(wt/ds381) - gob.mx · to article 21.5 of the dsu by india, wt/ds141/ab/rw, adopted 24 april 2003,...

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)

Second Written Submission of the United Mexican States

24 June 2014

United States – Measures Concerning the Importation, Second Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 24 June 2014

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TABLE OF CONTENTS

TABLE OF CONTENTS ................................................................................................................. i

CASES CITED IN THIS SUBMISSION ..................................................................................... vii

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

LIST OF EXHIBITS ..................................................................................................................... xii

I. INTRODUCTION ...............................................................................................................1

II. RESPONSE TO U.S. DESCRIPTION OF THE RELEVANT FACTS ..............................4

A. The Dolphin-Safe Status of Imports from Non-ETP Countries Cannot be Verified ...................................................................................................5

1. The U.S. Data On Vessel Flags and Gear Types Is Wholly Unreliable .....................................................................................................5

2. Mexico’s Evidence of Risks to Dolphins in Non-ETP Fisheries .......................................................................................................8

a. United States ....................................................................................8

b. Vietnam ..........................................................................................10

c. Philippines......................................................................................11

d. Taiwan............................................................................................12

e. Indonesia ........................................................................................14

f. Other Countries ..............................................................................14

B. There is Substantial Evidence on Risks to Dolphins From Alternative Fishing Methods Outside the ETP ......................................................15

1. Purse Seine Fishing ....................................................................................15

2. Longline Fishing ........................................................................................15

3. Gillnet Fishing ...........................................................................................16

4. Trawl Fishing .............................................................................................17

C. Global Practices Do Not Support Discrimination in Treatment ............................17


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D. Captains’ Self-Certifications are Insufficient to Ensure Compliance ....................18

E. The Record-keeping Requirements Imposed on Mexican Products are Different than those Imposed on U.S. and other Non-ETP Producers................................................................................................................21

F. The U.S. Comparison of the ETP to Other Fisheries is Unsupported and Inconsistent ................................................................................22

G. Lack of Deterrence for Non-Compliance ..............................................................24

H. Response to U.S. Argument that Mexico’s Observer and Tracking Obligations Arise from the AIDCP and not the Amended Tuna Measure ..................................................................................................................25

III. RESPONSE TO U.S. LEGAL ARGUMENTS .................................................................26

A. The Panel has Jurisdiction under Article 21.5 of the DSU to Rule on Mexico’s Claim under Article 2.1 of the TBT Agreement in respect of the Amended Tuna Measure .................................................................26

1. Mexico’s Article 2.1 Claim is Within the Panel’s Terms of Reference ...................................................................................................27

2. Mexico’s Article 2.1 Claim relates to the “new” Amended Tuna Measure “in its Totality” ..................................................................28

3. Mexico’s Article 2.1 Claim does not Impinge upon or Threaten the Finality of the Recommendations and Rulings of the DSB in the Original Proceedings .....................................................29

4. Mexico’s Article 2.1 Claim does not Jeopardize the Principles of Fundamental Fairness and Due Process ...............................31

5. Conclusions on the Jurisdiction of the Panel .............................................31

B. The Amended Tuna Measure is Inconsistent with Article 2.1 of the TBT Agreement .....................................................................................................32

1. “Technical Regulation” and “Like Products” ............................................32

2. The Amended Tuna Measure Modifies the Competitive Opportunities to the Detriment of Imports .................................................32

3. The Unilateral Action of the United States in Applying the Amended Tuna Measure’s Labelling Conditions and Requirements Supports a Finding of Detrimental Impact .........................32


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4. The Detrimental Impact Reflects Discrimination ......................................35

a. The Relevant Regulatory Distinction .............................................35

b. The Differences in the Dolphin-Safe Labelling Conditions and Requirements including in the Relevant Regulatory Distinction are not Legitimate .....................37

c. The Meaning of “Even-Handed” ...................................................38

(1) A Measure that Lacks Impartiality is Not Even-Handed ......................................................................38

(2) A Certification Process that is Designed and Applied in a Manner that Inherently Creates the Potential for Abuse is not Even-Handed ......................40

(3) A Measure is Not Even-Handed it Results in a Regulatory Difference that cannot be Reconciled with the Objective of the Measure ..............................................................................41

d. Disqualification/Qualification of Fishing Methods .......................42

e. Record-keeping and Verification Requirements ............................44

(1) The Regulatory Difference in Record-Keeping, Tracking and Verification Requirements is Not “Even-Handed” ................................46

(2) Mexico has Established a prima facie Case, while the United States has failed to Meet its Burden ................................................................................47

(3) The United States’ Arguments are Without Merit ...................................................................................49

(4) Conclusion .........................................................................51

f. Mandatory Independent Observer Requirements ..........................51

(1) The Findings of the Original Panel and the Appellate Body ..................................................................52

(2) The United States’ Arguments ...........................................53


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(3) Permitting Self-Certification by Commercially Interested Fishing Vessel Captains is Not Even-Handed ............................................55

(a) Captain Self-Certification Prevents the Impartial Administration of the Amended Tuna Measure ........................................55

(b) The Accuracy of Captain Self-Certifications Cannot be Verified ..........................57

(c) Self-Certification Undermines the Objectives of the Amended Tuna Measure ..................................................................59

(4) Conclusion on the Self-Certification of Captains..............................................................................59

5. Conclusions on Mexico’s Article 2.1 Claim ..............................................60

C. The Amended Tuna Measure is Inconsistent with Article I:1 of the GATT 1994 ............................................................................................................60

1. The Requirements of Article I:1 ................................................................60

2. Article I:1 Prohibits Conditions to the Granting of an Advantage that Result in a Detrimental Impact on the Competitive Opportunities of a Member ...................................................61

3. The Arguments of the United States are Without Merit and Contrary to the prior Ruling of the Appellate Body ..................................62

4. The Unilateral Action of the United States in Applying the Amended Tuna Measure’s Labelling Conditions and Requirements Supports a Finding of Detrimental Impact under Article I:1 of the GATT 1994 ..........................................................64

5. Conclusion regarding Article I:1 of the GATT 1994 .................................65

D. The Amended Tuna Measure is Inconsistent with Article III:4 of the GATT 1994 ......................................................................................................65

1. The Requirements of Article III:4 of the GATT 1994 ...............................66

2. The Unilateral Action of the United States in Applying the Amended Tuna Measure’s Labelling Conditions and Requirements Supports a Finding of Detrimental Impact under Article III:4 of the GATT 1994 .......................................................70


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3. Conclusion regarding Article III:4 of the GATT 1994 ..............................70

E. The Inconsistencies with Articles I:1 and III:4 cannot be Saved by Article XX of the GATT 1994 ...............................................................................70

1. The Amended Tuna Measure, Considering its Objectives, does not fit into the General Exceptions provided in Subparagraphs (b) and (g) of GATT Article XX .......................................71

2. The Amended Tuna Measure does not Satisfy the Requirements of Article XX(b) of the GATT 1994 ...................................73

a. The Amended Tuna Measure does not Fall within the Range of Policies Designed to Protect Animal Life or Health under Article XX(b) ...............................................73

b. The Amended Tuna Measure is not “Necessary” to Fulfil the Invoked Policy Objective ...............................................75

(1) Relevant Factors.................................................................76

(2) The Amended Tuna Measure does Not Contribute to the Objective that it Pursues ........................77

(3) Trade Restrictiveness .........................................................79

c. Less Trade Restrictive Alternative Measures ................................79

(1) Establishment of a Label Verified By A Unbiased Recordkeeping Verification Requirements Supported by Independent Observers ...........................................................................80

(a) Less Trade Restrictive ............................................80

(b) Equivalent Contribution to the Relevant Legitimate Objective ..............................81

(c) Reasonably available .............................................81

(2) Allow the use of Alternative Labels for Tuna Products While Requiring Publication of Full Information about Dolphin Protection and Sustainability .............................................81

(a) Less Trade Restrictive ............................................82


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(b) Equivalent Contribution to the Relevant Legitimate Objective ..............................82

(c) Reasonably Available ............................................82

3. Article XX(g) of the GATT 1994 Does not Apply to the Amended Tuna Measure ............................................................................82

a. The Amended Tuna Measure does not Relate to the Conservation of an Exhaustible Natural Resource ........................83

(1) Dolphin are Exhaustible Natural Resources ......................83

(2) The Amended Tuna Measure does not Relate to the Conservation of Dolphin ...............................83

b. The Amended Tuna Measure is not Made Effective in Conjunction with Restrictions on Domestic Production or Consumption ...........................................................86

4. The Requirements of the Chapeau of Article XX are not Met .............................................................................................................87

a. The Same Relevant Conditions Prevail in Different Countries ........................................................................................87

b. The Amended Tuna Measure is Designed and Applied in a Manner that results in Discrimination .......................89

c. The Discrimination is Arbitrary and Unjustifiable ........................91

5. The Unilateral Action of the United States in Designing and Applying the Amended Tuna Measure’s Labelling Conditions and Requirements Supports a Finding of Arbitrary or Unjustifiable Discrimination under the chapeau of Article XX of the GATT 1994 ................................................93

IV. CONCLUSIONS................................................................................................................93


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CASES CITED IN THIS SUBMISSION

Short title Full case title

Argentina – Hides and Leather

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

Brazil – Retreaded Tyres

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

China – Rare Earths Panel Reports, China – Measures Related to the Exportation of Rare Earths, Tungsten, and Molybdenum, WT/DS431/R / WT/DS432/R / WT/DS433/R / and Add.1, circulated to WTO Members 26 March 2014 [appeal in progress]

China – Raw Materials

Panel Reports, China – Measures Related to the Exportation of Various Raw Materials, WT/DS394/R / WT/DS395/R / WT/DS398/R / Add.1 and Corr.1, adopted 22 February 2012, as modified by Appellate Body Reports WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R, DSR 2012:VII, 3501

Dominican Republic – Import and Sale of Cigarettes

Appellate Body Report, Dominican Republic – Measures Affecting the Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 May 2005, DSR 2005:XV, 7367

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

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

EC – Bed Linen (Article 21.5 – India)

Appellate Body Report, European Communities – Anti Dumping Duties on Imports of Cotton Type Bed Linen from India – Recourse to Article 21.5 of the DSU by India, WT/DS141/AB/RW, adopted 24 April 2003, DSR 2003:III, 965

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

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

EC – Tariff Preferences

Panel Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/R, adopted 20 April 2004, as modified by Appellate Body Report WT/DS246/AB/R, DSR 2004:III, 1009

Korea – Various Measures on Beef

Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161/AB/R,


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WT/DS169/AB/R, adopted 10 January 2001, DSR 2001:I, 5

Thailand – Cigarettes (Philippines)

Appellate Body Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/AB/R, adopted 15 July 2011, DSR 2011:IV, 2203

Thailand – Cigarettes (Philippines)

Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines, WT/DS371/R, adopted 15 July 2011, as modified by Appellate Body Report WT/DS371/AB/R, DSR 2011:IV, p. 2299

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 – 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 – FSC (Article 21.5 – EC II)

Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations" – Second Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW2, adopted 14 March 2006, DSR 2006:XI, 4721

US – Gambling Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, 5663 (Corr.1, DSR 2006:XII, 5475)

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

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

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

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

US – Shrimp (Article 21.5 – Malaysia)

Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia, WT/DS58/AB/RW, adopted 21 November 2001, DSR 2001:XIII, 6481

US – Tuna II (Mexico)

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

US – Tuna II (Mexico)

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


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US – Upland Cotton (Article 21.5 – Brazil)

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

US – Zeroing (EC) (Article 21.5 – EC)

Appellate Body Report, United States – Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing") – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS294/AB/RW and Corr.1, adopted 11 June 2009, DSR 2009:VII, 2911


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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

ATA American Tunaboat Association

C.F.R. Code of Federal Regulations

DMLs Dolphin Mortality Limits

DPCIA Dolphin Protection Consumer Information Act

DSB Dispute Settlement Body

DSU Understanding on Rules and Procedures Governing the Settlement of Disputes

GATT 1994 General Agreement on Tariffs and Trade 1994

EPO Eastern Pacific Ocean

ETP Eastern Tropical Pacific

EEZ Exclusive Economic Zones

FAD Fish Aggregating Device

FAO United Nations Food and Agriculture Organization

IATTC Inter-American Tropical Tuna Commission

ICCAT International Commission for the Conservation of Atlantic Tunas

IDCP International Dolphin Conservation Program

IDCPA International Dolphin Conservation Program Act


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IOTC Indian Ocean Tuna Commission

IRP International Review Panel

IUU Illegal, unreported and unregulated

ISSF International Seafood Sustainability Foundation

MMPA Marine Mammal Protection Act

NAD National Advertising Division

NAFTA North American Free Trade Agreement

NMFS National Marine Fisheries Service

NOAA National Oceanic and Atmospheric Administration

NRDC Natural Resources Defense Council

PNG Papa New Guinea

PLTRT Pelagic Longline Take Reduction Team

RFMOs Regional Fishery Management Organizations

SPREP South Pacific Regional Environment Programme

SPTC South Pacific Tuna Corporation

TBT Agreement Agreement on Technical Barriers to Trade

TTF Tuna Tracking Form

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

MEX-2 Letter from Vice President Al Gore to Representative Gilchrest (June 3, 1996)

MEX-3 Report On The International Dolphin Conservation Program, Document MOP-28-05 (October 18, 2013)

MEX-4 International Dolphin Conservation Program, Scientific Advisory Board, “Updated Estimates of Nmin and Stock Mortality Limits”, 7th Meeting, 30 October 2009, Document SAB-07-05

MEX-5 AIDCP, 22nd Meeting of the Parties, Minutes (30 Oct. 2009)

MEX-6 Read, Drinker, & Northridge, “Bycatch of Marine Mammals in U.S. and Global Fisheries,” in 20 Conservation Biology (2006)

MEX-7 2013 Final Rule, 78 Fed. Reg. 40997 (July 9, 2013)

MEX-8 16 USC § 1385

MEX-9 16 U.S.C. § 1414a

MEX-10 64 Fed. Reg. 24590 (May 7, 1999) (“Initial Finding”)

MEX-11 Brower v. Daley, 93 F. Supp.2d 1071, 1087 (N.D. Cal. 2000)

MEX-12 Brower v. Evans, 257 F.3d 1058 (9th Cir. 2001)

MEX-13 68 Fed. Reg. 2010 (January 15, 2003) (“Final Finding”)

MEX-14 Earth Island Inst. v. Evans, 2004 U.S. Dist. LEXIS 15729 (N.D. Cal. 2004)

MEX-15 Earth Island Inst. v. Hogarth, 484 F.3d 1123 (9th Cir. 2007)

MEX-16 Earth Island Inst. v. Hogarth, 494 F.3d 757 (9th Cir. 2007)

MEX-17 Letter from Penelope D. Dalton, Assistant Administrator for Fisheries, to Mark Robertson (Sept. 14, 2000)

MEX-18

Young and Iudicello, “Worldwide Bycatch Of Cetaceans,” U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service (NOAA Technical Memorandum NMFS-OPR-36) July 2007 (“Bycatch Report”)

MEX-19 National Oceanic and Atmospheric Administration, “List of Fisheries for 2013”, 78 Fed. Reg. 53336 (August 29, 2013)

MEX-20 50 CFR § Part 216

MEX-21 2012 Report Of The Secretary Of Commerce to the Congress of the United States Concerning U.S. Actions Taken On Foreign Large-Scale High Seas Driftnet Fishing

MEX-22 NOAA Form 370


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MEX-23 5 U.S.C. § 706(2)(C)

MEX-24 Bowen v. Georgetown Univ. Hosps., 488 U.S. 204, 208 (1988)

MEX-25 Letter from Bumble Bee Foods LLC, Chicken of the Sea International and Starkist Co. to National Marine Fisheries Service (May 1, 2013)

MEX-26 65 Fed. Reg. 26585 (May 8, 2000)

MEX-27 75 Fed. Reg. 34106 (June 16, 2010)

MEX-28 NOAA Fisheries, “Tuna/Dolphin Embargo Status Update”, available at http://www.nmfs.noaa.gov/pr/dolphinsafe/embargo2.htm

MEX-29 Inter-American Tropical Tuna Commission, Quarterly Report (April-June 2013)

MEX-30 Agreement on the International Dolphin Conservation Program, as amended Oct. 2009

MEX-31 Norma Oficial Mexicana de Emergencia NOM-EM-002-PESC-1999, Pesca responsable de túnidos. Especificaciones para la protección de delfines. Requisitos para la comercialización de túnidos en territorio nacional.

MEX-32 Norma Oficial Mexicana NOM-001-SAG/PESC-2013. Pesca responsable de túnidos. Especificaciones para las operaciones de pesca con red de cerco.

MEX-33 Letter of ATA to National Marine Fisheries Service (April 29, 2013)

MEX-34 Letter of Davis Wright Tremaine LLP to National Marine Fisheries Service (April 30, 2013)

MEX-35 Department of Commerce, “United States Tuna Cannery Receipts January - December 2013 and Comparison”

MEX-36 AIDCP, “Resolution To Adopt The Modified System For Tracking And Verification Of Tuna” (20 June 2001)

MEX-37 Statement of Mario G. Aguilar, Commissioner of Fisheries and Aquaculture (CONAPESCA)

MEX-38 Declaration of P. Donley, Civ. No. CO3-0007 (March 7, 2003)

MEX-39 Kobe II Bycatch Workshop Background Paper

MEX-40 U.S. National Marine Fisheries Service, An Annotated Bibliography Of Available Literature Regarding Cetacean Interactions With Tuna Purse-Seine Fisheries Outside Of The Eastern Tropical Pacific Oceans (November 1996)

MEX-41 Secretariat of the Pacific Community, “The Western And Central Pacific Tuna Fishery: 2006 Overview And Status Of Stocks,” 2008

MEX-42 Secretariat of the Pacific Community, Status of Tuna Stocks and Management Challenges in the WCPO

MEX-43 Proposed Conservation And Management Measure: Mitigating Fishing Impacts on Cetaceans, Paper Prepared by Australia, WCPFC7-20 I O-DP/17 (15 November 2010)

MEX-44 New York Times, “A Small Victory for Whale Sharks” (Dec. 6, 2012)


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MEX-45 Australia and Maldives, “On The Conservation Of Whale Sharks (Rhincodon Typus)”, IOTC–2013–S17–PropD[E] (April 5, 2013)

MEX-46 In the Matter of Matthew James Freitas, et al. (“Freitas case”)

MEX-47 Congressman E Faleomavaega, press release (March 1, 2011)

MEX-48 FAO, “Gillnets and Entangling Nets”

MEX-49 FAO, “Tuna Driftnet Fishing”

MEX-50 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-51 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-52 M. Gomercic, et al., “Bottlenose dolphin (Tursiops truncatus) depredation resulting in larynx strangulation with gill-net parts,” Marine Mammal Science, 25(2): 392–401 (April 2009)

MEX-53 FAO, Industrial Tuna Longlining

MEX-54 OECD Glossary of Statistical Terms

MEX-55

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 (October 2012) (“Odontocete Bycatch”)

MEX-56 FAO Species Identification Guide, Marine Mammals of the World

MEX-57 M. Tetley, J. Kiszka & E. Hoyt, “Defining hotspots for toothed cetaceans involved in pelagic longline fishery depredation in the western Indian Ocean: a preliminary approach”, IOTC-2012-WPEB08-40 (28 Aug. 2012)

MEX-58 NOAA Fisheries Office of Protected Resources, “False Killer Whale”

MEX-59 Hui Malama I Korol et al. v. National Marine Fisheries Service et al., Complaint for Declaratory Judgment and Injunctive Relief, Civil No. CV09 00112 (March 17, 2009)

MEX-60 NOAA, False Killer Whale, Take Reduction Team and Plan, “Frequently Asked Questions”

MEX-61 NOAA Fisheries, Office of Protected Resources, “Pelagic Longline Take Reduction Team”

MEX-62 U.S. National Oceanic and Atmospheric Administration (NOAA), “Pelagic Longline Take Reduction Team Key Outcomes Memorandum”, August 21-23, 2012 (“Key Outcomes Memorandum”)

MEX-63 NOAA, “Pelagic Observer Program”

MEX-64 Turtle Restoration Project, “Pillaging the Pacific” (November 16, 2004)


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MEX-65 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-66 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)

MEX-67 Earthjustice, “False Killer Whales: Wounded by Longline Fishing”

MEX-68

Respuesta a los comentarios y modificaciones efectuadas al Proyecto de Modificación a la Norma Oficial Mexicana NOM-023-PESC-1996, Que regula el aprovechamiento de las especies de túnidos con embarcaciones palangreras en aguas de jurisdicción federal del Golfo de México y Mar Caribe, publicado el 15 de octubre de 2013.

