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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)

Second Written Submission of Mexico

4 November 2016

United States – Measures Concerning the Importation Second Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products: Recourse 4 November 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 ............................. iii

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

LIST OF EXHIBITS ................................................................................. v

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

II. NATURE OF AIDCP-COMPLIANT DOLPHIN ENCIRCLEMENT ................. 1

III. “CALIBRATION” IN THE CONTEXT OF THE LEGAL TEST FOR EVEN-HANDEDNESS ............................................................................. 6

A. The Criticisms Raised by the United States ............................ 6

B. The Legal Test for “Even-handedness” in this Dispute Involves the Consideration of a Number of Relevant Factors or Questions ......................................................................... 7

C. “Calibration” and the “Nexus” Between the Regulatory Distinctions and the Objectives of the Measure Must Both be Taken into Account when Assessing “Even-Handedness” ......... 9

D. The Existence of “Unjustifiable Discrimination” Should be Taken into Account when Assessing “Even-Handedness” ................. 10

E. The Dolphin-Safe Label must be “Accurate” in order to Achieve the Objectives of the Measure ........................................... 12

1. The Risks to Dolphins can only be Addressed if the Label is Accurate ............................................................ 12

2. Label Accuracy in the Calibration Assessment is Consistent with the Appellate Body’s Reasoning ......... 13

F. The Factors and Circumstances Relevant to the Calibration Analysis May Differ Depending on the Regulatory Distinction at Issue and how the Distinctions Operate Together ................. 17

IV. THE 2016 TUNA MEASURE IS INCONSISTENT WITH ARTICLE 2.1 OF THE TBT AGREEMENT ................................................................. 18

A. Eligibility Criteria ............................................................. 18

1. Risk Profile of the Fishing Method and Fishing Area ..... 18

2. Potential Metrics for Evaluating Risk Profiles .............. 20

3. Gillnet .................................................................. 21


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4. Longline ............................................................... 22

5. Trawl ................................................................... 23

6. Handline ............................................................... 23

7. Purse Seine ........................................................... 25

B. Certification Requirements ................................................ 28

C. Tracking and Verification Requirements .............................. 30

D. Determination Provisions .................................................. 33

V. THE 2016 TUNA MEASURE IS NOT JUSTIFIED UNDER ARTICLE XX OF THE GATT 1994 ......................................................................... 35

VI. CONCLUSIONS .......................................................................... 35


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TABLE OF WTO DISPUTES CITED IN THIS SUBMISSION

Short Title Full Case Title and Citation

India – Solar Cells Appellate Body Report, India – Certain Measures Relating to Solar Cells and Solar Modules, WT/DS456/AB/R and Add.1, adopted 14 October 2016

Korea – Dairy Panel Report, Korea – Definitive Safeguard Measure on Imports of Certain Dairy Products, WT/DS98/R and Corr.1, adopted 12 January 2000, as modified by Appellate Body Report WT/DS98/AB/R, DSR 2000:I, p. 49

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

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 – 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

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


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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 DPCIA Dolphin Protection Consumer Information Act

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 ETP Eastern Tropical Pacific Ocean FAD Fish Aggregating Device FAO United Nations Food and Agriculture Organization 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 ISSF International Seafood Sustainability Foundation IUU Illegal, unreported and unregulated MMPA Marine Mammal Protection Act MSC Marine Stewardship Council NMFS National Marine Fisheries Service NOAA National Oceanic and Atmospheric Administration PBR Potential Biological Removal PNG Papua New Guinea

SPS Agreement Agreement on the Application of Sanitary and Phytosanitary Measures

TBT Agreement Agreement on Technical Barriers to Trade 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 R.C. Anderson, 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


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MEX-63 International Dolphin Conservation Program, Document IRP-32-12 (2003).

MEX-64 How Fast Do Dolphins Swim?, available at http://www.dolphins-world.com/how-fast-do-dolphins-swim

MEX-65 International Dolphin Watch, Facts About Dolphins available at www.idw.org/dolphinfacts.hth

MEX-66

Radio Australia, “Footage shows threatened species killed by tuna boats”, available at http://www.radioaustralia.net.au/international/radio/onairhighlights/footage-shows-threatened-species-killed-by-tuna-boats

MEX-67 V. Restrepo, Chair's Report of the ISSF Tuna-Dolphin Workshop (Oct. 25-26, 2012)

MEX-68 Memorandum of Amicus Curiae, filed in Defenders of Wildlife v. Dalton, Court No. 00-02-00060 (April 27, 2001)

MEX-69 SCS Global Services, “MSC Evaluation of the Northeastern Tropical Pacific Purse Seine Yellowfin & Skipjack Tuna Fishery: Announcement of Final Report and Determination” (October 2016)

MEX-70 M. Moazzam, “Status report on bycatch of tuna gillnet operations in Pakistan,” IOTC 8th Session of the Working Party on Ecoystems and Bycatch (2012)

MEX-71 Greenpeace International, “Dolphins die in trawler nets”, available at http://www.greenpeace.org/international/en/news/features/dolphins-die-in-trawler-nets

MEX-72 S. Allen et al., Patterns of Dolphin Bycatch in a North-Western Australian Trawl Fishery, PLOS ONE, Vol. 9, Issue 4 (April 2014)

MEX-73 Secretariat of the Pacific Community, Report of the Seventh Meeting of the Tuna Fishery Data Collection Committee (2007)

MEX-74 NOAA Technical Memorandum NMFS-SEFSC-572, NMFS, Estimated Bycatch of Marine Mammals and Sea Turtles in the U.S. Atlantic Pelagic Longline Fleet During 2007 (August 2008)

MEX-75 Ganapathiraju Pramod et al., "Estimates of Illegal and Unreported Fish in Seafood Imports to the USA", 48 Marine Policy 102 (2014)

MEX-76 Amanda Hamilton et. al., Market and Industry Dynamics in the Global Tuna Supply Chain, FFA, June 2011

MEX-77 Mike McCoy, A Survey of Tuna Transshipment in Pacific Island Countries, Gillet, Preston and Associates, Inc., June 2012

MEX-78 Young and Iudicello, “Worldwide Bycatch of Cetaceans,” U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA Tech. Memorandum NMFS-OPR-36 (July 2007)

United States – Measures Concerning the Importation, Second Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products: Recourse 4 November 2016 to DSU Article 21.5 by the United States and Mexico II

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I. INTRODUCTION AND SUMMARY

1. Mexico and the United States agree that the principal outstanding issue before the Panels is whether the differences in the labelling conditions for tuna products containing tuna caught by setting on dolphins in the Eastern Tropical Pacific Ocean (ETP) and for tuna products containing tuna caught by other fishing methods outside the ETP are “calibrated” and otherwise even-handed so that the 2016 tuna measure is in compliance with the requirements of Article 2.1 of the Agreement on Technical Barriers to Trade (TBT Agreement) and the chapeau of Article XX of the General Agreement on Tariffs and Trade 1994 (GATT 1994). However, the parties disagree on how to assess calibration in the circumstances of this dispute. This submission focuses on this principal outstanding issue.

2. This submission also responds to the United States’ factual allegations. Although Mexico answers the specifics of the United States’ allegations, a key cross-cutting issue is that, in presenting the risk profiles of different fishing methods and fisheries, the United States continues to apply a presumption that the Agreement on the International Dolphin Conservation Program (AIDCP)-compliant dolphin encirclement method as used by the Mexican fleet is harmful to dolphins, while it applies a presumption that other methods and other fisheries are not harmful. In part, this presumption is based on historical factual information related to unregulated dolphin encirclement that is not relevant to Mexico’s fishing method (AIDCP-compliant dolphin encirclement). The United States also applies different risk standards to different fishing methods and fisheries that result in an outright ban on the use of the label for an environmentally sustainable fishing method that is specifically designed to protect dolphins in the most regulated fishery in the world, while allowing the label to be used by other fishing methods in other regions that are a high risk to dolphins, are not environmentally sustainable and do not have strong regulatory oversight, if any. The inconsistency in the United States’ approach to, and use of, the available evidence is not even-handed.

3. For these reasons and for the previous reasons set out in Mexico’s first written submission, the differences in the tuna measure’s labelling conditions are not “calibrated” to the relative risks of overall harms to dolphins posed by different fishing methods in different ocean regions; rather, the regulatory distinctions are designed and applied in a manner that lacks even-handedness and constitutes a means of arbitrary and unjustifiable discrimination. Accordingly, Mexico respectfully requests that the Panels find that the 2016 tuna measure is inconsistent with Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994, and cannot be justified under Article XX of the GATT 1994.

II. NATURE OF AIDCP-COMPLIANT DOLPHIN ENCIRCLEMENT

4. Throughout these proceedings, the United States has used colourful language and exaggerations in order to inaccurately suggest that dolphin encirclement involves cruel and vicious attacks on dolphins.1 The actual facts are as follows:

• Contrary to the United States’ allegation that dolphins are ”chased down” over a period of hours until they are exhausted,2 a scientific study reporting data collected from dolphins equipped with radio tags showed that: “[o]ne dolphin traveled at an average speed of 3.38 knots [3.89 mph] during chase; another dolphin, a mother accompanied by a calf, averaged 5.66 [6.5 mph] knots

1 See e.g., United States’ second written submission, paras. 48, 51, 55-60, 76, 133, 137, and 177. 2 United States’ second written submission, para. 55.


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without causing separation of the pair (Chivers and Scott, 2002).”3 This is slower than dolphins’ normal swimming speed of 7 to 8 mph and much slower than their maximum speed of 25 mph.4 Moreover, the study found that the majority of chases took less than 30 minutes, with many in the range of 5 to 15 minutes, while only a small percentage lasted more than 40 minutes.5 In other words, the “chase” is actually a procedure to slowly stop the herd, not to exhaust it.

• Contrary to the United States’ inference that the use of helicopters in tuna fishing is unusual, helicopters are commonly used in tuna fishing in the West Pacific and elsewhere.6

5. When assessing whether the differences in labelling conditions are calibrated, it is essential that the Panels look behind the United States’ bare assertions and presumptions, and analyse these and other facts and circumstances in an objective manner. In its submission, the United States repeatedly refers to 6-6.3 million dolphins being “chased” and 3-4 million dolphins being “captured” each year.7 The term “captured” is misleading. More accurately, the dolphins are being encircled, but they are not being captured by the net, as would occur for example in a gillnet. Rather, a careful procedure is followed, overseen by independent observers, to minimize the risk that any dolphin may be injured.8 The implication of these references by the United States is the implicit assertion that AIDCP-compliant dolphin encirclement is causing substantial unobserved dolphin mortalities and serious injury. However, the facts contradict this implicit assertion. Mexico has presented considerable evidence that the previously depleted stocks of dolphins in the ETP are recovering at the highest possible rate.9 The most compelling evidence appears to be the United States’ own agreement to increasing the per-stock dolphin mortality limits (a subset of the overall dolphin mortality limit) for both the alleged depleted dolphin stocks in 2009, signalling that it agreed

3 International Dolphin Conservation Program, Document IRP-32-12 (2003), p. 3 (Exhibit MEX-63). 4 How Fast Do Dolphins Swim?, available at http://www.dolphins-world.com/how-fast-do-dolphins-swim/ (Exhibit MEX-64). Another source states:

“The dolphin's fast cruising speed (a travelling speed they can maintain for quite a while) is about 6-7 knots. They can reach speeds of up to 9.3 knots while travelling in this fashion.”

International Dolphin Watch, Facts About Dolphins available at www.idw.org/dolphinfacts.hth (Exhibit MEX-65). The speeds established by scientific monitoring are less than the above-referenced “fast cruising speed.” 5 Ibid., p. 1. 6 See, e.g., Radio Australia, “Footage shows threatened species killed by tuna boats”, available at http://www.radioaustralia.net.au/international/radio/onairhighlights/footage-shows-threatened-species-killed-by-tuna-boats (Exhibit MEX-66) (report on video shot by helicopter pilot shot working on South Korean FAD vessel). 7 United States’ first written submission, paras. 37, 53, 100, 127 and footnotes 51, 404. 8 See, e.g., Panel Report, US – Tuna II (Mexico), paras. 7.609-7.610 and footnote 854. 9 Mexico’s first written submission, paras. 54-60. In responding to Mexico’s evidence on population growth, the United States simply ignores the most recent information contained in the Barlow report (Exhibit MEX-53) and cites to older reports. It also mischaracterizes the Punt paper (Exhibit US-104), which does not say that the populations are not growing at maximum rates, but rather reviews “hypotheses” by others why rates of increase purportedly do “not match that expected from theoretical arguments.” Ibid., p. 5. The paper simply provides recommends on how further research could be conducted.


