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Back to the Future: US-Tuna II and the New Environment-Trade Debate

Published online by Cambridge University Press:  20 January 2017

Alessandra Arcuri
Alessandra Arcuri*
Affiliation:
International Economic Law and Law and Economics, Erasmus School of Law, Erasmus University Rotterdam, e-mail:
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Abstract

This article discusses a number of pitfalls of the US-Tuna II Panel Report. This Report is interesting because it offers an occasion to reflect on some provisions of the Technical Barrier to Trade (TBT) Agreement, which may be crucial for the assessment of the legality of environmental labelling regimes. The most troubling part of the Report is the one dealing with the trade-restrictive nature of the measure. The Panel seems to have relied on a test by which if a measure does not reach its objectives perfectly, any other ineffective measures adopted with allegedly the same goals can be judged as a valid less-trade restrictive alternative. In other words, two wrongs seem to make a right in the view of the Panel; a conclusion that, for obvious reasons, will not be greeted with enthusiasm by environmentalists.

Type
Articles
Information
European Journal of Risk Regulation , Volume 3 , Issue 2 , June 2012 , pp. 177 - 189
Copyright
Copyright © Cambridge University Press 2012

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References

1 The fishing practice that uses purse seine nets consists in using very large nets to encircle schools of fish. In this case, the schools encircled are schools of dolphins as they typically swim together with tunas. Once the schools of fish are encircled, the nets are pulled together by closing the net from the bottom, so that the fishes cannot escape.

2 GATT Panel Report, United States – Restrictions on Imports of Tuna, DS21/R, DS21/R, 3 September 1991, unadopted, BISD 39S/155 (US – Tuna (Mexico)). Next to the prohibition on imports from Mexico, the US banned the importation of tuna from countries that, in turn, were importing from Mexico (a sort of ‘anti-tuna-laundering’ measure); also these measures were disputed before a GATT Panel, cf. GATT Panel Report, United States – Restrictions on Imports of Tuna, DS29/R, 16 June 1994, unadopted (US – Tuna (EEC)).

3 See US – Tuna (Mexico), above note 2.

4 Panel Report United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R, 15 September 2011 (US-Tuna II).

5 Next to setting on dolphins, also high seas driftnet fishing disqualified for the dolphin-safe labeling. Mexico did not raise any issue in relation to this fishing technique.

6 The set of measures includes three measures (i) the United States Code, Title 16, Section 1385 (“Dolphin Protection Consumer Information Act” or DPCIA), (ii) the Code of Federal Regulations, Title 50, Section 216.91 (“Dolphin-safe labeling standards”) and Section 216.92 (“Dolphin-safe requirements for tuna harvested in the ETP [Eastern Tropical Pacific Ocean] by large purse seine vessels”) and (iii) the ruling in Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007).

7 For more information on the AIDCP, visit its website, available on the Internet at <http://www.iattc.org/IDCPENG.htm> (last accessed on 11 April 2012).

8 While the TBT Agreement has been invoked in several disputes, only in EC-Asbestos and EC-Sardines, the WTO Courts had the opportunity to interpret the text of the Agreement in some depth; cf. Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, 5 April 2001 (EC-Asbestos); Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, 23 October 2002 (EC – Sardines). More recently, the TBT Agreement has been invoked in several cases and at the end of 2011 three important Panel reports were released. Next to the case discussed in this article, Panels have issued reports in the dispute between the US and Indonesia on Clove Cigarettes, and the one between the US and Canada concerning certain mandatory country of origin labelling (COOL) provisions in the agricultural field; see Panel Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/R, 2 September 2011, (US – Clove Cigarettes); Panel Report, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384,386, 18 November, 2011 (US – COOL).

9 This is because Article 2 of the TBT Agreement refers only to the ‘preparation, adoption and application of technical regulation.’