MEX-69 FOA, “Trawl Nets”

MEX-70 U.K. House of Commons, Environment, Food and Rural Affairs Committee, “Caught in the net: by-catch of dolphins and porpoises off the UK coast”, printed January 21, 2004

MEX-71 A. Ross and S. Isaac, “The Net Effect? A Review of Cetacean Bycatch in pelagic trawls and other fisheries in the north-east Atlantic” (Whale and Dolphin Conservation Society) (2004)

MEX-72 L. Nunny, The Price of Fish: A review of cetacean bycatch in fisheries in the north-east Atlantic (Whale and Dolphin Conservation Society) (2011)

MEX-73 Statement of Mexican industry

MEX-74 A. Hamilton et. al., Market and Industry Dynamics in the Global Tuna Supply Chain, FFA, June 2011

MEX-75 M. McCoy, A Survey of Tuna Transshipment in Pacific Island Countries, Gillet, Preston and Associates, Inc., June 2012

MEX-76 16 U.S.C. § 1387

MEX-77 Department of Commerce, “Evaluating Bycatch”, NOAA Technical Memorandum NMFS-F/SPO-66 (October 2004)

MEX-78 Wall Street Journal, “Un-American Tuna” (March 16, 2014)

MEX-79 Advertising Self-Regulatory Council, “NAD Refers Advertising Claims from Chicken of the Sea to Regulatory Agencies for Further Review”

MEX-80 Council of Better Business Bureaus, National Advertising Division

MEX-81 M. Maunder, “Evaluating Recent Trends in EPO Dolphin Stocks”

MEX-82 V. Restrepo, Chair’s Report of the ISSF Tuna-Dolphin Workshop (October 25-26, 2012)

MEX-83 BCI

Confidential statement

MEX-84 Programa Nacional de Aprovechamiento del Atún y Protección de Delfines, Statement of Chief Researcher


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MEX-85 NMFS import statistics

MEX-86 Globefish Highlights: A quarterly update on world seafood markets, issue 2/2011

MEX-87 National Marine Fisheries Service, “Processed Fishery Products”

MEX-88 16 U.S.C. §1371

MEX-89-A BCI

Statement on behalf of Mexican producer

MEX-89-B BCI


MEX-89-C BCI


MEX-90 NOAA Fisheries, “Frequently Asked Questions”

MEX-91 NMFS, Commercial Fisheries Statistics

MEX-92 Customs and Border Protection Headquarters Ruling 733865 (April 15, 1991)

MEX-93 WCPFC, Record of Fishing Vessels

MEX-94 IOTC, “Positive List”

MEX-95 WCPFC, Scientific Committee, Ninth Regular Section, Annual Report to the Commission, Thailand Annual Fishery Report (August 2013)

MEX-96 Atuna, “Big Spread Between Thailand 2013 Skipjack Prices”

MEX-97 European Commission, “European Commission intensifies the fight against illegal fishing” (26 November 2013)

MEX-98 NMFS, Fisheries Statistics and Economics Division

MEX-99 South Pacific Tuna Corporation, “Our Fleet”

MEX-100 Letter from IATTC to Secretary of Commerce enclosing Scientific Report On The Status Of Dolphin Stocks In The Eastern Pacific Ocean (October 30, 2002), Scientific Report

MEX-101 National Tuna Management Plan in Vietnam, report to WCPFC (November 2012)

MEX-102 Centre for the Promotion of Imports from Developing Countries (Wageningen University), “The Vietnamese Seafood Sector: A Value Chain Analysis, complied for the Ministry of Foreign Affairs of the Netherlands (March 2012)

MEX-103 Natural Resources Defense Council, “Net Loss: The Killing of Marine Mammals in Foreign Fisheries” (January 2014)

MEX-104 European Commission, “Commission warns Philippines and Papua New Guinea over insufficient action to fight illegal fishing”

MEX-105 Atuna, “Has The Philippines Pulled PNG Into IUU Trouble?”

MEX-106 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)


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MEX-107 Pew Charitable Trusts, “Why and How to Ratify the Ports State Measures Agreement”

MEX-108 The White House, “Presidential Memorandum -- Comprehensive Framework to Combat Illegal, Unreported, and Unregulated Fishing and Seafood Fraud” (June 17, 2014)

MEX-109 Oceana, Wasted Catch: Unsolved Problems In U.S. Fisheries (March 2014)

MEX-110 IAATC, Ecosystem Considerations

MEX-111 Statement of Dr. Michel Dreyfus

MEX-112 Atuna, “Tuna Market Price Watch”

MEX-113 Concise Oxford Dictionary, 9th ed., D. Thompson (ed.) (Oxford University Press, 1995)

MEX-114 Office of Foreign Assets Control Ruling 031105-FACRL-BU-01 (November 3, 2003)

MEX-115 Procedures for AIDCP Dolphin Safe Tuna Certification (20 June 2001)


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I. INTRODUCTION

1. In its first written submission, Mexico demonstrated that the Amended Tuna Measure violates Article 2.1 of the Agreement on Technical Barriers to Trade (TBT Agreement) and Articles I:1 and III:4 of the General Agreement on Tariffs and Trade 1994 (GATT 1994). In response, the United States has mischaracterized and disregarded Mexico’s arguments and evidence. It has also advanced legal arguments that conflict with the Appellate Body’s findings regarding the report of the original Panel and with the Appellate Body’s interpretation of the relevant provisions and agreements. In this submission, Mexico responds to the arguments raised by the United States and further supplements the legal and factual basis for its claims that the Amended Tuna Measure is inconsistent with Articles 2.1, I:1 and III:4 and, in the case of the violations of the GATT 1994, cannot be saved by the general exceptions in Article XX.

2. This dispute concerns the application of the dolphin-safe label on tuna products sold in the U.S. market. In the original proceedings, both the Panel and the Appellate Body recognized the significant value of the label.1 Among other things, the label is necessary for tuna products to access the principal U.S. distribution channels.2 Thus, the ability to affix the label on tuna products substantially affects the balance of competitive opportunities between tuna products being distributed and sold in the U.S. market.

3. The United States has acknowledged that the objectives of the Amended Tuna Measure are the same as the Original Tuna Measure: (i) ensuring that consumers are not misled or deceived about whether tuna products contain tuna caught in a manner that adversely affects dolphins, and (ii) contributing to the protection of dolphins by ensuring that the U.S. market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins.3 Accurate information on whether the tuna contained in tuna products is dolphin-safe is at the foundation of these objectives.4 If the information is not accurate, it is impossible to ensure that consumers are not misled or deceived. Moreover, the second objective is dependent on the achievement of the first objective: the use of such harmful fishing techniques will be discouraged on the U.S. market through the use of the label only if consumers can accurately distinguish tuna caught in conditions that are harmful to dolphins from tuna caught in conditions that are not harmful to dolphins.5

4. Mexican tuna products continue to be denied the dolphin-safe label, while tuna products from tuna fisheries other than the Eastern Tropical Pacific (ETP) can be easily labelled dolphin-safe when supported only by an unverified copy of a simple statement from a ship’s captain claiming that the tuna is dolphin-safe, with no comparable tracking requirements to verify the source of the tuna and its dolphin-safe status, and without accounting for the substantial adverse

1 Panel Report, US – Tuna II (Mexico), para. 7.289; Appellate Body Report, US – Tuna II (Mexico), para. 233.

2 Confidential Statement (Exhibit MEX-83).

3 United States’ first written submission, para. 14.

4 Panel Report, US – Tuna II (Mexico), paras. 7.412, 7.479, 7.427, 7.507.

5 Panel Report, US – Tuna II (Mexico), para. 7.427.


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impact that the fishing methods used to catch the tuna have on dolphins in non-ETP fisheries. The balance of competitive opportunities between Mexican tuna products and like products from the United States and other countries is being upset on the premise that these other products are dolphin-safe when, in fact, this status cannot be proven. For tuna caught outside the ETP, there are insufficient controls to ensure that a dolphin-safe designation is accurate. As a consequence, it is highly likely to the point of certainty that tuna products containing tuna caught outside the ETP under circumstances causing adverse effects to dolphins are entering the U.S. market inaccurately labeled as dolphin-safe. As a consequence, not only do the measures taken by the United States to comply with the recommendations and rulings of the Dispute Settlement Body (DSB) lack even-handedness, they provide misleading information to U.S. consumers about the dolphin-safe status of the tuna products that they consume.

5. In its first written submission, the United States asserts that an issue raised in this dispute is whether “the U.S. Government and its citizens have been defrauded on an industry-wide scale for over the past two decades.”6 Although this bluntly-stated question is not one that this Panel needs to resolve, the equally blunt answer is yes, consumers have been deceived over an extended period about what the dolphin-safe standard actually means. Certainly the great majority of consumers would be surprised to know that, prior to the adoption of the Amended Tuna Measure, tuna products could be labelled dolphin-safe under the U.S. rules even if dolphins were killed or seriously injured during the harvesting of the tuna. And they would be surprised now as the changes made by the Amended Tuna Measure continue to bring uncertainty about the dolphin-safe status of a tuna product.

6. Even today, there is no information readily available to consumers to explain the U.S. standard. There is no definition on the Department of Commerce website, which instead links to a download of the Dolphin Protection Consumer Information Act, which itself allows tuna caught outside the ETP to be labelled dolphin-safe even if dolphins were killed or seriously injured.7 The Department of Commerce website continues, as before, to discuss risks to dolphins in the ETP and not in other tuna fisheries. As discussed in detail in this submission, there is no way to verify the dolphin-safe status of tuna products containing tuna that is caught outside the ETP.

7. In fact, based on the explanation offered by the United States in its first written submission and on the evidence before the Panel, it appears that the U.S. standard for non-ETP tuna and tuna products now in effect means:

no purse seine net was intentionally deployed on or used to encircle dolphins during the particular set during which the tuna were caught except maybe a few times and probably no dolphins were killed or seriously injured in the sets or other gear deployments in which the tuna were caught, but we’re not sure.

Of course, that is not the standard presented in the statute or regulation, and it is not the standard applied to Mexican tuna products. For Mexican tuna products, there must be an absolute 6 United States’ first written submission, para. 247.

7 See NOAA Fisheries, “Frequently Asked Questions,” available at http://www.nmfs.noaa.gov/pr/dolphin safe/faq.htm (Exhibit MEX-90).


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assurance that no dolphin sets were made, and that no dolphins were killed or seriously injured, backed by the certification of an independent observer on the fishing vessel and by detailed tracking and verification procedures that trace tuna from the moment of capture, to storage in a particular well of the vessel, to transfer to the processing facility, and through to the canning and commercialization of the product. Mexico has demonstrated in its first written submission that the tuna in Mexican tuna products can be traced all the way back to not only the vessel that caught the fish, but also to the well of the vessel in which the tuna was stored after it was caught.8

8. The United States incorrectly takes an extremist interpretation of Mexico’s case. The United States argues that “[i]n Mexico’s view, it is simply impossible for the United States, consistent with its WTO obligations, to recognize some, but not all, fishing methods as ‘dolphin safe’”.9 It argues further that “[i]n Mexico’s view, the United States must make a choice: either the United States must declare Mexico’s preferred fishing method – setting on dolphins with a purse seine net – to be ‘dolphin safe’, or the United States must eliminate the label entirely.”10 Contrary to this characterization, it is possible for the United States to achieve its objectives in a WTO-consistent manner. However, the Amended Tuna Measure does not accomplish this. The measure is discriminatory, arbitrary and not even-handed and, as a consequence, it is inconsistent with Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994. In the case of the GATT 1994, it cannot be saved by Article XX. For the United States to achieve its goals, it must eliminate the arbitrariness and lack of even-handedness in its discriminatory measure. It has not done so.

9. In addition to its substantive arguments, the United States raises various procedural arguments that the Panel does not have jurisdiction to consider Mexico’s claim that the Amended Tuna Measure is inconsistent with Article 2.1 of the TBT Agreement. There is no merit to these arguments. The original Tuna Measure was found to be inconsistent with Article 2.1. The fundamental purpose of this proceeding, in respect of this claim, is to determine whether the Amended Tuna Measure – i.e., the “measure taken to comply” – eliminates this inconsistency. The arguments of the United States unnecessarily complicate what is, in reality, a very simple situation. The Panel clearly has jurisdiction to rule on Mexico’s Article 2.1 claim.

10. Throughout its submission, the United States repeatedly states that “setting on dolphins is particularly harmful to dolphins” (italics original), citing paragraph 289 of the Appellate Body Report, which states that “the Panel accepted the United States’ argument that the fishing technique of setting on dolphins is particularly harmful to dolphins”.11 This statement mischaracterizes the Appellate Body’s statement and quotes it out of context. The Appellate Body carefully distinguished between “the unregulated practice of setting on dolphins and setting on dolphins under the conditions of the AIDCP” (emphasis original).12 Reviewing the

8 Mexico’s first written submission, paras. 158-160.


10 Ibid., para. 1.

11 Ibid., paras. 2, 30, 71, 75, 100, 110, 166, 179, 192, 237, 301, 338 and footnote 348.

12 Appellate Body Report, US – Tuna II (Mexico), para. 260.


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reasoning and the findings of the Panel, the Appellate Body found that there was “no contradiction between, on the one hand, the Panel's finding that the unregulated use of setting on dolphins to catch tuna poses greater risks to dolphins than other tuna fishing methods and, on the other hand, the Panel’s statement that it was not persuaded 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”13 (emphasis original). The Appellate Body found that the Panel did not err when it stated that “it was not persuaded 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”14 (emphasis added). The Panel itself was careful to distinguish between the unregulated setting on dolphins and setting on dolphins under the controlled conditions developed in the context of the AIDCP.15

11. The United States made a strenuous effort to have the Appellate Body reverse these factual findings, alleging that they were unsupported by the evidence. The Appellate Body examined in detail the many arguments advanced by the United States regarding this issue and disagreed with each one.16 In its first written submission, the United States ignores these crucial aspects of the Panel and Appellate Body reports.

12. Mexico has presented even more evidence of the risks to dolphins in tuna fisheries outside the ETP during these proceedings, further confirming the Panel’s original findings about such risks.

13. In light of the tremendous success of the AIDCP in reducing dolphin mortality in the ETP to a statistically insignificant level while allowing the use of a fishing method that promotes sustainability of tuna stocks and limiting harm to other species of sea life, it is important that this Panel distinguish between the practice of setting on dolphins in an AIDCP-consistent manner and otherwise setting on dolphins.

II. RESPONSE TO U.S. DESCRIPTION OF THE RELEVANT FACTS

14. In this section, Mexico responds to the United States’ factual assertions in relation to the following topics: (a) the dolphin-safe status of non-ETP tuna products, (b) the substantial evidence of risks to dolphins from fishing methods used outside the ETP, (c) global practices in protecting marine mammals, (d) the unreliability of captains’ self-certifications, (e) the differences in record-keeping requirements imposed on ETP and non-ETP tuna product manufacturers, (f) the United States’ attempted comparison of the ETP to other fisheries, (g) the lack of deterrence of non-compliance by the United States for non-ETP vessels, and (h) the U.S. claim that the AIDCP is completely independent of the Amended Tuna Measure.


14 Ibid., para. 288.

15 Panel Report, US – Tuna II (Mexico), paras. 7.438, 7.506, 7.612, 7.615 and 7.617.

16 Appellate Body Report, US – Tuna II (Mexico), paras. 253-281.


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A. The Dolphin-Safe Status of Imports from Non-ETP Countries Cannot be Verified

15. The United States attempts to argue that tuna imported from non-ETP locations is unlikely to be non-dolphin-safe because some of the examples Mexico provided related to fishing in the waters of countries that, according to the United States, export relatively little tuna to the United States, such as India and Sri Lanka.17 In support of this argument, the United States relies on customs import statistics and a confidential database of data on vessel flags and gear types purportedly derived from Form 370s and information reported by U.S. canneries when receiving tuna from U.S.-flag vessels. The United States also claims that Mexico has not identified any evidence of dolphin mortalities caused by vessels of the nations that are the principal exporters of tuna products to the United States.

16. Mexico separately analyzes the two key aspects of this U.S. argument below.

1. The U.S. Data On Vessel Flags and Gear Types Is Wholly Unreliable

17. The United States asserts that vessels flagged to Thailand, the Philippines, Vietnam, Ecuador, Indonesia and the United States catch the tuna contained in over 96 percent of the U.S. market for canned tuna.18 In support of this statement, the United States cites Exhibit US-53, which contains statistics on imports of canned and pouched tuna products available from the National Marine Fisheries Service (NMFS). That is the same source as Mexico’s Exhibit 85, which has matching numbers for the year 2012. NMFS itself explains that the source of the import statistics is the U.S. Bureau of Customs and Border Protection:

Where does NMFS get this data?

Well, like everyone else, we purchase the data from the Foreign Trade Division of the U.S. Census Bureau. Census is responsible for compiling the information submitted by importers and exporters to the U.S. Customs and Border Protection. The data are normally scheduled for release to the public 43 days after the close of the statistical month.

Importers and exporters submit their transactions to the U.S. Bureau of Customs and Border Protection using the international Harmonized Commodity Description and Coding System (HS). The HS is the system for classifying goods in international trade which has been developed under the auspices of the World Customs Organization (WCO), located in Brussels. The WCO is an international organization consisting of representatives of about 161 countries. The U.S. is represented in the WCO by the U.S. Bureau of Customs and Border Protection. The International Trade Commission maintains the Harmonized Tariff

17 United States’ first written submission, paras. 116-117.

18 United States’ first written submission, paras. 117 and 124.


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Schedule of the United States used by importers to classify their goods. Exporters use the Schedule B maintained by the U.S. Census Bureau.19

18. The processing of whole tuna into loins (which are then packed into canned or pouched tuna products) is considered under U.S. customs law to be a “substantial transformation” that changes the country of origin of the fish to the country where the processing takes place.20 Accordingly, the country of origin of a tuna product is the country in which the processing took place, not the country of the vessel that caught the tuna. The fact that tuna products have Thai origin, therefore, provides no indication of which nation’s vessels caught the tuna.

19. This is verified by the fact that Thailand’s tuna fishing fleet is capable of providing only an extremely small portion of the tuna used in Thai-processed tuna products. Thailand has no fishing vessels registered with the Western and Central Pacific Fisheries Commission (WCPFC).21 Thailand has two vessels registered with the Indian Ocean Tuna Commission (IOTC) that are currently authorized to operate; they are listed as using “drifting longline.”22

20. Thailand’s lack of a tuna fishing fleet is well known. A 2013 report by Thailand to the WCPFC discusses that “Thailand contributes small amount [sic] of tuna production each year.”23 Consistent with the IOTC vessel registry, the report states that Thailand has two large-scale tuna longliners operating in the Indian Ocean, and adds that Thailand lacks capacity to operate in the Western and Central Pacific Ocean (WCPO).24 The report further states that Thailand imports 800,000 to 900,000 tons of frozen tuna annually to supply its canning industry, and that the leading sources are Taiwan, the United States, South Korea, Vanuatu, Japan, and ASEAN countries.25

21. Another source indicates that in 2013, the leading sources of tuna imported into Thailand were Taiwan, the United States, South Korea, Indonesia, Japan, and the Philippines (the Philippines is a member of ASEAN, and therefore the Thai report’s reference to ASEAN may have meant the Philippines).26

22. Further, it is undisputed that as Mexico previously demonstrated, tuna processors in Thailand obtain 80 percent of their supply from tuna trading companies, who (i) purchase tuna from third parties and (ii) regularly consolidate catches of tuna from different vessels on carrier

19 NMFS, Commercial Fisheries Statistics, available at http://www.st.nmfs.noaa.gov/commercial-fisheries/foreign-trade/index (Exhibit MEX-91).

20 Customs and Border Protection Headquarters Ruling 733865 (April 15, 1991) (tuna caught by Taiwanese vessels was substantially transformed by processing into loins in South Africa, and therefore the country of origin of the loins was South Africa) (Exhibit MEX-92) (Exhibit MEX-52 in original proceeding).

21 Thailand has six “carrier” vessels registered with the WCPFC. WCPFC, Record of Fishing Vessels (Exhibit MEX-93). Carrier vessels transport fish caught by other vessels.

22 IOTC, “Positive List” (Exhibit MEX-94).

23 WCPFC, Scientific Committee, Ninth Regular Section, Annual Report to the Commission, Thailand Annual Fishery Report (August 2013), p. 1 (Exhibit MEX-95).

24 Ibid., p. 2.

25 Ibid., p. 2.

26 Atuna, “Big Spread Between Thailand 2013 Skipjack Prices,” p. 2 (Exhibit MEX-96).


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ships, making it especially difficult, if not impossible, to trace the original sources of the tuna.27 There is therefore good reason to question whether Thailand’s import statistics are accurate.

23. The problem of accuracy is not limited to Thailand. Illegal, unreported and unregulated (IUU) fishing is a global phenomenon. For example, the European Union recently issued warnings to a number of countries, including South Korea and Vanuatu (both major suppliers to Thailand) about their failure to keep up with international obligations to fight illegal fishing.28

24. In any event, the claim of the United States that all Thai-origin tuna products contain tuna caught by Thai-flagged vessels is self-evidently and blatantly incorrect. The United States lacks information on the sources of the tuna used in Thai tuna products, as well as in tuna products imported from other countries that are not members of the AIDCP, including Vietnam, the Philippines, and Indonesia. The lack of such information extends to tuna loins imported from Thailand for use in the U.S. canneries of Bumblebee and Chicken of the Sea,29 as the origin of the loins would be reported as Thai even though the tuna was caught, for example, by a Taiwanese- or Sri Lankan-flagged vessel.

25. This blatant inaccuracy in the U.S. information calls into doubt much, if not all, of the U.S. data on the sources of tuna in non-ETP tuna products and the gear types used to capture that tuna. Without independent observers and a process for precisely tracking tuna from a specific well on a fishing vessel, all the way through production, into specific cans – such as the process that Mexico has implemented – there is no credible way to identify the source of the tuna, the manner in which it was harvested, and whether or not dolphins were killed or seriously injured during the set in which the tuna was caught.30

26. In addition, Mexico notes that the United States is legally incorrect when it asserts that tuna products containing tuna caught by Iranian-flag vessels are prohibited from import into the United States.31 The U.S. agency that administers the U.S. embargo of Iran – the Office of Foreign Assets Control – follows the origin determinations of the U.S. customs authorities.32 Thus, for example, imports of tuna products made in the Philippines containing the meat of fish

27 Mexico’s first written submission, paras. 163–170.

28 European Commission, “European Commission intensifies the fight against illegal fishing” (26 November 2013), available at http://europa.eu/rapid/press-release_IP-13-1162_en.htm (Exhibit MEX-97).

29 Mexico’s first written submission, para. 185.

30 Mexico notes that Exhibit US-54, which purports to show the number of “vessel records” associated with imports of “tuna product” into the United States, is completely unverified and unexplained. Nonetheless, the NMFS reports that in 2012, the United States imported almost two million kilos of tuna from Sri Lanka (including fresh and frozen), valued at over $20 million, and over 100,000 kilos of canned tuna from India. NMFS, Fisheries Statistics and Economics Division (Exhibit MEX-98). Mexico submitted evidence that there is substantial dolphin bycatch in gillnet fisheries off the coasts of Sri Lanka and Yemen. Mexico’s first written submission, para. 109. All of those tuna and tuna products was eligible to be sold as dolphin-safe in the United States.


32 See, e.g., Office of Foreign Assets Control Ruling 031105-FACRL-BU-01 (November 3, 2003) (“If under

the Customs Rules of Origin, the Burmese lumber was ‘substantially transformed’ in a third country, then the goods would not be considered products of Burma and are not prohibited from importation by Executive Order 13310”), available at https://web.archive.org/web/20050121015713/https://www.treas.gov/offices/ enforcement/ofac/rulings/bu120103.pdf (Exhibit MEX-114).


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caught by the Iranian fleet would be treated by the United States as Philippine-origin products, both for customs purposes and for purposes of enforcing the embargo of Iran. Those products therefore would be legal for importation.

2. Mexico’s Evidence of Risks to Dolphins in Non-ETP Fisheries

27. The United States claims that Mexico must show that tuna caught by vessels of particular countries using particular gear types are included in tuna products exported to the United States. Given that the United States itself has no reliable method for tracing the sources of tuna products and the method by which they were captured, Mexico does not agree that it is necessary to show that a specific shipment of non-dolphin-safe tuna was made.33 Mexico has nonetheless demonstrated that, considering the facts, the risks are very high that tuna products containing tuna caught using methods, or under circumstances, that do not comply with the U.S. dolphin-safe requirements are being sold in the U.S. market under the dolphin-safe label.

