united states – measures concerning the importation, … · 2018. 9. 4. · sector, wt/ds146/r,...

UNITED STATES – MEASURES CONCERNING THE IMPORTATION, MARKETING AND SALE OF TUNA AND TUNA PRODUCTS

RECOURSE TO ARTICLE 21.5 OF THE DSU BY THE UNITED STATES AND MEXICO II (DS381/RW2)

First Written Submission of Mexico

9 September 2016

United States – Measures Concerning the Importation First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products: Recourse 9 September 2016 to DSU Article 21.5 by the United States and Mexico II

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TABLE OF CONTENTS

TABLE OF WTO DISPUTES CITED IN THIS SUBMISSION ................................................ v

TABLE OF ACRONYMS USED IN THIS SUBMISSION ....................................................... ix

LIST OF EXHIBITS .................................................................................................... x

I. INTRODUCTION AND SUMMARY ....................................................................... 1

A. Environmental Sustainability .................................................................. 2

B. This Dispute Concerns Consumer Labelling Tuna Products as “Dolphin-Safe” and Not for a Particular Tuna Fishing Method ...................... 2

C. The Effects of the Measure..................................................................... 3

1. Mexican Tuna Products and Fisheries Ecosystems ............................ 3

2. United States’ Tuna Product Market ............................................... 4

D. The Interpretation and Application of the Appellate Body’s “Calibration” Test is at the Core of these Proceedings ................................ 5

E. The Differential Treatment is Not Calibrated ............................................. 6

II. PROCEDURAL ISSUE – FAILURE OF UNITED STATES TO CONSULT ........................ 8

III. FACTUAL BACKGROUND .................................................................................. 8

A. Protection of Dolphins in the ETP under the Agreement on International Dolphin Conservation Program (AIDCP) ................................ 9

B. U.S. Implementation of the AIDCP ......................................................... 12

C. Comparisons of Fishing Methods ............................................................ 13

1. Dolphin Encirclement Method ...................................................... 14

2. Gillnet Fishing ........................................................................... 20

3. Purse Seine .............................................................................. 23

4. Longline Fishing ........................................................................ 27

5. Trawl Fishing ............................................................................ 33

6. Handline Fishing ........................................................................ 33

D. Comparison of Ocean Areas .................................................................. 35


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1. ETP ......................................................................................... 35

2. Other Ocean Areas .................................................................... 36

E. Tuna Measure ..................................................................................... 41

1. DPCIA ...................................................................................... 41

2. U.S. Code of Federal Regulations, Title 50, Part 216, Subpart H (“Dolphin Safe Tuna Labeling”) ..................................... 43

a. Eligibility of Different Fishing Methods for the “Dolphin-Safe” Label ........................................................ 43

b. Certification Requirements ................................................ 43

c. Tracking and Verification .................................................. 44

d. Determination Provisions .................................................. 46

3. Hogarth Ruling .......................................................................... 47

4. Pressure by U.S. Government on Retailers .................................... 48

F. Recent U.S. Measures to Regulate Seafood Imports that Indicate the United States Does Not Trust that Non-ETP Tuna Products are Dolphin-Safe .................................................................... 49

IV. THE 2016 TUNA MEASURE IS INCONSISTENT WITH ARTICLE 2.1 OF THE TBT AGREEMENT .................................................................................... 52

A. The 2016 Tuna Measure is a “Technical Regulation”.................................. 52

1. The U.S. Tuna Measure Applies to an Identifiable Product or Group of Products .................................................................. 53

2. The 2016 tuna measure Lays Down One or More Characteristics of the Product ...................................................... 55

3. Compliance with the Product Characteristics Required by the 2016 tuna measure is Mandatory ........................................... 57

4. Conclusion that the 2016 Tuna Measure Constitutes a Technical Regulation .................................................................. 59

B. The Tuna Products at Issue are “Like” .................................................... 60

C. The Treatment According to Mexican Tuna Products is “Less Favourable” ........................................................................................ 61


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1. The 2016 Tuna Measure Modifies the Conditions of Competition in the Relevant Market to the Detriment of Mexican Tuna Products ............................................................... 61

2. The Detrimental Impact Reflects Discrimination against Mexican Tuna Products ............................................................... 65

a. The Relevant Regulatory Distinctions are not Designed and Applied in an Even-Handed Manner ................ 67

b. Eligibility Criteria ............................................................. 76

c. Certification Requirement ................................................. 86

d. Tracking and Verification Requirements .............................. 93

e. Conclusions on Article 2.1 of the TBT Agreement ................ 101

V. THE 2016 TUNA MEASURE IS INCONSISTENT WITH ARTICLES I:1 AND III:4 OF THE GATT 1994 .............................................................................. 102

A. The 2016 Tuna Measure is Inconsistent with Article I:1 of the GATT 1994 ....................................................................................... 103

1. The 2016 tuna measure falls within the scope of application of Article I:1 ........................................................... 105

2. The Tuna Products at Issue are “Like” ........................................ 105

3. The 2016 Tuna Measure Confers an Advantage, Favour or Privilege on Like Tuna Products Originating in Other WTO Members ........................................................................ 106

4. The “Advantage” is not Accorded Immediately and Unconditionally to Like Tuna Products from Mexico ....................... 106

5. Conclusions on the Inconsistency of the 2016 tuna measure with Article I:1 of the GATT 1994 .................................. 107

B. The 2016 tuna measure is Inconsistent with Article III:4 of the GATT 1994 ....................................................................................... 107

1. The Tuna Products at Issue are “Like” ........................................ 108

2. The 2016 Tuna Measure is a Law, Regulation and/or Requirement Affecting the Internal Sale, Offering for Sale, Purchase, Transportation, Distribution or Use of Like Products .......................................................................... 108

3. The 2016 Tuna Measure Accords Less Favourable Treatment to Mexican Tuna Products .......................................... 110


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4. Conclusions on the Inconsistency of the Tuna Measure with Article III:4 of the GATT 1994 ............................................ 112

C. The Tuna Measure is Not Justified under Article XX of the GATT 1994 ............................................................................................... 112

VI. CONCLUSIONS ........................................................................................... 113


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TABLE OF WTO DISPUTES CITED IN THIS SUBMISSION

Short Title Full Case Title and Citation

Argentina – Hides and Leather

Panel Report, Argentina – Measures Affecting the Export of Bovine Hides and Import of Finished Leather, WT/DS155/R and Corr.1, adopted 16 February 2001, DSR 2001:V, 1779

Argentina – Textiles and Apparel

Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/AB/R and Corr.1, adopted 22 April 1998, DSR 1998:III, 1003

Brazil – Retreaded Tyres Appellate Body Report, Brazil – Measures Affecting Imports of Retreaded Tyres, WT/DS332/AB/R, adopted 17 December 2007, DSR 2007:IV, 1527

Canada - Autos Panel Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/R, WT/DS142/R, adopted 19 June 2000, as modified by Appellate Body Report WT/DS139/AB/R, WT/DS142/AB/R, DSR 2000:VII, p. 3043

Canada – Wheat Exports and Grain Imports

Panel Report, Canada – Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/R, adopted 27 September 2004, upheld by Appellate Body Report WT/DS276/AB/R, DSR 2004:VI, p. 2817

Chile – Price Band System (Article 21.5 – Argentina)

Appellate Body Report, Chile – Price Band System and Safeguard Measures Relating to Certain Agricultural Products – Recourse to Article 21.5 of the DSU by Argentina, WT/DS207/AB/RW, adopted 22 May 2007, DSR 2007:II, 513

China – Auto Parts Panel Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/R / WT/DS340/R / WT/DS342/R / and Add.1 and Add.2, adopted 12 January 2009, upheld (WT/DS339/R), upheld (WT/DS339/R) and as modified (WT/DS340/R / WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, DSR 2009:I

China – Publications and Audiovisual Products

Appellate Body Report, China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products, WT/DS363/AB/R, adopted 19 January 2010, DSR 2010:I, 3

Colombia – Ports of Entry

Panel Report, Colombia – Indicative Prices and Restrictions on Ports of Entry, WT/DS366/R and Corr.1, adopted 20 May 2009, DSR 2009:VI, 2535

Colombia - Textiles Appellate Body Report, Colombia - Measures Relating to the Importation of Textiles, Apparel and Footwear, WT/DS461/AB/R, WT/DS461/AB/R/Add.1, adopted 22 June 2016


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EC - Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos Containing Products, WT/DS135/AB/R, adopted 5 April 2001, DSR 2001:VII, 3243

EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591

EC - Sardines Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII

EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R, adopted 20 April 2004, DSR 2004:III, 925

EC – Seal Products Appellate Body Reports, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/AB/R / WT/DS401/AB/R, adopted 18 June 2014

EC – Seal Products Panel Report, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/R, WT/DS401/R and Add.1, adopted 18 June 2014

India – Autos Panel Report, India – Measures Affecting the Automotive Sector, WT/DS146/R, WT/DS175/R and Corr.1, adopted 5 April 2002, DSR 2002:V, 1827

Korea – Various Measures on Beef

Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, DSR 2001:I, 5

Mexico – Corn Syrup (Article 21.5 – US)

Appellate Body Report, Mexico – Anti Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States – Recourse to Article 21.5 of the DSU by the United States, WT/DS132/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6675

Thailand – Cigarettes (Philippines)

Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/AB/R, adopted 15 July 2011

US – Clove Cigarettes Appellate Body Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012

US – COOL Appellate Body Reports, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/AB/R / WT/DS386/AB/R, adopted 23 July 2012


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US – COOL Panel Reports, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/R / WT/DS386/R, adopted 23 July 2012, as modified by Appellate Body Reports WT/DS384/AB/R / WT/DS386/AB/R, Adopted 23 July 2012

US – COOL

(Article 21.5 – Canada and Mexico)

Appellate Body Report, United States – Certain Country of Origin Labelling (COOL) Requirements, Recourse to Article 21.5 of the DSU by Canada and Mexico, WT/DS384/AB/RW, WT/DS386/AB/RW, adopted 29 May 2015

US – FSC

(Article 21.5 – EC)

Appellate Body Report, United States – Tax Treatment for “Foreign Sales Corporations” – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, 55

US - Gasoline Appellate Body Report, United States – Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, DSR 1996:I, 3

US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina)

Appellate Body Report, United States – Sunset Reviews of Anti Dumping Measures on Oil Country Tubular Goods from Argentina – Recourse to Article 21.5 of the DSU by Argentina, WT/DS268/AB/RW, adopted 11 May 2007, DSR 2007:IX, 3523

US - Shrimp Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, 2755

US – Softwood Lumber IV (Article 21.5 – Canada)

Appellate Body Report, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada – Recourse by Canada to Article 21.5 of the DSU, WT/DS257/AB/RW, adopted 20 December 2005, DSR 2005:XXIII, 11357

US – Softwood Lumber VI (Article 21.5 – Canada)

Appellate Body Report, United States – Investigation of the International Trade Commission in Softwood Lumber from Canada – Recourse to Article 21.5 of the DSU by Canada, WT/DS277/AB/RW, adopted 9 May 2006, and Corr.1, DSR 2006:XI, 4865

Tuna-Dolphin I GATT Panel Report, United States-Restrictions on Imports of Tuna, 3 Sept. 1991, unadopted, BISD 39S/155 30 I.L.M. 1594 (“Tuna-Dolphin I”), p. 2.1

US – Tuna II (Mexico) Appellate Body Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, adopted 13 June 2012

US – Tuna II (Mexico) Panel Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R, adopted 13 June 2012, as modified by Appellate Body Report WT/DS381/AB/R


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US – Tuna II (Mexico) (Article 21.5 – Mexico)

Appellate Body Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products – Recourse to Article 21.5 of the DSU by Mexico, WT/DS381/AB/RW and Add.1, adopted 3 December 2015

US – Tuna II

(Article 21.5 – Mexico)

Panel Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, Recourse to Article 21.5 of the DSU by Mexico, WT/DS381/RW, 14 April 2015

US – Upland Cotton (Article 21.5 – Brazil)

Appellate Body Report, United States – Subsidies on Upland Cotton – Recourse to Article 21.5 of the DSU by Brazil, WT/DS267/AB/RW, adopted 20 June 2008, DSR 2008:III, 809


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TABLE OF ACRONYMS USED IN THIS SUBMISSION

Acronym Full Name

2013 Final Rule Enhanced Document Requirements to Support Use of the Dolphin Safe Label on Tuna Products; Final Rule 78 Fed. Reg. 40997 (July 9, 2013)

BCI Business confidential information AIDCP Agreement on the International Dolphin Conservation Program C.F.R. Code of Federal Regulations DMLs Dolphin Mortality Limits DPCIA Dolphin Protection Consumer Information Act DSB Dispute Settlement Body DSU Understanding on Rules and Procedures Governing the Settlement

of Disputes GATS General Agreement on Trade in Services GATT 1994 General Agreement on Tariffs and Trade 1994 EEZ Exclusive Economic Zone ETP Eastern Tropical Pacific Ocean FAD Fish Aggregating Device FAO United Nations Food and Agriculture Organization IATTC Inter-American Tropical Tuna Commission ICCAT International Commission for the Conservation of Atlantic Tunas IDCP International Dolphin Conservation Program IDCPA International Dolphin Conservation Program Act IOTC Indian Ocean Tuna Commission IUU Illegal, unreported and unregulated MMPA Marine Mammal Protection Act NAFTA North American Free Trade Agreement NMFS National Marine Fisheries Service NOAA National Oceanic and Atmospheric Administration PBR Potential Biological Removal PLTRT Pelagic Longline Take Reduction Team RFMOs Regional Fishery Management Organizations SDGs Sustainable Development Goals SPREP South Pacific Regional Environment Programme SPS Agreement Agreement of the Application of Sanitary and Phytosanitary

Measures TBT Agreement Agreement on Technical Barriers to Trade TTF Tuna Tracking Form U.N. United Nations U.S.C. United States Code WCPFC Western and Central Pacific Fisheries Commission WCPO Western and Central Pacific Ocean WTO World Trade Organization


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LIST OF EXHIBITS

Number Title

MEX-1

Section 1385 (“Dolphin Protection Consumer Information Act”), as contained in Subchapter II (“Conservation and Protection of Marine Mammals”) of Chapter 31 (“Marine Mammal Protection”), 16 U.S.C. § 1385(d)

MEX-2 U.S. Code of Federal Regulations, Title 50, Part 216, Subpart H (“Dolphin Safe Tuna Labeling”), as amended by the 2013 Final Rule and the 2016 Interim Final Rule

MEX-3 Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007); Earth Island Institute v. Hogarth, 484 F.3d 1123 (9th Cir. 2007)

MEX-4 U.S. Department of State, Dolphin Conservation Agreement Wins Award at United Nations Food and Agriculture Organization, Media Note, November 22, 2005

MEX-5 Public Opinion Strategies, National Survey Methodology (Oct. 16, 2010)

MEX-6 IATTC, “Fishery Status Report No. 14” (2016), available at https://www.iattc.org/FisheryStatusReportsENG.htm

MEX-7 Government Accountability Office, “National Marine Fisheries Service: Improvements are Needed in the Federal Process Used to Protect Marine Mammals from Commercial Fishing,” GAO 09-78 (Dec. 2008)

MEX-8 AIDCP, “Report on the International Dolphin Conservation Program”, Document MOP-28-05 (Oct. 18, 2013)

MEX-9 IATTC to Secretary of Commerce enclosing Scientific Report on the Status Of Dolphin Stocks In The Eastern Pacific Ocean (Oct. 30, 2002), Scientific Report

MEX-10

National Oceanic and Atmospheric Administration, “Taking and Importing of Marine Mammals; Decision Regarding the Impact of Purse Seine Fishing on Depleted Dolphin Stocks” 68 Fed. Reg. 2010 (Jan. 15, 2003) (Final Finding)

MEX-11 AIDCP, “Updated Estimates of NMin and Stock Mortality Limits,” Document SAB-07-05 (30 Oct. 2009)

MEX-12 International Dolphin Conservation Program (IDCP), 22nd Meeting of the Parties, Minutes (30 Oct. 2009), item 8 on p. 4, Appendix 8

MEX-13 NOAA Technical Memorandum NMFS, “Estimates of 2006 Dolphin Abundance In The Eastern Tropical Pacific, With Revised Estimates From 1986-2003” (April 2008)

MEX-14 David St. Aubin, et al., “Hematological, serum, and plasma chemical constituents in pantropical spotted dolphins (Stenella attenuata) following chase, encirclement, and tagging”, Marine Mammal Science, 29(1)

MEX-15 FAO, “Tuna Driftnet Fishing”, available at http://www.fao.org/fishery/fishtech/1011/en