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that, in the fisheries management context, outside the circumstances of this dispute, those stocks are not under pressure.10

6. Regarding the alleged “unobservable” effects on dolphins, important perspective is provided by the Chair’s Report of the International Seafood Sustainability Foundation (ISSF) Tuna-Dolphin Workshop held in 2012. The ISSF is a respected association of scientists, tuna processors and environmental NGOs that undertakes science-based initiatives to promote the conservation and sustainable use of tuna stocks.11 The Chair’s Report states:

After considering the presentations and discussions, there was general agreement that direct mortality of dolphins in the fishery has been reduced to levels below those prescribed as sustainable. There also appeared to be general agreement that even if the direct mortality were underestimated by an order of magnitude, such levels would still be sustainable.12

7. The report also states:

Unfortunately, there was not a general agreement about whether indirect effects are allowing recovery at the expected rate (what is to be “expected” is itself a subject of debate). Some participants felt that continued chase and capture could be having adverse impact on the stocks' rebuilding rate. While most participants agreed that adverse impacts by the mechanisms identified were plausible, especially at the individual level, as these indirect impacts have not been quantified in a population context, the overall impacts remain largely hypothetical. Various studies have produced quantitative results that could potentially serve as the basis for estimates of population-level effects, pending availability of specific data on the fishery. However, this has not been done. In addition, some of the physiological research presented on indirect effects is not being done on the species of concern, but on other dolphins instead, which further adds to the differing views.13

Thus, there is agreement that direct mortalities in the fishery are well within the limits of sustainability. Suggestions of indirect effects are speculative and unproven.14

8. When assessing the risks associated with AIDCP-compliant dolphin encirclement, it is crucial for the Panels to focus on objective evidence and not unsubstantiated assertions. Further, to the extent that conclusions may be based on speculation or hypotheses, the same

10 Mexico’s first written submission, para. 42. 11 See http://iss-foundation.org/. 12 V. Restrepo, Chair's Report of the ISSF Tuna-Dolphin Workshop (Oct. 25-26, 2012), p. 3 (Exhibit MEX-67). 13 Ibid., p. 3. 14 For example, the United States relies on a report in Exhibit US-47 (US – Tuna II (Article 21.5 - US)), which itself states:

The responses observed in the sampled live animals were well within those ranges from which dolphins are expected to recover fully; however, it is possible that some dolphins may experience stronger responses, such as during occasional ‘catastrophic’ aspects of fishery operations when dolphins may become trapped under a canopy in the net. In theory, this could result in a surge in catecholomines intense enough to cause injury or death within hours or days of being released (a condition known as capture myopathy). To date, no live ETP dolphin exhibiting such a response has been identified or sampled.

S. Reilly et al., Report of the Scientific Research Program Under the International Dolphin Conservation Program Act (2005) (italics emphasis original; underline emphasis added) (Exhibit US-47) (US – Tuna II (Article 21.5 - US)).


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types of speculation and hypotheses must be presumed in relation to other fisheries and fishing methods. Importantly, as the Panel in the original proceeding stated, “the absence of information should not be assumed to reflect the absence of a problem.”15

9. It is also important to recognize that the specific fishing actions that the United States is criticizing – i.e., the dolphin “chase” and encirclement – are the same actions that make AIDCP-compliant dolphin encirclement an environmentally-sustainable fishing practice. As previously explained, the AIDCP is widely recognized for its contributions to sustainable fisheries. In 2005, the UN’s Food and Agriculture Organization (FAO) awarded the AIDCP the Margarita Lizárraga Medal for serving with distinction in the application of the Code of Conduct for Responsible Fisheries. The FAO stated:

The AIDCP is an international agreement with the objective of progressively reducing dolphin mortality in the tuna purse-seine fishery in the eastern Pacific Ocean (EPO), and to ensure the sustainability of tuna stocks and associated species in the EPO pelagic ecosystem…. The AIDCP has been an unqualified success and has diligently applied the relevant principles set forth in the Code, in particular those aspects relating to the precautionary approach and to the utilization of fishing gear and techniques which minimize the catch of non-target species. The enormous reduction in dolphin mortality attributable to the Agreement, while maintaining sustainable fisheries, is a practical, hands-on contribution. The results are tangible and measurable. The process established by the Agreement is continuous and not a one-off phenomenon. And the success of the AIDCP has the potential to be catalytic.16

10. In 1996, when the U.S. Congress was considering the International Dolphin Conservation Program Act (IDCPA) to implement the United States’ commitments in the AIDCP, then-Vice President Al Gore sent a letter to Congress that stated:

I am writing to thank you for your leadership on the International Dolphin Conservation Program Act, H.R. 2823. As you know, the Administration strongly supports this legislation which is essential to the protection of dolphins and other marine life in the Eastern Tropical Pacific.

In recent years, we have reduced dolphin mortality in the Eastern Tropical Pacific tuna fishery far below historic levels. Your legislation will codify an international agreement to lock these gains in place, further reduce dolphin mortality, and protect other marine life in the region. This agreement was signed last year by the United States and 11 other nations, but will not take effect unless your legislation is enacted into law.

As you know, H.R. 2823 is supported by major environmental groups, including Greenpeace, the World Wildlife Fund, the National Wildlife Federation, the Center for Marine Conservation, and the Environmental Defense Fund. The legislation is also supported by the U.S. fishing industry, which has been barred from the Eastern Tropical Pacific tuna fishery.

Opponents of this legislation promote alternative fishing methods, such as “log fishing” and "school fishing,” but these are environmentally unsound. These fishing methods involve unacceptably high by-catch of juvenile tunas, billfish,

15 Panel Report, US – Tuna II (Mexico), para. 7.530. 16 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).


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sharks, endangered sea turtles and other species and pose long-term threats to the marine ecosystem.17

11. When a group of NGOs initiated a lawsuit in the U.S. Court of International Trade challenging the validity of the Department of Commerce’s implementing regulations for the AIDCP, another group of NGOs filed a brief as amicus curiae in support of implementation.18 The brief filed by the Center for Marine Conservation, Environmental Defense, National Wildlife Federation, and World Wildlife Fund stated “… setting on dolphins is currently the most ecologically viable tuna-fishing method available for use in the ETP.”19 The brief further explains:

FAD and school sets result in the death of large numbers of non-target species and juvenile tuna, called bycatch. … Conversely, there is relatively little bycatch associated with dolphin sets, because smaller, immature tuna and other small fish are unable to keep up with the faster swimming dolphins….

As the table at Exhibit 6 illustrates, FAD sets and school sets have dramatically higher levels of bycatch than dolphin sets. Moreover, bycatch associated with both FAD and school sets detrimentally affects a variety of other sensitive marine species, including endangered sea turtles, sharks, and fish species that are critical to the ETP marine ecosystem.20

The NGO’s amicus brief also states:

The number of juvenile tuna discarded as bycatch is approximately 20 to 40 times greater for FAD sets and school sets compared to dolphin sets. According to fisheries experts, sets on FADs and schools may have dire consequences for ETP tuna populations…. The loss of juvenile tuna too young to spawn could remove between 10% and 32% of the total recruitment (i.e. fish added to the population through reproduction) of the species…. These levels of bycatch are potentially large enough to cause the tuna fishery itself to decline.21

12. It is therefore unsurprising that the Marine Stewardship Council (MSC) – a well-regarded eco-labelling organization – recently has recommended that the Mexican large purse seine tuna fishery be approved for MSC certification, after a two year independent scientific and stakeholder review.22 The request for certification was made by the Pacific Alliance for Sustainable Tuna (which represents Mexico’s four largest tuna fishing companies representing more than 95 percent of domestic production), and addresses their specific fishing practices, including dolphin encirclement, current science; national and multilateral regulations and management; and an action plan that will be implemented by the industry to respond to issues raised by the review and stakeholder comments. The MSC certification is not finalized,

17 Letter from Vice President Al Gore to Representative Gilchrest (June 3, 1996) (Exhibit MEX-61). 18 This lawsuit was separate from the Hogarth case involving the labeling rules. It involved the elimination of the embargoes on Mexico after it had been certified as complying with the AIDCP, and was heard in a different court than the Hogarth case. 19 Memorandum of Amicus Curiae, filed in Defenders of Wildlife v. Dalton, Court No. 00-02-00060 (April 27, 2001) at p. 3 (Exhibit MEX-68) (Exhibit MEX-36 in original proceedings). 20 Ibid., pp. 3-4. 21 Ibid., footnote 4, p. 3. 22 SCS Global Services, “MSC Evaluation of the Northeastern Tropical Pacific Purse Seine Yellowfin & Skipjack Tuna Fishery: Announcement of Final Report and Determination” (October 2016) (Exhibit MEX-69).


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but the fact that the recommendation has been made is offered as a reflection of the consistent recognition that the Mexican ETP large purse seine fishery is sustainable.

13. No FAD or gillnet fishery for tuna has ever been certified, or recommended for certification, by the MSC.

14. The foregoing attributes must be taken into account by the Panels when establishing the risk profile of AIDCP-compliant dolphin encirclement and comparing it to the risk profiles of other fishing methods in other ocean areas.

III. “CALIBRATION” IN THE CONTEXT OF THE LEGAL TEST FOR EVEN-HANDEDNESS

15. Mexico and the United States disagree on the appropriate role of calibration in this dispute. The United States complains that Mexico’s description of the use of calibration goes beyond the general descriptions presented by the Appellate Body in the previous proceedings. However, Mexico’s description is firmly grounded in the Appellate Body’s reasoning, and the higher level of detail presented by Mexico is necessary because the Panels will, for the first time, be required to fully interpret and apply calibration to the facts in this dispute. Precision and foresight is necessary when describing calibration because the approach taken by the Panels will have profound systemic implications for the interpretation and application of Article 2.1 of the TBT Agreement, the chapeau of Article XX of the GATT 1994, and similar provisions such as 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). The Panels must determine in what circumstances regulatory differences are “calibrated” such that they do not constitute a means of arbitrary or unjustifiable discrimination or are otherwise designed or applied in a manner that lacks even-handedness. More specifically, the Panels must decide where to draw the line 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 in the legal test 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 applicable obligations in the WTO Agreements. At the same time, calibration is not a synonym for even-handedness, but rather only one element of the legal test for even-handedness.

16. In this section, Mexico explains the appropriateness of its description of the legal test for even-handedness under Article 2.1 of the TBT Agreement, including the role of a calibration assessment in that analysis, and responds to the criticisms of the United States.

A. The Criticisms Raised by the United States

17. The United States criticises Mexico’s description of the use of calibration in the context of Article 2.1 of the TBT Agreement.23 Consequently, Mexico focuses its replies to the US arguments primarily on Article 2.1 although the chapeau to Article XX is also briefly addressed at the end of this submission.

23 The United States’ reply is limited to Mexico’s submissions under Article 2.1. It does not reply to Mexico’s submissions regarding the United States’ failure to demonstrate that the requirements of the chapeau to Article XX are met. See United States’ second written submission, para. 179. In its first written submission, the United States relies on its submissions regarding Article 2.1 of the TBT Agreement in its argument that the requirements of the chapeau to Article XX are met. See United States’ first written submission, paras. 198-223.


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18. In the view of the United States, Mexico is erroneously proposing that: (i) there are separate calibration tests;24 (ii) the first test is whether the measure imposes arbitrary or unjustifiable discrimination because the regulatory distinctions are inconsistent with the objectives of the measure;25 (iii) the second test assesses whether the measure is calibrated to the relative risks of overall harms to dolphins posed by different fishing methods in different ocean regions, taking into account “certain non-risk related factors”, including broader environmental sustainability;26 (iv) the third test assesses whether the measure is calibrated to differences in the accuracy of the dolphin-safe certifications and the tracking and verification systems in different fisheries, and therefore erroneously omits consideration of the risks to dolphins;27 (v) a different test applies to the eligibility criteria compared to the certification and tracking and verification requirements, notwithstanding that these are “cumulative and highly interrelated” regulatory distinctions;28 and (vi) calibration is an inquiry into whether the measure is calibrated “to different relevant circumstances”, rather than “to the risks to dolphins” using the Appellate Body’s formulation of calibration.29

19. These criticisms mischaracterize Mexico’s submissions and are without merit. Mexico’s first written submission sets out the legal reasoning upon which Mexico’s description of the calibration test is based.30 In responding to the United States’ criticisms, Mexico further elaborates upon its legal reasoning.

B. The Legal Test for “Even-handedness” in this Dispute Involves the Consideration of a Number of Relevant Factors or Questions

20. In the second step of the “treatment no less favourable” analysis under Article 2.1 of the TBT Agreement, “even-handedness” is the central concept for determining whether the identified detrimental treatment stems exclusively from a legitimate regulatory distinction.31 Mexico’s submissions regarding the multi-factor legal test for “even-handedness”, including the roles of both the “rational connection” assessment and the “calibration” assessment, as well as the roles of other relevant assessments, elaborate upon the meaning of even-handedness in the context of the facts and circumstances of this dispute.