28. In this regard, Mexico has established that many dolphins have been killed in the WCPO by vessels fishing for tuna with purse seine nets.34 In addition, Mexico has established that other fishing methods that are used globally, especially longline fishing, gillnet fishing and trawl fishing, are highly destructive to dolphins, with both direct and indirect effects.35

29. Highlights of available evidence regarding the fishing fleets of specific countries that export tuna products to the United States or harvest tuna used in such tuna products are reviewed below.

a. United States

30. Mexico has established that U.S.-flag vessels set purse seine nets on dolphins in the WCPO without self-reporting such events.36 The United States seeks to minimize the importance of the Freitas case by claiming it reflects the behavior of only “one captain”, who was the captain of the Ocean Conquest.37 But in the Freitas case, two vessels were penalized for setting nets on dolphins. The other vessel, the Ocean Encounter, was found to have set nets on dolphins four times during a single voyage.38 The United States inaccurately suggests that the penalty assessed on the Ocean Conquest operators for setting on dolphins was $215,776.77,39 when in fact over $200,000 of that penalty was for violations on restrictions on the deployment

33 In the original proceeding the Appellate Body noted “[w]ith respect to tuna fishing outside the ETP, the participants do not contest that the vast majority of tuna caught in the western Pacific Ocean is caught with FADs, trolls, or gillnets, and that US and foreign vessels use these fishing techniques.” Appellate Body Report, US – Tuna II (Mexico), para. 251.

34 See, e.g., Mexico’s first written submission, para. 119. See also Panel Report, US – Tuna II (Mexico), para. 7.523.


36 Ibid., paras. 120-124.


38 Freitas case, pp. 98-100. (Exhibit MEX-46).



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of FADs. The actual fine for setting a net in association with dolphins was $11,000.40 The total fine for the Ocean Encounter for setting nets in association with dolphins was $44,000 (four times $11,000).41

31. All of the vessels at issue in the Freitas case are managed by a single company, the South Pacific Tuna Corporation. The company operates 18 tuna fishing vessels.42 As Mexico explained in its first written submission, a senior officer of that company testified that for the company – i.e., all of its 18 vessels – “it was not possible to relate any particular fish sold for the trip to a particular, individual set.”43 Thus, as Mexico stated, it is impossible for those vessels to comply with the purported requirement of the 2013 Final Rule that tuna caught in a set that harms dolphins be segregated from tuna caught in dolphin-safe sets all the way through to the point at which the tuna is offloaded at port.44 The United States criticizes Mexico for using the word “impossible,” but offers no evidence to contradict the testimony of the corporate officer.45

32. Mexico also established that U.S. longline vessels kill and injure dolphins, both in the area of Hawaii and in the Atlantic.46 The United States acknowledges that evidence, but tries to minimize it. In the case of the Hawaii fishery, the United States defends the harm by arguing that the absolute numbers of dolphins harmed is relatively low, even if the killings are above the U.S.-established “potential biological removal” (PBR) percentage of the dolphin population.47 In the case of the Atlantic fishery, the number of dolphins killed is higher, but United States claims that those deaths are not relevant because the number of dolphins harmed is below the PBR.48

33. In 2002, the Southwest Fisheries Science Center (SWFSC) of the NMFS submitted its “Report of the Scientific Research Program under the International Dolphin Conservation Program Act” (SWFSC report) to the IATTC for its comments. In a report submitted to the U.S. Secretary of Commerce, the IATTC noted:

The SWFSC calculations of PBR shows that the observed mortality is 36% of PBR for eastern spinner dolphins and 28% of PBR for northeastern spotted dolphins. Thus, even if the unobserved mortality increased the mortality by almost 300% relative to the observed mortality, the total mortality in the fishery would still be below the PBR for these stocks. In other words, the level would be acceptable in the risk-averse approach that the NMFS uses in every other case in which there is an

40 Freitas case, p. 96 (Exhibit MEX-46).

41 Ibid., p. 98-100 (Exhibit MEX-46).

42 South Pacific Tuna Corporation, “Our Fleet”, available at www.sopactuna.com/portfolio/ (Exhibit MEX-99).








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interaction between a commercial fishery and marine mammal populations.49

It is inconsistent and arbitrary for the United States to rely on its PBR calculations to defend dolphin mortalities caused by its own Atlantic longline fleet, while disregarding its PBR calculations for the ETP tuna fishery, where the U.S. fleet does not fish.50

34. Most importantly, the United States does not explain why killing and injuring dolphins with longlines would be considered acceptable by consumers of dolphin-safe tuna products who, according to the declared objectives of the Amended Tuna Measure, must be accurately assured by the label that the tuna was captured without harm to dolphins.

35. In trying to draw a contrast between the U.S. fishery in the Atlantic and the AIDCP regime, the United States claims that the AIDCP does not provide for the monitoring of the number of dolphins that are seriously injured.51 But in support of that claim, the United States cites to a document from the IATTC that reports on the number of dolphins injured in the ETP. In other words, the United States relies on evidence that directly contradicts and disproves its allegation.52

b. Vietnam

36. According to a report on Vietnam presented to the WCPFC, Vietnam’s fleet fishes for tuna using longlines, purse seine nets, gillnets and hand lines; Vietnam lacks a reliable count of its tuna fishing vessels; Vietnam lacks a reliable method to track the quantity of tuna landings; Vietnam has not established an observer program; and Vietnam does not have an enforceable or accurate log book program.53

37. A report on Vietnamese fisheries prepared by Wageningen University for the Ministry of Foreign Affairs of the Netherlands states as follows:

In Vietnam, tuna fisheries are considered to be the most important type of fishery. However, availability of data regarding tuna catch and species is limited. In 2010, catch of Yellow Fin tuna and Big Eye tuna were estimated at 17,000 tonnes, while an estimated 20,000 tonnes of Skipjack was caught. Participants of the strategic conference estimated the catch of Skipjack at less than 20,000 tonnes. More specific data could not be provided. Tuna is caught using long line, purse seines and gillnets. Long

49 Letter from IATTC to Secretary of Commerce enclosing Scientific Report On The Status Of Dolphin Stocks In The Eastern Pacific Ocean (October 30, 2002), Scientific Report, p. 2 (Exhibit MEX-100) (Exhibit MEX-67 in original proceeding).

50 The original Panel observed that it was “clear, from the United States' own description of its objectives, that its intention to address adverse effects of fishing techniques on dolphins in the form of observed or unobserved mortality is not subordinated to considerations relating to the conservation of depleted dolphin stocks”. Panel Report, US – Tuna II (Mexico), para. 7.550). PBR is relevant to the conservation of fisheries stocks.


52 See Exhibit US-26, p. 3.

53 National Tuna Management Plan in Vietnam, report to WCPFC (November 2012), pp. 6, 7, and 13 (Exhibit MEX-101).


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lines are used only in the three central provinces of Vietnam (i.e. Binh Dinh, Phu Yen and Khanh Hoa), while gillnets and purse seiners are used in almost all coastal provinces. Gillnet and purse seiners are catching mainly Skipjack tuna, but shark, rays, and mackerel are an important bycatch.

In Vietnam, tuna catch volumes are not sufficient to provide the processing industry with enough raw material. Therefore tuna is imported from other countries. These low catch volumes are partially the result of the small size of most Vietnamese fishing vessels and the fact that they do not fish in international waters. In 2010 more than 52,000 tonnes of tuna was imported with a value of USD95m. In the period 2006-2009 an annual volume of 35,000-45,000 tonnes was imported. Vietnam imported about 52,000 tonnes of tuna in 2010. Although it is likely that most imported tuna are Skipjack and Yellow Fin tuna, no detailed information about the imported species is available. Information about the countries of origin is also lacking. However, during an interview with an exporter it was mentioned that in 2010 Vietnam imported significant volumes of tuna from Taiwan.54

Thus, Vietnam imports most of the tuna it uses to make tuna products from Taiwan and other unknown sources.

38. The United States has no reliable method to determine the source of the tuna contained in Vietnamese tuna products, and therefore has no way to verify dolphin-safe claims made for such products.

c. Philippines

39. Mexico submitted evidence that Philippine tuna purse seine vessels have killed thousands of dolphins,55 that Philippine fishers use gillnets to catch dolphins,56 and that Philippine “group seine operations” are eligible for exemption from the WCPFC’s general prohibition on transshipments at sea.57

40. The European Commission recently issued a warning to the Philippines (as well as to Papua New Guinea (PNG)) of potential sanctions for countries it considers non-cooperative in the fight against IUU (illegal, unreported and unregulated) fishing. The Commission stated:

54 Centre for the Promotion of Imports from Developing Countries (Wageningen University), “The Vietnamese Seafood Sector: A Value Chain Analysis, complied for the Ministry of Foreign Affairs of the Netherlands (March 2012), p. 18 (Exhibit MEX-102).


56 Mexico’s first written submission, para. 127. See also Natural Resources Defense Council, “Net Loss: The Killing of Marine Mammals in Foreign Fisheries” (January 2014), p. 20 (“In the Philippines, spinner dolphins (as well as Fraser’s dolphins …) are known to suffer significant levels of bycatch-related mortality, some of it due to tuna driftnet fisheries.”) (Exhibit MEX-103).



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Today’s decision highlights that these countries are not doing enough to fight illegal fishing. It identifies concrete shortcomings, such as lack of system of sanctions to deter IUU activities or lack of actions to address deficiencies in monitoring, controlling and surveillance of fisheries.58

41. An article on the European Commission’s warning to the Philippines provides the following additional information:

The Bureau of Fisheries and Aquatic Resources (BFAR) in the Philippines, has often failed to account where fish used in Filipino canneries was coming from. During inspections in the Philippines, EU authorities have come to the conclusion that BFAR had very little knowledge of where their flagged vessels were moving, and knew little about the PNA Vessel Day Scheme, the system its fleet is operating under in PNG waters.

In December last year, the Philippines and PNG created a joint committee to draft a detailed monitoring control and surveillance system over tuna exports. Filipino fishermen in PNG have always wanted to expand export to the EU, but the absence of certificates of origin has commonly obstructed this.

Authorities from the Philippines, in the past, have blamed PNG for not supplying them with sufficient information. Many Filipino-flagged tuna fishing vessels are operating in the EEZ of PNG. Papua New Guinea supplies the observers onboard of the Philippine vessels fishing within its EEZ, and they are only reporting information back to fishing management authorities in PNG and not to those in the Philippines.59

42. The United States has no reliable method to determine the source of the tuna contained in Philippine tuna products, and therefore has no way to verify dolphin-safe claims made for such products.

d. Taiwan

43. Taiwan has by far the largest tuna fishing fleet in the WCPO, and is the largest supplier of tuna to Thailand and other countries. Mexico has established that Taiwan uses gillnets to catch tuna,60 and that the Taiwanese longline fleet kills dolphins.61 A recent report published by the Natural Resources Defense Council (NRDC) included the following description of the Taiwanese fleet:

58 European Commission, “Commission warns Philippines and Papua New Guinea over insufficient action to fight illegal fishing”, available at http://europa.eu/rapid/press-release_IP-14-653_en.htm?subweb=347&lang=en. (Exhibit MEX-104).

59 Atuna, “Has The Philippines Pulled PNG Into IUU Trouble?” (Exhibit MEX-105).




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Taiwan maintains a massive distant-water fishing fleet, including tuna purse-seiners and longliners that are responsible for killing a large number of marine mammals in foreign fishing grounds. At more than 1,900 vessels, the country’s fleet is currently the largest in the Western and Central Pacific and contributes significantly to the region’s outsize tuna catch, which represents some 60 percent of the entire world’s tuna.

Specific bycatch statistics for marine mammals killed in Taiwanese distant-water purse seines are not available. But the scale of the fishery, along with the lack of management, is cause for concern. NGOs have reported that observer numbers are insufficient and that observers are often unable to perform their jobs without interference from fishing operators; accordingly, any official bycatch figures for the fishery are likely to underestimate the impact.

The Taiwanese offshore and distant-water driftnet fleet was also identified in Global Priorities for Reduction of Cetacean Bycatch as a problem fishery and conservation priority. Taiwanese gillnetters targeting tuna previously operated in waters north of Australia, where they killed a variety of small cetaceans including spinner dolphins and Indo-Pacific humpback dolphins (Sousa chinensis). This fishery caught approximately 14,000 cetaceans in a span of only four and a half years. After the Taiwanese were expelled from Australian waters due to high levels of cetacean bycatch, the fishers are believed to have moved to Indonesian waters. Illegal, unreported, and unregulated Taiwanese vessels have also been identified as a particular problem in offshore waters of the Philippines, where enforcement measures are lacking.

Nearshore Taiwanese fisheries are also likely to represent a serious bycatch threat to cetaceans, as documented in the 2005 paper Report of the Second Workshop on the Biology and Conservation of Small Cetaceans and Dugongs of South-East Asia (“Workshop Report on Southeast Asia Bycatch”). The paper summarizes the findings of a 2002 Convention on Migratory Species workshop focusing intently on bycatch threats, conservation status, and relevant legislation applicable to marine mammals in Southeast Asia. According to the paper, between 27,000 and 41,000 cetaceans are incidentally killed each year by the fisheries in the eastern waters of Taiwan. The report notes that while these estimates are ‘highly provisional because of the many assumptions involved and the relatively small sample sizes for the observations,


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they are indicative of large-scale mortality’ taking place in the region.62

44. Based on the foregoing, there is a material risk that tuna caught by Taiwanese vessels and processed into tuna products, particularly in Thailand, for sale in the United States may not comply with the U.S. dolphin-safe requirements.

e. Indonesia

45. With regard to Indonesia, the NRDC report states: “Unfortunately, Indonesia has not established any effective bycatch mitigation measures, and monitoring is largely nonexistent despite the sheer scale of offshore fishing operations in the country.”63 Thus, as with the other major producing countries, there can be no assurance that any particular lot of Indonesian tuna or tuna products comply with the U.S. dolphin-safe requirements.

f. Other Countries

46. The U.S. Pelagic Longline Take Reduction Team report referenced in Mexico’s first written submission states:

There is a consensus among the Team that management standards required by the Plan, the MMPA and other provisions of U.S. law are more protective of marine mammals than those of many other countries operating longline fleets. Consequently, the Team recommends that NMFS should promptly implement the requirements of Section 101 of the MMPA requiring the banning of imports of fish products from nations engaged in longline fishing until and unless such nations can demonstrate they are utilizing measures comparable to those of the U.S. longline fleet so as to protect pilot whales and other marine mammals from bycatch. At present, we have reason to believe that no nation has demonstrated such compliance and therefore importation of tuna, swordfish and other longline caught fish products from these nations should be banned. NMFS should work to ensure that measures adopted by the U.S. fleet are made known to other countries operating longline fleets so as to increase the likelihood of such measures being adopted by those nations.64 (emphasis original)

Thus, notwithstanding that in this proceeding the United States is representing that there are no imports of tuna caught with longlines that were captured while harming dolphins, the U.S. Pelagic Longline Take Reduction Team believes otherwise.

62 Natural Resources Defense Council, “Net Loss: The Killing of Marine Mammals in Foreign Fisheries” (January 2014), p. 29 (footnotes omitted) (Exhibit MEX-103).

63 Ibid., p. 31.

64 Pelagic Longline Take Reduction Team, Key Outcomes Memorandum (August 2012), p. 24 (Exhibit MEX-62).


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47. In light of the above evidence and other information submitted by Mexico, there is no basis for the U.S. claims that dolphins are safer in fisheries outside the ETP than they are within the ETP.

B. There is Substantial Evidence on Risks to Dolphins From Alternative Fishing Methods Outside the ETP

48. The evidence clearly demonstrates that there are significant risks to dolphins in tuna fisheries outside the ETP, resulting from the use of a number of different fishing methods. The United States has not explained why these other fishing methods – including the use of purse seine nets outside the ETP, longlines, gillnets, trawls and high seas driftnets – should be considered to be inherently dolphin-safe. Each is briefly reviewed below.

1. Purse Seine Fishing

49. As Mexico described in its first written submission, the association of tuna and dolphins has been observed and documented in ocean regions other than the ETP.65 The fact that thousands of dolphins are being killed in purse seine nets outside the ETP suggests that vessels are regularly intentionally setting on dolphins outside the ETP, even when claiming to be FAD fishing. On the other hand, if the thousands of dolphins are being killed because of “accidents”, as the United States alleges, the association between dolphins and purse seine fishing outside the ETP must be especially strong.66

2. Longline Fishing

50. Longline fishing attracts dolphins – which are drawn to the bait on the hooks – meaning that dolphins “associate” with longline fishing.67 Additional evidence verifying the association is available from a 2008 report published by NMFS.68 The report described limited observer coverage (about 10 percent) that had been provided the prior year for the U.S. “Atlantic Pelagic Longline” fleet. The Atlantic longline fleet has been deemed a “Category I” fishery under U.S. law due to “frequently documented interactions with marine mammals.” The report includes notes of the observers, such as the following:

Animal very young. It appeared that 1-2 foot of the leader to the hook was wrapped around the tail and the crew quickly cut the line. Hook and partial leader were left on the animal. Sank motionless out of sight after being cut off, and considered dead. When setting gear there were a group of dolphins all around the boar and [sic] the gear was being set. They had a black stripe along top of body (Spinners?). No adjustments were made to avoid the animals. The biopsy pole was closer than camera, but crew

65 See, e.g., Mexico’s first written submission, para. 109.

66 Panel Report, US – Tuna (II) (Mexico), para. 7.306.

67 Mexico’s first written submission, paras. 109 and 133-137.

68 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) (hereinafter “Estimated Bycatch”) (Exhibit MEX-106).


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cut line before I could take sample. Last hook set that caught the dolphin.69 (emphasis added)

This report reaffirms the dolphins are attracted to the longline vessels.

51. Mexico also has shown that even when dolphins do not die immediately from an interaction with longlines, they are at risk of serious mutilation and other harm.70 The NMFS report contains further observer notes supporting that conclusion, samples of which are quoted below:

“Animal pulled as close to the vessel as possible; line cut. Line around tail before caudal peduncle. Made red cuts but were not bleeding. Animal swam away.”

“Mono leader cut quickly; 40-50 feet of line left trailing. Unknown if hooked, but a single gangion seemed to be connected with the animal's head or mouth; however observer was never able to see entire head or mouth as it never came above the surface. Most likely entangled by mess of mono and dobs. Alive, swam away abnormally. Pelvic fin up in air. Animal breathing but not moving; animal would twist body to breath - observer heard breath. Animal upside down with pelvic fin out of water. Could see animal in same position as boat moved forward to the point that it was no longer visible.”

“Animal was hooked in lower side of mouth. Attempted to unhook using long-handled dehooker. Could not get animal close enough to dehook; cut line as close to hook as possible using hand held line cutters – animal released with 3 feet of line left. Took one deep breath then dove; swam away normally.”71

It remains unclear why, in this proceeding, the United States claims that this type of mutilation and rough handling is not an important “indirect effect” of longline fishing.

52. Mexico previously noted that longlines can be up to 90 miles in length. Accordingly, although some dolphins that are entangled in the longlines may be pulled close to the vessel, other dolphins can be injured by the hooks well outside of the visible range of an observer and never be seen.72 The United States did not respond to that evidence.

3. Gillnet Fishing

53. Mexico has established that gillnet fishing kills hundreds of thousands of dolphins annually, and that this fishing method is used by some of the nations that are the largest suppliers of the tuna used in the production of tuna products.73

69 Estimated Bycatch, p. 56 (Exhibit MEX-106).

70 See, e.g., Mexico’s first written submission, paras. 144-149.

71 Estimated Bycatch, pp. 56-58 (Exhibit MEX-106).

72 Mexico’s first written submission, paras. 132 and 138.



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54. High seas driftnets are a type of gillnet. With regard to high seas driftnet fishing, the United States avoids the key point: Form 370 does not require any certification that tuna was not caught by high seas driftnets as a condition for the tuna and tuna products to be dolphin-safe, and in fact there is no mechanism to prevent entry of fish caught in high seas driftnets, other than for Italy. The U.S. response is that high seas driftnet fishing is not really a problem so it is unnecessary to regulate imports, and that, in any event, it trusts that foreign exporters always provide accurate information on whether tuna was harvested with that method74 – even though the information provided on Form 370 is unverifiable (except for tuna and tuna products from the ETP). Moreover, the United States does not comment on the fact that the three shipments that contained tuna actually identified as caught in high seas driftnets were apparently allowed to be imported and labelled as dolphin-safe. Mexico has therefore demonstrated that tuna caught with driftnets on the high seas is eligible to be labelled dolphin-safe under the Amended Tuna Measure.

4. Trawl Fishing

55. Mexico has established that trawl fishing kills and injures dolphins.75

C. Global Practices Do Not Support Discrimination in Treatment

56. With regard to what the United States calls an “emerging international trend” to prohibit fishing vessels from setting in association with cetaceans, the United States cites a proposal it submitted to the ICCAT one week before filing its first written submission, and largely identical resolutions adopted by the WCPFC and IOTC in 2013. The United States omits to mention the following:

None of those three Regional Management Fisheries Organizations has adopted, or has plans to adopt, measures to protect dolphins that are remotely comparable to those of the AIDCP. None of them has even proposed a comprehensive program involving use of special equipment, training, monitoring, tracking, verification, and certification.76

In particular, none of those organizations has established programs featuring the use of trained independent observers who are marine biologists onboard every large tuna fishing vessel fishing for tuna in their fishery regions. The goals for observer coverage in both the ICCAT and IOTC are five percent, and observers have no responsibility to monitor harm to dolphins. Observer coverage in the WCPFC is higher, but observers have no responsibility to monitor harm to dolphins, and in most instances the reports are not even shared with the WCPFC.77

57. Indeed, if those other Regional Fisheries Management Organizations had functioning systems to reliably monitor for harm to dolphins and validate and certify the dolphin-safe status



76 See Mexico’s first written submission, para. 110.

77 See Mexico’s first written submission, para. 110.


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of tuna, it should be a simple matter for the United States to require independent observer certifications for tuna caught in those fisheries, pursuant to the 2013 Final Rule.78 Instead, the United States asserts that requiring observers from non-ETP fisheries would be an “expensive requirement.”79 It further argues: “[o]f course, such an approach is entirely unworkable for many Members given the expense of administering an observer program, particularly without the support of the RFMO.”80 But there is no evidence that the United States has sought to have the other RFMOs create or fund comprehensive observer programs.