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MEX-16 World Wildlife Fund Pakistan and Australian Marine Mammal Centre, An Assessment of Cetacean Mortality in the Tuna Fisheries of Pakistan (28 Oct. 2014), IOTC-2014-WPEB10-INF25

MEX-17 K.S.S.M. Yousuf, et al., “Observations On Incidental Catch Of Cetaceans In Three Landing Centres Along The Indian Coast,” Marine Biodiversity Records, Vol. 2 (2009)

MEX-18 Natural Resources Defense Council, “Net Loss: The Killing of Marine Mammals in Foreign Fisheries” (January 2014)

MEX-19 Convention on Migratory Species, Report of the Second Workshop on The Biology and Conservation of Small Cetaceans and Dugongs of South-East Asia, CMS Technical Series Publication No. 9 (July 2002)

MEX-20 M. Gomercic, et al., “Bottlenose dolphin (Tursiops truncatus) depredation resulting in larynx strangulation with gill-net parts,” Marine Mammal Science, 25(2)

MEX-21 Young and Iudicello, “Worldwide Bycatch of Cetaceans,” U.S. Department of Commerce (NOAA Tech. Memo. NMFS-OPR-36) July 2007

MEX-22 Convention on Migratory Species, Report of the Third Southeast Asian Marine Mammal Symposium, CMS Technical Series No. 32 (2015)

MEX-23 Papua New Guinea, Annual Report to the Commission (WCPFC-SC11-AR/CCM-19) (Aug. 2015)

MEX-24 Western and Central Pacific Fisheries Commission (WCPFC), Yearbook 2014 (15 Oct. 2015)

MEX-25 Secretariat of the Pacific Community, “Status of Tuna Stocks and Management Challenges in the WCPO”

MEX-26 FAO, Industrial Tuna Longlining, available at http://www.fao.org/fishery/fishtech/1010/en

MEX-27 OECD Glossary of Statistical Terms, available at http://stats.oecd.org/glossary/detail.asp?id=1557

MEX-28 D. Hamer, S. Childerhous & N. Gales, “Odontocete bycatch and depredation in longline fisheries: A review of available literature and of potential solutions,” Marine Mammal Science, 28(4): E345–E374 (Oct. 2012)

MEX-29 FAO Species Identification Guide, Marine Mammals of the World, pp. 64-67, available at http://www.vliz.be/imisdocs/publications/255680.pdf

MEX-30 NOAA Fisheries Office of Protected Resources, False Killer Whale, available at http://www.nmfs.noaa.gov/pr/species/mammals/cetaceans/ falsekillerwhale.htm

MEX-31 NOAA Fisheries, “False Killer Whale Take Reduction Team and Plan, Frequently Asked Questions

MEX-32 NOAA Fisheries, Office of Protected Resources, Pelagic Longline Take Reduction Plan, available at http://www.nmfs.noaa.gov/pr/interactions/trt/pl-trt.html


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MEX-33

Pelagic Longline Take Reduction Team Meeting December 1-3, 2015, Key Outcomes Memorandum, available at http://www.nmfs.noaa.gov/pr/interactions/trt/pdfs/pltrt_kom_dec_2015.pdf

MEX-34 Turtle Restoration Project, “Pillaging the Pacific” (November 16, 2004), available at http://www.seaturtles.org/pdf/Pillaging.5.final.pdf

MEX-35 Eds. M. Donoghue, R. Reeves & G. Stone, “Report of The Workshop On Interactions Between Cetaceans and Longline Fisheries,” New England Aquarium Aquatic Forum Series Report 03-1 (May 2003)

MEX-36

R. Baird & A. Gogone, “False Killer Whale Dorsal Fin Disfigurements as a Possible Indicator of Long-Line Fishery Interactions in Hawaiian Waters,” Pacific Science (October 2005), available at http://www.nmfs.noaa.gov/pr/interactions/injury/pdfs/day2_1155_baird_gorgone.pdf

MEX-37 FOA, Trawl Nets, available at http://www.fao.org/fishery/geartype/103/en

MEX-38 FAO, “Tuna handlining,” available at http://www.fao.org/fishery/fishtech/1012/en

MEX-39 Marine Research Center, Ministry of Fisheries and Agriculture, Republic of Maldives, “Handline Large Yellowfin Tuna Fishery of the Maldives”, IOTC-2009-WPTT-15 (Oct. 2009)

MEX-40 Adam, Jauharee and Miller, Review of Yellowfin Tuna Fisheries in the Maldives, IOTC–2015–WPTT17–17 (8 Oct. 2015)

MEX-41 Marine Research Center, Ministry of Fisheries and Agriculture, Republic of Maldives, Association of Yellowfin Tuna And Dolphins In Maldivian Waters, IOTC 1998-ECT-22 (1998)

MEX-42 Anderson, R. C. (2014) Cetaceans and Tuna Fisheries in the Western and Central Indian Ocean, IPNLF Technical Report 2, International Pole and Line Foundation (2014)

MEX-43

Thailand: Commission Decision of 21 April 2015 on notifying a third country of the possibility of being identified as a non-cooperating third country in fighting illegal, unreported and unregulated fishing (2015/C 142/06)

MEX-44

Philippines: Commission Decision of 10 June 2014 on notifying a Third Country that the Commission considers as possible of being identified as non-cooperating Third Countries pursuant to Council Regulation (EC) No 1005/2008 establishing a Community system to prevent, deter and eliminate illegal, unreported and unregulated fishing (2014/C 185/03)

MEX-45 IOTC, “IOTC Compliance Report for: Philippines”, IOTC-2015-CoC12-CR22 [E] (23 March 2015)

MEX-46

Taiwan: Commission Decision of 1 October 2015 on notifying a third country of the possibility of being identified as a non-cooperating third country in fighting illegal, unreported and unregulated fishing (2015/C 324/10)


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MEX-47 Department of Commerce, Enhanced Document Requirements and Captain Training Requirements to Support Use of the Dolphin Safe Label on Tuna Products; Interim Final Rule, 81 Fed. Reg. 15444 (March 23, 2016)

MEX-48 United States International Trade Commission Dataweb report

MEX-49 Department of Commerce, Fish and Fish Product Import Provisions of the Marine Mammal Protection Act; Final Rule, 81 Fed. Reg. 54390 (Aug. 15, 2016)

MEX-50

Presidential Memorandum - Comprehensive Framework to Combat Illegal, Unreported, and Unregulated Fishing and Seafood Fraud, available at https://www.whitehouse.gov/the-press-office/2014/06/17/presidential-memorandum-comprehensive-framework-combat-illegal-unreporte

MEX-51 Department of Commerce, Magnuson-Stevens Fishery Conservation and Management Act; Seafood Import Monitoring Program, Proposed Rule, 81 Fed. Reg. 6210 (Feb. 5, 2016)

MEX-52

Presidential Task Force on Combating Illegal Unreported and Unregulated (IUU) Fishing and Seafood Fraud Action Plan for Implementing Recommendations 14/15; Commerce Trusted Trader Program, 81 Fed. Reg. 25646 (April 29, 2016)

MEX-53 J. Barlow, “Inferring trackline detection probabilities, g(0), for cetaceans from apparent densities in different survey conditions,” Marine Mammal Science (2015)

MEX-54

U.N., “Goal 14: Conserve and sustainably use the oceans, seas and marine resources” in Sustainable Development Goals (Targets 14.2 and 14.4), available online at https://sustainabledevelopment.un.org/?menu=1300 and http://www.un.org/sustainabledevelopment/oceans/

MEX-55 Department of Commerce, “Estimated Bycatch of Marine Mammals and Sea Turtles in the U.S. Atlantic Pelagic Longline Fleet During 2007 (August 2008) (NOAA Technical Memorandum NMFS-SEFSC-572)

MEX-56 “Dolphin-Safe Captain's Training Course”, available at http://www.nmfs.noaa.gov/pr/dolphinsafe/dsctc.htm

MEX-57 Bumblebee Seafoods, “Comments on Enhanced Document Requirements and Captain Training Requirements to Support Use of Dolphin Safe Label on Tuna Products” (April 15, 2016), p. 2

MEX-58 Tri Marine, “Enhanced Document Requirements and Captain Training Requirements to Support Use of Dolphin Safe Label on Tuna Products” (April 22, 2016), p. 1

MEX-59 AIDCP, “Resolution To Adopt The Modified System For Tracking And Verification Of Tuna” (20 June 2001)

MEX-60 Letter from Department of Commerce to “U.S. tuna importer” (March 28, 2016)