21. The United States argues that Mexico interprets the Appellate Body’s findings that (i) one of the ways to determine whether the detrimental impact caused by a technical regulation is “even-handed”, and therefore stems exclusively from a legitimate regulatory distinction, is by examining whether the regulatory distinction is designed or applied in a manner that constitutes “arbitrary or unjustifiable discrimination”,32 and (ii) in doing so, a panel may assess “whether the detrimental impact can be reconciled with, or is rationally related to, the

24 United States’ second written submission, paras. 16, 21-22. 25 United States’ second written submission, paras. 3, 21-23, 25-27. 26 United States’ second written submission, paras. 19, 21-22, 32. 27 United States’ second written submission, paras. 19, 21-22, 30, 39, 41. 28 United States’ second written submission, para. 42. 29 United States’ second written submission, para. 30. 30 Mexico’s first written submission, paras. 205-225. 31 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.96, citing Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.93 (referring to Appellate Body Report, US – Clove Cigarettes, para. 215). 32 See Mexico’s first written submission, para. 211, citing Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.94. We note that the United States’ criticisms cite to Mexico’s footnotes rather than to the substantive paragraphs of Mexico’s first written submission, thereby avoiding the actual content of Mexico’s arguments. See United States’ second written submission, para. 25 and footnote 31 to para. 25.


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policy [objective] pursued by the measure at issue, so long as, in doing so, it does not preclude consideration of other factors that may also be relevant to the analysis”,33 as “a mandate to apply this inquiry as the sole test of even-handedness”.34 This allegation is entirely incorrect, and mischaracterizes Mexico’s arguments and reasoning.35 This misinterpretation leads the United States to incorrectly speculate that “Mexico appears to suggest that a conflict could exist between the concepts of ‘arbitrary or unjustifiable discrimination’ and ‘even-handedness’”.36 Again, Mexico makes no such argument, which would be entirely inconsistent with Mexico’s reasoning; rather, Mexico takes the opposite approach.

22. The Panels must take into account a number of factors or questions in conducting and resolving the legal test for “even-handedness”.37 These questions are directly related to the arguments and evidence adduced by Mexico and the United States, respectively, in support of their claims. One of these questions is whether or not the discriminatory effects of the tuna measure’s regulatory distinctions can be justified on the basis that they are “calibrated”, a term described by the Appellate Body as “nomenclature from the original proceedings that was used by the United States, and employed by the Appellate Body, to test whether the original tuna measure was even-handed”.38 Another question is whether or not the discriminatory effects constitute arbitrary or unjustifiable discrimination on the basis that the regulatory distinctions cannot be reconciled with, or rationally connected to, the legitimate policy objectives of the measure.

23. These questions do not create independent or discrete legal tests; rather, they are elements within the overall analysis of whether or not the tuna measure is “even-handed”, and they are assessed cumulatively, in relation to one another, on a common record of facts and circumstances. The careful assessment of a relevant question or factor within the context of the legal test for “even-handedness” should not be viewed as conducting a separate legal test. As the Appellate Body explained, assessing whether a measure involves “arbitrary or unjustifiable discrimination” is “one of the ways to determine whether the detrimental impact caused by a technical regulation is even-handed”, but “the fact that a measure is designed in a manner that constitutes a means of arbitrary or unjustifiable discrimination is not the only

33 See Mexico’s first written submission, para. 212, citing Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.95 (underline emphasis added). 34 United States’ second written submission, para. 25. 35 For example, Mexico’s arguments are based on statements made by the Appellate Body other than the particular phrase quoted by the United States (i.e., “we find that the United States has not established that the Panel erred … in identifying an examination of whether the detrimental treatment can be reconciled with, or is rationally related to, the measure's objectives as potentially ‘helpful’ for purposes of the second step of the analysis of ‘treatment no less favourable’ under Article 2.1 of the TBT Agreement”). In this way, the United States is investing submissions that it attributes to Mexico, but which do not accurately reflect Mexico’s submissions. See Mexico’s first written submission, paras. 211-214; compare United States’ second written submission, paras. 23-26. 36 United States’ second written submission, para. 26. 37 Mexico’s first written submission, paras. 208-210, 224-225, 231. 38 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.154.


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way in which a measure may lack even-handedness.”39 A panel should not be precluded from considering “other factors that may also be relevant to the analysis”.40

24. Therefore, the United States is incorrect to the extent that it argues that an assessment of the relationship between the detrimental impact caused by the regulatory distinctions and the measure’s legitimate objectives is not part of the legal test for “even-handedness”.41 The United States is also incorrect to the extent that it attempts to narrow the legal analysis to a single-factor test, i.e., the question of whether or not the tuna measure is “calibrated” to (a narrow interpretation of) the relative risks to dolphins in different fisheries, to the exclusion of all other relevant questions or factors.

C. “Calibration” and the “Nexus” Between the Regulatory Distinctions and the Objectives of the Measure Must Both be Taken into Account when Assessing “Even-Handedness”

25. The United States is incorrect when it argues that the nexus between the regulatory distinctions and the objectives of the 2016 measure is not part of the even-handedness analysis.

26. The Appellate Body has firmly established that one of the ways to determine whether the detrimental impact caused by a measure is even-handed is by examining whether the regulatory distinctions at issue are designed or applied in a manner that constitutes “arbitrary or unjustifiable discrimination”,42 which, in turn, is likely to require an assessment of the nexus between the regulatory distinction and the objective of the measure.43 The Appellate Body has also made it clear that, when assessing whether a measure is even-handed, an inquiry into the nexus between the regulatory distinctions found in the measure and the measure’s policy objective may have to encompass also, or to be supplemented by, consideration of other factors.44 In US – COOL, the assessment of the nexus between the relevant regulatory distinctions and the objective was supplemented by consideration of whether the requirements imposed by the measure were disproportionate in the light of the objectives pursued.45 In the US – Tuna II (Mexico) dispute, the Appellate Body held that the assessment of the nexus between the regulatory distinctions and the objective must be

39 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.31, 7.94, 7.107 (“[W]e have already explained that the Panel identified this test as ‘a relevant consideration’ that may ‘help’ to determine whether the distinctions drawn involve arbitrary discrimination, while also acknowledging that an inquiry into whether a distinction constitutes arbitrary or unjustifiable discrimination is not the only means to determine whether a measure lacks even-handedness such that the detrimental treatment cannot be said to stem exclusively from a legitimate regulatory distinction”) (foonotes omitted). 40 See Mexico’s first written submission, para. 212, citing Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.95 (underline emphasis added). 41 United States’ second written submission, paras. 3, 21-22, 25, 27. 42 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.94, citing Appellate Body Reports, US – COOL, para. 271. 43 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.97. This is discussed in Mexico’s first written submission, paras. 211-214 (pp. 67-69 [due to a typographical error, the paragraph numbers 210-214 repeat at pp. 66-69 and 69-72 in Mexico’s first written submission]), citing the Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.92-7.97. 44 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.153 (emphasis added). This is discussed in Mexico’s first written submission, para. 213 (pp. 68-69) and footnote 255, citing Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.97 and 7.153. 45 Ibid., Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.153, referring to Appellate Body Reports, US – COOL, para. 347.


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supplemented by an analysis of whether the regulatory distinctions are calibrated to the differences in the likelihood that dolphins will be adversely affected by different tuna fishing methods in different areas of the oceans.46 In this regard, the Appellate Body has explicitly confirmed that, in the circumstances of this dispute, a calibration assessment is a necessary part of the legal test for even-handedness, but it is not a separate, independent test in and of itself.47

27. Consistent with the approach of conducting a calibration assessment as part of the legal test for even-handedness, the Appellate Body made it clear in the following passage that a calibration analysis must take into account the nexus between the regulatory distinctions and the objectives of the measure:

[T]he Appellate Body considered appropriate an analysis involving: first, an identification of whether different tuna fishing methods in different areas of the oceans pose different risks to dolphins; and, second, examination of whether, in the light of these risks, the different treatment created by the relevant regulatory distinction shows that, as between different groups, the treatment accorded to each group is commensurate with the relevant risks, taking account of the objectives of the measure. This assessment was conducted in order to determine whether or not the original US dolphin-safe labelling regime was even-handed (emphasis added).48

28. Accordingly, contrary to the arguments of the United States, both the nexus between the regulatory distinctions and the objectives of the measure and the calibration of the measure are relevant to the assessment of whether the 2016 tuna measure is even-handed. The pivotal question before the Panels is whether the regulatory distinctions are calibrated to the relevant risks taking account of the objectives of the measure.

D. The Existence of “Unjustifiable Discrimination” Should be Taken into Account when Assessing “Even-Handedness”

29. The legal test for “even-handedness” is a multi-factor test. In addition to the above-noted factors, in assessing even-handedness in this instance the Panels should also consider whether “unjustifiable discrimination” exists. As discussed above, the Appellate Body has recognized that unjustifiable discrimination is part of the legal test for even-handedness, that the relationship of the discrimination to the objective of a measure may not be the entire inquiry, and that, depending on the nature of the measure at issue and the circumstances of

46 This is discussed in Mexico’s first written submission, para. 210 (p. 69), citing Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.98, 7.154 and 7.155. 47 This is discussed in Mexico’s first written submission, para. 210 (p. 70), citing Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.101, 7.155, 7.157, 7.160, 7.161, 7.330, 7.332, 7.334, 7.344 and 7.359. See also ibid., para. 7.154 (“We also explained above that an assessment of the “calibration” of a measure and the regulatory distinctions that it draws is not, in and of itself, a generally applicable test of whether detrimental impact stems exclusively from a legitimate regulatory distinction. Rather, this term is nomenclature from the original proceedings that was used by the United States, and employed by the Appellate Body, to test whether the original tuna measure was even-handed”). 48 This is discussed in Mexico’s first written submission, para. 214 (p. 72), citing the Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.155.


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the case at hand, there could be additional factors that may also be relevant to the overall assessment.49

30. In this case, the differences in the labelling conditions discriminate against an environmentally sustainable fishing method (AIDCP-compliant dolphin encirclement) in favour of an environmentally unsustainable fishing practice (FAD fishing). The justifiability of this discrimination must be assessed against an interpretation of the even-handedness test in Article 2.1 of the TBT Agreement and the test set out in the chapeau of Article XX of the GATT 1994 in the light of the context of those provisions. The first recital in the preamble of the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) “demonstrates a recognition by WTO negotiators that optimal use of the world’s resources should be made in accordance with the objective of sustainable development”, and “must add colour, texture and shading to [the] interpretation of the agreements annexed to the WTO Agreement”.50 With respect to fishing practices, this context is elaborated upon by the Parties’ commitments under the United Nations’ Sustainable Development Goals to “conserve and sustainably use the oceans, seas and marine resources”.51

31. In light of the importance of environmental sustainability in the WTO Agreements and in public international law, the Panels must carefully assess whether the differences in the labelling conditions are justifiable because the discrimination at issue arises from a choice by the Mexican fleet to fish for tuna in sustainable manner and its refusal to abandon this fishing method for an alternative method that is environmentally damaging and unsustainable. In Mexico’s view, the different treatment is not justifiable. The U.S. statute contemplated allowing tuna products containing tuna caught by AIDCP-compliant dolphin encirclement to use the dolphin safe label following a determination by the Department of Commerce that this fishing method was not having a significant adverse effect on the recovery of stocks of depleted dolphins. The Department of Commerce made that determination, but it was overruled by a U.S. court and that is what led to this dispute. The tuna measure does not provide for a reconsideration of this issue. Such an outcome is inconsistent with the principles of environmental sustainability.

32. Mexico acknowledges the right of the United States to establish its own level of protection and, contrary to the United States’ argument, Mexico is not asking the Panels to dictate to the United States what its environmental fisheries objectives should be. However, Mexico is asking the Panels to recognize that the 2016 tuna measure discriminates against an environmentally sustainable fishing method in favour of one that is unsustainable and, as a consequence, the Panels must not apply the relevant WTO provisions to that sustainable fishing method in a manner that disfavours that method compared to the others being assessed. In determining the consistency of the measures of WTO Members with their WTO obligations, there is a difference between the ends that Members choose - their objectives -

49 The Appellate Body has found that one of the ways to determine whether the detrimental impact caused by a technical regulation is “even-handed”, and therefore stems exclusively from a legitimate regulatory distinction, is by examining whether the regulatory distinction is designed or applied in a manner that constitutes “arbitrary or unjustifiable discrimination”. See Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.94 and 7.239. 50 Appellate Body Report, US – Shrimp, paras. 152-153. See also Appellate Body Report, India – Solar Cells, para. 5.72 (“Our interpretation of Article XX(j) of the GATT 1994 is in consonance with the preamble of the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement), which refers to the ‘optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with [Members’] respective needs and concerns at different levels of economic development’”). 51 U.N., “Goal 14: Conserve and sustainably use the oceans, seas and marine resources” in Sustainable Development Goals (Exhibit MEX-54).


