a “relevant international standard.” The Appellate Body concluded that in order to qualify as an international standard the standard must be approved by an “international standardizing body” (i.e., “a body whose membership is open to at least all WTO Members”). The AIDCP, to which new parties can accede only by invitation, is not “open to the relevant body of every country” and, therefore, did not qualify as an international standardizing organization.
Unique to the Eastern Tropical Pacific, schools of yellowfin tuna tend to be associated with and swim under pods of pantropical, spinner, and common dolphins. In the 1950s, with the advent of strong netting that would not rot in tropical water and the introduction of hydraulic crane power, fishermen began exploiting the tuna-dolphin relationship by tracking dolphins and encircling them in massive purse seine nets and then capturing the tuna underneath. The fishermen close the nets like a purse around the dolphins and tuna alike. This technique is still used today by Mexican fleets, as well as those of a few other nations. Since the inception of this fishing technique known as “setting” or “setting on dolphins,” millions of dolphins have been killed, with more than 400,000 dolphins estimated as killed in 1972 alone. Bowers v. Evans, 257 F.3d 1058, 1061 n.3 (9th Cir. 2001). As of 2002, despite an estimated 98 percent reduction in annual mortality, dolphin stocks in the Eastern Tropical Pacific were estimated to still be depleted, with northeastern spotted and eastern spinner dolphins at 19 percent and 29 percent of their historic abundance, respectively.
Concerned about these and other impacts to marine mammals, in 1972 Congress enacted the Marine Mammal Protection Act, which prohibited the harassment, hunting, capturing, and killing of marine mammals without prior authorization. The Marine Mammal Protection Act also included provisions for reducing incidental marine mammal bycatch to “insignificant levels approaching zero.” In the 1970s, the U.S. government began to study the issue, monitor fishing in the Eastern Tropical Pacific, and promulgate regulations to reduce the number of dolphins killed on U.S. vessels. These efforts reduced the kill rate in the U.S. industry. Increased fishing by Latin American fleets, however, caused dolphin mortality to rise again in the mid-1980s.
The issue drew significant public attention in the United States, prompting legislative action. Congress amended the Marine Mammal Protection Act in the 1980s to ban the importation of tuna not caught at mortality rates comparable to those applicable to U.S. vessels and, in 1990, passed the Dolphin Protection Consumer Information Act. That statute created a labeling system for “dolphin safe” tuna, based primarily on whether the fish were caught by using purse seine nets. Thereafter, U.S. consumers began almost exclusively to purchase tuna that was labeled as “dolphin safe.”
The United States also undertook a number of international efforts. Through two of these efforts, the 1995 Declaration of Panama and the later AIDCP, countries agreed to place observers on every vessel over 400 tons and impose mandatory mortality limits. Signatories envisioned that the United States would alter its definition of “dolphin safe” tuna to permit use of the label for tuna caught by setting on dolphins—as long as no dolphins were observed killed or seriously injured on that set.
In parallel to these cooperative efforts, Mexico successfully challenged the U.S. tuna embargo in a General Agreement on Tariffs and Trade (GATT) dispute settlement proceeding in 1991. The 1991 GATT report found that the United States could not embargo Mexican tuna imports simply because the manner in which Mexican fleets caught tuna did not satisfy U.S. regulations. The panel also found, however, that requiring tuna products to be labeled “dolphin safe” did not violate GATT rules. As to the latter finding, the panel reasoned that the labeling measure was designed to prevent deceptive advertising for all tuna products, whether imported or domestically produced. In 1994, intermediary nations where tuna was processed also successfully challenged the U.S. embargo. While never adopted, the 1991 and 1994 GATT decisions animated the trade and environment debate in the 1990s and impacted the negotiation of the 1994 North American Free Trade Agreement (NAFTA) and the international tuna fishery negotiations described above.
As noted, pursuant to the AIDCP, the United States agreed to seek to alter its labeling standard. Congress, however, required as a precondition that the Department of Commerce conduct studies to determine whether the use of purse seine netting was “having a significant adverse impact on any depleted dolphin stock in the Eastern Tropical Pacific.” While the National Oceanic and Atmospheric Administration (NOAA) made this finding in 2002, the Ninth Circuit vacated NOAA’s determination in Earth Island Inst. v. Hogarth, 494 F.3d 757 (9th Cir. 2007). This ruling effectively left the original definition of “dolphin safe” in place and set the stage for Mexico’s challenge.
In 2008, Mexico requested WTO consultations regarding the U.S. labeling law, and, in 2009, requested a WTO dispute resolution panel. In 2010, the United States sought to transfer the dispute to a NAFTA arbitration panel, but Mexico continued to pursue its WTO challenge. In 2011, the lower WTO Panel report found, inter alia, that the U.S. measure was more trade restrictive than necessary. As noted above, the Appellate Body reversed this finding, but concluded that the measure violated the TBT Agreement because the measure’s detrimental impact on Mexican tuna fishers does not result exclusively from a legitimate regulatory distinction between purse seine netting in the Eastern Tropical Pacific and fishing by other methods outside of the same area.
The WTO decision’s long-term implications
The original 1991 Tuna Dolphin GATT panel decision sparked an intense debate in the relationship between trade, development, and environmental protection. The subsequent Appellate Body rulings in US-Shrimp and Shrimp Products (1998) and European Communities-Measures Affecting Asbestos and Products Containing Asbestos (2001) seemed to signal greater sensitivity to environmental concerns and reduced the intensity of that debate somewhat. The WTO’s 2012 Tuna Dolphin decision may revive questions about the WTO’s ability to properly weigh the importance of environmental protection in its assessments.
However, the WTO decision adds an interesting wrinkle to the debate because it suggests that the violation of the TBT Agreement provision could be corrected by increasing the stringency of U.S. law to require certification that tuna caught outside the Eastern Tropical Pacific by other methods does not result in dolphin mortality or serious injury in order to be labeled “dolphin safe.” Moreover, the WTO’s important 2012 Tuna Dolphin decision will likely give rise to a new phase in the trade-environment discussion by raising new questions about the extent to which the international trade regime constrains environmentally-minded labeling measures.