MEX-61 Letter from Vice President Al Gore to Representative Gilchrest (June 3, 1996)

MEX-62 Letters to Department of Commerce solicited by U.S. government

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products: Recourse 9 September2016 to DSU Article 21.5 by the United States and Mexico II

1

I. INTRODUCTION AND SUMMARY

1. This proceeding, under Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), concerns a disagreement as to the consistency with the WTO covered agreements of measures taken to comply with the recommendations and rulings of the Dispute Settlement Body (DSB) in the Article 21.5 proceedings in the dispute United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (Tuna dispute).1

2. The measure taken to comply is the most recently amended tuna measure (the “2016 tuna measure”) which comprises:

a) Section 1385 (“Dolphin Protection Consumer Information Act”), as contained in Subchapter II (“Conservation and Protection of Marine Mammals”) of Chapter 31 (“Marine Mammal Protection”), in Title 16 of the U.S. Code;2

b) U.S. Code of Federal Regulations, Title 50, Part 216, Subpart H (“Dolphin Safe Tuna Labeling”), as amended by the 2013 Final Rule and the 2016 Interim Final Rule;3

c) The court ruling in Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007);4 and

d) Any implementing guidance, directives, policy announcements or any other document issued in relation to instruments (a) through (c) above, including any modifications or amendments in relation to those instruments.

3. The 2016 tuna measure continues to be inconsistent with Article 2.1 of the Agreement on Technical Barriers to Trade (TBT Agreement) and Articles I:1 and III:4 of the General Agreement on Tariffs and Trade, 1994 (GATT 1994). Moreover, it does not meet the requirements of the chapeau in Article XX of the GATT 1994 and, therefore, the general exceptions in Article XX do not apply.

4. This submission presents Mexico’s prima facie case that the measure violates these provisions in the Article 21.5 – Mexico II proceeding. It also responds to the first written submission of the United States in the Article 21.5 – United States proceeding.5 There is considerable common ground between Mexico and the United States regarding the legal elements of their respective claims. Although lengthy, a large part of this submission presents Mexico’s prima facie case with respect to those elements of its case which are agreed to by the United States. The key areas of disagreement relate to whether or not the

1 On 3 December 2015, the DSB adopted the Article 21.5 Appellate Body report and panel report, as modified by the Appellate Body report. See Action by the DSB, WT/DS381/28, 4 Dec. 2015. 2 Exhibit MEX-1. 3 Exhibit MEX-2. 4 Exhibit MEX-3. This exhibit also contains Earth Island Institute v. Hogarth, 484 F.3d 1123 (9th Cir. 2007), the ruling that was modified by the ruling at 494 F.3d 757. 5 United States – Tuna II (Mexico) (Article 21.5 – United States), U.S. first written submission (July 22, 2016).


2

tuna measure’s different regulatory treatment of tuna caught by the Mexican fishing fleet in the ETP large purse seine fishery, on the one hand, and tuna caught by other vessels in other fisheries, on the other hand, is appropriately “calibrated” to different relevant circumstances, taking into account the objectives of the measure.

A. Environmental Sustainability

5. Mexican tuna products contain tuna caught by the Mexican fleet using a fishing method that is certified as “dolphin-safe” under the Agreement on the International Dolphin Conservation Program (AIDCP), a multilateral environmental agreement to which the United States is a party. As the United States has acknowledged, the AIDCP is an award-winning environmental agreement that is an unqualified success and has enormously reduced dolphin mortality to statistically insignificant levels while promoting sustainable fishing practices.6 When adopting the AIDCP, the Parties recognized that the scientific evidence demonstrated that such fishing practices are an effective method for the protection of dolphins and rational use of tuna resources in the Eastern Tropical Pacific Ocean (ETP). The AIDCP’s objectives are to minimize to the greatest extent possible dolphin mortality in the ETP while, at the same time, ensuring the sustainability of tuna stocks and associated species in the ETP pelagic ecosystem. Maintaining these dual goals of protecting dolphins as well as other species in the ecosystem is crucially important to Mexico because, together, they will ensure the sustainability of the tuna fishery in the ETP.

6. In these proceedings, the Panels have an opportunity to interpret the “treatment no less favourable” analysis under Article 2.1 of the TBT Agreement and the chapeau of Article XX of the GATT 1994 in a manner consistent with the WTO Agreement’s objective of sustainable development, in particular, “seeking both to protect and preserve the environment and to enhance the means for doing so”. This important context is relevant to several aspects of the comparison between the AICDP-compliant fishing method used by Mexico’s fleet and other fishing methods. Importantly, the attributes of this fishing method that are criticized by the United States are the fundamental reason why this fishing method is environmentally sustainable and the difference between these attributes and those of the principal alternative fishing method promoted by the 2016 tuna measure is the reason why that alternative is environmentally damaging, not sustainable and unacceptable to the Mexican fleet.

B. This Dispute Concerns Consumer Labelling Tuna Products as “Dolphin-Safe” and Not for a Particular Tuna Fishing Method

7. The 2016 tuna measure is aimed at protecting dolphins through consumer labelling in the form of the U.S. dolphin-safe label for tuna products. The objectives of the measure, which are not in dispute, are: (i) ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins; and (ii) contributing to the protection of dolphins, by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins.7 The measure pursues these objectives by controlling the meaning of the term “dolphin-safe” in the U.S. market, a designation that confers a significant competitive

6 U.S. Department of State, Dolphin Conservation Agreement Wins Award at United Nations Food and Agriculture Organization, Media Note, November 22, 2005 (Exhibit MEX-4). 7 U.S. first written submission, para. 31.


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advantage on the tuna products that are eligible to use the label. Tuna products not having the dolphin-safe label will not be carried by the principal distribution channels in the U.S. market and are effectively denied all but de minimis access to the U.S. market.

8. In light of the objectives of the measure, the accuracy of the information provided to consumers on the U.S. dolphin-safe label is essential. If the measure is designed or applied in a manner that permits use of the “dolphin-safe” label on tuna (i) caught in fishing sets or gear deployments that result in dolphin mortalities or serious injuries or (ii) harvested through fishing methods known to be harmful to dolphins, the objectives cannot be fulfilled. Consumers are misled or deceived about whether the tuna products contain tuna that was caught in a manner that adversely affects dolphins, and the measure’s effectiveness to discourage fishing fleets from catching such tuna is undermined. Therefore, the tuna measure must be designed and applied in a manner that ensures the accuracy of the dolphin-safe information provided to U.S. consumers. To the extent that there are factors that may affect the accuracy of the label under different circumstances, the measure must be calibrated to sufficiently address them.

C. The Effects of the Measure

1. Mexican Tuna Products and Fisheries Ecosystems

9. The tuna measure prohibits tuna product labels from using the term “dolphin-safe” or describing how the tuna was harvested in a manner that protects or conserves dolphins unless the specific requirements of the U.S. measure’s labelling provisions — and, thus, its particular definition of “dolphin-safe” — are satisfied. The measure also prohibits “any other term or symbol that falsely claims or suggests that the tuna contained in the product were harvested using a method of fishing that is not harmful to dolphins”.8 In this way, the measure excludes from the definition of dolphin-safe all tuna products that contain tuna caught by encircling dolphins with purse seine nets, even if conducted in accordance with the strict AIDCP requirements. Thus, Mexican tuna products cannot use the AIDCP dolphin-safe label and cannot even inform U.S. consumers of the immense reductions in dolphin mortalities made possible by the AIDCP.

10. This prohibition has three main adverse effects on Mexican tuna products and on fisheries’ ecosystems:

(i) Mexican tuna products cannot access the principal distribution channels in the U.S. market.

(ii) Mexican tuna products cannot be otherwise labelled so as to inform U.S. consumers that the tuna contained in the products is caught in accordance with the AIDCP and not in an “unregulated” manner. Prior to the AIDCP and its precursor agreements, dolphins were encircled in an unregulated manner, and it was this practice that caused the massive dolphin mortalities that concerned U.S. consumers and that prompted the introduction of the tuna measure. Mexico and the United States agree that unregulated dolphin encirclement is not dolphin-safe and should not be permitted.

8 16 U.S.C. § 1385(d) (Exhibit MEX-1).


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(iii) The inability to be able to promote AIDCP-certified dolphin-safe fishing practices encourages the use of an alternative fishing method – setting purse seine nets on fish aggregating devices (FADs) – which is damaging to both target and bycatch fisheries stocks and is environmentally unsustainable.