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and the means they use to achieve those ends. Members are of course free to choose their own objectives. But if the means they use to achieve those ends are inconsistent with the objectives of sustainable development, then they are likewise inconsistent with their WTO obligations. This has always been true of the obligations under the WTO, and interpreting WTO obligations in the light of the three economic, social, and environmental pillars of sustainable development is especially imperative now that the Members of the United Nations – including both Mexico and the United States – have approved the Sustainable Development Goals. These global goals highlight the global need to protect the sustainability of fisheries and of overall ocean ecosystems.

33. At the very least, the foregoing means that the Panels must: (i) subject the measure and the assertions of the United States to the highest possible level of objective scrutiny; (ii) require positive evidence to substantiate all of the United States’ bare assertions; (iii) distinguish evidence pertaining to unregulated and unsustainable dolphin encirclement and not attribute it to AIDCP-compliant sustainable dolphin encirclement; (iv) when conducting a comparative assessment of the risk profile of Mexico’s fishing method in the ETP with other fishing methods in other ocean areas, apply the same evidentiary standards and presumptions52 to those other fishing methods and ocean areas as the United States has applied to AIDCP-compliant dolphin encirclement in the ETP; and (v) rigorously apply the burden of proof that applies to the United States under Article XX of the GATT 1994.

E. The Dolphin-Safe Label must be “Accurate” in order to Achieve the Objectives of the Measure

1. The Risks to Dolphins can only be Addressed if the Label is Accurate

34. The undisputed objectives of the 2016 tuna measure 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.53

35. Taking these two objectives into account in the calibration assessment requires an assessment of the “accuracy” of the label. This is because an inaccurate label misleads consumers about whether tuna products that they purchase contain tuna caught in a manner that adversely affects dolphins, and allows the U.S. market to be used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins. Thus, the objectives of the measure cannot be fulfilled if the accuracy of the dolphin-safe information with respect to such tuna is neither (i) required nor (ii) enforced, i.e., through certification and tracking and verification conditions.

36. The fundamental linkage between protecting dolphins from mortality and serious injury and providing accurate labelling information was recognized by the original Panel.54 As discussed in Mexico’s first written submission, in the original proceedings, the Panel found that the tuna measure operated on the basis of incentives created by consumer choice, such that achievement of the measure’s secondary objective (i.e., to protect dolphins by ensuring

52 As discussed above, the United States continues to apply a presumption that the Agreement on the AIDCP-compliant dolphin encirclement method as used by the Mexican fleet is harmful to dolphins to the extent that the fishing method should be designated as ineligible, while it applies a presumption that other methods and other fisheries are not harmful to the extent that those fishing methods are designated as eligible. 53 United States’ first written submission, para. 31. 54 Panel Report, US – Tuna II (Mexico), paras. 7.427, 7.542, 7.564.


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that the U.S. market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins) was therefore dependent in large part on the achievement of the primary objective (to ensure that consumers are not misled or deceived about whether tuna products contain tuna caught in a manner that adversely affects dolphins).55

37. Therefore, contrary to the arguments of the United States, the consideration of the accuracy of the information provided to consumers on the US dolphin-safe label in the calibration analysis is not distinct from or to the exclusion of the consideration of the relative risks of overall harm to dolphins. The risks of harm to dolphins are inextricably linked to the accuracy of the dolphin-safe information provided to consumers and, therefore, accuracy is a necessary and central consideration in the calibration analysis.

38. In arguing that the accuracy of the label is not relevant to the calibration test, the United States’ incorrectly narrows the test to an assessment of the “risks” (i.e., mortality and serious injury to dolphins) in isolation from the mechanism that addresses those risks (i.e., the provision of dolphin-safe information to consumers on the label affixed to tuna products in the US market). The Appellate Body has explained that the focus of the calibration test is on “how the risks … are addressed” and not on the risks in isolation.56 The risks are addressed through the dolphin-safe label which, in turn, is governed by the labelling conditions. The differences in the labelling conditions include differences that relate to the accuracy of the labels.

2. Label Accuracy in the Calibration Assessment is Consistent with the Appellate Body’s Reasoning

39. The United States alleges that “[t]he Appellate Body in both previous proceedings made it clear, with respect to the certification requirements in particular, that any difference in the requirements should be ‘calibrated to the risks to dolphins arising’ in different fisheries, not based on unsupported assertions concerning the accuracy of the label”.57 The United States also contends that, “while Mexico continues to insist that accuracy is ‘an integral part of the calibration test,’ Mexico’s claims in this regard find no support in the test that the Appellate Body has set out and affirmed over the course of two proceedings. Rather, the

55 See Panel Report, US – Tuna II (Mexico), paras. 7.426-7.427 (“only if consumers can and do accurately distinguish, under the measures at issue, tuna caught in conditions that are harmful to dolphins from tuna caught in conditions that are not harmful to dolphins, can the use of such harmful fishing techniques be discouraged on the US market through the use of the label” (emphasis original)). 56 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.126 (“Whether a regulatory distinction that involves a denial of access to the dolphin-safe label in respect of setting on dolphins is even-handed depends not only on how the risks associated with this method of fishing are addressed, but also on whether the risks associated with other fishing methods in other fisheries are addressed, commensurately with their respective risk profiles, in the labelling conditions that apply in respect of tuna caught in such other fisheries.”). Throughout its report, the Appellate Body refers to how risks “are addressed”, and not the risks in isolation. See ibid., paras. 7.108, 7.122, 7.165, 7.250, 7.259, 7.261, 7.287, 7.352, 7.357. See also ibid., para. 7.256 (In the context of the determination provision triggered by a regular and significant tuna-dolphin association, the Appellate Body reasoned that: “[b]ecause the Panel found that observers are more qualified, and therefore more likely to make accurate certifications in respect of mortality or serious injury, this determination appears, in our view, to enhance the correlation, for fisheries other than the ETP large purse-seine fishery, between the risks of harm to dolphins and the manner in which the measure seeks to address those risks”). 57 United States’ second written submission, para. 148, citing Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), footnote 586 to para. 7.155 and para. 7.169.


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Appellate Body’s analysis makes it plain that a calibration test must be done ‘in light of the objective of protecting dolphins’”.58

40. The United States’ allegations and arguments are incorrect; the accuracy of the information provided to consumers on the US dolphin-safe label is a central consideration in determining whether the detrimental impact caused by the tuna measure stems exclusively from a legitimate regulatory distinction, including on the basis of the “calibration” assessment described by the Appellate Body. This is clearly reflected in the reasoning and findings of the Appellate Body and the Panels in the previous proceedings.

41. There are three key points to consider in addressing this issue.

42. First, the original Panel found that “there is a direct correlation between the two objectives59 identified by the United States”, such that “achievement of the second objective seems to be dependant in large part on the achievement of the first objective. Only if consumers can and do accurately distinguish, under the measures at issue, tuna caught in conditions that are harmful to dolphins from tuna caught in conditions that are not harmful to dolphins, can the use of such harmful fishing techniques be discouraged on the US market through the use of the label”.60 The United States did not appeal this finding. In light of this reasoning, it is difficult to understand how the tuna measure might achieve the second objective in isolation, that is, in the absence of the first objective or, moreover, without providing accurate dolphin-safe information to consumers on the US label. Thus, the accuracy of the dolphin-safe label, as a consumer information measure, is essential to “the objective of protecting dolphins from adverse effects arising in different fisheries”.61

43. Second, in the original proceedings, the Appellate Body did not accept the United States’ defence that the regulatory distinction causing the detrimental impact on the competitive opportunities of Mexican tuna products in the US market was “calibrated” to the risk that dolphins may be killed or seriously injured because the information provided to consumers on the US dolphin-safe label did not accurately address dolphin mortalities or serious injuries associated with tuna caught outside the ETP.62 In this regard, the Appellate Body considered the original Panel’s finding that “where ‘tuna is caught outside the ETP, it would be eligible for the US official label, even if dolphins have in fact been caught or seriously injured during the trip, since there is, under the US measures as currently applied, no requirement for a certificate to the effect that no dolphins have been killed or seriously injured outside the ETP’”.63 This led the Appellate Body to conclude that the United States had not demonstrated that the regulatory distinction was “calibrated” to the risks to dolphins arising from different fishing methods in different areas of the ocean, noting in particular that the

58 United States’ second written submission, para. 41. 59 As noted above, the tuna measure’s two integrated objectives are “first, ‘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, second, ‘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’”. Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.16. See also Panel Report, US – Tuna II (Mexico), paras. 7.401, 7.425-7.427; Appellate Body Report, US – Tuna II (Mexico), paras. 242, 302 and 325; Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.134. 60 Panel Report, US – Tuna II (Mexico), paras. 7.426-7.427 (italics original; underline emphasis added). 61 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.253 and 7.353. 62 Appellate Body Report, US – Tuna II (Mexico), paras. 282-297. 63 Appellate Body Report, US – Tuna II (Mexico), para. 289, citing Panel Report, US – Tuna II (Mexico), para. 7.532.


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measure did not address mortality (observed or unobserved) arising from fishing methods other than dolphin-encirclement outside the ETP.64 In this respect, the accuracy of the dolphin-safe information provided to consumers on the US label affixed to tuna products, particularly products containing tuna caught outside the ETP, was a central consideration in the calibration assessment conducted by the Appellate Body.

44. Third, in the first compliance proceedings, the Appellate Body’s reasoning indicates that the accuracy of the dolphin-safe information provided to consumers on the US label is a central factor in the assessment of whether the regulatory distinctions drawn by the measure are “calibrated” to the relative risks of overall harms to dolphins posed by different fishing methods in different ocean regions. For example, the Appellate Body stated:65

We read the Panel as having taken the view that the relevant risk profiles would change or become irrelevant to the analysis of “even-handedness” merely because those requirements regulate a situation that occurs after the tuna has been caught. In our view, this approach by the Panel does not seem to comport with its own reasoning that the accuracy of the US dolphin-safe label can be compromised at any stage of the tuna production stage [sic], in contradiction with the objectives of the amended tuna measure.611 …

In the light of these considerations, it is clear that, since the Panel did not consider the risks to dolphins to be relevant to its analysis of the even-handedness of the tracking and verification requirements, the Panel did not seek to identify those risks in respect of eligible tuna caught both inside and outside the ETP large purse-seine fishery in this part of its analysis. Nor did the Panel compare the different tracking and verification requirements in the light of those risks and the amended tuna measure's objectives concerning the protection of dolphins and providing accurate consumer information.

611 We recall that, in the context of the certification requirements, the Panel found that the United States had not rebutted Mexico’s showing that captains may not necessarily and always have the technical skills required to certify that no dolphins were killed or seriously injured, and that this may result in inaccurate information being passed to consumers, in contradiction with the objectives of the amended tuna measure. (Panel Report, para. 7.233) Similarly, in the context of the tracking and verification requirements, the Panel indicated that the different tracking and verification requirements have a detrimental impact on Mexican tuna and tuna products, including because they may make it more likely that tuna caught other than by large purse-seine vessels will be incorrectly labelled as dolphin safe. (Ibid., para. 7.391).

Thus, the Appellate Body expressly acknowledged the role of label accuracy in the calibration assessment in the light of the Panel’s findings that the regulatory differences may result in inaccurate dolphin-safe information being provided to consumers on tuna products containing tuna caught outside the ETP, in contradiction with the objectives of the measure.

45. Consistent with this reasoning, the Appellate Body determined that the Panel had erred in its application of the second step of the “treatment no less favourable” test under Article 2.1 of the TBT Agreement because: (i) the Panel’s analysis had not encompassed an assessment of whether the regulatory distinctions drawn by the tuna measure were calibrated to the relative risks of harm to dolphins posed by different fishing techniques in different

64 Appellate Body Report, US – Tuna II (Mexico), para. 297. 65 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.166-7.167 and footnote 611 (underline emphasis added).


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ocean areas; and (ii) the Panel’s segmented analytical approach compromised its assessment of whether the detrimental impact could be reconciled with, or rationally related to, the policy objectives pursued by the tuna measure, as it resulted in discrete, individual assessments and findings that were not legally correct.66

46. Thus, the Appellate Body in no way suggested that the accuracy of the information provided to consumers on the US dolphin-safe label would be irrelevant to the analysis. To the contrary, the Appellate Body recognized the importance of this consideration, and the Panel’s uncontested findings regarding same, for the purposes of conducting the assessment of calibration in the circumstances of the dispute:

[W]e do not see that the Panel in these proceedings set out to examine the extent of mortality or serious injury arising from fishing methods in different areas of the oceans so as to enable itself to gauge properly the overall relative risks or levels of harm to dolphins arising in those fisheries, which was needed in order to assess whether the differences in the dolphin-safe labelling conditions under the amended tuna measure are appropriately tailored to, and commensurate with, those respective risks.