58. In publishing the Final Rule on July 9, 2013, NMFS responded to a comment that observers outside the ETP are not qualified or authorized to report on marine mammal interactions by stating “NMFS acknowledges that these skills are complex, and that many existing observer programs give little attention to marine mammal interactions.”81 The United States has not acted to remedy that situation.

D. Captains’ Self-Certifications are Insufficient to Ensure Compliance

59. The United States claims that a captain’s self-certification is sufficient to verify compliance with the requirements for dolphin-safe tuna products. It asserts that, in publishing the amended regulations, NMFS stated that it “considers the captain statement to provide accurate information.”82 But NMFS did not actually say that; rather, it stated:

The DPCIA itself expressly mandates the use of written statements by captains to attest that either no purse seine net was intentionally deployed on or used to encircle dolphins during the trip in which the tuna were caught, and (in some cases) to also attest that no dolphins were killed or seriously injured in the sets or other gear deployments in which the tuna were caught. The tracking and verification system does not rely solely on certifications by fishing captains. As described elsewhere in this rule, certifications by an onboard observer or by an authorized representative of the nation participating in a qualified and authorized observer program are also used to help verify the dolphin-safe status of the harvested tuna for some fishing trips. The tracking and verification system also includes recordkeeping and inspections at processing facilities and certifications by importers and exporters.83 (emphasis added)

Thus, NMFS did not claim that the captain’s certification is reliable. Rather, it said that a certification by an independent observer verifies the dolphin-safe status of the tuna “for some fishing trips” – i.e., fishing trips within the ETP only. The record-keeping and inspections at processing facilities – which is only required for processing facilities in the United States and in

78 2013 Final Rule, 50 CFR § 216.91(a)(2)(iii)(B) and 216.91(a)(4)(ii) (Exhibit MEX-7).



81 2013 Final Rule, 78 Fed. Reg. 40997, 40999 (July 9, 2013) (Exhibit MEX-7).


83 2013 Final Rule, 78 Fed. Reg. 40997, 40999 (July 9, 2013) (Exhibit MEX-7).


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the ETP, but not elsewhere – cannot improve the accuracy of captains’ certificates. Nor can certifications by importers and exporters, who of course are not present on the vessels when the tuna are caught.

60. In this regard, the United States’ claim that “the level of compliance with the additional requirements has been high from the very beginning”84 relates only to the filing of documents submitted at the time of importation – Form 370 and a captain’s certificate – not to the accuracy of the documents. The fact that captains’ certificates apparently were presented with imported tuna products85 “immediately following publication of the 2013 Final Rule”86 should have raised suspicions, as according to the United States, the tuna contained in those products would have been harvested as long as six months earlier, prior even to the publication of the proposed rule.87 The United States does not explain how the importers obtained reliable captains’ certifications for fishing voyages that took place months earlier, and prior to the captains even knowing that they were expected to monitor for dolphin deaths and injuries.

61. In fact, the U.S. assertion that captain statements are a “core implementation tool” to verify compliance with all applicable fishing rules88 is contradicted by the widespread IUU fishing that certain nations, including the European Union as discussed above, are attempting to combat. The U.S. citation to the Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing is misplaced, as that treaty is not in force.89

62. Indeed, President Obama recently announced a new initiative to focus the resources of the U.S. government in discouraging IUU fishing. His memorandum states:

Nevertheless, illegal, unreported, and unregulated (IUU) fishing continues to undermine the economic and environmental sustainability of fisheries and fish stocks, both in the United States and around the world. Global losses attributable to the black market from IUU fishing are estimated to be $10-23 billion annually, weakening profitability for legally caught seafood, fueling illegal trafficking operations, and undermining economic opportunity for legitimate fishermen in the United States and around the world.

It is in the national interest of the United States to promote a framework that supports sustainable fishing practices and combats seafood fraud and


85 The United States indicates that “many” of the forms were associated with frozen tuna, implying that the rest related to tuna products. United States’ first written submission, footnote 27.


87 According to the United States, any tuna product sold prior to January 1, 2014 likely contains tuna caught on trips that started prior to July 13, 2013.


89 Pew Charitable Trusts, “Why and How to Ratify the Ports State Measures Agreement,” available at http://www.pewenvironment.org/news-room/compilations/stopping-illegally-caught-fish-at-the-dock-85899496894 (Exhibit MEX-107).


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the sale of IUU fishing products. To achieve these objectives, the United States will need to enhance the tools it has available to combat IUU fishing and seafood fraud …; strengthening coordination and implementation of existing authorities to combat IUU fishing and seafood fraud; working with the Congress to strengthen and harmonize the enforcement provisions of U.S. statutes for implementing international fisheries agreements; and working with industry and foreign partners to develop and implement new and existing measures, such as voluntary, or other, traceability programs, that can combat IUU fishing and seafood fraud, and ensure accurate labeling for consumers.90 (emphasis added)

Apparently, therefore, the U.S. government agrees that there are significant problems with the traceability and accurate labelling of fish.

63. There are problems with obtaining accurate information on bycatch within the United States as well. A recent report by Oceana on bycatch included the following comments:

One of the biggest problems with low and inconsistent observer coverage is what is known as the “observer effect,” where fishermen actually fish in different locations or underreport bycatch when observers are not onboard to monitor their activities. The existence of this phenomenon means that actual bycatch could easily be much higher than existing estimates suggest. Employing more extensive monitoring is one of the only ways to produce accurate bycatch estimates. The need for accurate and precise bycatch data, and the significant cost of at-sea observers, highlights the importance of developing new technology and incentives to accurately report bycatch.91

* * *

For protected species such as whales, dolphins, seals, sea turtles and seabirds, the picture is even worse. Marine wildlife of all kinds becomes hooked, entangled, injured or drowns during the course of fishing activities. Some animals are particularly vulnerable to certain types of fishing gear depending on what they eat, where they live and how far they migrate. For example, sea lions and large whales often become entangled in gillnets, while sea turtles are most often captured by trawls and longlines. Unfortunately, accurately estimating the magnitude of these entanglements and deaths is even more difficult than estimating the rate of fish discarding, because the likelihood of an observer being onboard to report the incident is lower. A scientific report recommended that observer coverage must be at least 50 percent to accurately estimate marine mammal and sea turtle bycatch, and for some rare and endangered species,

90 The White House, “Presidential Memorandum – Comprehensive Framework to Combat Illegal, Unreported, and Unregulated Fishing and Seafood Fraud” (June 17, 2014) (Exhibit MEX-108).

91 Oceana, Wasted Catch: Unsolved Problems In U.S. Fisheries (March 2014), p. 12 (footnotes omitted) (Exhibit MEX-109).


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100 percent coverage is necessary. These recommended levels are far higher than the 1-5 percent that is common among many fisheries, if they are even observed at all.

Under the Marine Mammal Protection Act, NMFS is required to publish assessments for all marine mammals, including information about fishing mortality. In 2013, at least one-third of these assessments relied on outdated data and did not provide estimates of fishing mortality, as required. Bycatch exceeds mortality limits established by law for 20 percent of the marine mammal populations in the U.S. Even worse, human-related mortality is not even estimated for one-third of marine mammal populations, as is also required by law.

Without enhanced monitoring for entanglement events, bycatch estimates for protected species will remain highly uncertain and therefore ineffectively managed.92

E. The Record-keeping Requirements Imposed on Mexican Products are Different than those Imposed on U.S. and other Non-ETP Producers

64. With regard to record-keeping, the United States agrees that “detailed record-keeping requirements exist only for the tuna caught by large purse seine vessels operating in the ETP pursuant to the AIDCP.”93 The United States also agrees that those requirements apply to tuna products imported from an AIDCP country.94 The United States also expressly agrees that the Amended Tuna Measure does not impose any new record-keeping or verification requirements for non-U.S. processors.95 It is therefore undisputed that with regard to record-keeping, the Amended Tuna Measure imposes different requirements on tuna products from the ETP than it does on tuna products from other regions.

65. Also, importantly, the United States has confirmed that “no U.S.-flagged large purse seine vessels currently operate in the ETP”.96 Thus, no tuna products containing U.S.-caught tuna are subject to the extensive tracking and record-keeping requirements for ETP tuna contained in 50 CFR sections 216.92 and 216.93.97

92 Oceana, Wasted Catch: Unsolved Problems In U.S. Fisheries (March 2014), p. 13 (footnotes omitted) (Exhibit MEX-109).

93 United States’ first written submission, para. 44 (emphasis added).

94 United States’ first written submission, para. 46. Contrary to the claim of the United States in paragraph 47 of its first written submission, Mexico did not state that tuna caught by non-purse seine vessels and vessels not using purse seines were subject to those requirements. See, e.g., Mexico’s first written submission, para. 84 (“… the dolphin-safe documentation requirements are the same for all tuna products containing tuna caught by large purse seine vessels fishing in the ETP”) (emphasis added). This is one of many examples of the U.S. tactic of responding to arguments and claims that Mexico did not actually make.

95 United States’ first written submission, para. 242 (“The amended measure provides for certain record-keeping and verification requirements for U.S. processors (but not foreign ones.)”) (emphasis added).

96 United States’ first written submission, footnote 84.

97 Accordingly, when the United States in paragraph 45 of its first written submission says that “[w]hen tuna caught by a U.S.-flagged large purse seine vessel in the ETP is delivered to a U.S. tuna processor, the associated

Footnote continued on next page


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66. As Mexico noted in its first written submission, in 2013 tuna from the ETP constituted only about one percent of the tuna used to make tuna products in U.S. canneries.98 The claim of the United States that the AIDCP tracking requirements impose “considerable additional burdens”99 on U.S. importers cannot overcome this fact.

67. When the U.S. authorities perform their “verification” of U.S. canneries, they can only check whether a cannery maintains records of the documentation that it receives; there is no way to check the validity of the documentation. The United States does not perform any verification of non-U.S. canneries, and acknowledged during the comment period for its new regulations that the U.S. government lacks the authority or legal capacity to do so outside of U.S. territory.

F. The U.S. Comparison of the ETP to Other Fisheries is Unsupported and Inconsistent

68. The United States’ argument that the risks to dolphins from tuna fishing under the rules of the AIDCP is significantly greater than the risks to dolphins from tuna fishing outside the ETP is elaborately constructed on a series of mischaracterizations of (i) the prior findings of the Panel and Appellate Body and (ii) the relevant evidence.

69. The United States repeatedly claims that the Appellate Body made a “finding” that setting nets in association with dolphins in the ETP is “particularly harmful” to dolphins, and that fishing methods outside the ETP are less harmful.100 But the Appellate Body made no such finding. To the contrary, in the original proceeding, this Panel found that the risks to dolphins outside the ETP were significant. It stated:

we conclude that that … certain tuna fishing methods other than setting on dolphins have the potential of adversely affecting dolphins, and that the use of these other techniques outside the ETP may produce and has produced significant levels of dolphin bycatch ….101

The Panel also found as follows:

… the Panel is not persuaded that the threats arising from the use of fishing methods other than setting on dolphins to catch tuna outside the ETP are insignificant, as the United States suggests, be it in terms of observed mortality or serious injury, or even, in at least some cases, in terms of sustainability of the populations. Nor are we persuaded that they

Footnote continued from previous page

TTF is transmitted to the TTVP”, the United States was referring to a hypothetical situation and not to current practice. Since no U.S. large purse seine vessels fish in the ETP, no U.S. vessels are required to have TTFs (tuna tracking forms), and canneries using such tuna therefore have no need to maintain records of such TTFs.



100 See, e.g., United States’ first written submission, paras. 71-72.



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are demonstrated to be lower than the similar threats faced by dolphins in the ETP.102

Finally, the Panel stated:

… 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.103

70. The United States made strenuous arguments to the Appellate Body seeking to reverse these factual findings, alleging that they were unsupported by the evidence. The Appellate Body made a detailed examination of each of the many U.S. arguments regarding this subject and disagreed with each one.104 In its first written submission in this proceeding, the United States simply ignores these crucial aspects of the Panel and Appellate Body reports. Instead, the United States repeatedly cites an isolated sentence from the Appellate Body report, taken out of context, in order to support its argument the findings of the Panel and the Appellate Body mean the opposite of what the actually stated.

71. Mexico’s first written submission provided even more evidence of the risks to dolphins in tuna fisheries outside the ETP. Accordingly, the Panel’s findings in the original proceedings regarding such risks remain entirely valid and applicable in the present proceedings.

72. With regard to fishing in the ETP, the United States misleadingly cites to the maximum mortalities permitted, rather than the actual mortalities.105 The number of actual mortalities per year has been well below the overall limit of 5,000 since 1993, and during the past ten years, it has been consistently below 1,500. The total figure for the ETP for 2013 was 801.106 Also, in 2013, the total mortalities and serious injuries caused by the Mexican fleet was 605.107 Those figures are readily available to the United States, so it is unclear why it cites to the maximum allowable limits instead.

73. The United States asserts that Mexico’s evidence of dolphin mortalities in non-ETP fisheries is “ad hoc.” But Mexico presented substantial evidence from both governmental sources and from scientific studies. The United States presented no evidence to rebut Mexico’s evidence.

74. The United States seems to assume that its evidence of “indirect effects” of Mexican tuna fishing is somehow conclusive. To the contrary, in the original proceeding the Parties presented



104 Appellate Body Report, US – Tuna II (Mexico), paras. 253-281.


106 IAATC, Ecosystem Considerations, p. 3, available at https://www.iattc.org/Meetings/Meetings2014/ MAYSAC/PDFs/SAC-05-13-Ecosystem-Considerations.pdf (Exhibit MEX-110).

107 Statement of Dr. Michel Dreyfus (Exhibit MEX-111).


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scientific reports with conflicting conclusions, and the Panel found that the evidence of such indirect effects was mixed. The Panel stated:

From the above, it appears that there is a degree of uncertainty in relation to the extent to which setting on dolphins may have an adverse impact on dolphins beyond observed mortality. Nonetheless, we consider that sufficient evidence has been put forward by the United States to raise a presumption that genuine concerns exist in this respect. The information presented to us in this respect also suggests that this is a field of research in which the collection and analysis of information is inherently difficult, but that efforts have been ongoing to better understand these issues, including in the context of the implementation of the DPCIA.108

75. The evidence presented by Mexico of dolphin mortalities and injuries in tuna fisheries outside the ETP, and mortalities and injuries caused by other fishing methods, is both substantial and uncontested. Certainly Mexico’s evidence also supports a presumption that there are genuine concerns about harm to dolphins occurring outside the ETP.

76. Moreover, the United States has expressly disavowed any reliance on population effects as a measure of indirect effects on dolphins in the ETP. It states: “[c]onsequently, even if the dolphin populations were recovering, the United States would be under no obligation to re-visit the eligibility for the dolphin safe label” (emphasis original).109 In doing so, it contradicts the basis of the Hogarth ruling, and the foundation for the United States’ rules for the killing and injuring of dolphins in U.S. territorial waters.110 These distinctions in approaches and presumptions applied by the United States to the ETP fishery and other fisheries highlight the arbitrary nature of the manner in which the Amended Tuna Measure is designed and applied.

G. Lack of Deterrence for Non-Compliance

77. According to the United States, a “typical” U.S.-flagged purse seine vessel captures 2 to 3 million pounds (equal to 900 to 1,360 metric tons) of tuna per voyage.111 As of June 10, 2014, the average price paid for frozen skipjack landed in Bangkok was US$1,600 per ton, while the price for frozen yellowfin landed in the Seychelles was 2,170 euros (about US$2,950).112 Accordingly, as of that date, the value of tuna caught by a purse seine vessel would range from approximately US$1.4 million to US$2.2 million for skipjack tuna, and US$2.7 million to US$4 million for yellowfin tuna. Because under the U.S. measure the dolphin set method may not be used even one time during a voyage, there is an extremely strong disincentive for a captain to self-report a dolphin set. Otherwise, it would mean that all tuna caught in that voyage would not be eligible to be dolphin-safe. In the unlikely event that a U.S. vessel is caught in a misrepresentation – such as in the Freitas case – the penalty is only US$11,000 per violation,



110 See discussion of “potential biological removal” (PBR) levels in United States’ first written submission, paras. 139-141.


112 Atuna, “Tuna Market Price Watch” (Exhibit MEX-112).


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which is de minimis in relation to the value of the catch. Moreover, the catch would be sold long before any penalties were assessed. Non-U.S. vessels, of course, are not subject to any penalty at all because they are not within U.S. jurisdiction.

78. The judge in the Freitas case commented:

Given the incentives for making unlawful sets on marine mammals when the amount of potential economic gain associated with a catch of large tuna is so great, compliance with the mandates not to set on marine mammals is difficult to enforce. Here, Respondents knew not to intentionally set on whales and yet elected to do so anyway presumably because the economic benefits outweighed the potential cost under the MMPA.113

Accordingly, it is well-recognized that the U.S. fines for setting on dolphins do not create a deterrent. Yet, tuna products containing tuna caught in that manner, as a practical matter, can be labeled dolphin-safe if harvested outside the ETP.

H. Response to U.S. Argument that Mexico’s Observer and Tracking Obligations Arise from the AIDCP and not the Amended Tuna Measure

79. The United States argues that the tracking, verification and observer requirements imposed with respect to Mexican tuna products are exclusively the result of the AIDCP, and have no relation to the Amended Tuna Measure. On that basis, the United States claims that the Amended Tuna Measure should be deemed even-handed.114

80. The U.S. argument seeks to avoid the fact that the Amended Tuna Measure expressly incorporates the AIDCP requirements. Section (d)(2)(B) of the DPCIA establishes that, for a tuna product containing tuna caught in the ETP to qualify as dolphin-safe, it must be accompanied by a written statement executed by (i) a Commerce Department official, (ii) a representative of the IATTC, or (ii) an authorized representative of a participating nation whose national program meets the requirements of the AIDCP, which states that there was an observer approved by the AIDCP on board the vessel during the entire trip and that the observer certified that no dolphin sets were made during the entire voyage and no dolphins were killed or seriously injured during the set in which the tuna were caught.115 There is no such requirement for non-ETP tuna products.

81. Moreover, 50 CFR § 216.92(b)(2)(i) imposes a condition for tuna caught in the ETP to be harvested either by a U.S. vessel or by a vessel of a country that is a member of the AIDCP that “is adhering to all of the requirements of the [AIDCP] Tuna Tracking and Verification Plan.”116 The AIDCP tracking and verification requirements include the creation of documentation that can be used to trace tuna to the specific well in which it was stored, and to maintain records of

113 Freitas case, p. 96 (Exhibit MEX-46).


115 16 U.S.C. § 1385(d)(2)(B) (Exhibt MEX-8).

116 50 CFR § 216.92(b)(2)(i) (Exhibit MEX-20).


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which tuna is dolphin-safe and which is not, and this documentation is certified by the independent observer on the vessel.117 There are no such tracking and verification requirements for non-ETP tuna products.

82. The relationship between the AIDCP and the U.S. dolphin-safe regulations is neither surprising nor a coincidence. The creation of the AIDCP was based upon a commitment by the United States in the Panama Declaration to amend U.S. domestic law to allow use of the dolphin-safe label on tuna products containing tuna caught in the ETP by a purse seine vessel in which no dolphin mortality was observed.118 The U.S. Congress, to implement the U.S. commitment, enacted the International Dolphin Conservation Program Act (IDCPA). The IDCPA authorized a change in the U.S. requirements for dolphin-safe to make it consistent with the definition in the AIDCP, and to that end incorporated compliance with the AIDCP’s requirements into U.S. domestic law.119

83. The U.S. argument that there is no connection between the Amended Tuna Measure and the AIDCP is therefore unsupportable.

III. RESPONSE TO U.S. LEGAL ARGUMENTS

84. Mexico first addresses the United States’ challenge to the jurisdiction of the Panel. It then addresses the United States’ arguments concerning Mexico’s claims under Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994. Finally, it addresses the United States’ defence under Article XX of the GATT 1994.

A. The Panel has Jurisdiction under Article 21.5 of the DSU to Rule on Mexico’s Claim under Article 2.1 of the TBT Agreement in respect of the Amended Tuna Measure

85. The United States raises various arguments that the Panel does not have jurisdiction to consider Mexico’s claim that the Amended Tuna Measure is inconsistent with Article 2.1 of the TBT Agreement. There is no merit to these arguments. The Original Tuna Measure was found to be inconsistent with Article 2.1. The fundamental purpose of this proceeding in respect of this claim is to determine whether the Amended Tuna Measure – i.e., the “measure taken to comply” – is consistent with obligations of the WTO agreements. The arguments of the United States unnecessarily complicate what is, in reality, a very simple situation. The Panel clearly has jurisdiction to rule on Mexico’s Article 2.1 claim.

117 See Mexico’s first written submission, paras. 89-93.

118 Panel Report, US – Tuna II (Mexico), paras. 2.35–2.37.

119 Mexico’s first written submission, paras. 24-25. As previously described, the U.S. courts blocked the change in the definition of dolphin-safe. Ibid., paras. 30-38.


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1. Mexico’s Article 2.1 Claim is Within the Panel’s Terms of Reference

86. The Panel’s terms of reference are set out in Mexico’s Request for the Establishment of a Panel, which expressly include Mexico’s Article 2.1 claim regarding the Amended Tuna Measure.120

87. A compliance panel’s terms of reference encompass all claims that are raised in relation to the existence or consistency with a covered agreement of a measure “taken to comply”, provided that such claims have not already been resolved on the merits in the original proceedings by findings, rulings, or recommendations adopted by the DSB in relation to the original measure.121

88. The mandate of the Panel under Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) includes seeking to determine whether the measure “taken to comply” achieves full or partial compliance with the covered agreements in situations where, through omissions or otherwise, there is a disagreement on whether the measure “taken to comply” may achieve compliance.122 In this instance, there is a disagreement on whether the Amended Tuna Measure has achieved compliance in a manner consistent with Article 2.1 of the TBT Agreement.

120 Request for the Establishment of a Panel, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/20, Recourse to Article 21.5 of the DSU Mexico – Request for the Establishment of a Panel, 15 November 2013, p. 2 (“the claims in respect of which Mexico is seeking the establishment of a panel include: i) The Amended Tuna Measure is inconsistent with Article 2.1 of the TBT Agreement because it continues to accord Mexican tuna products treatment less favourable than that accorded to like tuna products of the United States and to like tuna products originating in any other country”).