11. These adverse effects of the tuna measure on Mexico and the ETP can be maintained only if the measure allows a sufficient supply of tuna products from other sources to be labelled “dolphin-safe”, thereby allowing a distinction to be made between Mexican and non-Mexican products. Currently, this supply is only made possible because tuna products are being labelled as dolphin-safe when that designation cannot be assured due to deficiencies and gaps in the labelling requirements for eligibility, certification, and tracking and verification. To bring the measure into compliance with the covered agreements, the United States must correct those deficiencies, ensuring that all tuna products labelled “dolphin-safe” are in fact dolphin-safe under the United States’ own definition. which purports to assure consumers in absolute terms that dolphins were not harmed in the capture of the tuna contained in the product bearing the label. As a practical consequence of ensuring the accuracy of the U.S. dolphin-safe label, a WTO-consistent tuna measure will necessarily increase the costs at all stages in the supply chain to reflect the true cost of dolphin-safe tuna. In turn, this will reduce the supply of tuna products labelled as “dolphin-safe”.

12. In addition to bringing the tuna measure into compliance with the covered Agreements, correcting this artificial situation will provide an incentive for all of the participants in the U.S. market to reconsider the dolphin-safe issue and the broader issue of fisheries’ sustainability. This will be conducive to future changes that will allow the provision of full and accurate consumer information regarding the adverse effects of tuna fishing operations on dolphins (e.g., AIDCP-certified v. unregulated dolphin encirclement fishing practices) and on the comparative environmental effects of AIDCP-certified dolphin-safe fishing, FAD fishing and other methods.

2. United States’ Tuna Product Market

13. When the United States originally introduced the tuna measure, it intervened in the U.S. tuna product market by defining, controlling, and regulating the information provided to consumers regarding the meaning of the “dolphin-safe” designation on labels affixed to tuna products. The measure extensively swayed the perceptions of U.S. distributors as to U.S. consumers’ understanding of what the term “dolphin-safe” means. In fact, the only direct evidence of consumers’ perceptions was submitted by Mexico during the original proceedings. A survey conducted by a professional polling firm indicated that 48 percent of the public believe that the term “dolphin-safe” means no dolphins were injured or killed in the course of capturing tuna (the AIDCP standard), 22 percent believe it means there is no dolphin meat in the can, and only 12 percent believe it means dolphins were not encircled and then released in the capture of tuna. In other words, consumers' preferences are not determined by the fishing method, and instead by whether no dolphins were killed or injured in harvesting the tuna. These results from the 2010 poll mirrored the results of an identical poll conducted in 2003.9

14. The 2016 tuna measure is fundamentally flawed because its controlled definition of “dolphin-safe” does not ensure that tuna products from the United States and other

9 Public Opinion Strategies, National Survey Methodology (Oct. 16, 2010) (Exhibit MEX-5).


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countries are accurately labelled so that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins. As a result, the measure also does not contribute to the protection of dolphins in these other fisheries because it cannot ensure that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins. Furthermore, the measure is inconsistent with the general goal of WTO obligations to fulfill the objective of sustainable development.

D. The Interpretation and Application of the Appellate Body’s “Calibration” Test is at the Core of these Proceedings

15. In the circumstances of this dispute, resolution of the key areas of dispute will ultimately turn on the issue of “calibration” — that is, whether the different regulatory treatment is “calibrated” in a WTO-consistent manner to the different relevant circumstances in different tuna fisheries, taking into account the objectives of the measure.

16. Article 2.1 of the TBT Agreement and the chapeau of Article XX of the GATT 1994 have been interpreted in these proceedings to allow WTO Members to employ discriminatory measures to fulfil environmental objectives provided that the discriminatory aspects of those measures are even-handed and do not constitute arbitrary or unjustifiable discrimination. This is a positive development consistent with the aims of the WTO, and one that will assist in addressing global environmental issues, but it must be applied carefully to avoid completely undermining the fundamental obligations of Members under the covered agreements.

17. The Panels will be required, for the first time, to fully interpret and apply the Appellate Body’s calibration test to determine whether the 2016 tuna measure is even-handed and whether it is applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination. The approach that is taken will have profound systemic implications for Article 2.1 of the TBT Agreement, for the chapeau of Article XX of the GATT 1994, and for the other WTO Agreements that have similar provisions10 because where there are differences in the regulatory treatment of products there will almost always be differences in the factual circumstances related to those products. Thus, the mere existence of differences in factual circumstances cannot, on its own, justify differences in regulatory treatment. Such an interpretation would render Article 2.1 and the chapeau of Article XX inutile. In what circumstances do regulatory differences amount to “calibration” that justifies them as being even-handed, such that they do not constitute a means of arbitrary or unjustifiable discrimination? Where is the line drawn between “legitimate” calibration of regulatory distinctions and regulatory distinctions that lack even-handedness or are otherwise arbitrary or unjustifiable? The determination of where this line is drawn must be flexible enough to accommodate the many different facts and circumstances that could arise in respect of a measure in pursuit of legitimate objectives, but not so flexible as to render inutile the obligations in Article 2.1 of the TBT Agreement, the chapeau of Article XX of the GATT 1994, and other similar provisions in the WTO Agreements.

10 For example, Article 2.3 of the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS Agreement) and Article XIV of the General Agreement on Trade in Services (GATS).


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18. In light of the foregoing, it is crucial that the Panels undertake an objective, methodical and complete analysis when interpreting and applying the calibration test to the facts of this dispute.

E. The Differential Treatment is Not Calibrated

19. The 2016 tuna measure’s different regulatory treatment of tuna caught by the Mexican fishing fleet in the ETP large purse seine fishery, on the one hand, and tuna caught by other vessels in other fisheries, on the other hand, is not “calibrated” to different relevant circumstances, taking into account the objectives of the measure.

20. In conducting a calibration assessment, it is essential that the Panels distinguish between the activities that define the fishing method and the level of adverse effects on dolphins caused by those activities. It is the latter that are legally relevant to the assessment because they comprise the risk profile of the fishing method and will enable the Panels to assess the comparative levels of risks. In its submission, the United States conflates these two factors. The United States refers to dolphins being “systematically … and routinely intentionally chased” and encircled when the AIDCP-compliant dolphin encirclement fishing method is used, as if proof of these actions alone amounts to proof of potential “massive unobservable harms” to dolphins. This is incorrect.

21. In preparing the risk profiles of the different fishing methods, the Panels must confirm that the actions actually cause adverse effects on dolphins. This cannot be assumed. For example, it is well-established that tuna associate with dolphins in areas of the Indian Ocean (just as in the ETP), and that hand-line fishers intentionally and routinely chase herds of dolphins to locate tuna. The risk profile and level of adverse effects on dolphins caused by this fishing method cannot be ascertained simply by establishing that dolphins are intentionally and routinely chased. A further examination is needed to ascertain the level of adverse effects that are actually caused by this activity. A second example is illustrated by the difference between AIDCP-compliant dolphin encirclement and unregulated dolphin encirclement. Both involve, in the words of the United States, dolphins being “systematically … and routinely intentionally chased” and encircled but their adverse effects on dolphins and their respective risk profiles are profoundly different. A third example relates to the “intentional” element of the action. Mexico acknowledges that dolphins are intentionally chased when using the AIDCP-compliant fishing method. However, fishing methods like gillnets regularly cause massive dolphin mortalities without the intentional chasing of dolphins. There is no practical difference between intentionally encircling dolphins with the knowledge that there is a chance of causing harm and being wilfully blind to the extremely high probability, if not certainty, that a fishing set or gear deployment will result in harm to dolphins. As explained below, the risk profile of gillnet fishing is higher than that for AIDCP-compliant fishing, even though dolphins are not intentionally chased and encircled.

22. The evidence presented by Mexico clearly establishes that the differential treatment is not calibrated:

Eligibility Criteria – (1) Applying the scientifically objective Potential Biological Removal (PBR) method of comparison to the calibration test, it is clear that the difference in the treatment of AIDCP-compliant dolphin encirclement in the ETP as “ineligible” when it has a low risk profile and longline fishing in other ocean areas as “eligible” when it has a high risk profile is the exact opposite of what is expected given the objectives of the measure to provide


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accurate information to U.S. consumers regarding adverse effects on dolphins. If the eligibility criteria were properly calibrated, they would result in low risk profile fishing methods being designated as “eligible” and high risk fishing methods being designated as “ineligible”. They are clearly not properly calibrated. (2) Applying an overall (i.e., observed and unobserved) absolute level of adverse effects method of comparison to the calibration test, it is clear that the difference in the treatment of AIDCP-compliant dolphin encirclement in the ETP as “ineligible” when it has a lower risk profile than four other “eligible” fishing methods is the exact opposite of what is expected given the objectives of the measure to provide accurate information to U.S. consumers regarding adverse effects on dolphins. If the eligibility criteria were properly calibrated, they would result in the lowest risk profile of the five fishing methods being designated as “eligible” (i.e., AIDCP-compliant dolphin encirclement) and the others being designated as “ineligible”. Alternatively, all five should be designated as ineligible.