For instance, we note the Panel’s finding that captains, in comparison to observers, do not necessarily and always have the technical skills required to certify that no dolphins were killed or seriously injured. As the Panel found, this difference, as between captains and independent observers, in the respective training and technical skills required to certify the dolphin-safe status of tuna “may result in inaccurate information being passed to consumers, in contradiction with the objectives of the amended tuna measure”. We also note the Panel’s conclusions that the tracking and verification requirements that apply outside the ETP large purse-seine fishery are less burdensome than those that apply inside that fishery in terms of their depth, accuracy, and degree of government oversight and that this “may contribute to inaccurate labelling of tuna caught outside the ETP large purse seine fishery”. In the absence of a proper assessment by the Panel of the relative risks existing inside and outside the ETP large purse-seine fishery, the Panel limited its ability to determine whether the discriminatory aspects of the amended tuna measure can be explained as being properly tailored to, or commensurate with, the differences in such risks in the light of the objective of protecting dolphins from adverse effects arising in different fisheries. For similar reasons, the Panel’s limited analysis in respect of the relative risk profiles in turn constrains our ability to complete the legal analysis in this regard.67

66 Appellate Body Report, US – Tuna II (Mexico), para. 7.169 (“Our review of the Panel Report reveals that the Panel’s analysis failed to encompass consideration of the relative risks to dolphins from different fishing techniques in different areas of the oceans, and of whether the distinctions that the amended tuna measure draws in terms of the different conditions of access to the dolphin-safe label are explained in the light of the relative profiles. We therefore consider that the Panel failed to take full account of ‘the particular circumstances’ of this case, including ‘the design, architecture, revealing structure, operation, and application’ of the amended tuna measure, as well as of the manner in which similar circumstances pertaining to the original tuna measure had been assessed in the original proceedings. In addition, due to the segmented approach that it adopted in its analyses of the different sets of certification and tracking and verification requirements, the Panel did not properly apply the legal test that it had identified as relevant to an assessment of even-handedness, namely, ‘whether the detrimental treatment can be reconciled with, or is rationally related to, the policy pursued by the measure at issue’” (underline emphasis added)). 67 Appellate Body Report, US – Tuna II (Mexico), paras. 7.252-7.253.


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47. Accordingly, label accuracy is part of the considerations in the calibration analysis.

F. The Factors and Circumstances Relevant to the Calibration Analysis May Differ Depending on the Regulatory Distinction at Issue and how the Distinctions Operate Together

48. The relevant regulatory distinctions at issue in the current compliance proceedings are the same as those found by the Appellate Body in the original proceedings – i.e., the differences in the labelling conditions for tuna products containing tuna caught by setting on dolphins in the ETP, on the one hand, and for tuna products containing tuna caught by other fishing methods outside the ETP, on the other hand.68 The relevant factors that must be considered in assessing whether the differences in the labelling conditions are designed and applied in an even-handed manner will vary depending upon the particular circumstances of a regulatory distinction. Contrary to the arguments of the United States, Mexico is not proposing separate calibration tests but, rather, a single multi-factor calibration test that takes into account the different relevant factors depending on the circumstances.

49. It is crucial to remain focused on the fact, as established in the first compliance proceedings, that the global supply chain for tuna is highly complex, and that tuna may pass through the physical possession of a number of unrelated entities before reaching the final processor.69 Tuna may be caught by a vessel belonging to one company, then consolidated with other tuna on a carrier vessel owned by another company, sent to another company for processing into loins, and then delivered to yet another company for final processing into cans or pouches.70 This complex supply chain has made the global industry highly susceptible to tuna “laundering” and illegal, unreported, and unregulated (IUU) fishing.71 The fact that a shipload of tuna was caught with an eligible fishing method without killing or seriously injuring any dolphins becomes meaningless if that tuna is mixed with, or substituted by, tuna that is not eligible for the dolphin-safe label before it reaches consumers. Similarly, if a captain is insufficiently trained to recognize when a dolphin has been harmed, the certification on which the entire system is based will be meaningless. The need for precision is reflected in the tuna measure itself, which defines “dolphin-safe” in a manner that mandates that the specific tuna in the can being purchased must have been caught without killing or injuring any individual dolphin, or during an entire fishing voyage in which dolphins were encircled even a single time. In this regard, it does not matter whether a dolphin mortality is characterized as “accidental”, or if a captain made an error because of lack of training and not with intent to deceive. If appropriate and accurate supporting information is not available, the label is per se deceptive.

50. Thus, although differences in the eligibility criteria will be assessed primarily in reference to the dolphin mortalities and serious injury caused by a particular fishing method, differences in the certification and tracking and verification criteria must take into account the

68 Appellate Body Report, US – Tuna II (Mexico), paras. 284 and 286. See also Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.168 (“In this dispute, the relevant regulatory distinction drawn by the amended tuna measure consists of the requirements applicable to tuna products derived from tuna caught in the ETP large purse-seine fishery vis-à-vis the requirements applicable to tuna products derived from tuna caught in other fisheries. … [A]ssessing the even-handedness of the amended tuna measure requires looking at both sides of the regulatory distinctions that it draws”). 69 See Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.362 (“The difficulty of ensuring that a particular certification matches an identified batch of tuna is compounded, in the Panel’s view, by the fact that in many cases tuna appears to pass through a number of parties before it reaches a US cannery.”). 70 See, e.g., Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.352. 71 See Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.327-7.330.


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risks of inaccurate information being provided. Certain types of certification and tracking or verification systems might have lower risks of inaccuracy if used by a highly regulated fleet and by processors with tightly integrated supply chains, but not if used by other fleets or in ocean areas that have poor record-keeping, low reporting reliability and significant IUU fishing.

51. All of these factors are highly inter-related. For example, the Panel potentially could decide that the risks to dolphins from a particular fishing method are not so high as to warrant complete disqualification from eligibility, but are sufficiently high (i.e., greater than de minimis) to require strict certification and tracking and verification requirements to ensure that individual sets and gear deployments have not resulted in dolphin mortalities or serious injuries. Similarly, for a fishing method otherwise considered safe for dolphins, such as handlining, tighter certification and tracking and verification requirements may be needed to provide assurance that particular lots of dolphin-safe tuna are not commingled with tuna caught by other fishing methods, or in sets or gear deployments that killed or seriously injured dolphins.

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

52. The following supplements the evidence and arguments in Mexico’s first written submission and applies the legal test described above to the facts of this dispute.

A. Eligibility Criteria

1. Risk Profile of the Fishing Method and Fishing Area

53. The eligibility criteria specify which fishing methods are prohibited from being used to catch tuna that can be designated as dolphin-safe. Only two methods are currently ineligible, dolphin encirclement and high seas driftnet fishing. All other tuna fishing methods are eligible to catch tuna that could be designated as dolphin-safe provided that the other labelling conditions are met. This difference in treatment between ineligible and eligible fishing methods is not even-handed.

54. Pursuant to the Appellate Body’s direction, in evaluating whether the criteria for eligibility of fishing methods is calibrated, the Panels must make a comparative analysis of the rellative risks of overall harm posed to dolphins by different fishing methods and in different ocean regions.72 The starting point is the determination of the Panel in the original proceeding, affirmed by the Appellate Body, 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 setting on dolphins are not facing risks at least equivalent to those currently faced by dolphin populations in the ETP under AIDCP monitoring.73

55. In the first compliance proceedings, the Panel narrowed its comparison to what it characterized as “unobservable” effects of fishing methods. The Appellate Body rejected this approach, determining that the comparison must take into account all of the effects of the fishing methods – that is, including direct mortalities.74 The Appellate Body expressly required

72 See e.g., Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.155, 7.160, 7.161, 7.169, 7.248-7.249, 7.252. 73 Panel Report, US – Tuna II (Mexico), para. 7.617. The Appellate Body affirmed this determination. Appellate Body Report, US – Tuna II (Mexico), para. 7.617. 74 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.247.


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the assessment to take into consideration “the relative risks posed by different fishing methods in respect of observed mortality or serious injury”.75

56. Mexico summarized the applicable calibration assessment in its first written submission as follows:

Whether the de jure and de facto regulatory differences – i.e., the “relevant regulatory distinctions” under Article 2.1 of the TBT Agreement – are “calibrated” to the different relative risks (i.e., the likelihood) that dolphins will be adversely affected (i.e., dolphin mortalities or serious injuries) in the course of tuna fishing operations by using different fishing methods in different areas of the oceans. The differences are calibrated if they are “not disproportionate with”, “are commensurate with” and are “appropriately tailored to” the different “overall levels of risks” (i.e., observable and unobservable mortality and serious injury) associated with tuna fishing using different fishing methods in different oceans, “taking account of” and “in the light of” the objectives of the measure.76

57. This summation makes clear that risk profiles must be objectively determined for the different fishing methods and fishing areas. Those profiles must capture the implications of all factors that affect the likelihood of total (i.e., observed and unobserved) dolphin mortalities and serious injury caused by the fishing method at issue in the ocean area at issue. Once these profiles are determined, they can then be compared in order to identify differences and then those differences can then be assessed to determine whether they are calibrated.

58. It is systemically important to the interpretation and application of the WTO Agreements that the risk profiles be constructed in a complete and accurate manner. Factors must not only be identified but, to the extent possible, quantified.

59. In the circumstances of this dispute, the determinative factors for the assessment of calibration are the existence of observed and unobserved dolphin mortalities and serious injury and the magnitude of those mortalities and serious injury. These factors reflect the aggregate “results” of all other risk factors that have been discussed in this dispute. Given that the risk factors for each fishing method and ocean area will be unique to that method and area, these determinative factors provide a common measurement against which to conduct the necessary comparison for a calibration assessment.

60. Throughout this dispute, when distinguishing AIDCP-compliant fishing in the ETP from other fishing methods and fishing areas, the United States has focused on the activities comprising the fishing method which it characterizes as risk factors rather than the results of those activities. Thus, it has focused on the “intentional” targeting of dolphins, the “chase” of dolphins and the “encirclement” of dolphins. As discussed above, it has described these activities using colourful, exaggerated and inaccurate language. Mexico cautions the Panels from diverting its assessment of risk profiles from the determinative factors noted above and instead examining the activities comprising the fishing method. Those activities will inherently be different for each fishing method. Allowing such differences to be used for calibration could undermine the meaning of Article 2.1, the chapeau to Article XX and other similar WTO provisions.

61. Moreover, as discussed in Mexico’s first written submission and elaborated upon below, by virtue of the design, architecture and structure of the tuna measure, the activities associated with dolphin encirclement are not determinative of the eligibility criteria. This is confirmed by the following facts: (i) high seas driftnet fishing is ineligible even though it does

75 Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.248, 7.252 and 7.350. 76 Mexico’s first written submission, para. 217.


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not involve any of the activities associated with dolphin encirclement; (ii) dolphins are “chased” using other fishing methods (e.g., handline) yet those methods are eligible; and (iii) some fishing methods such as gillnets regularly cause massive dolphin mortalities and serious injury and even though dolphins are not intentionally targeted, fishers using that fishing method know dolphin mortalities are certain.

62. Thus, the focus of the risk profiles and calibration assessment should be on whether there are observed and/or unobserved dolphin mortalities and serious injury associated with a fishing method and fishing area and the magnitude of those adverse effects. Mexico strongly cautions against using the unique activities comprising each fishing method in the calibration assessment. If the Panels determine that these activities must be part of the assessment, it is crucial that the objective facts associated with those activities are taken into account.

2. Potential Metrics for Evaluating Risk Profiles

63. In its first written submission, Mexico identified alternative bases for evaluating the risk profiles. The most scientific and objective approach would be to use potential biological removal (PBR) rates for the affected fisheries, to judge whether the dolphin populations are affected by the fishing method.77 Another alternative would be to look at the estimated overall, worldwide mortality levels of different fishing methods based on the available evidence.78 The United States rejects these forms of measurement.79 It variably cites to a standard based on “harassment”80 – under which the number of mortalities caused by the method apparently is irrelevant – and a metric based on mortalities per set,81 which it then itself rejects in assessing certain gillnet fisheries in the Indian Ocean region, to which it instead applies a metric that compares estimated mortalities to the quantity of tuna harvested.82 The United States also renews its claim that the rate of dolphin mortalities is higher in the ETP than anywhere else.83

64. The United States’s rejection of the use of PBR levels to evaluate whether fishing methods and specific fisheries are dolphin-safe84 is inconsistent with the manner in which the United States regulates its own fisheries, and is contrary to scientific methods. If a fishery is small but the fishing method used is depleting the local dolphin stocks, allowing tuna caught by those methods in those fisheries to be marketed as “dolphin-safe” because the absolute

77 Mexico’s first written submission, paras. 22, 41-44, 24-246. 78 Mexico’s first written submission, paras. 247-257. 79 United States’ second written submission, paras. 118-124 and 125-131. 80 United States’ second written submission, para. 55. 81 United States’ second written submission, paras. 87, 88, 91, 95, 99, 130, 135, 143, 161-167; United States’ first written submission, paras. 42-44, 57-58, 102, 130, 217. 82 United States’ second written submission, paras. 168-171. 83 See e.g., United States’ second written submission, paras. 48, 135-136, 137, 143, and 167 (“As is shown by the relevant evidence on the record in this dispute, no evidence suggests that, on a per set basis, any other fishery causes close to the level of dolphin mortalities caused by dolphin sets in the ETP, as an average since 1997. … Thus, no evidence suggested that any fishery for which fishery-specific evidence was available exhibited “regular and significant” dolphin mortality”); United States’ first written submission, paras. 54 (“the evidence establishes … that the ETP large purse seine fishery has a higher level of observed mortality (and, of course, unobservable harms) than other fisheries do”), paras. 209-210. 84 United States’ second written submission, paras. 118-124.