10 On this issue, it is worth mentioning that well-known legal scholar Robert Howse has submitted an amicus curiae brief before the Appellate Body, where he argues that when assessing the legality of the US measures the relationship between Article 2 an Article 5, concerning ‘Conformity with Technical Regulations and Standards’, should have been considered; in other words, he seems to argue that the core of the US measures concerned conformity assessment with respect to standards, rather than technical regulation. Cf. Robert Howse, Amicus Curiae Submission before the World Trade Organization Appellate Body, in the case United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, AB-2012-2/DS381, 17 February, 2012, pp. 4–9.

11 Panel Report, para. 7.145.

12 Panel Report, para. 7.131, emphasis in original.

13 The reasoning of the Panel is very similar to the one in EC – Trademarks and Geographical Indications (Australia); cf. Panel Report, European Communities – Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs, Complaint by Australia, WT/DS290/R, adopted 20 April 2005, DSR 2005:X, 4603, paras. 7.453–456. The Panel does also refer to the reasoning by the Appellate Body Report in EC – Sardines, supra note 8.

14 Panel Report, para. 7.142.

15 Panel Report, para. 7.143.

16 Panel Report, para. 7.151, emphasis added.

17 A similar taxonomy has been articulated by a number of WTO scholars in the well-known International Trade Law and Policy blog, with inputs, inter alia, by Lorand Bartels, Simon Lester and Robert Howse; thread available on the Internet at <http://worldtradelaw.typepad.com/ielpblog/2011/09/technical-regulations-vs-standards-in-the-tuna-panel-report.html> (last accessed on 11 April 2012).

18 It should be noted, however, that the argument can be made that private standards can also fall within the category of technical regulations, if they are so pervasive that in practice companies are able to enter the market only when they abide to the private standards. Such an argument has been discussed by Wlostowski; see Wlostowski, Tomasz, “Selected Observations on the Regulation of Private Standards by the WTO”, in Polish Yearbook of International Law 2010 (Bydgoszcz: Wydawnictwo, 2011) 205–33, p. 219Google Scholar.

19 It is also worth mentioning that several academic scholars have already sided with the view of the dissenting panelist. See e.g. the thread on this issue at the International Law and Policy Blog, available on the Internet at <http://worldtradelaw.typepad.com/ielpblog/2011/09/technical-regulations-vs-standards-in-the-tuna-panel-report.html> (last accessed on 11 April 2012).

20 The Panel rests on the reasoning of the Appellate Body Report in EC – Sardines, supra note 8 and EC – Trademarks and Geographical Indications (Australia), supra note 13.

21 Note that this sentence is slightly paraphrasing, so as to generalize it, the following passage of the Panel's Report: “no tuna product may be labelled dolphin-safe or otherwise refer to dolphins, porpoises or marine mammals if it does not meet the conditions set out in the measures, and thus impose a prohibition on the offering for sale in the United States of tuna products bearing a label referring to dolphins and not meeting the requirements that they set out”; Panel Report, para. 7.131.

22 Subparagraph (d)(3) of the DPCIA allows for competing ‘dolphinsafe’ marks only when three conditions are met: 1. no dolphins have been killed or seriously injured while fishing the tuna, 2. the label is supported by a tracking and verification program comparable in effectiveness to the US one and 3. The label complies with any labelling, advertising and marketing laws and regulations of the Federal Trade Commission.

23 See the passage of the Panel Report, supra note 14.

24 See Annex 3(F) TBT Agreement.

25 Panel Report, para. 4.54.

26 Panel Report, para. 7.175.

27 As evidence of the choice operated by market actors, the Panel quotes the following passage from the website of one of the major market actor in the market for tuna products: “Bumble Bee Foods, LLC remains fully committed to the 100% dolphin-safe policy we implemented in April 1990. … The US Government Dolphin-Safe Regulations are in the process of being modified through the International Dolphin Conservation Program. The new regulations will allow for a less stringent US Dolphin-Safe Regulation. Despite the new, less stringent ‘compliance’ criteria, Bumble Bee remains committed to and in compliance with a ‘no encirclement’ policy. The commitment of Bumble Bee to dolphin-safety will remain unchanged regardless of any changes to the dolphin-safe law. We continue to strictly adhere to our 100% dolphin-safe policy.” Panel Report, para. 7.362.