Certification Requirement – Overall (i.e., observed and unobserved) dolphin mortalities and serious injuries in tuna fisheries outside the ETP exceed the levels within the ETP. Moreover, regulatory compliance and reporting in many of those fisheries are substantially deficient and vessel captains are not trained to certify when dolphin mortalities and serious injuries occur. Requiring trained independent observers to certify dolphin-safe tuna catch in the ETP where regulatory compliance and reporting are at the highest levels while allowing untrained captains to certify dolphin-safe tuna in ocean areas where regulatory compliance and reporting are at their lowest levels is not calibrated. The purported “training” program introduced by the 2016 tuna measure is substantively deficient and unverifiable.

Tracking and Verification Requirements - Where there are deficiencies in control and monitoring, such as in ocean areas where regulatory compliance and reporting are at their lowest levels, a more stringent or more “sensitive” mechanism should be used in order to ensure that the information is accurate. Otherwise, any difference in the relevant regulatory distinctions that result in the provision of inaccurate information to consumers would be contrary to the tuna measure’s objectives. The 2016 tuna measure does not accomplish this because the deficiencies identified by the Panel in the first compliance proceeding remain.

23. For the foregoing reasons, the regulatory distinctions drawn by the tuna measure are not calibrated, appropriately tailored to, or commensurate with either the overall relative risks or levels of harm to dolphins arising from different fishing methods in different areas of the oceans, or to the relative risks of inaccurate dolphin-safe information being passed on to U.S. consumers. Thus, the detrimental impact reflects discrimination against Mexican tuna products and thereby accords less favourable treatment to those products. The 2016 tuna measure is, therefore, inconsistent with Article 2.1 of the TBT Agreement.

24. The United States acknowledges that the 2016 tuna measure violates Articles I:1 and III:4 of the GATT 1994. The same reasons that establish the lack of calibration under Article 2.1 of the TBT Agreement also establish that the requirements of the chapeau of Article XX are not met. The general exceptions in Article XX therefore do not apply to justify the tuna measure’s violations of Articles I:1 and III:4.


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II. PROCEDURAL ISSUE – FAILURE OF UNITED STATES TO CONSULT

25. The United States did not request to hold consultations with Mexico in relation to the Article 21.5 proceedings it initiated, thereby violating its obligations under DSU Articles 4, 6 and 21.5. Mexico raised its objection to the failure of the United States to consult in a timely manner, during the meetings of the DSB held on 22 April 2016 and 9 May 2016.

26. DSU Article 21.5 states that “[w]here there is disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings such dispute shall be decided through recourse to these dispute settlement procedures”. The phrase “these dispute settlement procedures” includes, inter alia, the appeal stage and consultations.

27. The practice of WTO Members of adopting additional procedural agreements known as “sequencing agreements” regarding Articles 21 and 22 of the DSU address, among other things, the understanding between the disputing parties on the requirement for consultations. In relation the first Article 21.5 proceedings, the disputing parties signed the Understanding between the United States and Mexico regarding Procedures under Articles 21 and 22 of the DSU (the “Sequencing Agreement”), which set out that “Mexico [was] not required to hold consultations with the United States prior to requesting the establishment of an Article 21.5 panel”. This reinforces the view that consultations are part of Article 21.5 compliance proceedings, unless there is an explicit exemption or agreement otherwise.

28. In fact, in relation to Mexico’s initiation of its second Article 21.5 proceedings, Mexico requested consultations with the United States that were held on 2 June 2016, but failed to find a positive solution.

29. Mexico confirms its position that consultations must be held in Article 21.5 compliance proceedings unless explicitly agreed otherwise in a sequencing agreement between the disputing parties. This procedure was not followed in the United States’ Article 21.5 proceedings. In normal circumstances, this would undermine the jurisdiction of the Panel. Given the specific circumstances of these proceedings, wherein the subject matters of the two proceedings substantially overlap and consultations were held in relation to the second of the two proceedings, Mexico does not challenge the jurisdiction of the Panel in the United States’ Article 21.5 proceedings. However, Mexico requests that the Panel set forth guidance for future cases, especially whether in the absence of agreement with the other party a Member is allowed to initiate an Article 21.5 compliance proceeding without requesting consultations.

III. FACTUAL BACKGROUND

30. This section reviews the facts that are relevant to the Panels’ rulings on the issues before it in these proceedings. They are (i) the protection of dolphins in the ETP under the multilateral AIDCP; (ii) the efforts of the United States to implement its international commitments to amend the definition of “dolphin-safe”, which were blocked by the U.S. courts; (iii) the major alternative methods for fishing for tuna and their comparative adverse effects on dolphins; (iv) the major ocean areas for tuna fishing, regulation within those areas, and adverse effects on dolphins in those areas; (v) the main components of the tuna measure; and (vi) the evolving nature of U.S. laws relating to the protection of dolphins.


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31. As reviewed in both the original and compliance proceedings, there are a number of different methods of fishing for tuna. Virtually all methods, when used in large scale commercial operations, have the potential to harm dolphins and other types of non-target “bycatch.” In addition, there are also significant differences in the risks to dolphins and to accurate reporting of adverse effects on dolphins in the different areas of the oceans.

A. Protection of Dolphins in the ETP under the Agreement on International Dolphin Conservation Program (AIDCP)

32. It is important to the issues in these proceedings that the Panels understand the difference between unregulated purse-seine net fishing and purse-seine fishing in an AIDCP-compliant manner as well as to understand the positive record evidence that objectively establishes the level of adverse effects on dolphins caused by encircling dolphins in an AIDCP-compliant manner.

33. The “purse-seine” net fishing method involves locating a school of fish and sending out a motorized vessel to hold the far end of the purse-seine net. The smaller vessel motors around the perimeter of the school of fish, unfurling the net and encircling the fish, and then attaches its end of the net to the fishing vessel. The fishing vessel then purses the net by winching in a cable that draws closed the bottom edge of the net, and draws in the top cables of the net to gather its contents.11

34. Purse seine nets can be set on logs or fishing aggregating devices (FADs), which capitalize on the fact that sea life is attracted to the shadows that are cast by floating objects. This method attracts and kills immature as well as mature tuna, as well as a wide variety of other bycatch, including sea turtles, sharks, and other species.12 Purse seine nets can also be set on “free-swimming” schools of tuna (i.e., “unassociated sets”), which are not associated with logs or FADs but which also result in significant levels of bycatch. The Panel previously found that all these methods may result in substantial dolphin bycatch.13

35. In some ocean regions, tuna “associate” with herds of dolphins, following them in close proximity. In the ETP, including in the area adjacent to Mexico’s Pacific coastline, fishermen are able to locate schools of yellowfin tuna by finding dolphins on the ocean’s surface and encircling them with purse seine nets in order to harvest the tuna underneath.14 Because only mature tuna are able to swim fast enough to keep up with the dolphins, this method of fishing produces a large catch of mature tuna (that have already spawned and contributed to the tuna biomass) and no juvenile tuna. This method also has very little bycatch of other species.15 When unregulated, this method can result in significant dolphin bycatch. As discussed in more detail below, in the ETP measures have long been in place to protect dolphins – such as independent observers on each large purse seine vessel capable

11 GATT Panel Report, United States-Restrictions on Imports of Tuna, 3 Sept. 1991, unadopted, BISD 39S/155 30 I.L.M. 1594 (“Tuna-Dolphin I”), p. 2.1. 12 Panel Report, US – Tuna II (Mexico), para. 4.10. 13 Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.132; see also Panel Report, US – Tuna II (Mexico), para. 7.521. 14 Panel Report, US – Tuna II (Mexico), paras. 4.6-4.7. 15 Panel Report, US – Tuna II (Mexico), para. 4.11.