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number of dolphins killed is lower than in larger fisheries is inconsistent with protecting dolphins and contrary to the objectives of the tuna measure.85

65. As Mexico has previously explained, if the United States disregards scientific measurements and justifies disqualification of Mexico’s AIDCP-compliant fishing method on the basis of precautionary presumptions and speculation, the same type of precautionary presumptions and speculation must be applied to other fishing methods and other ocean regions. In other words, where there is credible evidence that dolphins have been harmed by a fishing method, it must be assumed that there are widespread direct and indirect harms unless proven otherwise with absolute certainty.

66. If the United States were to consistently apply the same presumptions to other fishing methods, gillnet, longline, trawl fishing and handlining fishing in association with dolphins would all have been deemed ineligible for the dolphin-safe label, as well as other methods when dolphins are used to locate tuna.

67. Following is a review of the status of the evidence on the fishing methods discussed by Mexico in its first written submission.

3. Gillnet

68. On page 74 of its second written submission, the United States contradicts its prior position that direct dolphin mortalities are higher in the ETP purse seine fishery than in any other fishery in the world. Relying exclusively on reports that Mexico submitted in the first compliance proceeding,86 the United States explains that it has used the “determination provisions” to find that the tuna gillnet fisheries of Iran, India, Sri Lanka, Pakistan, Oman, Yemen, Tanzania, the United Arab Emirates, Mozambique and Saudi Arabia all have dramatically higher dolphin bycatch rates than dolphin sets in the ETP, and that dolphin-safe certifications from gillnet fisheries of those countries must be supported by independent observers in the future.87 The United States did not, however, make gillnet fishing ineligible for the label, so tuna caught by gillnets by the fleets of other countries can still be allowed to have the dolphin safe label with the more liberal requirements for non-ETP tuna products.

69. To be clear, gillnet fishing is a method that is highly destructive to dolphins and the United States was correct to impose tougher conditions for the use of the label on tuna and tuna products from the identified countries caught by gillnets. The United States’ action, however, raises strong questions about why it has not made gillnet-caught tuna completely

85 The United States claims it is not possible to evaluate dolphin PBRs in other fisheries because sufficient data is not available. United States’ second written submission, paras. 120-121. But in direct connection with the tuna measure, in May 2016 the Department of Commerce sent letters to India, Pakistan, Sri Lanka, Saudi Arabia, Mozambique, Tanzania, the United Arab Emirates, Oman and Yemen, giving them 60 days to provide “data on dolphin abundance and distribution” in their gillnet fisheries, along with research results documenting mortality and serious injury of dolphins. Exhibit US-134. Accordingly, the United States agrees that it is possible to seek such information. 86 United States’ second written submission, footnote 411 to para. 169, citing M. Moazzam, “Status report on bycatch of tuna gillnet operations in Pakistan,” IOTC 8th Session of the Working Party on Ecosystems and Bycatch (2012) (Exhibit MEX-70) (Exhibit MEX-51 in the first compliance proceeding), and R.C. Anderson, Cetaceans and Tuna Fisheries in the Western and Central Indian Ocean, IPNLF Technical Report 2 (2014), pp. 46-52 (Exhibit MEX-42) (Exhibit MEX-161 in the first compliance proceeding). 87 United States’ second written submission, para. 172 (“Thus, the Indian Ocean gillnet fisheries in question exhibited bycatch rates significantly higher than that caused by dolphin sets in the ETP during the relevant period” (emphasis original)). The United States’ submissions on this point indicate that the “dolphin bycatch rate” in certain gillnet fisheries for which data are available is estimated to be more than 1,500% greater than the dolphin bycatch rate in the ETP purse seine fishery.


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ineligible for the dolphin-safe label. The United States argues that gillnet fishing can be safe if it is done where there are no dolphins, and in support cites to a report on U.S. fisheries that includes a few that have not been deemed dangerous to marine mammals.88 But the fisheries to which the United States refers are not tuna fisheries, and in any event the same document identifies a total of 26 gillnet fisheries that are designated as posing risks to marine mammals.89 Absent comprehensive evidence demonstrating that gillnets can be used in tuna fisheries without harming dolphins, there is no reasonable explanation for the United States not to have made gillnet fishing ineligible for the dolphin-safe label at all.

70. It is manifestly not even-handed for the United States to allow tuna caught with gillnets to be eligible for the dolphin-safe label.

4. Longline

71. There is substantial and uncontradicted evidence on the record that longlines kill and maim dolphins, and that longline fishing is threatening the viability of dolphin stocks in some fisheries.90 The United States responds by arguing that the total numbers of reported dolphin deaths from longlines is lower than for dolphin sets in the ETP, and that the number of “interactions” that are reported is low on a per-deployment basis.91 But the United States has not shown that there is comprehensive and reliable evidence on the effects of longline fishing on dolphins in major fisheries such as the Indian Ocean and the Western and Central Pacific Ocean (WCPO), as there is not a comprehensive dolphin observer program or regulated monitoring system for longline vessels in those oceans. Accordingly, the United States is applying a presumption that there are not greater numbers of dolphins killed and other dolphin interactions in those fisheries, without any scientific basis for doing so. It is not even-handed that the tuna measure does not disqualify a fishing method known to kill and seriously injure dolphins on a regular basis.

72. The United States’ argument that longline fishers would like to avoid depredation of their catch by dolphins cannot overcome the well-documented evidence that depredation is a global and significant problem in longline fisheries. The same report that the United States cites for its statistics on mortalities from gillnet fishing includes the following discussion of longline fishing:

Although not the only species implicated in longline depredation in the tropical Indian Ocean, false killer whales [a species of dolphin] do seem to be involved more than any other species (e.g. Anon, 2007; Rabearisoa et al., 2012; also other examples noted in Appendix 1). The abundance of false killer whales around the Maldives has decreased over the past 20 years or so, and this might be related to interactions with the longline fishery in the wider WIO (IOTC, 2012; RCA, pers. obs.). It has been reported from elsewhere that false killer whales may be ‘deliberately persecuted because of their depredations on the longlines’ (Perrin et al., 2005). From tuna or tuna-related fisheries within the Indian Ocean there are reports of cetaceans being shot by fishermen from Thailand and Australia (Kemper and Gibbs, 2001; Saughnessy et al., 2003), while from the SWIO Rabearisoa et al. (2009) noted that ‘there are increased risks of injury or mortality of cetaceans … in a deliberate way due to fishermen

88 United States’ first written submission, para. 105. 89 NMFS, Proposed Rule: List of Fisheries for 2017, 81 Fed. Reg. 54,019 (Exhibit US-101). Gillnet fisheries classified in Category 1 and II – the categories for fisheries that harm marine mammals – are listed on pages 54027-54028. 54032-54033, and 54036-54037. 90 Mexico’s first written submission, paras. 91-105. 91 United States’ second written submission, paras. 95, 97.


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who can’t stand losing fish anymore.’ … There is strong possibility that false killer whales, and possibly also other small cetacean species, are being shot by tuna longline fishermen within the Indian Ocean.92

Accordingly, the fact that fishermen are unhappy with depredation does not provide an assurance that dolphins are safe from longline fishing.

73. Accordingly, it is also manifestly not even-handed for the United States to allow tuna caught with longlines to be eligible for the dolphin-safe label.

5. Trawl

74. The original panel determined, based on evidence submitted by Mexico, that trawl fishing for tuna causes dolphin mortalities. The United States seeks to disregard this finding. Nonetheless, an article published by Greenpeace explains:

Every winter hundreds of dead dolphins and porpoises wash up on British and French beaches. Many have obvious injuries - broken beaks, torn flippers, bruising, and lacerations that tell the story of a prolonged death in fishing nets. The bodies of thousands of others never wash up and are claimed by the ocean.

The main culprit for the deaths is a fishing method called pair trawling most often used to catch sea bass during the winter. Huge nets (some can hold 10 jumbo jets) are towed in mid water at high speed by two fishing boats to catch fish such as sea bass, mackerel, horse mackerel, hake and in summer albacore tuna. However these fish are also the food of common dolphins and Atlantic white-sided dolphins in particular, but also bottlenose dolphins and long-finned pilot whales. These species are caught accidentally in the same nets and dragged to their death.

Observers of pair trawling in 2001 saw 53 dolphins killed in 116 hauls of the net; with two Irish boats in 1999, 145 dolphins were killed in 313 hauls, with 30 animals being killed by one single haul of the net. There are hundreds of boats in the whole EU fleet mainly from UK, France, Spain, Ireland, the Netherlands, and Denmark.93 (Emphasis added)

75. Again, although is it uncontested that trawl fishing is a highly destructive fishing method that kills dolphins in many types of fisheries,94 the United States applies a presumption that this is a safe fishing method for dolphins that should be eligible for the dolphin-safe label. However, as in the cases of gillnet and longline fishing, it is not even-handed for the tuna measure not to disqualify trawling.

6. Handline

76. The United States has mischaracterized the evidence presented by Mexico regarding handline fishing in association with dolphins. Contrary to the United States’ assertion, handline vessels are not limited to canoes. Also contrary to the implication of the United States’ assertions, when fishing in association with dolphins, handline vessels do not paddle to a stationary herd of dolphins. They use motorboats that speed with the herd. An example can be seen starting at the 50-second mark of the video available at

92 R.C. Anderson, Cetaceans and Tuna Fisheries in the Western and Central Indian Ocean, IPNLF Technical Report 2 (2014), p. 69 (Exhibit MEX-42). 93 Greenpeace International, “Dolphins die in trawler nets”, available at http://www.greenpeace.org/international/en/news/features/dolphins-die-in-trawler-nets/ (Exhibit MEX-71). 94 See, e.g., S. Allen et al., Patterns of Dolphin Bycatch in a North-Western Australian Trawl Fishery, PLOS ONE, Vol. 9, Issue 4 (April 2014) (Exhibit MEX-72).


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http://www.allreadable.com/6c4b2qFG, which is presented in Aceh, a language of Indonesia. The screenshots below show a sample of the boats and the dolphins they are chasing.


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77. In its second written submission the United States cites the report by Charles Anderson in Exhibit MEX-42 as somehow supporting its position that handline fishers do not chase dolphins.95 But that report states:

Fishermen typically locate the large yellowfin tuna by the presence of the dolphins (and often seabirds too). The schools are typically fast moving, and the fishermen move ahead of the dolphin school to deploy their lines.96

The report further states that dolphins can be hooked on the baited hooks, and that “[t]he scale of this issue, and of possible post-release mortality or sublethal effects are unknown, but deserve study.”97

78. Mexico’s point is not that handline fishing is identical to purse seine fishing, as the United States seems to claim. Rather, in presenting evidence on handline fishing in association with dolphins, Mexico has established that (i) the ETP is not the only place in the world in which tuna routinely associate with dolphins, as the United States has argued, and (ii) that other fishing methods intentionally “target” dolphins to find tuna. Moreover, if the “chasing” and intentional use of dolphins to locate tuna is “intrinsically” harmful to dolphins, and the level of dolphin mortalities is irrelevant and indirect harms must be presumed, as the United States argues in some parts of its submissions, the tuna measure must disqualify tuna caught by handlines in association with dolphins in order to be even-handed.

7. Purse Seine

79. The United States continues to assert that purse seine fishing outside the ETP is totally safe for dolphins. Contrary to the United States’ argument, Mexico already rebutted all of the United States’ evidence. For example, Mexico showed that the report on which the United States relies for its Indian Ocean estimates of bycatch relied on observer coverage of a small sampling of only 4.6% of trips by only French and Spanish vessels, and that the authors themselves stated that the data was “insufficient to accurately monitor the effects of fishing on pelagic communities associated with tuna schools.”98 The reports cited by the United States for its statistics in the eastern Atlantic similarly are limited to an extremely small percentage of the trips of French and Spanish vessels.99 Mexico also refuted the other evidence on which the United States relied.

80. Mexico also showed that in providing reports to the Western and Central Pacific Fisheries Commission (WCPFC), the United States apparently selectively omitted the report of Papua New Guinea (PNG) – the only reporting nation with data on dolphin bycatch from trained observers – which showed that there were interactions between purse seine vessels and 292 dolphins in 2014. The United States questions the codes used in that report, so following is the explanation: DPD means discarded dead; DPU mean discarded unknown condition; DUS means discarded uneconomic species; DPA means discarded alive (presumably indicating that the dolphin was pulled onto the vessel and then tossed back into

95 United States’ second written submission, para. 113. 96 R.C. Anderson, Cetaceans and Tuna Fisheries in the Western and Central Indian Ocean, IPNLF Technical Report 2 (2014), p. 70 (Exhibit MEX-42). 97 Idem. 98 M. Amande et al., “Precision in Bycatch Estimates: The Case of Tuna Purse Seine Fisheries in the Indian Ocean,” ICES J. Mar. Sci., at 6 (2012), p. 7 (Exhibit US-21) (US – Tuna II (Article 21.5 - US)). 99 Mexico’s first written submission, paras. 84-86.