121 See Appellate Body Report, US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina), paras. 150-152 (finding that a claim against an aspect of the original measure, with respect to which the Panel in the original proceedings had exercised judicial economy, was properly within the scope of review under Article 21.5 of the DSU when it was re-asserted by Argentina in the Article 21.5 proceedings against the same aspect incorporated by reference, unchanged, into the measure “taken to comply”); Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil), paras. 210-213 (finding that Brazil’s claims against an aspect of the original measure, which “were not resolved on the merits in the original proceedings because the Appellate Body was unable to complete the analysis as a result of there being insufficient factual findings or undisputed facts on the record”, were within the panel’s terms of reference under Article 21.5 when Brazil re-asserted the same claims against the same unchanged aspect of the measure “taken to comply”; and Appellate Body Report, US – Zeroing (Article 21.5 – EC), paras. 426-433 (finding that a new claim raised by the European Communities against an unchanged aspect of the measure “taken to comply” which could have been raised, but was not raised, in the original proceedings in respect of the original measure, was within the Panel’s terms of reference under Article 21.5; in particular, the Appellate Body held that: “allowing a complaining Member to make a case that it did not establish in the original proceedings would not provide it with an unfair ‘second chance’, nor would it compromise the finality of the DSB’s recommendations and rulings”).

122 Appellate Body Report, US – Zeroing (Article 21.5 – EC), para. 206, citing Appellate Body Report, US – FSC (Article 21.5 – EC II), para. 60.


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2. Mexico’s Article 2.1 Claim relates to the “new” Amended Tuna Measure “in its Totality”

89. Mexico’s Article 2.1 claim relates to the Amended Tuna Measure as a whole, that is, “in its totality”.123 As the measure “taken to comply”, the Amended Tuna Measure is “in principle, a new and different measure”.124 Rather than acknowledging this, the United States focuses its jurisdictional challenge on certain elements of the measure – i.e., particular dolphin-safe labelling conditions and requirements – that it argues are “unchanged” from the original measure.125 Specifically, the United States argues that, to the extent that these elements are unchanged, the question of whether they are consistent with Article 2.1 of the TBT Agreement falls outside the Panel’s terms of reference under Article 21.5.126 The United States contends that it is “entitled to assume” that such unchanged elements are consistent with Article 2.1 in the absence of any specific findings in the original proceedings that they are inconsistent,127 notwithstanding the general finding adopted by the DSB in respect of the original Tuna Measure that “the US ‘dolphin-safe’ labelling provisions are inconsistent with Article 2.1 of the TBT Agreement”.128

90. The United States’ argument focuses on three labelling conditions and requirements that Mexico identifies in its arguments in support of its Article 2.1 claim. These conditions and requirements (i.e., qualification/disqualification of fishing methods, record keeping and verification, and independent observers) are included in the relevant regulatory distinction that accounts for the detrimental impact on Mexican tuna products.129

91. In making its argument, the United States conflates Mexico’s Article 2.1 “claim” with Mexico’s “arguments” in support of that claim. In addressing jurisdictional issues under Article 21.5, the Appellate Body considers whether certain claims may be raised or re-asserted by a complaining party within the scope of Article 21.5 proceedings, not whether isolated arguments – that is, arguments taken out of the context of the specific claims which they are advanced to support – may be raised or re-asserted.130 In Mexico’s view, arguments are advanced in support

123 Appellate Body Report, US – Oil Country Tubular Goods (Article 21.5 – Argentina), para. 146, citing Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia), para. 87 (“the task of a panel in a matter referred to it by the DSB for an Article 21.5 proceeding is to consider [the] new measure in its totality” [emphasis original]).

124 Appellate Body Report, US – Zeroing (Article 21.5 – EC), para. 432.

125 United States’ first written submission, paras. 177, 201, 205, 209, 261.

126 United States’ first written submission, paras. 170, 171, 201, 202(1), 206, 261.

127 United States’ first written submission, paras. 171, 206, 207.

128 Appellate Body Report, US – Tuna II (Mexico), paras. 299, 407(b).

129 See, e.g., Mexico’s first written submission, paras. 235-236.

130 See, e.g., United States’ first written submission, paras. 170-171 (collectively citing Appellate Body Report, Zeroing (Article 21.5 – EC), paras. 415-439; Appellate Body Report, US – Shrimp (Article 21.5 – Malaysia), para. 96; Appellate Body Report, US – Upland Cotton (Article 21.5 – Brazil), para. 210; and Appellate Body Report, EC – Bed Linen (Article 21.5 – India), para. 98).


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of claims, but arguments do not themselves constitute claims.131 This is true whether the United States characterizes Mexico’s arguments as “grounds” for its claim or otherwise.

92. In determining its jurisdiction in this proceeding, the Panel must focus on the Amended Tuna Measure “in its totality” because that is the measure “taken to comply” in respect of which Mexico makes its Article 2.1 claim.

3. Mexico’s Article 2.1 Claim does not Impinge upon or Threaten the Finality of the Recommendations and Rulings of the DSB in the Original Proceedings

93. In Mexico’s view, the Panel should focus on the Amended Tuna Measure as a whole and not elements comprising that measure. If the Panel determines that it is appropriate to assess whether Mexico’s Article 2.1 claim falls within the Panel’s terms of reference by examining each of the three “aspects” of the Amended Tuna Measure that the United States seeks to exclude from these compliance proceedings, then Mexico submits that the Panel has jurisdiction to consider all of these aspects of the measure, as they all fall within the Panel’s terms of reference under Article 21.5 of the DSU.

94. The United States argues that the three labelling conditions and requirements referenced above are merely unchanged elements from the original Tuna Measure which the Appellate Body did not specifically consider in rendering its finding that the US dolphin-safe labelling provisions are inconsistent with Article 2.1 of the TBT Agreement.132

95. Mexico disagrees that these labelling conditions and requirements are “unchanged”. To the contrary, the Amended Tuna Measure directly and/or indirectly changes these labelling conditions and requirements. With respect to the record-keeping and verification requirements, new provisions regarding the storage of tuna on fishing vessels133 and the processing of tuna in canneries have been introduced in relation to tuna caught outside the ETP.134 With respect to the independent observer requirement, new provisions for the self-certification of compliance with

131 The distinction between claims and arguments has been recognized by the Appellate Body as follows:

We … observe that the Appellate Body has consistently distinguished between the claims of a Member regarding the application of the various provisions of the WTO Agreement, and the arguments presented in support of those claims. Claims, which are typically allegations of violation of the substantive provisions of the WTO Agreement, must be set out clearly in the request for the establishment of a panel. Arguments, by contrast, are the means whereby a party progressively develops and supports its claims. These do not need to be set out in detail in a panel request; rather, they may be developed in the submissions made to the panel.

See Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes, para. 121 (emphasis original; footnotes omitted), citing Appellate Body Report, EC – Bananas III, para. 141 (“In our view, there is a significant difference between the claims identified in the request for the establishment of a panel, which establish the panel’s terms of reference under Article 7 of the DSU, and the arguments supporting those claims, which are set out and progressively clarified in the first written submissions, the rebuttal submissions and the first and second panel meetings with the parties” (emphasis original)).


133 2013 Final Rule, 50 CFR § 216.93(c) (Exhibit Mex-7).

134 2013 Final Rule, 50 CFR § 216.93(d) and (e) (Exhibit Mex-7).


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applicable dolphin-safe labelling conditions by fishing vessel captains have been introduced in relation to tuna caught outside the ETP,135 and provisions have also been introduced to allow for the potential implementation of independent observer certifications in relation to tuna caught outside the ETP “where the Assistant Administrator [of the NMFS] has determined that observers participating in a national or international observer program are qualified and authorized” to make the appropriate certifications.136

96. To the extent that these labelling conditions and requirements are unchanged, a claim previously raised under Article 2.1 in the original proceedings may be re-asserted against an unchanged “aspect” of the measure “taken to comply” if the claim was not resolved on the merits in the original proceeding, such that the DSB made no findings in respect of the claim, and there is therefore no threat to the finality of the DSB’s recommendations or rulings in the original proceedings.137 To the extent that the United States is correct that certain aspects of the Amended Tuna Measure are unchanged and that Mexico is making “claims” against each of those “aspects” of the measure, the DSB did not make any recommendations or rulings with respect to such claims against those particular “aspects” of the measure. The United States cannot assume that unchanged aspects of the Original Tuna Measure are WTO-consistent.138 In the absence of an actual finding that a particular aspect of a measure at issue is WTO-consistent, the implementing Member is not “entitled to assume” that such an aspect is WTO-consistent, especially where the full measure has been found to be in violation of a covered agreement.139 Thus, to the extent that such specific “claims” are found to exist in the original proceedings, they can be re-asserted by Mexico in the present compliance proceedings without impinging upon the finality of the recommendations and rulings adopted by the DSB in respect of the original Tuna Measure.

97. To the extent that these labelling conditions and requirements are unchanged, and the United States argues that Mexico is raising new “claims” against these “aspects” of the measure that Mexico could have raised, but did not raise, during the original proceedings, the Appellate Body has clarified that “new claims against inseparable aspects of a measure taken to comply, which are unchanged from the original measure” are within a panel’s terms of reference under Article 21.5, even if such claims could have been raised, but were not raised, in the original 135 2013 Final Rule, § 216.91(a)(2)(iii)(A), § 216.91(a)(4)(i) (Exhibit Mex-7).

136 2013 Final Rule, § 216.91(a)(2)(iii)(B), § 216.91(a)(4)(ii) (Exhibit Mex-7).

137 See US – Oil Country Tubular Goods Sunset Reviews (Article 21.5 – Argentina), para. 152. See also US – Upland Cotton (Article 21.5 – Brazil), para. 210.

138 United States’ first written submission, paras. 171, 206 and 207, citing Panel Report, US – Countervailing Measures on Certain EC Products (Article 21.5 – EC), para. 7.75 (“In our view, it would be unfair to expose the United States to the possibility of a finding of violation on an aspect of the original measure that the United States was entitled to assume was consistent with its obligations under the relevant agreement given the absence of a finding of violation in the original report”).

139 See Appellate Body Report, US – Zeroing (Article 21.5 – EC), paras. 423-427 (“We disagree with the notion that a Member may be entitled to assume in Article 21.5 proceedings that an aspect of a measure that was not challenged in the original proceedings is consistent with that Member’s obligations under the covered agreements. [...] If certain claims against aspects of a measure were not decided on the merits in the original proceedings, they are not covered by the recommendations and rulings of the DSB and, therefore, a Member should not be entitled to assume that those aspects of the measure are consistent with the covered agreements” at para. 424).


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proceedings.140 Thus, to the extent that the measure “taken to comply” contains inseparable aspects which are unchanged from the original measure, Mexico’s Article 2.1 claim is not rendered ultra vires by the Panel’s terms of reference under Article 21.5 of the DSU.

98. For these reasons, Mexico’s Article 2.1 claim does not, as the United States alleges, constitute an attempt to “appeal” the findings of the Appellate Body in the original proceedings141 or to otherwise re-open or reverse the recommendations and rulings of the DSB in respect of the original Tuna Measure.142 To the contrary, Mexico is raising a new claim under Article 2.1 in respect of the Amended Tuna Measure as a whole. Accordingly, Mexico’s claim under Article 2.1 does not impinge upon the finality of the recommendations and rulings adopted of the DSB in the original proceedings. Nothing precludes the Panel from considering and deciding this claim in respect of the Amended Tuna Measure in the present Article 21.5 proceedings.

4. Mexico’s Article 2.1 Claim does not Jeopardize the Principles of Fundamental Fairness and Due Process

99. Contrary to the allegations of the United States, Mexico’s claim under Article 2.1 of the TBT Agreement in respect of the Amended Tuna Measure in no way “jeopardize[s] the principles of fundamental fairness and due process.”143 Indeed, the United States fails to specifically identify which actual findings or recommendations adopted by the DSB in relation to the original Tuna Measure are endangered by Mexico’s claim in the present proceedings. Instead, the United States describes considerations and determinations that the Appellate Body did not make in the original proceedings as if such silence somehow constitutes affirmative findings against Mexico’s new claim under Article 2.1 in respect of the Amended Tuna Measure in the present compliance proceedings.144

5. Conclusions on the Jurisdiction of the Panel

100. On the basis of the foregoing, the Panel should reject the United States’ arguments that the Panel does not have jurisdiction to consider Mexico’s Article 2.1 claim. 140 Appellate Body Report, US – Zeroing (Article 21.5 – EC), para. 433. The Appellate Body held:

While claims in Article 21.5 proceedings cannot be used to re-open issues that were decided on substance in the original proceedings, the unconditional acceptance of the recommendations and rulings of the DSB by the parties to a dispute does not preclude raising new claims against measures taken to comply that incorporate unchanged aspects of original measures that could have been made, but were not made, in the original proceedings.

Ibid., para. 427.

141 See United States’ first written submission, paras. 5, 177, 201, 259, and 268.

142 See United States’ first written submission, paras. 177-178, 259.


144 United States’ first written submission, para. 210-213 (“The Appellate Body thus did not consider any of the numerous other regulatory distinctions contained in the original measure proved the measure discriminatory – either because the particular regulatory distinction was not relevant to the analysis, or because the regulatory distinction, while relevant, was even-handed. That is to say, the Appellate Body has already rejected all other alternative legal theories relating to this claim”) (emphasis added).


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B. The Amended Tuna Measure is Inconsistent with Article 2.1 of the TBT Agreement

101. The United States raises two arguments in defense of Mexico’s Article 2.1 claim. First, it argues that the Panel does not have jurisdiction to consider this claim. For the reasons set out above, this argument is without merit. Second, the United States presents a series of arguments that essentially posit that the detrimental impact of the Amended Tuna Measure on imports of Mexican tuna products stems exclusively from a legitimate regulatory distinction and, therefore, the measure does not violate Article 2.1. For the reasons set out below, this argument also lacks merit.

1. “Technical Regulation” and “Like Products”

102. At paragraphs 203-220 of its first written submission, Mexico demonstrates that the Amended Tuna Measure is a “technical regulation” within the meaning of Annex 1.1 of the TBT Agreement and that the relevant imported products at issue – i.e., tuna products from Mexico – continue to be “like” tuna products of U.S. origin and “like” tuna products originating in any other country within the meaning of Article 2.1 of the TBT Agreement.

103. The United States does not contest these elements of Mexico’s Article 2.1 claim.145 Accordingly, Mexico has established these two elements of its claim.

2. The Amended Tuna Measure Modifies the Competitive Opportunities to the Detriment of Imports

104. At paragraphs 222-233 of its first written submission, Mexico demonstrates that the Amended Tuna Measure de facto modifies the conditions of competition in the relevant market to the detriment of the group of like imported products as compared to the group of like domestic products or like products originating in any other Member. While all like U.S. tuna products and most tuna products of other countries have access to the dolphin-safe label, the Amended Tuna Measure denies access to this label for most Mexican tuna products.146

105. The United States does not contest this element of Mexico’s Article 2.1 claim.147 Accordingly, Mexico has established this element of its claim.

3. The Unilateral Action of the United States in Applying the Amended Tuna Measure’s Labelling Conditions and Requirements Supports a Finding of Detrimental Impact

106. While Mexico has already established that the Amended Tuna Measure’s labelling conditions and requirements result in a de facto detrimental impact on the competitive opportunities of imported Mexican tuna products in the U.S. market vis-à-vis like tuna products of U.S. origin and like tuna products imported from other countries, further support can be found in an analysis of the consequences of the United States’ unilateral application of the Amended Tuna Measure’s labelling conditions and requirements. Specifically, the Amended Tuna 145 United States’ first written submission, para. 181.

146 Panel Report, US – Tuna II (Mexico), paras. 7.316-7.317 and 7.533; Appellate Body Report, US – Tuna II (Mexico), para. 234.

147 United States’ first written submission, paras. 182-183, 223.


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Measure’s unilateral dolphin-safe labelling conditions and requirements have the effect of exerting pressure on Mexico to modify its tuna fishing practices,148 even though these practices are already fully compliant with the dolphin-safe labelling regime under the AIDCP – the multilateral agreement that was negotiated between the United States, Mexico, and other IATTC member countries specifically for the purpose of establishing a dolphin-safe labeling regime to protect dolphins and other marine species in the ETP from harmful tuna fishing practices.

107. In its first written submission, Mexico explained how the AIDCP has been tremendously successful in reducing the harm that is caused to dolphins by commercial tuna fishing within the ETP to a statistically insignificant level, while allowing and regulating the use of a fishing method that promotes the sustainability of tuna stocks and limits the harm caused to other marine species.149 The United States, however, despite negotiating with Mexico and the other member countries of the IATTC to develop, adopt, and implement the AIDCP dolphin-safe labelling regime,150 has unilaterally designed and applied a different regime of dolphin-safe labelling conditions and requirements under the Amended Tuna Measure in a manner that undermines the AIDCP regime and effectively coerces other countries within the ETP to adopt the U.S. regime instead. Specifically, the Amended Tuna Measure’s dolphin-safe labelling conditions and requirements are designed and applied in a manner that denies the use of the dolphin-safe label in the U.S. market to virtually all imported tuna products from Mexico, even though the tuna contained in such tuna products is caught in full compliance with the AIDCP regime and without harm to dolphins – as independently verified by qualified observers aboard Mexican fishing vessels – and is therefore qualified for the AIDCP dolphin-safe label. Mexico’s “choice”, 148 See Appellate Body Report, US – Tuna II (Mexico), para. 226. In the original proceedings, Mexico appealed the original Panel’s failure to find that the United States uses a market access restriction to pressure Mexico and the Mexican fleet to adopt essentially the same dolphin-safe regime as that in force in the United States. In response, the Appellate Body held that it may have been pertinent, in the context of determining detrimental impact under Article 2.1 of the TBT Agreement, for the Panel to consider the question of whether the original Tuna Measure had the effect of exerting pressure on Mexico to modify its practices. In this regard, the Appellate Body stated that: “we have noted that any adverse impact on competitive opportunities for imported products vis-à-vis like domestic products that is caused by a technical regulation may potentially be relevant for an assessment of ‘less favourable treatment’. It may thus have been pertinent for the Panel to consider, along with other factors, the question of whether the US measure had the effect of exerting pressure on Mexico to modify its practices. This alone, however, would not be sufficient to establish a breach of Article 2.1” (emphasis added). Accordingly, Mexico submits that the dolphin-safe labelling conditions and requirements of the Amended Tuna Measure are designed and applied in a manner that has the effect of exerting pressure on Mexico and the Mexican fleet to change their tuna fishing practices – that is, to adopt the unilateral U.S. dolphin-safe regime instead of the multilateral AIDCP dolphin-safe regime – and this provides further support for a finding that the design and application of the Amended Tuna Measure’s labelling conditions and requirements result in a detrimental impact on the competitive opportunities of imported Mexican tuna products in the U.S. market in comparison to domestic U.S. tuna products and tuna products imported from other countries for the purposes of Article 2.1 of the TBT Agreement.


150 As Mexico explained in the original proceedings, the incentive for Mexico and other IATTC members to formalize the procedures already being followed by creating an international binding agreement in the AIDCP was to gain commercially meaningful access to the U.S. market through the establishment of a common multilateral dolphin-safe labelling standard. A fundamental premise of the negotiation, understood by all member countries, was that the United States would change its laws to provide that tuna products harvested in the ETP in accordance with the AIDCP would be eligible for access to the U.S. “dolphin safe” label. See e.g. Mexico’s second written submissions in the original proceedings, para. 73.


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therefore, is to either comply with the Amended Tuna Measure’s unilateral dolphin-safe labelling conditions and requirements, despite full compliance with the AIDCP regime that Mexico negotiated with the United States, or to suffer the detrimental impact of being denied access to the advantage of the dolphin-safe label for Mexican tuna products in the U.S. market.

108. In contrast to the circumstances in US – Shrimp, where the Appellate Body held that the United States had unilaterally applied a trade-restrictive measure without first entering into the appropriate multilateral negotiations with affected WTO Members,151 the United States has unilaterally designed and applied the Amended Tuna Measure’s dolphin-safe labelling conditions and requirements in a manner that undermines and contradicts the AIDCP dolphin-safe labelling regime that was established by multilateral agreement. This unilateral action is intended by the United States to exert extraterritorial pressure on the Mexican tuna fishing fleet to abandon the AIDCP-compliant method that it uses to fish for tuna and to adopt the U.S. dolphin-safe regime instead.

109. Therefore, the “intended and actual coercive effect”152 of the Amended Tuna Measure’s dolphin-safe labelling conditions and requirements “is to establish a rigid and unbending standard”153 that, by restricting access to the advantage of the dolphin-safe label in the U.S. market, requires other countries to adopt essentially the same regulatory regime.154 Specifically, in unilaterally designing and applying the Amended Tuna Measure’s dolphin-safe labeling conditions and requirements in a manner that undermines the AIDCP regime – i.e., by rejecting tuna caught in AIDCP-compliant sets in the ETP that qualify for the AIDCP dolphin-safe label – the United States either failed to take into account or deliberately ignored both the conditions that may occur in the territories of other IATTC and WTO Members,155 namely Mexico, and the specific policies and measures adopted by those countries for the purposes of protecting and conserving dolphins and other marine species, namely the AIDCP dolphin-safe labelling regime.156

110. Considering the tremendous success of the AIDCP dolphin-safe labelling regime in reducing the harm caused to dolphins in the ETP to statistically insignificant levels and its ongoing success in this regard, it is difficult to reconcile the consequences of the United States’ unilateral action to prevent AIDCP-compliant tuna products from using the dolphin-safe label in the U.S. market with the declared policy objectives of the measure at issue.157 This suggests that the Amended Tuna Measure is more concerned with effectively influencing WTO Members, i.e., Mexico, to adopt the Amended Tuna Measure’s dolphin-safe labelling regime, as unilaterally designed and applied by the United States, even though Members such as Mexico are situated

151 Appellate Body Report US – Shrimp, paras. 164-169.

152 Appellate Body Report, US – Shrimp, para. 161.

153 Ibid., para. 163.

154 See ibid., para. 164.

155 See ibid., paras. 164-165.




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differently under the AIDCP dolphin-safe labelling regime,158 as agreed multilaterally by Mexico, the United States, and other members of the IATTC.

4. The Detrimental Impact Reflects Discrimination

111. With respect to the two-step approach established by the Appellate Body in US – Tuna II (Mexico) for applying the provisions of Article 2.1, Mexico explained in its first written submission that, where there is an affirmative finding of detrimental impact on imports in the first step, the Panel must then determine in the second step whether this detrimental impact stems exclusively from a legitimate regulatory distinction rather than reflecting discrimination against a group of imported products.159 The United States raises several arguments regarding this second step of the Appellate Body’s approach. For the reasons set out below, all of the United States’ arguments are without merit.

a. The Relevant Regulatory Distinction

112. At paragraphs 235-236 of its first written submission, Mexico discussed the Appellate Body’s finding that the relevant regulatory distinction was the “difference” in “labelling conditions and requirements” 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. This difference is the regulatory distinction that accounts for the above-noted detrimental impact on Mexican tuna products. As a consequence of the difference in labelling conditions and requirements, all like U.S. tuna products and most tuna products of other countries have access to the dolphin-safe label, while, at the same time, the Amended Tuna Measure denies access to this label for most Mexican tuna products.