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of making dolphin sets, and special procedures and equipment designed to ensure that the dolphins are able to leave the nets unharmed.16

36. The Inter-American Tropical Tuna Commission (IATTC), which originally was created for the purpose of conserving tuna stocks, later broadened its responsibilities to include protecting dolphins, and began multilateral efforts that led to the creation of the International Dolphin Conservation Program (IDCP).

37. The combined efforts and commitment of the governments and the fleets participating in the ETP fishery led to the adoption and implementation in 1993 of the voluntary La Jolla Agreement. In the first year of that Agreement, incidental dolphin mortalities were reduced dramatically to a statistically insignificant level below which mortalities have remained in every year since.

38. In 1995, the participating governments adopted the Declaration of Panama in which they all agreed to improve and make legally binding the successful La Jolla Agreement, in exchange for the United States’ commitment to change its law and definition of “dolphin-safe” from a standard based on the method of capture to a standard based on whether dolphins were killed or injured. Accordingly, the participating governments implemented the commitments of the Declaration of Panama in the AIDCP (which entered into force in 1999) and incorporated the requirements within their national laws and regulations on the basis of the United States’ commitment. The AIDCP entered into force in 1999. Both Mexico and the United States are signatories to the La Jolla Agreement and the Panama Declaration and parties to the AIDCP.17

39. In the original proceedings, Mexico demonstrated that the AIDCP and its predecessor agreements have been a tremendous success, reducing dolphin mortality in the ETP caused by large purse seine vessels to a statistically insignificant level while allowing the use of a fishing method that contributes to the sustainability of tuna stocks and limits harm to other species of sea life. The original Panel found that:

It is undisputed that the application of the AIDCP controls has played a decisive role in the considerable reduction of dolphin mortalities in the ETP in the last decades. [The] [a]nnual estimate of dolphin mortality in the ETP in 1986 was 132,169 marine mammals, whereas the estimate in 2008 was 1,169 individuals. As noted above, the United States recognizes that the observed dolphin mortalities as a result of setting on dolphins in the ETP are approximately 1,200 dolphins per year. Furthermore, the Panel observes that the majority of sets on dolphins in the ETP these days produce zero observed dolphin mortalities. In 2008, for instance, in 92 per cent of the sets on dolphins in the ETP no incidental mortalities of dolphins were observed to have occurred.18 (emphasis original; footnotes omitted)

The success of the AIDCP has been recognized by the United Nations Food and Agriculture Organization (FAO), which awarded the Margarita Lizárraga Medal to the AIDCP in 2005. 16 Panel Report, US – Tuna II (Mexico), para. 7.610 and footnote 854. 17 Panel Report, US – Tuna II (Mexico), para. 2.35. 18 Panel Report, US – Tuna II (Mexico), para. 7.609. See also Appellate Body Report, US – Tuna II (Mexico), paras. 244 and 260.


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The medal is awarded biennially to a person or organization that serves with distinction in the application of the Code of Conduct for Responsible Fisheries.19

40. By 2015, the total number of mortalities was reduced to 765 – about 35 percent lower than in 2008 – of which the portion caused by the Mexican fleet was 504.20 No multilateral or national fisheries management organization other than the IATTC in the ETP has adopted comparable measures to protect dolphins from tuna fishing operations or even to monitor harm to dolphins.21

41. It is important to be aware that the United States (as do other countries) tolerates marine mammal mortalities in its own territorial fisheries. The United States applies a Potential Biological Removal (PBR) methodology to its own fisheries to determine whether dolphin bycatch is problematic.22 The PBR level is the maximum number of animals, not including natural mortalities, that may be removed from an animal stock (such as dolphins) while allowing that stock to reach or maintain its optimum sustainable population.23 There are two “stocks” of dolphin species located in particular regions of the ETP that the United States claims are ”depleted”: the “eastern spinner dolphin” and the “northeastern offshore spotted dolphin”.24 In a report on the ETP issued in 2003 based on data from 2001, the U.S. Department of Commerce determined that the rate of dolphin mortality caused by tuna fishing in the ETP was 39 percent of the PBR level for eastern spinner dolphins and 31 percent of the PBR level for north eastern spotted dolphins, and these figures included projections for the effects of potential unobserved mortalities.25 This meant that even if mortalities were multiple times greater, the overall level would not affect stock sustainability

19 Panel Report, US – Tuna II (Mexico), footnote 620. 20 IATTC, “Fishery Status Report No. 14” (2016), available at https://www.iattc.org/ FisheryStatusReportsENG.htm, p. 127 (Exhibit MEX-6). 21 See Panel Report, US – Tuna II (Mexico), para. 7.556 (“… the Panel recognizes that the evidence concerning dolphin bycatch outside the ETP is not as detailed and as abundant as the information in relation to the ETP. As mentioned above, it has been observed in this respect that the absence of information is not indicative of absence of a problem and that the scarce information available should be considered as an underestimation of the bycatch. It is also known that some fishing fleets refuse to take observers on board. Therefore, we disagree with the United States that ‘[i]f anything can be inferred from the absence of a 100 per cent observer requirement to monitor marine mammal interactions in other fisheries is that in those fisheries there is no problem such as the one in the ETP’”) (footnotes omitted). 22 See, e.g., Government Accountability Office, “National Marine Fisheries Service: Improvements are Needed in the Federal Process Used to Protect Marine Mammals from Commercial Fishing,” GAO 09-78 (Dec. 2008) (Exhibit MEX-7). 23 Panel Report, US – Tuna II (Mexico), para. 7.510 and footnote 716. 24 Other types of dolphins – in particular common dolphins – are involved in dolphin sets. See AIDCP, “Report on the International Dolphin Conservation Program”, Document MOP-28-05 (Oct. 18, 2013), p. 14 (Exhibit MEX-8). Common dolphins are not identified as “depleted” under the U.S. rules. To the contrary, it is estimated that the population of common dolphins in the ETP increased by over 750,000 during 1986-2000. See Letter from IATTC to Secretary of Commerce enclosing Scientific Report on the Status Of Dolphin Stocks In The Eastern Pacific Ocean (Oct. 30, 2002), Scientific Report, p. 3 (Exhibit MEX-9). 25 National Oceanic and Atmospheric Administration, “Taking and Importing of Marine Mammals; Decision Regarding the Impact of Purse Seine Fishing on Depleted Dolphin Stocks” 68 Fed. Reg. 2010 (Jan. 15, 2003) (Final Finding), p. 2015 (Exhibit MEX-10).


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and would still be acceptable under the approach that the United States applies to evaluating bycatch in its own fisheries. As noted above, overall dolphin mortalities in the ETP were considerably lower in 2015 than in 2001.26

42. Under the AIDCP, “dolphin mortality limits” are set for individual stocks of dolphins. Exhibit MEX-11 contains a 2009 report of the AIDCP’s Scientific Advisory Board on updated estimates of stock mortality limits from the 2008 U.S. abundance estimate for the two dolphin stocks at issue – the northeastern spotted dolphin and eastern spinner dolphin. Based on the fact that the populations of these stocks are larger than previously believed, the report recommended increases in the per-stock, per-year dolphin mortality limits (DMLs) for those stocks.27 The United States agreed to those increases – from 648 to 793 for the northeastern spotted dolphin, and from 518 to 655 for the eastern spinner dolphin.28 The fact that the United States agreed to increase the DMLs objectively and positively confirms the evidence of growth in dolphin stocks.

43. The 2015 data for dolphin mortalities in the ETP (765 in total, 191 northeastern spotted dolphins and 196 eastern spotted dolphins),29 along with the fact that these figures are well below the relevant PBR levels, constitute the most accurate fisheries data available globally because they are gathered by independent observers in accordance with the strict requirements of the AIDCP. These data are the most recent “positive evidence” on the record of this proceeding that establish the level of observed adverse effects on dolphins from AIDCP-compliant dolphin encirclement fishing.30

44. As described below, the U.S. Government initially pursued domestic measures consistent with the AIDCP’s approach to dolphin and fisheries stocks sustainability. However, after rulings of U.S. courts blocked changes, the United States has periodically adjusted its views on the amended tuna measure’s chosen level of protection of dolphins (to the detriment of the protection of other fisheries stocks) in efforts to defend the status quo.