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the water alive); and ESC means escape.100 Out of the 292 dolphins, two escaped and 18 were discarded alive; the rest were known to have died or their fate is uncertain. The report itself states that the cetacean bycatch information is provided in response to the WCPFC’s request for data on ”any instances in which cetaceans have been encircled by the purse seine nets of their flagged vessels”.101 The same report states that PNG-flagged purse seine vessels caught a total of 54,770 MT of tuna in 2014, which using the United States’ methodology translates into a “dolphin bycatch rate” of about 0.005 (272 divided by 54,770), which is close to the rate of 0.008 the United States calculated for “ETP dolphin sets” using averages from 1997 to 2015. However, if the figures for 2015 are used, the United States’ methodology gives a dolphin bycatch rate for ETP dolphin sets of 0.004 – which is lower than the PNG purse seine fleet’s rate.102

81. The United States also asserts that reports to the WCPFC by other countries are of equal reliability to that of the PNG, without offering an explanation of why they would have lower bycatch rates. The United States asserts that Taiwan, the Philippines, Kiribati and Micronesia have 100% observer coverage, and that it is sufficient to rely on logbooks from other countries.103 But the focus of observers in the WCPFC system is on monitoring catches of tuna and enforcing periodic limits on the use of FADs, not recording cetacean interactions. Note that the recent European Communities’ report on the Philippines states, among other things, “[a]s the Philippines considers that the WCPFC rules do not fully apply to waters under its jurisdiction, it is not entirely clear what is collected and reported to WCPFC; this does not cover assessments of all the Philippines fisheries waters.”104 Moreover, the Philippines’ report does not state that there was 100% observer coverage; it says that there was 100% observer coverage for its “high sea pocket #1” operations,105 which are limited to “traditional fresh/ice chilled fishing vessels.”106 The Taiwan report to the WCPFC itself states that the cetacean interaction data came from “fishing masters,” not independent observers.107 The various reports have inconsistent formats and are vague in describing the sources of data. The WCPFC does not have an enforceable obligation on its members to report cetacean bycatch, and would be unreasonable – and contrary to the precautionary principle – to treat self-serving reports based on incomplete information as more probative of the risks from FAD fishing than the evidence Mexico has submitted.

82. There is of course additional evidence that purse seine vessels using FADs interact with dolphins. Below are screenshots from a video taken by a FAD vessel helicopter pilot showing dolphins in the net and onboard a FAD vessel in the West Pacific.108

100 Secretariat of the Pacific Community, Report of the Seventh Meeting of the Tuna Fishery Data Collection Committee (2007) (excerpt) (Exhibit MEX-73). 101 Papua New Guinea, Annual Report to the Commission (WCPFC-SC11-AR/CCM-19) (Aug. 2015), p. 24 (Exhibit MEX-23). 102 In 2015, the total retained catch from dolphin sets was 166,554 MT, and the number of dolphin mortalities was 765. IATTC, “Fishery Status Report No. 14” (2016), pp. 46, 127 (Exhibit MEX-6). 103 United States’ second written submission, para. 86. 104 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), para. 101 (Exhibit MEX-44). 105 Philippines, Annual Report to the Commission, WCPFC-SC11/AR/CCM-20 (Sept. 28, 2015), para. 10 (Exhibit US-38) (US – Tuna II (Article 21.5 - US)). 106 Ibid., p. 2. 107 Chinese Taipei, Annual Report to the Commission, WCPFC-SC11/AR/CCM-23 (Nov. 3, 2015), p. 12 (Exhibit US-31) (US – Tuna II (Article 21.5 - US)). 108 Video available at https://www.youtube.com/watch?v=6JlKwoUtMk4#t=75.


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83. An interview of the pilot, along with the chief oceanic fisheries scientist of the Secretariat of the Pacific Community and a representative of Greenpeace, was broadcast by Radio Australia and a transcript is published. Among the comments were as follows:

PILOT: Every morning you are thinking 'Oh what are we going to catch today!', because when the ships were running down the schools and setting the net the by-catch was pretty much zero. Using the FADs it was pretty much anything from reef runners, manta rays, dolphins, whales, you name it ....the whole lot got caught!

GARRETT: On the video, which is available on U-tube, you can see threatened species such as turtles, rays, and whale sharks being caught - along with dolphins and billfish.109

84. It is important to recall that in the original proceedings, the Panel found as follows:

We are therefore not persuaded that these figures demonstrate, as the United States suggests, that there is no or only insignificant risk of dolphin mortality or injury arising from tuna fishing operations outside the ETP or call into question the other evidence referred to by Mexico and cited above. Rather, the observations reflected in this report confirm the existence of interaction outside the ETP between purse seine (and longline) tuna fisheries and marine mammals, including dolphins, and the existence of some bycatch and mortality in this context in the WCPO.110

85. The United States has not presented evidence or arguments sufficient for the Panels to change the conclusion of the original Panel. It is not even-handed for the tuna measure to allow fishing with FADs to be eligible for the dolphin-safe label.

B. Certification Requirements

86. The tuna measure contains important regulatory distinctions in its requirements for the certification of tuna as dolphin-safe. Imports of tuna products caught by large purse seine vessels in the ETP must be supported by a signed statement from an independent observer. Tuna products from the United States and other countries that are not members of the AIDCP can be supported only with the vessel captain’s self-certification.

87. In its first written submission, Mexico reviewed the determination by the panel in the first compliance proceedings that:

The evidence … strongly suggests that certifying whether a dolphin has been killed or seriously injured in a set or other gear deployment is a highly complex task. It is especially telling, in the Panel’s view, that the amended tuna measure itself recognizes the necessity of training and education in equipping persons with the necessary technical know-how to ensure that they can properly certify the dolphin-safety of a tuna catch.111

The Panel concluded that the United States did not rebut Mexico’s evidence that captains may not necessarily and always have the technical skills required to certify that no dolphins were

109 Radio Australia, “Footage shows threatened species killed by tuna boats”, available at http://www.radioaustralia.net.au/international/radio/onairhighlights/footage-shows-threatened-species-killed-by-tuna-boats (Exhibit MEX-66) (emphasis added). 110 Panel Report, US – Tuna II (Mexico), para. 7.529. 111 Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.214-7.218 (footnotes omitted).


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killed or seriously injured, and that this may result in inaccurate information being passed to consumers, in contradiction to the objectives of the measure.112

88. In its first written submission, Mexico demonstrated that the “training” purportedly provided under the 2016 tuna measure is superficial and filled with ambiguous language.113 Mexico also showed that the measure is ambiguous as to how the word “intentional” is to be defined and applied114 – a particularly important issue in light of the evidence Mexico has previously submitted regarding setting of purse seine nets on dolphins by FAD vessels,115 and the deployment of longlines when dolphins are close to longline vessels.116 Mexico also pointed out that the Department of Commerce has no mechanism to verify that a captain has read the short training document. Finally, Mexico submitted written comments on the new regulations by two of the largest suppliers of tuna products to the United States, who both stated that it will not be possible to implement or enforce the training requirements.117 The United States did not respond to any of this evidence, and therefore apparently has accepted that the training requirement is meaningless.

89. The United States does try to argue that certifying compliance with the eligibility requirements is “much more difficult” in the ETP, an apparent effort to evade the Panel’s determination in the first compliance proceeding that “certifying whether a dolphin has been killed or seriously injured in a set or other gear deployment is a highly complex task.”118 The United States provides no evidence to support its claim, nor can it. Indeed, without a trained marine biologist onboard, it remains unclear how a captain – who may not even be watching the fishing operation – will be able to certify that a hook in a dolphin is confirmed “in lip only, external tissue outside of teeth, no trailing gear,” or that a hook does not have the potential to “become a constricting wrap,” “be ingested,” “accumulate drag”, or “become snagged on something in the environment”. For other types of gear, a captain is supposed to be able to judge, among other things, whether there is “loss or disfigurement of dorsal fin,” “partially or completely severed or fractured pectoral flipper(s),” or whether a “social animal separated from group and/or released alone post-interaction.”119

90. The United States’ main argument, in essence, is that reliable certifications are unnecessary outside the ETP large purse seine fishery, because, in its view, there are no significant interactions between tuna fishers and dolphins in other fisheries. The United States refers to this as a “difference in the ‘margin of error’” that the different regulatory requirements allow.120

112 Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.233. See also Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.106, 7.137, 7.158, 7.163 and footnote 611. 113 Mexico’s first written submission, paras. 269-270. 114 Mexico’s first written submission, paras. 276-278. 115 Panel Report, US – Tuna II (Mexico), para. 7.201. 116 NMFS, 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), p. 56 (“When setting [longline] gear there were a group of dolphins all around the boat and the gear was being set. … No adjustments were made to avoid the animals.”) (Exhibit MEX-74) (Exhibit MEX-106 in first compliance proceeding). 117 Mexico’s first written submission, paras. 272-273. 118 United States’ second written submission, para. 145. 119 “Dolphin-Safe Captain's Training Course”, available at http://www.nmfs.noaa.gov/ pr/dolphinsafe/dsctc.htm (Exhibit MEX-56). 120 United States’ second written submission, para. 145.


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91. The United States’ claim that the ETP large purse seine fishery is the only fishery with significant interaction with dolphins is of course contradicted by the United States itself when it describes gillnet fishing as having a much higher mortality rate than dolphin sets in the ETP. Yet the United States has imposed observer requirements only on gillnet fishing in certain countries, and not all the countries where gillnets are used to catch tuna. The United States’ assertion has also been contradicted by evidence that other fishing methods, including longlines, trawl fishing, and setting purse seine nets on FADs, regularly affect dolphins.

92. The Panel in the first compliance proceeding already found that inaccurate certifications lead to inaccurate information being provided to consumers, and that this contradicted the objective of the measure.121 Applying the guidance of the Appellate Body, the issue is whether the lack of training – leading to the certification requirement being meaningless – is calibrated to the risks to dolphins from other fishing methods and in other ocean regions. In assessing the purported calibration, a different measure may be applied than with respect to the fishing method eligibility criterion. It is possible that some fishing methods do not pose sufficiently high risks to dolphins that require them to be completely disqualified under the eligibility criterion, but still entail sufficient risks such that the certification process must be meaningful – either through the use of trained independent observers or through competent and verifiable training of captains and other vessel crew who are directly involved in the fishing procedures. In Mexico’s view, the use of any fishing method that poses more than a de minimis risk to dolphins requires reliable certifications. Otherwise, the entire purpose of the tuna measure would be undermined.

93. An additional relevant factor that Mexico identified in its first written submission is that certain major suppliers of tuna for the U.S. market have been the subject of detailed reports by the European Commission identifying them as non-cooperating countries in fighting IUU fishing. For example, the Philippines was found to have a “lack of checks on logbooks.”122 Taiwanese vessels were found to have “inconsistent information concerning catch, master declarations, logbook, International Commission for the Conservation of Atlantic Tunas (ICCAT) statistic documents, dolphin safety declarations.”123 The United States provided no explanation of why captains’ declarations from the fleets of these countries could be treated as reliable. Noting that the Appellate Body’s guidance is to assess whether the tuna measure is calibrated to the risks to dolphins arising from different fishing methods in different areas of the oceans, it is pertinent and appropriate for the Panels to evaluate the application of the regulatory distinctions not just on the basis of the fishing methods, but also on where they are being used. The reliability (or unreliability) of a fishing fleet or the regulatory authorities that oversee the fleet are relevant factors in the analysis.

94. For these reasons, it is clear that the certification requirements are being applied in a manner that is not even-handed.

C. Tracking and Verification Requirements

95. Mexico’s first written submission reviews the important differences that remain between the tracking and verification requirements for tuna caught by large purse seine vessels in the ETP and tuna caught elsewhere.124 Mexico also highlighted the determination of the Panel in the first compliance proceeding that the United States failed to prove that tuna

121 Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.233. See also Appellate Body Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.106, 7.137, 7.158, 7.163, 7.253 and footnote 611. 122 Mexico’s first written submission, para. 115. 123 Mexico’s first written submission, para. 115. 124 Mexico’s first written submission, paras. 286-290.