28 Panel Report, para. 7.178.

29 For a rather critical stand on the application of the TBT (and the SPS) Agreement(s) to private standards see Tomasz Wlostowski, “Selected Observations on the Regulation of Private Standards by the WTO”, supra note 18.

30 Wlostowski has identified four types of responsibility, which range from the rather encompassing formulation of Article 3.5 of the TBT Agreement (‘Members are fully responsible’) to less restrictive formulations that impose on Member the obligation of ‘taking reasonable measures as may be available to them’ (Article 3.1 and 4.1, second sentence of the TBT Agreement); see Tomasz Wlostowski, “Selected Observations on the Regulation of Private Standards by the WTO”, supra note 18, pp. 227–29. Whether the obligations established by Article 4.1 are of conduct or of result is another relevant issue, which has been discussed by Jan Bohanes and Iain Sandford, “The (Untapped) Potential of WTO Rules to Discipline Private Trade-Restrictive Conduct”, Working Paper Presented at the Society of International Economic Law Inaugural Conference, Geneva, July 15–17, 2008, at p. 35.

31 Leaving private regulation out of the WTO legal framework would have arguably left a great margin for protectionist behavior enacted by non-state actors. For an overview of this phenomenon see Schepel, Harm, The Constitution of Private Governance (Oxford: Hart Publishing, 2005)Google Scholar. Few authors have already examined the relationship between private standards and WTO law. For an overview see Bernstein, Steven and Hannah, Erin, “Non-State Global Standard Setting and the WTO: Legitimacy and the Need for Regulatory Space”, 11 (3) Journal of International Economic Law (2008), pp. 575–608 CrossRefGoogle Scholar; Jan Bohanes and Iain Sandford, “The (Untapped) Potential of WTO Rules to Discipline Private Trade-Restrictive Conduct”, supra note 30; Prevost, Denise, “Private Sector Food-Safety Standards and the SPS Agreement: Challenges and Possibilities”, 33 South African Yearbook of International Law (2008), pp. 1–37 Google Scholar.

32 The second sentence of Article 4.1 of the TBT Agreement reads: ‘[Members] shall take such reasonable measures as may be available to them to ensure that local government and non- governmental standardizing bodies within their territories, … accept and comply with this Code of Good Practice.’

33 See Jan Bohanes and Iain Sandford, “The (Untapped) Potential of WTO Rules to Discipline Private Trade-Restrictive Conduct”, supra note 30, emphasis added, at p. 33.

34 Ibid., at p. 33, footnote 75; emphasis in original.

35 Against this approach see Tomasz Wlostowski, “Selected Observations on the Regulation of Private Standards by the WTO, supra note 18. The author identifies two sets of arguments against the application of the TBT (and SPS) Agreement(s) to private standards: the first set includes mainly arguments of political/pragmatic nature (e.g. ‘importing WTO Members, with extended retailer and distribution interests … will be extremely unhappy with subjecting private standards to WTO regulations’ p. 232); the second deals with legal issues (e.g. the WTO rules in this realm are very vague and if applied to private parties are likely to result in a Pyrrhic victory at most).

36 The fact that the order of the Panel's report is followed does not imply endorsement of this order. It is in fact possible to argue that the order of the analysis should be reversed in such a way that the necessity of the measure needs to be scrutinized first, and its nondiscriminatory nature subsequently. In an informal conversation about this case, Professor Petros Mavroidis suggested that this ‘reversed’ ordering may make more sense than the ordering followed by this Panel.

37 Article 2.1 of the TBT Agreement reads: “Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no less favourable than that accorded to like products of national origin and to like products originating in any other country.”