B. U.S. Implementation of the AIDCP

45. As noted above, based on the commitments agreed under the Panama Declaration, the United States was to define “dolphin-safe” as meaning that no dolphins were killed or seriously injured during the fishing set in which the tuna was caught, and to eliminate the complete disqualification of the dolphin set method.31

26 In 2001, the number of mortalities of the northeastern offshore spotted dolphin was 656; in 2015, the number was 191. In 2001, the number of mortalities of the eastern spinner dolphin was 466; in 2015, it was 196. Compare Final Finding, p. 2015 (Exhibit MEX-10) to IATTC, “Fishery Status Report No. 14” (2016), p. 127 (Exhibit MEX-6). 27 AIDCP, “Updated Estimates of NMin and Stock Mortality Limits,” Document SAB-07-05 (30 Oct. 2009) (Exhibit MEX-11). 28 International Dolphin Conservation Program (IDCP), 22nd Meeting of the Parties, Minutes (30 Oct. 2009), item 8 on p. 4, Appendix 8 on p. 10 (Exhibit MEX-12). 29 IATTC, “Fishery Status Report No. 14” (2016), p. 127 (Exhibit MEX-6). 30 The issue of “unobserved” or “indirect” adverse effects on dolphins is discussed below. 31 Panel Report, US – Tuna II (Mexico), para. 4.22.


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46. Reflecting the U.S. commitment in the Panama Declaration, the U.S. legislation to implement the AIDCP, known as the International Dolphin Conservation Program Act (IDCPA) and enacted in 1997, authorized a change in the “dolphin safe” labeling standard, but not immediately or automatically. Instead, the U.S. Congress made the amendment contingent on the outcome of studies it required the Department of Commerce to perform. The Secretary of Commerce was directed to make initial and final findings of whether the intentional deployment on or encirclement of dolphin with purse-seine nets was having a significant adverse impact on any depleted dolphin stock in the ETP.32 These findings would in turn be a part of the information used by the Secretary of Commerce to determine whether to revise the definition of “dolphin-safe” tuna.

47. In May 1999, the Department of Commerce published its Initial Finding pursuant to the IDCPA. In the Initial Finding, the Department of Commerce determined that there was insufficient evidence to conclude that intentional encirclement of dolphins with purse-seine nets was having a significant adverse effect on what the United States labeled as “depleted” dolphin stocks in the ETP.33 The agency then did additional studies and reached the same conclusion as before in a Final Finding issued in December 2002. The Department actually went forward in early 2003 and changed the definition of “dolphin-safe” to conform to the AIDCP standard, but revoked that change soon after in reaction to court litigation.34

48. Several non-governmental organizations challenged the Department of Commerce Findings in the District Court for the Northern District of California, with the U.S. Government defending the actions of the Department of Commerce. The District Court ruled in favor of the plaintiffs, holding that the Department of Commerce erred when it triggered a change in the dolphin safe label standard on the ground that it lacked sufficient evidence of no significant adverse impacts. In a decision with the name Earth Island Institute et al. v. Hogarth, the Court of Appeals for the Ninth Circuit affirmed the District Court’s decision, holding that the agency should not have made a finding of no adverse impact in the absence of what the court considered conclusive scientific data.35 The United States decided not to appeal this ruling and abandoned efforts to implement its international commitments relating to the dolphin-safe label.

C. Comparisons of Fishing Methods

49. In the original proceedings, both the Panel and the Appellate Body dealt extensively with the issue of the risks to dolphins arising from dolphin encirclement conducted in accordance with the requirements of the AIDCP (discussed below) and other fishing methods. The original panel found that:

… we are not persuaded, based on the evidence presented to us, that at least some of the dolphin populations affected by fishing techniques other than

32 Panel Report, US – Tuna II (Mexico), paras. 2.4, 2.15-2.18; Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 3.6 and 3.16-3.18. 33 Panel Report, US – Tuna II (Mexico), para. 2.17. 34 See Panel Report, US – Tuna II (Mexico), paras. 2.17-2.18. 35 Panel Report, US – Tuna II (Mexico), paras. 2.18-2.19.


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setting on dolphins are not facing risks at least equivalent to those currently faced by dolphin populations in the ETP under AIDCP monitoring.36

The Appellate Body specifically affirmed this finding.37

50. In the first compliance proceedings, as discussed above, the Panel determined that a number of fishing methods cause dolphin mortalities, but when comparing the effects on dolphins of fishing methods, the panel focused exclusively on the nature of unobservable effects on dolphins. The Appellate Body found that the Panel’s approach was incorrect, and that it was necessary to analyse the extent of all harms from the different fishing methods in relation to each other.38

51. Set forth below is a discussion of the relevant evidence available concerning the impact of various fishing methods on dolphins.

1. Dolphin Encirclement Method

52. It is relevant to the legal issues discussed below that, originally, the United States placed restrictions on the use of dolphin sets because of the high numbers of dolphins known to be harmed by unregulated sets on dolphins. After the measures adopted under the AIDCP and predecessor agreements were proven successful and observed mortalities were reduced to statistically near zero, the United States shifted to an approach based on the measurement of growth of dolphin stocks, with the argument that growth rates below an arbitrarily set percentage were evidence of indirect (“unobserved”) harm. Once the dolphin stocks were shown to be growing at the expected rates, the United States abandoned population growth as the benchmark. It now claims that alleged unobservable and unmeasurable effects of the dolphin encirclement fishing method are its main concern, regardless of whether they affect population growth. Specifically, the United States asserts that the method is uniquely harmful simply “by its very nature.”39 That is not a scientific standard. Moreover, it conflates the characteristics of a fishing method (i.e., dolphin encirclement) with the adverse effects on dolphins caused by that fishing method. By their very nature, almost all commercial tuna fishing methods have adverse effects on dolphins. Thus, the fact that AIDCP-compliant dolphin encirclement harms dolphins is not unique. As discussed below, what matters for the determination of the key issues in this proceeding is the comparative levels of harm caused by a particular fishing method in a particular ocean area.

53. It is important for the Panels to assess the quality of the “evidence” presented by the United States regarding unobservable effects on dolphins. Such an assessment will show that the evidence is speculative, biased and faulty. For example, the United States claims that the dolphins are driven until they are “exhausted,” but the source cited by the United States does not state that.40

36 Panel Report, US – Tuna II (Mexico), para. 7.617. 37 Appellate Body Report, US – Tuna II (Mexico), paras. 259-281 and 288. 38 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.247. 39 U.S. written submission, para. 36 (emphasis original). 40 U.S. written submission, para. 34, citing to Exhibit US-12 (US – Tuna II (Article 21.5 - US)).


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54. Further, as evidence of indirect harms to dolphins, the United States cites to old reports that claim, or are based on the assumption, that the populations of the two dolphin stocks on which the tuna measure is based – the northeastern offshore spotted and eastern spinner stocks – are not recovering at the “expected rate.” It is therefore necessary to review the fact that those assumptions have subsequently been found to be inaccurate by the U.S. Department of Commerce itself.

55. The most recent assessment model is a report published in 2008 by the Department of Commerce, entitled “Estimates of 2006 Dolphin Abundance in the Eastern Tropical Pacific, With Revised Estimates from 1986-2003.” This report was based on new research conducted in 2006, as well as a re-examination of the observation data collected in prior research voyages.

56. The 2008 report included the following conclusions:

Over the 8-year period from 1998-2006 when reported dolphin bycatch was at low levels relative to population sizes, all 3 of the officially depleted dolphin stocks (coastal and northeastern offshore spotted and eastern spinner dolphins) were estimated to be growing at rates considered to be near the 4-8% maximum possible for dolphins (Reilly and Barlow 1986) (Table 13).41

Table 13 indicates that the estimated rate of growth was 3.5 percent for northeastern offshore spotted dolphins and 9.2 percent for eastern spinner dolphins.

57. The report also states:

Previous studies considering data through 2000 (Lennert-Cody et al. 2001, Gerrodette and Forcada 2005, Wade et al. 2007) have concluded that neither of the two focal dolphin stocks was recovering at a rate consistent with its depleted status and low reported bycatch. The new, higher estimates for 2003 and 2006 reported here, however, may indicate that the stocks are beginning to recover.42

58. The 2008 report indicates that the prior data were previously misinterpreted because (i) the observers consistently underestimated the number of dolphins they saw, (ii) some of the dolphins that were seen were accidentally left out of the data, and (iii) there were problems with the computer code used to run projections.43

41 NOAA Technical Memorandum NMFS, “Estimates of 2006 Dolphin Abundance In The Eastern Tropical Pacific, With Revised Estimates From 1986-2003” (April 2008), p. 12 (Exhibit MEX-13). 42 Ibid., p. 12. 43 The report states:

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