113. Mexico then identified three “labelling conditions and requirements” that are “different” for tuna products containing tuna caught by setting on dolphins in the ETP and for tuna products containing tuna caught by other fishing methods outside the ETP. The differences in these labelling conditions and requirements together account for the detrimental impact on imports because they grant all like U.S. tuna products and most tuna products of other countries access to the dolphin-safe label while denying the same access to Mexico’s tuna products. Accordingly, these labelling conditions and requirements fall squarely within the Appellate Body’s definition of “relevant regulatory distinction”. The fact that the Appellate Body focused on only one condition and requirement – i.e., the certification that no dolphins were killed or injured – does not limit the relevant regulatory distinction to that single condition and requirement.160 To the contrary, all conditions and requirements that fall within the relevant regulatory distinction must be assessed by the Panel.

114. As discussed below, the three labelling conditions and requirements identified by Mexico in the first written submission relate closely to the accuracy of the information on the dolphin-



160 In fact, given that there was no need to assess whether dolphins were killed or injured outside of the ETP, there was no need to go further to consider the conditions and requirements for tracking and verification and independent observers.


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safe status of tuna products. Mexico acknowledges that, at paragraph 286 of its Report, the Appellate Body stated:

The question examined by the Panel was thus different from the question of whether the detrimental impact of the US "dolphin-safe" labelling provisions on Mexican tuna products stems exclusively from a legitimate regulatory distinction. The Panel's findings with respect to the calibration of the measure at issue for the purposes of its analysis under Article 2.2 are thus not necessarily dispositive of the question whether the measure is calibrated for the purposes of Article 2.1. In particular, it would appear that in answering the question of whether the measure gives accurate information to consumers, all distinctions drawn by the measure are potentially relevant. By contrast, in an analysis under Article 2.1, we only need to examine the distinction that accounts for the detrimental impact on Mexican tuna products as compared to US tuna products and tuna products originating in other countries. (emphasis original)

115. In the original Panel’s analysis of Article 2.2, the Panel assessed the degree to which the Original Tuna Measure contributed to its objectives, which included factors relating to the accuracy of the information communicated to U.S. consumers. This is not the same exercise as the examination required under the present Article 2.1 claim, which focuses on the “differences” in the treatment of Mexican tuna products and like tuna products from the United States and other countries. To the extent that the “differences” in these labelling conditions and requirements account for the detrimental impact, they are properly considered in the second step of the Appellate Body’s two-part test under Article 2.1.

116. The United States misunderstands and misapplies the Appellate Body’s finding on the “relevant” regulatory distinction. It argues that the relevant regulatory distinction is not, as explicitly found by the Appellate Body, “the difference in 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”.161 Instead, the United States describes the relevant regulatory distinction as follows: “the original measure prohibited tuna products from being labeled dolphin safe if containing tuna caught inside the ETP and a dolphin was killed or seriously injured, but allowed tuna products containing tuna caught outside the ETP to be so labeled even if dolphins had been killed or seriously injured”.162 The Appellate Body made no such finding. The aspects of the measure identified by the United States are but one example of the “different … conditions and requirements” that account for the detrimental impact on the competitive opportunities of Mexican tuna products in the U.S. market. It is not the only condition and requirement, as evidenced by the three conditions and requirements identified by Mexico in the present proceeding.

117. The United States argues that the three labelling conditions and requirements that Mexico raises do not account for the detrimental impact on imported Mexican tuna products and, therefore, cannot be part of the “relevant” regulatory distinction. In the view of the United States,




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“if the AIDCP parties agreed to eliminate the record-keeping and observer requirements, the detrimental impact would not be affected in the least bit. Mexican tuna product containing tuna caught by setting on dolphins would still be ineligible for the ‘dolphin safe’ label, and tuna product containing tuna caught using other fishing methods would still be potentially eligible for the label”.163 This argument misses the key legal point. Mexico is arguing that the absence of sufficient fishing method qualification, record-keeping, verification and observer requirements for tuna that is used to produce tuna products from the United States and other countries means that Mexican tuna products are losing competitive opportunities to tuna products that may be inaccurately labelled as dolphin-safe. This difference is what is creating the detrimental impact. A detrimental impact can be viewed from two perspectives: the denial of a competitive advantage on products (i.e., imported Mexican tuna products), or the conferral of a competitive advantage on other like products (i.e., tuna products from the United States and other countries). The arguments advanced by the United States ignore the second perspective.

118. The United States argues that Mexico has not demonstrated that the United States has “failed to make ‘even-handed’ the one regulatory distinction that the Appellate Body considered was not even-handed in the original proceeding”.164 Mexico notes that the United States has not fully complied with the recommendations and rulings of the DSB. As discussed below, the Amended Tuna Measure, by omission, does not go far enough to achieve full compliance with the recommendations and rulings of the DSB and with the requirements of the covered agreements, and it therefore continues to be inconsistent with Article 2.1 of the TBT Agreement.

b. The Differences in the Dolphin-Safe Labelling Conditions and Requirements including in the Relevant Regulatory Distinction are not Legitimate

119. In its first written submission, Mexico applied the approach to the assessment of even-handedness developed by the Appellate Body in US – Clove Cigarettes, US – Tuna II (Mexico) and US – COOL as well as the different three-question approach developed by the Panel in EC – Seal Products in order to establish that the differences in the three labelling conditions and requirements included in the relevant regulatory distinction were not legitimate.165 As Mexico noted in its first written submission, it does not matter whether the approach of the Panel in EC – Seal Products or the approach of the Appellate Body is applied.166 All three of the Panel’s questions, or simply the third question asked in isolation (which appears to encompass the Appellate Body’s approach), lead to the same conclusion. The relevant regulatory distinction in the Amended Tuna Measure is not legitimate. Since Mexico filed its first written submission, the Appellate Body has issued its report in EC – Seal Products wherein it declared moot and of no legal effect the Panel’s reasoning and findings under Article 2.1 on the basis that the measure in question was not a “technical regulation”.167 Given this ruling, Mexico limits its submissions to




166 Ibid., para. 242.

167 Appellate Body Report, EC – Seal Products, para. 5.70.


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the approach of the Appellate Body. However, for the same reasons set out in Mexico’s first written submission, should this Panel choose to adopt the three-question approach of the Panel in EC – Seal Products, the outcome will be the same.

c. The Meaning of “Even-Handed”

120. Under the Appellate Body’s approach, an enquiry into the even-handedness of a measure can answer the question of whether the detrimental impact of a measure on imported products stems exclusively from a legitimate regulatory distinction.168 The concept of “even-handedness” as interpreted and applied by the Appellate Body appears to be shorthand for the following part of the sixth recital to the TBT Agreement: measures: “are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade”, i.e., including (i) arbitrary discrimination, (ii) unjustifiable discrimination, and/or (iii) a disguised restriction.169 Thus, if a regulatory distinction constitutes a means of arbitrary discrimination, unjustifiable discrimination or a disguised restriction, it is not even-handed and, therefore, it is not a legitimate distinction. In such circumstances, the detrimental impact cannot be said to stem exclusively from a legitimate regulatory distinction.

121. In its first written submission, Mexico addressed the meaning of even-handedness under each of the three labelling conditions and requirements that it identified under the Amended Tuna Measure. The following further elaborates upon the meaning of even-handedness.

(1) A Measure that Lacks Impartiality is Not Even-Handed

122. The plain meaning of “even-handedness” is “impartial, fair”.170 The word “fair” is defined to mean “just, unbiased, equitable; in accordance with the rules”,171 while “unfair” is defined as “not equitable or honest” and “not impartial or according to the rules”.172 The word “impartial” is defined to mean “unprejudiced, fair”,173 while its antonym, “partial”, is defined as “biased, unfair”.174 In turn, “biased” encompasses “influence (usu. unfairly)”.175 On the basis of the foregoing, a regulatory distinction must be designed and applied in an impartial, unbiased manner, “according to the rules”, in order to be considered even-handed, while a regulatory distinction that is designed or applied in a manner that is biased, unfairly influenced, or not honest cannot be considered to be even-handed.

168 See discussion at paragraphs 238-239 of Mexico’s first written submission.

169 Appellate Body Report, US – Clove Cigarettes, para. 95; Appellate Body Report, US – Tuna II (Mexico), paras. 212-213; and Appellate Body Report, US – COOL, paras. 271-272, 293, 340-341, 347 and 349.

170 Concise Oxford Dictionary, 9th ed., D. Thompson (ed.) (Oxford University Press, 1995), p. 466 (Exhibit MEX-113).

171 Ibid., p. 484 (Exhibit MEX-113).






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123. This plain meaning is supported by the context of Article 2.1, which includes the sixth recital to the preamble of the TBT Agreement. The sixth recital refers to the requirement that measures “are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail”. This language formed the basis for the Appellate Body’s interpretation, as noted above, that a regulatory distinction that is designed or applied in a manner that constitutes a means of “arbitrary or unjustifiable discrimination” is not “even-handed”. Almost identical language is included in the chapeau of Article XX of the GATT 1994.176 Accordingly, the interpretation of “arbitrary discrimination” in the chapeau of Article XX sheds light on the interpretation of “arbitrary discrimination,” within the meaning of Article 2.1 of the TBT Agreement.

124. The Appellate Body in US – Shrimp used the context of Article X:3 of the GATT 1994 to interpret the meaning of “arbitrary discrimination” in the chapeau of Article XX.177 It found that “Article X:3 of the GATT 1994 establishes certain minimum standards for transparency and procedural fairness in the administration of trade regulations” that were not met on the facts of that dispute for the purpose of Article XX because the procedures in question were “all contrary to the spirit, if not the letter, of Article X:3”.178 In reviewing the qualities of the certification process at issue in US – Shrimp, the Appellate Body noted that it was “informal and casual, and was conducted in a manner that could result in the negation of the rights of Members.” In addition, it was noted that there was no way for the complaining Member to be certain that the relevant regulations were being applied in a fair and just manner. On this basis, the Appellate Body found that the measure in question failed to meet the minimum standards for procedural fairness in Article X:3, and that the measure was therefore applied in a manner which amounted to “arbitrary discrimination” between countries where the same conditions prevail, contrary to the requirements of the chapeau of Article XX.179

125. Additional guidance with respect to the relevant “minimum standard” to be used in evaluating “arbitrary discrimination” is set out in subparagraph (a) of Article X:3, which requires that laws, regulations, decisions and rulings be administered “in a[n]… impartial… manner”. This minimum standard is consistent with the plain meaning of “even-handedness”, as discussed above, and supports the conclusion that where a measure lacks impartiality, it will also lack even-handedness.180

176 “Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail”.

177 Appellate Body Report, US – Shrimp, paras. 181-184.

178 Ibid., para. 183.

179 Ibid., para. 184.

180 The Appellate Body in U.S. – COOL stated that, for the purposes of Article 2.1 of the TBT Agreement, the manner in which a technical regulation is applied is an indicator of the “even-handedness” (or lack thereof) of the regulatory distinction it creates (para. 271). Though Article X:3(a) of the GATT is focused upon an assessment of the “administration” of a technical regulation, the Panel in Thailand – Cigarettes (Philippines) stated that this impartial administration standard requires that the relevant laws and regulations be shown to be applied in a fair, unbiased and unprejudiced manner (para. 7.899). Thus, the evaluation of impartial administration pursuant to Article X:3(a) of the GATT and the evaluation of even-handedness pursuant to Article 2.1 of the TBT Agreement both depend upon an examination of the manner in which the law or regulation in question is applied. Accordingly,



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(2) A Certification Process that is Designed and Applied in a Manner that Inherently Creates the Potential for Abuse is not Even-Handed

126. The Appellate Body has provided further guidance on the meaning of even-handed in EC – Seal Products. Specifically, the Appellate Body found that the EU Seal Regime could be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail because, inter alia, it was not clear how the auditor of the recognized body administering the measure “would be able reliably to assess whether the recognized body has diligently applied the criteria of the IC exception”.181 The Appellate Body observed that, as was the case in US – Shrimp, there appeared to be no way that exporting Members could be certain whether the relevant provisions and guidelines were “being applied in a fair and just manner by the appropriate governmental agencies of the United States”.182

127. The matter before the Appellate Body involved a consideration of the certification process for seal products that qualified for the “IC” exception, which was an exception to the prohibition on seal products where such products were obtained from seals hunted by Inuit or other indigenous communities. The relevant requirement was that in order to qualify for the exception the seal products had to be “partially used” for traditional purposes. The Appellate Body noted that the “partial use” requirement was ambiguous, and that this ambiguity gave rise to the possibility that a substantial proportion of seal products would be inaccurately qualified for the IC exception as a result of being improperly assessed under the “partial use” criterion.183 Specifically, seal products that should have been characterized as products derived from “commercial” hunts, and therefore not eligible for the IC exception, might nonetheless enter the EU market under the IC exception due to abuses in the assessment of the “partial use” criterion by the regulatory bodies providing the certification.184

128. The Appellate Body held that the ambiguity embedded in the IC exception rendered it vulnerable to instances of abuse even where the body responsible for certifying seal products for the IC exception was acting in good faith.185 Furthermore, although the certifying body was subject to independent third party audits, the Appellate Body found that there were no means by which the third party auditor could reliably assess compliance with the “partial use” requirement. As the EC’s certification process was designed in a manner that inherently created the potential


the analysis of impartial administration under Article X:3(a) can be used as a tool to assess even-handedness within the meaning of Article 2.1 of the TBT Agreement. Where it is determined that the application of a measure lacks impartiality, it will also lack even-handedness. The result is that a measure that is not applied in an impartial manner necessarily gives rise to “arbitrary discrimination.”


182 Ibid., para. 5.328.

183 Ibid., para. 5.325.

184 Ibid., para. 5.326.

185 Ibid., para. 5.236.


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for abuse of the IC exception, this indicated that it constituted a means of arbitrary and unjustifiable discrimination.186

129. Thus, a lack of even-handedness can result where the measure in question exhibits an ambiguity that creates the potential for its abuse and misapplication, regardless of whether or not the body responsible for applying the measure is acting in good faith.

130. The certification system considered by the Appellate Body in EC – Seal Products is analogous to the labelling condition and requirement for self-certification by fishing vessel captains under the dolphin-safe labelling regime at issue before the Panel. In EC – Seal Products, the Appellate Body determined that a system which permits the certification of potentially non-conforming products results in arbitrary and unjustified discrimination. Notably, the Appellate Body did not require that specific and concrete instances of the certification of non-conforming products be proven. Considering that the design and application of the measure created an inherent risk under the circumstances, the Appellate Body held that the mere potential that seal products derived from “commercial” hunts could inaccurately enter the market under the IC exception was sufficient to establish a contravention of the prohibition against arbitrary discrimination contained in the chapeau to Article XX.

131. Moreover, a regulatory system that does not provide an effective means of verifying whether a measure is being applied in an accurate and diligent manner will also give rise to arbitrary discrimination. Where the design of the measure is such that it is impossible to audit or assess the degree to which it is being applied appropriately, the measure cannot be said to be even-handed.

(3) A Measure is Not Even-Handed it Results in a Regulatory Difference that cannot be Reconciled with the Objective of the Measure

132. The Appellate Body in EC – Seal Products also confirmed that one of the most important factors in the assessment of arbitrary or unjustifiable discrimination under the chapeau to Article XX is the question of “whether the discrimination can be reconciled with, or is rationally related to” the relevant policy objective.187 Where the alleged rationale for the distinction created by the measure in question is inconsistent with, or actively undermines, its stated policy objective, it is reflective of arbitrary discrimination.188 Given the parallel language employed in Article 2.1 and the chapeau to Article XX, this analysis also provides relevant guidance in assessing “even-handedness,” or the lack thereof. Therefore, as the Appellate body explained, an assessment of the degree to which the resulting regulatory distinction can be reconciled to the policy objective pursued by the measure will provide a clear indication of whether arbitrary discrimination and a lack of even-handedness results. This is consistent with the “even-handedness” requirement embodied in Article XX(g), which requires a Member seeking to justify a discriminatory measure on the basis of the conservation of an exhaustible natural resource to demonstrate that

186 Ibid., para. 5.327-5.328.

187 Ibid., para. 5.306.

188 See Appellate Body Report, Brazil – Retreaded Tyres, para. 227.


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the measure is even-handed when assessed against restrictions on domestic production and consumption of the resource in question.

d. Disqualification/Qualification of Fishing Methods

133. In its first written submission, Mexico established that the labelling conditions and requirements imposed by the Amended Tuna Measure differed depending on the fishing method used to catch tuna and that this difference was not even-handed.189 In response, the United States raises several arguments.

134. First, the United States argues that, in respect of the original proceedings, “Mexico appealed on this very ground and the Appellate Body did not agree with Mexico”.190 For this reason, the United States argues that Mexico’s claim as to this regulatory difference should be rejected.191 The United States is factually incorrect. Mexico did not appeal “on this very ground”, nor did the Panel or Appellate Body in the original proceedings rule on this issue. At issue in this proceeding are the different labelling conditions and requirements that relate to the qualification and disqualification of the fishing methods permitted to catch dolphin-safe tuna under the Amended Tuna Measure. This issue was not raised in the original proceedings.

135. Second, the United States argues that “Mexico is unable to explain why an element that is entirely neutral as to origin and fishery is not even-handed” and that “the original panel determined that the eligibility conditions of the original measure do not put Mexican tuna product at a disadvantage compared to the like U.S. tuna product and the like product originating in any other Member”.192 The United States omits the fact that, with respect to the first element of the Appellate Body’s test under Article 2.1 – i.e., the detrimental impact on imports – the Appellate Body overturned this finding of the Panel and, instead, found that the eligibility conditions deny competitive opportunities to Mexican tuna products.193 The United States’ arguments regarding the de jure application of these conditions and requirements ignore their de facto effects, which are what formed the basis of the Appellate Body’s to determination that there was a detrimental impact on Mexican tuna products.

136. Third, the United States argues that “Mexico is unable to prove that certain other fishing techniques have adverse effects on dolphins that are equal to or greater than what setting on dolphins has on dolphins”.194 This statement highlights the arbitrariness of these conditions and requirements.

137. Specifically, it is unclear what implicit benchmark the United States is using for qualifying or disqualifying a fishing method. In the original proceeding, the United States expressly acknowledged that “the observed annual dolphin mortality in the ETP ‘is not believed



191 Ibid.

192 Ibid., para. 226.




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to be significant from a population recovery perspective’”.195 In this proceeding, the United States has expressly disavowed any reliance on population effects as a measure of indirect effects as well, stating that “even if the dolphin populations were recovering, the United States would be under no obligation to re-visit the eligibility for the dolphin safe label” (emphasis original).196 Yet the United States also criticizes the ETP fishery for the number of dolphin mortalities (without regard to their relationship to the overall population),197 as well as the theoretical maximum mortality limit established by the AIDCP (even though the fishery has not come close to that limit during the past twenty years).198

138. The changing and inconsistent justifications given by the United States itself provide strong evidence of arbitrariness. Is the benchmark zero tolerance? The United States does not apply that benchmark to any other fishery. Is the benchmark based on an arbitrarily-selected absolute number of mortalities? The United States does not apply that benchmark to any other fishery. Is the benchmark based on the existence of several inconclusive reports speculating that there are substantial unseen mortalities? There are many detailed reports on dolphin mortalities in non-ETP fisheries, but the United States dismisses them as irrelevant.

139. This lack of objectivity is clearly arbitrary and indicates that the measure is aimed at Mexico’s tuna products rather than at the protection of dolphins. How large does the adverse impact on dolphins have to be to justify disqualifying a fishing method? The Amended Tuna Measure does not establish an objective benchmark to answer this question.

140. Whatever benchmark is applied, Mexico has put forward evidence that demonstrates that fishing methods outside the ETP have adverse effects on dolphins equal to or greater than setting on dolphins in the ETP in an AIDCP-consistent manner. The original Panel found that “sufficient evidence has been put forward by the United States to raise a presumption that genuine concerns exist [that setting in association with dolphins may have an adverse impact on dolphins beyond observed mortality]” and the Appellate Body referred to this finding several times in its Report.199 The implicit evidentiary threshold in this statement is “sufficient evidence… to raise a presumption that genuine concerns exist”. Mexico has clearly demonstrated that there is “sufficient evidence … to raise a presumption that genuine concerns exist” regarding the adverse effects on dolphins caused by other fishing methods.

141. Fourth, the United States argues that there is “significant scientific evidence” underlying the distinction between fishing methods.200 Similarly, elsewhere in its first written submission the United States argues that “[t]he distinctions … [the United States] has drawn are fully supported by science”, that “science supports the distinctions of the amended measure”, that “the




198 United States’ first written submission, para. 61. In establishing the AIDCP, the United States United States advocated and agreed to that maximum limit.

199 Panel Report, US – Tuna II (Mexico), para. 7.504 referred to in the Appellate Body Report, US – Tuna II (Mexico), paras. 246 and 274, footnote 592, and footnote 664.

200 Ibid., para. 227.


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science supports the eligibility conditions of the amended measure” and that “the science… directly contradicts Mexico’s approach” 201 (emphasis original). The reality is that there is no science to back up the differences in the conditions and requirements of the Amended Tuna Measure and the United States has not filed any scientific evidence to support the distinction. To the contrary, the overwhelming evidence is that other ocean regions should be subject to the same or equivalent requirements. Moreover, the Amended Tuna Measure does not allow for the reconsideration of the adverse impact on dolphin stocks in the ETP,202 and NMFS has never untaken to evaluate the risks to dolphins in other ocean regions. This lack of science further underscores the arbitrary nature of the qualification and disqualification of fishing methods.