38 It is interesting to note that almost contextually, the Panel in US – Clove Cigarettes, opted for a rather different interpretation of likeness, where the likeness test should be informed by the regulatory goal of the measure. Panel Report, US – Clove Cigarettes, note 8 above, para. 7.119.

39 Panel Report, US – Tuna II, para. 7.251.

40 Panel Report, para. 7.233.

41 Panel Report, para. 7.284.

42 Panel Report, para. 7.289 and 7.291.

43 Panel Report, para. 7.296.

44 Panel Report, 7.324; The Panel phrased its conclusions as follows: “… as of 1990 (enactment of the first version of the DPCIA), Mexico and the United States had a comparable number of purse seine vessels operating in the ETP, although it remains unclear what proportion of those purse seiners was setting on dolphins (as opposed to unassociated sets). In addition, the Mexican fleet had a higher number of baitboats (non-purse seine vessels) than the US fleet had. On that basis, it appears that the United States and Mexico were in a comparable position with regard to their fishing practices in the ETP, in that both of them had the majority of their fleet operating in the ETP composed of purse seine vessels potentially setting on dolphins.”

45 Panel Report, para. 7.345.

46 It should also be noted that, under Article 2.1, an analysis limited to the market-effects of the measures may be misleading. Arguably, under the TBT Agreement, the test for finding discrimination should not merely replicate the one under Article III GATT 1994. This is because there is no Article XX GATT 1994 in the TBT Agreement that provides a shield for measures adopted to pursue legitimate regulatory goals. While the relationship between Article 2.1 and 2.2 of the TBT Agreement has not been clarified by the Appellate Body, it seems that the there is no rule-exception relationship between these two provisions. In support of this statement is the fact that the Panel, when conducting the analysis under Article 2.2 in US – Tuna II, has placed the burden of proof on the complainant (see Panel Report, para. 7.392 and 7.468). This implies that a measure found in violation of Article 2.1 could not be ‘saved’ by a finding of compliance with Article 2.2. Thus, even if measures have different effects on market-actors originating from different countries, they may arguably be found to be non-discriminatory. Otherwise, it may be impossible for a Member to protect the environment, health and safety of its constituency, as provided for in the sixth Preambular paragraph of the TBT Agreement.

47 At the basis of its reasoning, the Panel explained the relationship between the first and the second sentence: “… complying with the requirements contained in the second sentence of Article 2.2 serves the purpose of ensuring that technical regulations do not create unnecessary obstacles to international trade.” Panel Report, para. 7.386.

48 Cf. Panel Report, paras. 7.408–7.413. The core of the consumer protection objective coincides with what was claimed by the US: “ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins”. Panel Report, para. 7.413.

49 Panel Report, paras. 7.414–7.427.

50 Panel Report, para. 7.444.

51 Panel Report, para. 7.461.

52 Panel Report, para. 7.468.

53 Panel Report, para. 7.566.

54 Panel Report, para. 7.599.

55 Panel Report, paras 7.620–7.621.

56 See Panel Report. Para 7.460. In making this parallel the Panel compared Article XX GATT with Article 2.2 of the TBT Agreement.

57 See Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R, 17 December 2007.

58 See Panel Report, paras 7.520–7.523.

59 Panel Report, paras 7.519.

60 Panel Report, para. 7.588.

61 See Panel Report, paras 7.520–7.523.

62 Panel Report, para. 7.623; emphasis added.

63 The US contested, inter alia, one of the basic conditions to conclude that that the AIDCP is an international standard, namely that the AIDCP is an international standardizing organization. The jolt of the US reasoning is that the AIDCP was and is not open to all Members and thus cannot be considered as an international standardizing body. See Appellant Submission of the United States of America, AB-2012-2/DS-381, paras. 138–48.

64 Panel Report, para. 7.740.

65 On May 16 the Appellate Body Report was circulated and it will be covered in one of the forthcoming EJRR issues.