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products companies could trace tuna back to the vessel from which it was caught and to a related dolphin-safe certificate.125 Mexico also submitted a comment on the new regulations submitted by a major tuna products manufacturer stating that it was unclear what documentation was required, and complaining that the regulation cross-references a separate and unrelated set of regulations on traceability that have not been adopted.126 The United States, in response, simply argues that the differences in requirements reflect a calibration to the different risk profiles of the fisheries, and that it is appropriate to use a “less sensitive” tracking and verification mechanism where the risks of dolphin mortality and serious injury are low.127

96. In the first compliance proceedings, Mexico submitted extensive evidence regarding the complex supply chain for tuna, the widespread practice of transshipping and the problem of IUU fishing. The Panel in the first compliance proceeding took note of the issue, quoting from a peer-reviewed study that stated:

The highly internationalized seafood supply chain feeding imports into the United States and other major markets is one of the most complex and opaque of all natural commodities. It involves many actors between the fisherman and the consumer, including brokers, traders, wholesalers, and other middlemen, often distant from the consumer markets they supply.128

97. As Mexico explained in the first compliance proceeding, unlike the Mexican industry, most major tuna products companies in other countries are not vertically integrated. They purchase tuna from third party companies, and in many cases the tuna has passed through several parties before it is processed.

98. For example, processors in Thailand (the largest exporter of tuna products to the United States) obtain 80 percent of their supply of tuna from the world’s three major tuna trading companies – FCF, TriMarine, and Itochu.129 Those three companies have different business models. Tri-Marine has a network of company owned and affiliated fishing vessels, but still acquires the great majority of its tuna from third parties.130 FCF does not invest in fishing vessels, though some of its shareholders are believed to hold significant ownership positions in Taiwan’s purse seine and large-scale longline tuna fleets.131 Itochu does not own any fishing or carrier fleet vessels and instead time charters them or purchases space onboard carriers on the spot market.132

99. For both longline and purse seine fishing, an important role is played by refrigerated fish carriers, who consolidate the catch of multiple fishing vessels. Some of these are believed to be engaged in transshipment at sea. One study has reported:

125 Mexico’s first written submission, paras. 294-295, citing Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), paras. 7.356-7.359 (BCI) and 7.361; see also ibid., paras. 6.15-6.19. 126 Mexico’s first written submission, para. 296, citing Exhibit MEX-57. 127 See, e.g., United States’ second written submission, para. 152. 128 Panel Report, US – Tuna II (Mexico) (Article 21.5 – Mexico), para. 7.352, quoting quoting G. Pramod et al., "Estimates of Illegal and Unreported Fish in Seafood Imports to the USA", 48 Marine Policy 102 (2014) (Exhibit MEX-75) (Exhibit MEX-131 in the first compliance proceedings), p. 106. 129 A. Hamilton et. al., Market and Industry Dynamics in the Global Tuna Supply Chain, FFA, June 2011, p. 26 (Exhibit MEX-76). 130 Ibid., p. 139. 131 Ibid., p. 145. 132 Ibid., p. 150.


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The beneficial ownership of refrigerated fish carriers is not easy to determine. Vessels are often registered under offshore shell companies or through other means that mask the identity of actual owners, a common practice in the utilization of flags of convenience in the international shipping business.133

100. The issue of the lack of strong supervision of transhipments was discussed at length in the Panel Report in the first compliance proceeding, as was the global problem with IUU fishing.134

101. In light of this evidence, the dramatic deficiencies described in the European Communities’ reports on Thailand, the Philippines and Taiwan are especially important in assessing the calibration of the tracking and verification requirements. For example, the report on Thailand states:

National documentation schemes developed by the authorities for the purpose of traceability are used incorrectly by operators, who were found to inaccurately record incoming quantities of fish. This exposes the system to potential abuse by allowing operators to over declare incoming quantities from erroneous catch certificates and to launder fish through these overestimations.135

Similarly, in relation to the Philippines the European Commission reports:

A working traceability system would indeed be necessary from the stage of landing to that of export, or from the stage of import to subsequent export. However, such a system is not in place in the Philippines and the lack of control and monitoring of fishing activities in particular of landing, the dearth of inspections at sea and in port, the lack of checks on the logbooks entail that IUU fishing products may have easy access to the Philippines, and the EU market. In addition, it is common business practice that fish stemming from Philippines flagged vessels is captured in the waters of Third Countries and subsequently either landed to Third Countries for further processing, or transhipped in the waters of Third Countries and subsequently sent for further processing in another country. Therefore, many transactions at risk take place outside the waters of Philippines. … However, the Philippines does not implement any measure needed to ensure that authorities are controlling the veracity of information and traceability of transactions pertaining to their vessels activities.136

With respect to Taiwan, the European Commission states: “[t]he 2012 and 2015 visits revealed that Taiwan lacks a traceability system that is able to ensure full transparency in all

133 Mike McCoy, A Survey of Tuna Transshipment in Pacific Island Countries, Gillet, Preston and Associates, Inc., June 2012, p. 18 (Exhibit MEX-77). 134 Panel Report, US – Tuna II (Mexico) (Article 21.5), paras. 7.373-7.381. 135 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), para. 46 (Exhibit MEX-43). 136 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), para. 45 (Exhibit MEX-44).


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stages of fishing transactions i.e. catch, transhipment, landing, transport, factory processing, export and trading.”137 It further commented:

The Commission established that the trading companies are not incorporating in their accounting systems information concerning traceability of fishing transactions and there is no certainty that what is recorded in the authorities' systems corresponds with what is recorded in the companies' accounting and production systems. This situation undermines the reliability of the traceability chain at company level. …. Furthermore, the Taiwanese electronic databases supporting the authorities' systems are incomplete and crucial documents in the supply chain such as landing declarations, e-logbooks and information from designated ports are still either not fully recorded or missing. This highlights the failures of the traceability system as a whole.”138

102. Unless tuna is caught in an area and by a method that assures a de minimis possibility that dolphins were killed or seriously injured, and there is also a de minimis possibility that such tuna could be commingled or substituted by tuna caught by an ineligible method or in relation to which dolphins were killed or seriously injured, the tuna measure’s “less sensitive” tracking and verification requirements for non-ETP tuna cannot reasonably be considered “calibrated” to the risks arising from different fishing methods in different ocean areas.

103. For these reasons, it is clear that the certification requirements are being applied in a manner that is not even-handed.

D. Determination Provisions

104. On September 28, 2016, the Department of Commerce issued a notice that it had determined that the gillnet fisheries of Iran, India, Sri Lanka, Pakistan, Oman, Yemen, Tanzania, the United Arab Emirates, Mozambique and Saudi Arabia have a regular and significant mortality and serious injury of dolphins. On that basis, tuna and tuna products from the designated fisheries may not be labelled as dolphin-safe unless supported by a certification by an independent observer participating in a national or international program acceptable to the Department of Commerce. The notice also stated that the Department of Commerce had not determined that any observer program operating in those fisheries was acceptable.139 Although Mexico strongly believes that no gillnet-caught tuna should be eligible for the dolphin-safe label, it is evident that the United States chose these particular fisheries because it thinks they export no or little tuna to the United States.

105. The United States explains the purported methodology that underlies the designations only in its second written submission. It is noteworthy that its explanation has not been published anywhere else but in this dispute settlement proceeding. It is not contained in any regulation, was not the subject of public comments, and is not supported by any scientific analysis.

106. The United States’ explanation of its methodology is highly convoluted. The United States presents an argument intended to justify using a “per set measure of dolphin mortality”,140 but then abruptly abandons it in favour of a “bycatch rate metric,” which the

137 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), para. 49 (Exhibit MEX-46). 138 Ibid., para. 50. 139 Taking and Importing of Marine Mammals and Dolphin-Safe Tuna Products, 81 Fed. Reg. 66625 (Sept. 28, 2016) (Exhibit US-131). 140 United States’ second written submission, paras. 162-163.


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United States defines as “the number of dolphins killed per ton of target catch (tuna) landed.”141

107. The United States uses as its “benchmark” a twenty-year average of mortalities caused by dolphin sets in the ETP from 1997 to 2015. Because mortalities in the ETP fishery in 2015 were only a quarter of their level in 1997 (765 compared to 2,981), that means the United States is artificially inflating the benchmark by using an average. In other words, under the United States’ methodology, a fishery that has a higher “bycatch rate” in 2015 than the ETP fishery has in 2015 would not be designated as having regular and significant mortality and serious injury of dolphins. The United States does not explain how such an approach could be considered consistent with the objective of the tuna measure.

108. Finally, the United States’ methodology for deciding when to consider evidence of dolphin mortalities in a fishery deserving of investigation appears to be based on arbitrary judgments. Remarkably, the United States says that for the gillnet fisheries it designated, it became aware of the possibility of significant dolphin mortalities only when Mexico submitted publicly available reports on those mortalities during the first compliance proceeding.142 But for all the other fisheries and country fleets about which Mexico submitted evidence, the United States rejects even the possibility that there could be regular and significant mortalities.143 Unlike as it did with the countries whose gillnet fleets it designated, the United States did not even send letters to other countries asking for data on dolphin populations and mortalities in their tuna fisheries.

109. The fact that there are significant dolphin mortalities in tuna fisheries other than the ETP large purse seine fishery has of course been well known for many years. For example, the Panel in the original proceedings extensively cited a 2007 report commissioned by the U.S. National Oceanic and Atmospheric Administration, which identified dolphin mortalities in a number of fisheries other than the ETP.144 In fact, on the basis of this report, the Panel in the original proceeding made a finding that “in the western Pacific Ocean, from where most of the tuna sold in the US market is sourced, there are also examples of incidental dolphin mortalities which affect a percentage of dolphin populations in that area that is higher than the percentage of dolphins observed to be affected in the ETP … under the controlled conditions of the AIDCP.”145

110. Further, the Panel in the original proceedings also quoted the report as follows:

There are large areas of the world where it seems likely there may well be interactions between cetaceans and fisheries, but for which there are, as yet, no data, and no idea of any impact that such fisheries may cause. This lack of information on the impacts of a fishery does not imply, however, that there is no problem, especially since reporting of just a few individuals in a specific fishery may be indicative of a larger interaction. Only when scientists can accomplish a detailed study of the cetacean stock abundance, the fishing effort,

141 United States’ second written submission, paras. 169-171. 142 United States’ second written submission, para. 169. 143 United States’ second written submission, para. 168. 144 Young and Iudicello, “Worldwide Bycatch of Cetaceans,” U.S. Department of Commerce, National Oceanic and Atmospheric Administration (NOAA Tech. Memorandum NMFS-OPR-36 (July 2007) (Exhibit MEX-78) (Exhibit MEX-5 in original proceeding) (hereinafter “Bycatch Report”). The Bycatch Report is cited frequently in Panel Report, US – Tuna II (Mexico), e.g., in footnotes 634, 684, 726, 727, 733, 735, 737, 738, 739, 740, 741, 742, 743, 752, 757, 758, 760, 764, 788, 790, 791, 792, 793, 794, 795, and 797. 145 Panel Report, US – Tuna II (Mexico), para. 7.554.


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and the bycatch rate in each fishery can a thorough and accurate assessment be made.146

111. It is inexplicable that the United States would have disregarded this report – which the Department of Commerce itself commissioned – in deciding how to apply the determination provisions.

112. For the United States to claim that there are no other fisheries worthy of examination under the determination provisions is unjustifiable and contrary to the objectives of the tuna measure. Other fisheries should have been evaluated and made the subject of designations.

113. For these reasons, the application of the tuna measure’s determination provisions by the United States is not even-handed.

V. THE 2016 TUNA MEASURE IS NOT JUSTIFIED UNDER ARTICLE XX OF THE GATT 1994

114. As explained in Mexico’s first written submission, its arguments under both Article 2.1 of the TBT Agreement and the chapeau of Article XX of the GATT 1994 are grounded in arbitrary and unjustifiable discrimination and it is appropriate to rely on Mexico’s submissions under Article 2.1, as supplemented by this submission, to establish that the 2016 tuna measure is applied in a manner that constitutes a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail.147

115. The burden of proof is on the United States to demonstrate that the exceptions in Article XX apply to the tuna measure. In the circumstances of this dispute, this burden must be applied rigorously because the measure discriminates against an environmentally sustainable fishing method in favour of an alternative that is environmentally unsustainable. Viewed objectively, the evidence presented by Mexico in its first written submission and supplemented in this submission has not been rebutted by the United States. Accordingly, the United States has not met its burden to prove that the exceptions in Article XX apply. At best, the evidence presented by the United States is in equipoise with Mexico’s evidence and, in such circumstances the party required to satisfy the burden of proof (i.e., the United States) must lose.148

116. For these reasons, the requirements of the chapeau to Article XX are not met and the general exceptions do not apply to the tuna measure.

VI. CONCLUSIONS

117. For the foregoing reasons and for the previous reasons set out in Mexico’s first written submission, Mexico respectfully requests that the Panels find that the 2016 tuna measure is inconsistent with Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994, and cannot be justified under Article XX of the GATT 1994.

146 Panel Report, US – Tuna II (Mexico), para. 7.518, quoting Bycatch Report, p. viii. 147 Mexico’s first written submission, para. 337. 148 Panel Report, Korea - Dairy, para. 4.44.

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