142. Finally, the United States attempts to distinguish setting on dolphins from other fishing methods by arguing that “setting on dolphins is the only fishing technique that specifically targets dolphins”, that setting on dolphins is “is inherently harmful to dolphins”, and that “this harm is not replicated in other fishing methods, which do not depend on the presence of dolphins, and, in fact, are often employed without any dolphin in sight of the vessel and without any interaction with dolphins at all”.203 In its discussion of gillnets, the United States argues that “where dolphins interact with gillnets, it is merely by accident” while “[s]etting on dolphins, on the other hand, is a fishing method that intentionally interacts with dolphins”.204 This argument emphasizes the absence of a rational connection between the difference in labelling conditions and requirements under the Amended Tuna Measure and the objectives of that measure. The focus of the objective is on whether dolphins are killed or seriously injured. The evidence shows that various types of fishing methods – including the use of purse seine nets, longlines, gillnets and trawls – all result in substantial dolphin mortalities. Whether or not the operators of the vessel claim the mortalities were an “accident” is not relevant. Indeed, the more relevant consideration is whether the vessel operators proactively seek to avoid harming dolphins, and the only fishery where that is done consistently is the ETP.

143. Thus, the United States has failed to rebut Mexico’s case that the Amended Tuna Measure’s labelling conditions and requirements differ depending on the fishing method used to catch tuna and that this difference is not even-handed. For this reason, the detrimental impact of the Amended Tuna Measure on Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. Accordingly, the Amended Tuna Measure is inconsistent with Article 2.1 of the TBT Agreement.

e. Record-keeping and Verification Requirements

144. In its first written submission, Mexico established that, under the Amended Tuna Measure, the dolphin-safe labelling conditions and requirements related to record keeping, tracking and verification differ depending on the geographic area in which tuna are caught, and that this difference is not even-handed.205 Mexico established that: (i) the Amended Tuna

201 United States’ first written submission, paras. 3, 237, 341.

202 Mexico’s first written submission, paras. 96, 247.


204 Ibid., para. 156.



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Measure imposes strict record-keeping and verification requirements in relation to tuna that is caught within the ETP, where the dolphin-safe status of tuna is recorded on a tuna tracking form (TTF) at the point when it is harvested in a fishing set, and then tracked by the TTF number continuously through onboard storage, unloading at port, and production into the finished products which contain the tuna206; and (ii) in contrast, for tuna caught outside the ETP, the Amended Tuna Measure requires only the execution of a written statement by a vessel captain,207 and there is no TTF or other mechanism to ensure that this unverified “self-certification” tracks with the corresponding tuna from the point at which it is harvested from the ocean through to the production of finished tuna products.208

145. In particular, Mexico established in its first written submission that the Amended Tuna Measure provides no requirements or procedures by which the dolphin-safe status of tuna caught by a vessel outside the ETP can be tracked or verified at any point while it is stored onboard fishing vessels, consolidated with the tuna caught by other fishing vessels, unloaded at port, brokered through intermediaries, transshipped, partially processed into loins, processed into finished tuna products, or imported into the United States.209 Thus, while the Amended Tuna Measure requires a comprehensive and independently-verified record-keeping and tracking system for the dolphin-safe status of tuna caught within the ETP, it requires neither an independent verification of the dolphin-safe status of products containing tuna caught outside the ETP nor an effective means of tracking same from the point of capture through production of tuna products to delivery to the U.S. consumer.210 As a consequence, U.S. consumers are provided with accurate information regarding the dolphin-safe status of products containing tuna caught within the ETP, but with information that is inherently unverifiable, unreliable, and inaccurate regarding the dolphin-safe status of products containing tuna caught outside the ETP.211 Notably, the vast majority of the tuna products that are either produced in the United States212 or imported into the United States213 contain tuna that is caught outside the ETP. As a

206 Mexico’s first written submission, paras. 80-93, 157-160. For the relevant provisions under the Amended Tuna Measure, see 2013 Final Rule, §216.93(a), (c) (Exhibit MEX-7).

207 See 2013 Final Rule, § 216.91(a)(2)(iii)(A), §216.91(a)(4)(i) (Exhibit MEX-7).

208 Mexico’s first written submission, paras. 94, 161-187, 269. As Mexico explained in its first written submission, there are no authorities with responsibility to monitor whether captains’ certificates match a particular lot of tuna, or whether that tuna has been mixed with uncertified tuna in a storage well onboard one or more vessels.


210 See, e.g., Freitas case, p. 18 (“Ms. Schlife [Chief Financial Officer of SPTC] indicated that SPTC got paid by the amount of total tonnage for the trip – not by discrete sets and it was not possible to relate any particular fish sold for the trip to a particular, individual set. Tr. At 118:3-123:3; 127:10-129:4 (August 23, 2012)”) (emphasis added) (Exhibit MEX-46).

211 Mexico’s first written submission, paras. 266-282. As Mexico explained in its first written submission, there are insufficient requirements and procedures under the Amended Tuna Measure to provide the necessary audit trail for tracking the tuna. As a consequence, accurate information is not being provided on the dolphin-safe status of tuna products that contain tuna caught outside the ETP.

212 See Mexico’s first written submission, paras. 83, 228. See also United States’ first written submission, footnote 111.

213 See United States’ first written submission, para. 124; Mexico’s first written submission, para. 229.


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consequence, U.S. consumers are provided with inherently unverifiable, unreliable, and inaccurate information regarding the dolphin-safe status of virtually all of the tuna products that they consume.

146. The accuracy of the dolphin-safe status of tuna products under the Amended Tuna Measure is central to the assessment of whether the measure is “even-handed” in the context of Article 2.1 of the TBT Agreement.214 In order to achieve the stated objectives of the Amended Tuna Measure,215 the information provided to consumers as to whether the tuna contained in a tuna product was caught in a manner that adversely affected dolphins must be accurate. Considering the “significant commercial value” of the dolphin-safe label and the “advantage” that it constitutes in the U.S. market,216 it is only through the provision of accurate information that the label can be made available exclusively to products containing tuna that was not caught in a manner that adversely affected dolphins.217 Indeed, the United States takes the position that the “content of the label is entirely correct” (emphasis added) under the Amended Tuna Measure.218

(1) The Regulatory Difference in Record-Keeping, Tracking and Verification Requirements is Not “Even-Handed”

147. As Mexico explained in its first written submission, the Amended Tuna Measure cannot be considered to be “even-handed” where the differing dolphin-safe labelling conditions and requirements related to record keeping, tracking and verification result in consumers being provided with independently-verified, accurate information regarding the dolphin-safe status of tuna caught within the ETP, but, at the same time, information that is inherently unverifiable, unreliable, and inaccurate regarding the dolphin-safe status of tuna caught outside the ETP. Where tuna products from the United States and other countries containing non-dolphin-safe tuna caught outside the ETP are permitted to be inaccurately labelled as dolphin-safe – on the sole basis of the inherently unreliable and unverifiable self-certifications by the commercially interested captains of the fishing vessels which catch the tuna, and without any system to ensure that such certifications track with the corresponding tuna through its complex commercial path to the U.S. market – such tuna products are granted an illegitimate competitive advantage over otherwise equivalent products containing non-dolphin-safe tuna caught in the ETP.

214 Mexico’s first written submission, paras. 266-267, 272, 280.

215 As confirmed by the United States in its first written submission, the stated objectives of the Amended Tuna Measure are as follows: (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”. See United States’ first written submission, para. 14. See Appellate Body Report, US – Tuna II (Mexico), paras. 242 and 325, citing Panel Report, US – Tuna II (Mexico), para. 7.401.

216 See Appellate Body Report, US – Tuna II (Mexico), para. 233, citing Panel Report, US – Tuna II (Mexico), paras. 7.289, 7.90 and 7.91.


218 United States’ first written submission, para. 313. The United States takes this position in the context of the “treatment no less favourable” analysis under Article III:4 of the GATT 1994.


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148. As a consequence, the circumstances related to the application of the record-keeping, tracking and verification requirements result in prejudice to products containing tuna caught in the ETP that are not entitled to be labelled dolphin-safe.

(2) Mexico has Established a prima facie Case, while the United States has failed to Meet its Burden

149. In order to establish a prima facie case in this regard, Mexico is not required to adduce evidence that proves actual instances where tuna products containing non-dolphin-safe tuna caught outside the ETP have been inaccurately labelled as dolphin-safe. In fact, it is impossible to determine by way of a post-entry audit (i.e., visual inspection, sample testing, etc.) whether tuna harvested outside the ETP was actually caught in accordance with the dolphin-safe labelling conditions and requirements. Tuna that was caught by setting a purse seine net upon dolphins or in a set in which dolphins were seriously injured or killed is indistinguishable from tuna that was caught without setting upon dolphins or in a set in which no dolphins were harmed. Inspection of the tuna itself yields no information regarding the dolphin-safe status of the circumstances in which it was harvested.

150. Rather, Mexico is only required to establish a prima facie case that, under the circumstances related to the design and application of the Amended Tuna Measure’s labelling conditions and requirements, tuna products containing non-dolphin-safe tuna caught outside the ETP could potentially enter the U.S. market inaccurately labelled as dolphin-safe. The burden then shifts to the United States to sufficiently explain how such instances can be prevented in the application of the Amended Tuna Measure’s labelling conditions and requirements.219

151. In EC – Seal Products, for example, the Appellate Body indicated, in the context of the chapeau of Article XX of the GATT 1994, that where the circumstances related to the application of the measure at issue “could allow for instances of abuse”220 (emphasis added), whereby the products in question “could potentially”221 (emphasis added) enter the market inaccurately characterized with a designation which constitutes an advantage in that market,222 it will fall to the responding Member to “sufficiently explain … how such instances can be prevented in the application” of the measure at issue.223 Specifically, the Appellate Body held that inherent ambiguities in the requirements of the IC Exception, together with the particular circumstances related to the application of these requirements – i.e., the broad discretion of the

219 See Appellate Body Report, EC – Seal Products, para. 5.388 (The Appellate Body held that “we found considerable ambiguity in the “subsistence” and “partial use” criteria of the IC exception. Given the ambiguity of these criteria and the broad discretion that the recognized bodies consequently enjoy in applying them, seal products derived from what should in fact be properly characterized as “commercial” hunts could potentially enter the EU market under the IC exception. We did not consider that the European Union has sufficiently explained how such instances can be prevented in the application of the IC exception” (emphasis added). See also para. 5.326.

220 Appellate Body Report, EC – Seal Products, paras. 5.326, 5.328.


222 Appellate Body Report, EC – Seal Products, paras. 5.326, 5.328, 5.338 and 5.95 (“the measure at issue is inconsistent with Article I:1 because it does not, ‘immediately and unconditionally’, extend the same market access advantage to Canadian and Norwegian seal products that it accords to seal products originating from Greenland”).

223 Appellate Body Report, EC – Seal Products, paras. 5.326, 5.328, 5.338.


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“recognized bodies” authorized to apply the requirements – could potentially allow for instances of abuse of the IC Exception (“even where the recognized body is acting in good faith”), such that it could potentially be applied inaccurately to “seal products derived from what should in fact be properly characterized as ‘commercial’ hunts.”224

152. Importantly, the Appellate Body had previously affirmed that designation under the IC Exception constituted a “market access advantage” within the meaning of Article III:4 of the GATT 1994.225 Thus, the Appellate Body considered the mere possibility that the measure at issue could be applied in a manner that might inaccurately characterize products with an advantageous market status to be sufficient to establish a prima facie case of arbitrary or unjustifiable discrimination, thereby shifting the burden to the responding Member. In this respect, the Appellate Body indicated that it fell to the European Union to sufficiently explain how instances of such inaccurate characterization could be prevented in the application of the IC Exception.226 Where the European Union failed to provide a sufficient explanation, the Appellate Body concluded that:

[W]e consider that seal products derived from what should in fact be properly characterized as “commercial” hunts could potentially enter the EU market under the IC exception. Thus, pursuant to its design, the EU Seal Regime could be applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail.227 (emphasis added)

153. As discussed above, Mexico has established a prima facie case that tuna products derived from tuna caught outside the ETP under non-dolphin-safe circumstances – which are therefore not properly eligible for the dolphin-safe label – could potentially enter the U.S. market inaccurately labelled as dolphin-safe.

154. Moreover, in respect of captains’ self-certifications, Mexico has established that it is not merely possible, but highly likely if not certain, that tuna caught outside the ETP under non-dolphin-safe circumstances will be inaccurately certified as dolphin-safe at the point of capture. As discussed below, the commercial interests of fishing vessel captains are in direct conflict with their administrative responsibility to decline to certify as dolphin-safe any tuna that is caught under non-dolphin-safe circumstances outside the ETP. On one hand, where there are no qualified independent observers aboard, there are no significant risks or apparent downsides to making inaccurate certifications; on the other hand, there are significant economic losses involved in properly declining to certify as dolphin-safe any tuna that is caught under non-dolphin-safe circumstances, while there is significant economic value in making an inaccurate certification. As the dolphin-safe status of tuna that is caught outside the ETP is determined solely on the basis of such self-certifications by captains, Mexico has established a prima facie case that tuna products derived from tuna caught outside the ETP under non-dolphin-safe






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circumstances are highly likely if not certain to enter the U.S. market inaccurately labelled as dolphin-safe.

155. It therefore falls to the United States to meet its burden of rebutting this prima facie case by sufficiently explaining how such instances can be prevented in the application of the Amended Tuna Measure’s labelling conditions and requirements related to record-keeping, tracking and verification. In this regard, the United States has failed to provide any explanation, much less any evidence, and has therefore failed to meet its burden. Thus, Mexico has established that the circumstances related to the design and application of the Amended Tuna Measure’s differing record-keeping, tracking and verification requirements for tuna caught within the ETP and for tuna caught outside the ETP, respectively, demonstrate that the relevant regulatory distinction—that is, the “difference in labelling conditions and requirements” – lacks even-handedness and constitutes arbitrary or unjustifiable discrimination. Accordingly, Mexico has established that the detrimental impact on imported tuna products from Mexico does not stem from a legitimate regulatory distinction.

(3) The United States’ Arguments are Without Merit

156. Unable to respond to the merits of Mexico’s position, the United States attempts instead to obfuscate and confuse both the issues before the Panel and Mexico’s arguments regarding same. The arguments advanced by the United States in this regard are without merit.

157. To begin with, the United States attempts to argue that Mexico is improperly complaining of a regulatory difference “created by the AIDCP, not the U.S. measure”.228 This is simply wrong.

158. The fact that the Amended Tuna Measure serves, in part, to implement the United States’ obligations under the AIDCP is irrelevant to Mexico’s position that: (i) the Amended Tuna Measure itself provides dolphin-safe labelling conditions and requirements related to record keeping, tracking and verification that differ depending on the geographic area in which tuna are caught; and (ii) the circumstances related to the design and application of the differing record keeping, tracking and verification requirements for tuna that is caught within the ETP in comparison to tuna that is caught outside the ETP results in a regulatory difference in labelling conditions and requirements that is not “even-handed”, and constitutes arbitrary or unjustifiable discrimination (as discussed above). Simply stated, Mexico’s claim is made in respect of the relevant regulatory distinction in the labelling conditions and requirements of the Amended Tuna Measure, and not the AIDCP. The United States helpfully proves this point, contrary to its own arguments, by stating that: “Indeed, if the United States eliminated all references to the AIDCP (and its requirements) from the amended measure, the regulatory distinction that Mexico criticizes would still exist”229 (emphasis original). In this respect, the United States responds to arguments that Mexico has not made in an effort to mischaracterize Mexico’s position.230

228 United States’ first written submission, para. 244. See also paras. 240-243.


230 See, e.g., United States’ first written submission, para. 245 (“But such is the impossibility of Mexico’s argument. The mere fact that the U.S. measure acknowledges the AIDCP requirements cannot be considered to be



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159. Second, the United States argues that Mexico’s claim must fail on the basis that Mexico cannot establish a prima facie case without providing evidence that proves actual instances where tuna products containing non-dolphin-safe tuna caught outside the ETP have entered the U.S. market inaccurately labelled as dolphin-safe.231

160. As discussed above, Mexico has met its burden of establishing a prima facie case that, under the circumstances related to the design and application of the Amended Tuna Measure’s record-keeping, tracking and verification requirements, tuna products containing tuna caught outside the ETP under non-dolphin-safe circumstances could potentially enter the U.S. market inaccurately labelled as dolphin-safe.232 In fact, Mexico has not only met its burden in this respect, but has further established a prima facie case that it is highly likely to the point of certainty that tuna products containing such non-dolphin-safe tuna are entering the U.S. market inaccurately labelled as dolphin-safe. It therefore falls to the United States to meet its burden of rebutting this prima facie case by sufficiently explaining how such instances can be prevented in the application of the Amended Tuna Measure’s record-keeping, tracking and verification requirements.

161. In this regard, the United States’ arguments entirely fail to address the total absence of an effective verification and tracking mechanism for the captains’ self-certifications regarding tuna caught outside the ETP, where there is no TTF or other mechanism that tracks the dolphin-safe certification of the corresponding tuna from the point when it is harvested from the ocean through to the point when it enters the United States. The United States appears to rely upon the NOAA Form 370, which is a “foreign country of origin” (FCO) importation document, and other legal obligations that entirely fail to address the critical gaps in the record-keeping, tracking and verification requirements for tuna that is caught outside the ETP before it enters the United States.

162. Finally, the United States argues that whether “U.S. law imposes ‘insufficient requirements and procedures’” – that is, whether the Amended Tuna Measure imposes insufficient record-keeping, tracking and verification requirements and procedures – for tuna caught outside the ETP “is entirely beside the point” and “simply irrelevant to Mexico’s claim of discrimination”.233 In this regard, the United States relies upon the principle set forth in the TBT Agreement that “a Member shall not be prevented from taking measures necessary to achieve its legitimate objectives ‘at the levels it considers appropriate,’”234 (emphasis original) asserting


legally problematic. Indeed, it would seem difficult to conceive of Mexico successfully arguing that the binding international legal commitments that Mexico has made put its own tuna producers at such a disadvantage vis-à-vis their competitors that the United States should be considered to have acted inconsistently with its WTO obligations” (emphasis original).

231 See United States’ first written submission, paras. 247-248. While Mexico refers to tuna caught outside the ETP, the United States reframes this as tuna caught by “non-AIDCP competitors”.

232 See Appellate Body Report, EC – Seal Products, paras. 5.326, 5.328, 5.338.

233 United States’ first written submission, para. 249, citing Mexico’s first written submission at para. 272.

234 United States’ first written submission, para. 249, citing Appellate Body Report, US – Tuna II (Mexico), para. 316; Appellate Body Report, US – COOL, para. 373. See also the TBT Agreement, sixth recital and Art. 2.4.


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that the “United States sets its own ‘floor’” for the level of record-keeping, tracking and verification requirements under the Amended Tuna Measure.235

163. Again, the United States not only misunderstands and misconstrues Mexico’s arguments, but it responds to arguments that Mexico has not made. The issue is not the insufficiency itself of the Amended Tuna Measure’s record-keeping, tracking and verification requirements and procedures for the purpose of providing accurate information regarding the dolphin-safe status of tuna caught outside the ETP. Rather, the issue is the regulatory difference resulting from the differing record-keeping, tracking and verification requirements and procedures, which provide U.S. consumers with independently-verified, accurate information regarding the dolphin-safe status of tuna caught within the ETP, but information that is inherently unverifiable, unreliable, and inaccurate regarding the dolphin-safe status of tuna caught outside the ETP. As a consequence, it is highly likely to the point of certainty that tuna products containing tuna caught outside the ETP in circumstances causing adverse effects to dolphins are entering the U.S. market inaccurately labeled as dolphin-safe, while virtually all tuna products from Mexico are prohibited from using the dolphin-safe label based on accurate, independently-verified information about the fishing method used to harvest the tuna within the ETP. This regulatory difference modifies the conditions of competition in the U.S. market to the detriment of imported Mexican tuna products vis-à-vis like tuna products of U.S. origin and like tuna products imported from other countries. Considering the central importance of accurate information to the declared objectives of the Amended Tuna Measure,236 the dolphin-safe labelling conditions related to the differing record-keeping, tracking and verification requirements and procedures are therefore designed and applied in a manner that lacks even-handedness and constitutes a means of arbitrary or unjustifiable discrimination.

164. As the United States has attempted to respond to an argument that Mexico did not make, based on an isolated factual statement taken out of context from the foregoing line of reasoning in Mexico’s submission,237 the United States has failed to respond meaningfully to Mexico’s position.

(4) Conclusion

165. For the foregoing reasons, the United States has failed to rebut Mexico’s case that the circumstances related to the design and application of the Amended Tuna Measure’s differing record-keeping, tracking and verification requirements for tuna caught within the ETP in comparison to tuna caught outside the ETP demonstrate that the relevant regulatory distinction – that is, the “difference in labelling conditions and requirements” – lacks even-handedness and constitutes arbitrary or unjustifiable discrimination. For this reason, the detrimental impact of the Amended Tuna Measure on Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. Accordingly, the Amended Tuna Measure is inconsistent with Article 2.1 of the TBT Agreement.

f. Mandatory Independent Observer Requirements


236 See Section III(B)(4)(e) of this submission.



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166. In its first written submission, Mexico established that the absence of a mandatory independent observer requirement for tuna fishing outside the ETP meant that the detrimental impact of the Amended Tuna Measure on imports of Mexican tuna products did not stem exclusively from a legitimate regulatory distinction and, instead, reflects discrimination against a group of imported products.238

167. Mexico explained that it is both appropriate and necessary to have an independent observer requirement for tuna fishing outside the ETP.239 Mexico further explained the fundamental importance of this requirement to the designation of tuna as dolphin-safe at the time of capture. To the extent that legitimate dolphin-safe tuna can be caught by, and landed on, a fishing vessel outside the ETP, it will not matter if a comprehensive and meticulous audit trail is implemented downstream to the U.S. consumer if the initial dolphin-safe designation is inaccurate at the point when the tuna is harvested. The entire audit trail will be tainted.240

168. The initial dolphin-safe designation is done on-board the fishing vessel during the time period beginning with the deployment of the fishing gear and ending with the landing of the tuna on the vessel. In the ETP, the designation is done by a specially-trained, independent observer and this effectively ensures the accuracy of the information on the dolphin-safe status of the tuna.241 Outside the ETP, the designation is done by the captain of the fishing vessel. In its first written submission, Mexico established that captains are neither qualified nor able to make such a designation.242 The United States has not rebutted this evidence. Moreover, Mexico established that compliance with voluntary reporting (e.g., captains’ self-certifications) has been determined to be very low by both the U.S. Department of Commerce and an independent report on global marine mammal bycatch (Duke University and University of Saint Andrews).243 The United States has not rebutted this evidence.

169. In the following section, Mexico further elaborates why the difference in labelling conditions and requirements related to the initial dolphin-safe designation is not even-handed.

(1) The Findings of the Original Panel and the Appellate Body

170. Mexico acknowledges that the Appellate Body referred to the Panel’s analysis of the independent observer requirement in the original proceeding. In the context of the United States’ arguments regarding the “calibration” of the Original Tuna Measure, the Appellate Body observed that “nowhere in its reasoning did the Panel state that imposing a requirement that an independent observer certify that no dolphins were killed or seriously injured in the course of the fishing operations in which the tuna was caught would be the only way for the United States to calibrate its ‘dolphin-safe’ labelling provisions to the risks that the Panel found were posed by


239 Ibid., paras. 287 and 295.

240 Ibid., para. 283.

241 Ibid., para. 284.

242 Ibid., para. 285.

243 Ibid., para. 176, citing Exhibit MEX-6.


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fishing techniques other than setting on dolphins”.244 The Appellate Body also recognized that “the measure at issue itself contemplates the possibility that only the captain provide such a certification under certain circumstances”.245 However, it noted that an independent observer requirement “may be appropriate in circumstances in which dolphins face higher risks of mortality or serious injury”.246 As established in Mexico’s first written submission and in this submission, dolphins outside the ETP face higher risks of mortality or serious injury than dolphins within the ETP when tuna is being fished in an AIDCP-compliant manner.

(2) The United States’ Arguments

171. The United States responds to Mexico’s submissions regarding independent observers by arguing “… that a captain’s statement is an effective vehicle to determine the eligibility of tuna for the label.”247 Unfortunately for the United States, simply stating this as a fact does not make it true. In addition to the evidence of the unreliability of captain’s certifications presented in Mexico’s first written submission, the absence of independent observers outside the ETP and the Amended Tuna Measure’s reliance upon captain self-certification serve only to undermine the measure’s primary objective, which is concerned with the accuracy of information regarding the conditions in which tuna is caught.

172. The United States argues that the Amended Tuna Measure embodies the even-handedness required pursuant to Article 2.1 because it “… requires observer certification where one particular international agreement requires observers and does not require an observer certification where the relevant authority for the fishery does not require observers to certify as to the tuna’s eligibility for a ‘dolphin safe’ label.”248 What the United States is in effect stating is that the Amended Tuna Measure is even-handed because it requires independent and accurate certifications regarding the dolphin-safe status of tuna from one region, i.e., the ETP, but allows unreliable and unverifiable certifications by self-interested private parties in other regions, i.e., by the captains of the vessels fishing for tuna outside the ETP. The Appellate Body has ruled that one of the most important factors in the assessment of arbitrary or unjustifiable discrimination is the question of whether the discrimination can be reconciled with, or is rationally related to, the policy objective.249 As discussed below, regulatory difference in the labelling conditions and requirements – which mandate the provision of independently verified and accurate information regarding the dolphin-safe status of tuna caught within the ETP, while permitting the provision of inherently unreliable and inaccurate information regarding the dolphin-safe status of tuna caught outside the ETP – constitutes a means of unjustifiable and arbitrary discrimination, considering that the primary objective of the Amended Tuna Measure is


245 Ibid.

246 Ibid., footnote 612 to para. 296.


248 See United States’ first written submission, para. 257.



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to ensure that U.S. consumers are provided with accurate information regarding the dolphin-safe status of tuna.250

173. The United States argues that it is permitted to make such an arbitrary distinction because it in fact reflects a “calibration” of the relative threats posed to dolphins by different tuna fishing methods.251 However, the concept of “calibration” is totally inconsistent with the primary objective of the measure in question, which is concerned with the accuracy of information provided to consumers. The United States’ calibration argument implies that it is acceptable and “even-handed” to provide consumers with unreliable, unverified and inaccurate information regarding the dolphin-safe status of tuna where the tuna originates from all ocean regions save the ETP, but to ensure that such information is independently certified and accurate where the tuna originates specifically in the ETP. Tuna is either dolphin-safe or it is not – eligibility for the dolphin-safe label cannot be viewed as a relative assessment. Again, the United States’ calibration argument merely underscores the arbitrary and unjustifiable distinction that results from the Amended Tuna Measure’s captain self-certification system.

174. The United States also maintains that, because self-certification mechanisms are employed in other regulatory contexts, they are appropriate here. This is clearly not the case. As is outlined below, and unlike in other conventional customs contexts, tuna fishing activities provide no opportunity or possibility for post-entry auditing – that is, it is impossible to verify that tuna was harvested in accordance with the dolphin-safe labelling conditions and requirements after the point when the tuna is caught, let alone when the vessel returns to port to offload its catch. Consequently, the veracity of a captain’s self-certification of compliance with the requirements of the Amended Tuna Measure cannot be effectively audited or verified by authorities.

175. Finally, the United States argues that independent observers are “… expensive, and therefore required only in those fisheries ‘with known or suspected high levels of bycatch’”.252 Once again, where the objective of the measure is to provide accurate information to consumers, the fact that a particular fishery has a known or suspected high level of bycatch is irrelevant, as is the cost associated with independent observers. Dolphin injuries and fatalities resulting from tuna fishing occur outside the ETP at the same or higher levels than from tuna fishing inside the ETP in an AIDCP-compliant manner. In order for the dolphin-safe certification to be anything more than an arbitrary designation, the information upon which it is based must be accurate and verifiable. As described below, the captain self-certification system provided under the Amended Tuna Measure is inherently flawed, in that it creates a very real risk, if not a certainty, that inaccurate dolphin-safe certifications will be granted outside the ETP.

250 In relation to the original Tuna Measure, the Appellate Body recognized this as the primary objective in the original proceedings. See Appellate Body Report, US – Tuna II (Mexico), paras. 242 and 325, citing Panel Report, US – Tuna II (Mexico), para. 7.401. In the present proceedings, the United States has confirmed that this remains the primary objective of the Amended Tuna Measure. See, e.g., United States’ first written submission, paras. 14 and 69.

251 See United States’ first written submission, paras. 258–259.

252 See United States’ first written submission, para. 270.


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(3) Permitting Self-Certification by Commercially Interested Fishing Vessel Captains is Not Even-Handed

(a) Captain Self-Certification Prevents the Impartial Administration of the Amended Tuna Measure

176. As established above, where a measure lacks impartiality in the context of Article X of the GATT, it will also be a reasonable indication of lack of even-handedness. The Panel in Thailand – Cigarettes (Philippines) recognized that “there may be situations where a government’s measure or act is so egregiously flawed that the unfairness inherent in such a measure or act may be sufficient to demonstrate an impartial [sic] administration without the need to illustrate it with a concrete example(s) of decisions resulted from the concerned administration.”253 Accordingly, where it can be demonstrated that a measure is inherently unfair, this will be sufficient to demonstrate a lack of impartiality in the administration of the measure.254

177. Applying the legal analysis set out in Argentina – Hides and Leather, the panel in Thailand – Cigarettes (Philippines) stated that the central question in assessing the effect of the participation of commercially interested private parties is to ask what it is that these parties are actually permitted to do in the context of applying the relevant laws and regulations.255

178. The foregoing jurisprudence indicates that a legal instrument which permits or requires a private industry party to participate in the administration of laws or regulations which affect the party’s own commercial interests will give rise, in the absence of adequate safeguards, to an “inherent danger” that the party will administer the laws or regulations in a manner that is self-interested, i.e., aligned with its own commercial interests, and therefore lacking impartiality.

179. Under the Amended Tuna Measure, the only requirement for the purpose of establishing the dolphin-safe status of tuna caught by a vessel outside the ETP is the certification of a written statement by the captain of the vessel. Specifically, the dolphin-safe status of tuna caught by a large purse seine vessel outside the ETP is based solely upon “a written statement executed by the captain of the vessel certifying that no purse seine net was intentionally deployed on or used to encircle dolphins during the fishing trip in which the tuna were caught, and that no dolphins were killed or seriously injured in the sets in which the tuna were caught.”256 Similarly, the 253 Panel Report, Thailand – Cigarettes (Philippines), para. 7.909.

254 The participation of interested private parties in the administration of a law or regulation leads to such a lack of impartiality, and thus, to a lack of even-handedness. In Argentina – Hides and Leather, the Panel stated: “Whenever a party with a contrary commercial interest, but no relevant legal interest, is allowed to participate in an export transaction such as this, there is an inherent danger that the Customs laws, regulations and rules will be applied in a partial manner so as to permit persons with adverse commercial interests to obtain confidential information to which they have no right” (emphasis added). See Panel Report, Argentina – Hides and Leather, paras. 1198, 11.101, 12.2. Although this statement was made in the context of Article X:3(a) of the GATT 1994, as explained above, this provision provides important context for the meaning of “arbitrary discrimination” in Article XX of the GATT 1994 and also in Article 2.1 of the TBT Agreement

255 Panel Report, Thailand – Cigarettes (Philippines), paras. 7.902 and 7.904.

256 2013 Final Rule, § 216.91(a)(2)(iii)(A) (Exhibit MEX-7).


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dolphin-safe status of tuna caught by a vessel deploying any other kind of fishing gear outside the ETP is based solely upon “a written statement executed by the Captain of the vessel certifying that no dolphins were killed or seriously injured in the sets or other gear deployments in which the tuna were caught.”257

180. The direct participation of fishing vessel captains in the administration of the dolphin-safe certification requirements is therefore an essential feature of the administrative processes established by the Amended Tuna Measure. For tuna caught by vessels outside the ETP, what captains are actually required to do in the context of these administrative processes amounts to the full and total administration of the dolphin-safe certification requirements in relation to the tuna caught by their own vessels. Aside from the captain’s certification as to the dolphin-safe status of the tuna caught by his or her own vessel, there are no other elements or requirements in the administrative process for the initial dolphin-safe certification.

181. As discussed above, the value of the tuna catch in a single vessel is substantial.258 In the original proceedings, the Panel held that the dolphin-safe label has “significant commercial value on the U.S. market for tuna products”,259 and the Appellate Body observed that the United States had not appealed this finding.260 In the light of the substantial value of a vessel’s tuna catch, the “significant commercial value” attached to dolphin-safe certification provides a financial incentive for captains to declare the tuna caught by their vessels to be “dolphin-safe,” and a corresponding financial disincentive to declare any tuna caught by their vessels to be non-dolphin-safe. Indeed, if a captain were to decline to certify tuna caught by his or her own vessel as dolphin-safe, i.e., on the basis that dolphin mortalities or serious injuries were observed in the set in which the tuna was caught, then the value of such tuna would be significantly diminished.

182. Accordingly, the captains of vessels fishing for tuna outside of the ETP, who are delegated the task under the Amended Tuna Measure of certifying their own catch as dolphin-safe or, alternatively, declining to make such a certification where the tuna was caught under non-dolphin-safe circumstances, find themselves in an inherent conflict of interest. Captains have a vested commercial and financial interest in securing dolphin-safe certification for the tuna that they catch, creating a very real risk that tuna may be improperly certified as dolphin-safe. By delegating dolphin-safe certification powers to private parties with adverse commercial interests, the Amended Tuna Measure creates a very real possibility that the interests of other market participants will be unfairly prejudiced. Specifically, the captain self-certification regime poses a very real risk that tuna caught in the ETP, which is accurately certified as dolphin-safe by independent observers, will lose competitive opportunities to tuna caught outside the ETP, which has received an inherently unreliable dolphin-safe certification from a self-interested captain.

183. Importantly, there are no safeguards in place in relation to the administration of the dolphin-safe certification requirements for tuna caught outside the ETP.

257 2013 Final Rule, § 216.91(a)(4)(i) (Exhibit MEX-7).

258 See, e.g., Section II(G).




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184. The most obvious, effective and available safeguard would be to require that dolphin-safe certification be conducted by an independent, trained and qualified observer on board the fishing vessel – i.e., a party with no commercial interest in the administration of the dolphin-safe certification requirements, but rather a legal interest in the accurate and impartial administration of same. The Amended Tuna Measure, as amended, provides for the potential implementation of such a feature of the administrative process “where the Assistant Administrator [of NMFS] has determined that observers participating in a national or international observer program are qualified and authorized to certify that no purse seine net was intentionally deployed on or used to encircle dolphins during the fishing trip in which the tuna were caught, and that no dolphins were killed or seriously injured in the sets in which the tuna were caught, and where such an observer is on board the vessel.”261 Critically, however, the Assistant Administrator of the NMFS has made no such determination, and the only feature of the actual administrative process in relation to the dolphin-safe certification requirements for tuna caught outside the ETP remains the certification of a written statement by the captain of the vessel.

185. Further, there are no safeguards in the form of effective legal sanctions or enforcement mechanisms for fishing vessel captains who inaccurately or improperly certify the dolphin-safe status of tuna that is caught by their own vessels. As previously discussed, the Freitas decisions indicate that the legal penalties imposed on captains of U.S. vessels for making improper or inaccurate certifications are insignificant in comparison to the value of the harvested tuna that is improperly certified to be dolphin-safe.262 There are no penalties for captains of non-U.S. vessels for falsely certifying tuna to be “dolphin-safe,” because these individuals do not fall within U.S. jurisdiction. As a consequence, there are no incentives to accurately and properly administer the dolphin-safe certification requirements in relation to tuna caught outside the ETP. To the contrary, there is a strong financial disincentive to do so whenever dolphin mortalities or serious injuries are observed in a tuna set, and no effective downside to making a false declaration that such a set is dolphin-safe. In sum, there are no safeguards in place that are capable of counteracting the inherent partiality in the self-certification system.

186. In addition to the reasons set out in Mexico’s first written submission,263 given that the Amended Tuna Measure allows the participation of interested private parties in the administration of the measure, this leads to a lack of impartiality, and thus, to a lack of even-handedness for the purposes of Article 2.1 of the TBT Agreement. As a consequence, the detrimental impact caused by the Amended Tuna Measure does not stem from a legitimate regulatory distinction, but rather from a means of arbitrary and unjustifiable discrimination that violates Article 2.1 of the TBT Agreement.

(b) The Accuracy of Captain Self-Certifications Cannot be Verified

261 See 2013 Final Rule, § 216.91(a)(2)(iii)(B) and §216.91(a)(4)(2) (Exhibit MEX-7).

262 See Freitas case (Exhibit MEX-46). The Ocean Conquest respondents were fined $11,000, and the Ocean Encounter respondents were fined $44,000. These fines were minimal in relation to the millions of dollars of value of the tuna harvested during the voyage, and therefore provide no incentive for compliance. Of course, non-U.S. flagged vessels are not subject to any penalties at all for setting nets on dolphins, killing dolphins, and/or falsely reporting tuna to be dolphin-safe.



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187. In both US – Shrimp and EC – Seal Products, the Appellate Body confirmed that effective verification and auditing mechanisms are centrally important to an evaluation of whether a measure can be applied in a manner that constitutes a means of arbitrary discrimination.264 The inability to conduct an inquiry into whether relevant provisions and guidelines are being applied in an appropriate manner means that, pursuant to its design, the measure can be applied in such a way as to result in arbitrary discrimination. As discussed above, a measure that can be applied in a manner that results in arbitrary discrimination cannot be said to be even-handed.

188. It is a practical reality of tuna fishing activities that, by the time tuna arrives within U.S. territory, authorities have no means of verifying the accuracy of a captain’s dolphin-safe certification. Unlike the many other contexts in which self-certification systems are employed, the nature of tuna fishing activities is such that post-entry audits are impossible. The tuna in question is caught and certified by the captain on the high seas, thousands of kilometers from shore, and far from the oversight of objective and independent authorities. Aside from the inherently unreliable certifications provided by self-interested captains, it simply is not possible to distinguish between tuna that was caught in a dolphin-safe manner, and that which was not.

189. As explained above, the captains who conduct dolphin-safe certifications outside of the ETP are in an inherent conflict of interest, given the financial incentives associated with improperly certifying non-conforming tuna. It would be hard to imagine that a captain, without the supervision of an independent observer, would willing to certify that a set was made in association with dolphins when doing so would make all the tuna caught during the entire voyage non-dolphin-safe. As was the case in EC – Seal Products, the best intentions and good-faith efforts of U.S. authorities to ensure the diligent and appropriate use of dolphin-safe certifications are irrelevant. Combined with the adverse commercial interests of the captains conducting the certifications for tuna caught by their own vessels, and the resulting potential for abuse, the Amended Tuna Measure is designed and applied in a manner that creates the likelihood, if not the certainty, that non-conforming tuna will be improperly certified as dolphin-safe. The simple fact is that the responsible authorities cannot determine whether tuna that has been certified as dolphin-safe by the captain of a fishing vessel operating outside of the ETP is, in fact, dolphin-safe.

190. Furthermore, as discussed above,265 the Appellate Body’s decision in EC – Seal Products indicates that it is not necessary for Mexico to provide definite proof that improperly certified tuna has made its way into the U.S. market.266 Rather, the absence of any effective means of verifying or auditing the accuracy of captain self-certifications is an inherent flaw in the design of the United States’ dolphin-safe labelling regime, which means that the Amended Tuna Measure can be applied in a manner that constitutes a means of arbitrary discrimination. Consequently, the Amended Tuna Measure’s self-certification system is not even-handed.

264 See Appellate Body Report, EC – Seal Products, para. 5.327 and Appellate Body Report, US – Shrimp, para. 184.

265 See Section (III)(B)(4)(e)(2).



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(c) Self-Certification Undermines the Objectives of the Amended Tuna Measure

191. It has been confirmed by the Appellate Body that one of the most important factors in the assessment of arbitrary or unjustifiable discrimination is the question of “whether the discrimination can be reconciled with, or is rationally related to” the relevant policy objective.267 A measure which gives rise to a regulatory distinction that cannot be reconciled with the policy objective that the measure ultimately pursues results in arbitrary discrimination. Such a measure, therefore, lacks even-handedness.

192. As noted above, the policy objective sought by the United States in enacting the Amended Tuna Measure is concerned primarily with ensuring that consumers have access to accurate information regarding the dolphin-safe status of tuna products on the U.S. market. If this objective is undermined by the regulatory distinction created by the measure itself, then the distinction is arbitrary. A measure that results in arbitrary discrimination is not even-handed.

193. In effect, the difference in labelling conditions and requirements in the Amended Tuna Measure relating to independent observers and self-certification by captains imposes two distinct and conflicting standards for the accuracy of information regarding the dolphin-safe status of tuna: one standard for tuna caught inside the ETP, and a separate and much lower standard for tuna caught outside of the ETP. For tuna caught inside the ETP, a dolphin-safe certification must be executed by an objective and independent observer who is on board the fishing vessel at the time when the corresponding tuna is harvested. Outside the ETP, an inherently unreliable and unverifiable certification is provided only by the self-interested captain of the tuna fishing vessel harvesting the tuna. This distinction is entirely inconsistent with the objective pursued by the Amended Tuna Measure: to provide consumers with accurate information regarding the dolphin-safe status of tuna.

194. Not only is the regulatory difference created by the Amended Tuna Measure’s labelling conditions and requirements related to “dolphin-safe” certifications irreconcilable with, and unrelated to, the declared objectives of the measure, but it actively undermines the measure’s ability to achieve these objectives. Accordingly, the distinction created by the Amended Tuna Measure lacks even-handedness and constitutes a means of arbitrary or unjustifiable discrimination. As the detrimental impact caused by the Amended Tuna Measure cannot be said to stem exclusively from a legitimate regulatory distinction, the Amended Tuna Measure is therefore inconsistent with Article 2.1 of the TBT Agreement.

(4) Conclusion on the Self-Certification of Captains

195. The foregoing demonstrates that the United States has failed to rebut Mexico’s case that the absence of a requirement for mandatory certification by qualified, independent observers of the dolphin-safe status of tuna caught outside the ETP renders the regulatory difference in the Amended Tuna Measure’s labeling conditions and requirements related to dolphin-safe certifications a means of arbitrary or unjustifiable discrimination. Thus, the detrimental impact

267 Appellate Body Report, EC – Seal Products, para. 5.306. See also Appellate Body Report, Brazil – Retreaded Tyres, para. 227, and Appellate Body Report, US – Shrimp, para. 176.


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caused by the Amended Tuna Measure does not stem exclusively from a legitimate regulatory distinction and, instead, reflects discrimination against a group of imported products. Accordingly, the Amended Tuna Measure is inconsistent with Article 2.1 of the TBT Agreement.

5. Conclusions on Mexico’s Article 2.1 Claim

196. For the reasons set out above, the regulatory differences in each of the three labelling conditions and requirements identified by Mexico are not even-handed. Accordingly, viewed collectively or individually, these regulatory differences establish that the detrimental impact caused by the Amended Tuna Measure on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction and, as a consequence, the measure is inconsistent with Article 2.1 of the TBT Agreement.

C. The Amended Tuna Measure is Inconsistent with Article I:1 of the GATT 1994

197. In its first written submission, Mexico demonstrated that the Amended Tuna Measure is inconsistent with Article I:1 of the GATT 1994 because it grants the advantage of access to the dolphin-safe label to tuna products originating in some WTO Members – including, e.g., Thailand and the Philippines (which are the largest sources of tuna products imported into the United States)268 – but does not immediately and unconditionally accord the same advantage to like tuna products originating in all other WTO Members, namely Mexico.269

1. The Requirements of Article I:1

198. In EC – Seal Products, the Appellate Body most recently set out the four elements that must be demonstrated in order to establish an inconsistency with Article I:1,270 explaining that “if a Member grants any advantage to any product originating in the territory of any other country, such advantage must be accorded ‘immediately and unconditionally’ to like products originating from all other Members”271 (emphasis original). The United States “does not contest” that Mexico has satisfied the first three elements of the legal test,272 effectively agreeing that: (i) the Amended Tuna Measure falls within the scope of application of Article I:1; (ii) the imported tuna products at issue are “like” products within the meaning of Article I:1; and (iii) the Amended Tuna Measure confers an advantage to like tuna products, i.e., access to the dolphin-safe label in the United States.273 Accordingly, Mexico has presented a prima facie case with

268 See NMFS import statistics (Exhibit Mex-85).


270 Appellate Body Report, EC – Seal Products, para. 5.86 (“Based on the text of Article I:1, the following elements must be demonstrated to establish an inconsistency with that provision: (i) that the measure at issue falls within the scope of application of Article I:1; (ii) that the imported products at issue are ‘like’ products within the meaning of Article I:1; (iii) that the measure at issue confers an ‘advantage, favour, privilege, or immunity’ on a product originating in the territory of any country; and (iv) that the advantage so accorded is not extended ‘immediately’ and ‘unconditionally’ to ‘like’ products originating in the territory of all Members”).

271 Ibid., para. 5.86.


273 Ibid., paras. 278-279.


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respect to these three elements of its claim under Article I:1 in respect of the Amended Tuna Measure.

199. The United States disagrees with Mexico in respect of the fourth and final element of the legal test, i.e., that the advantage of access to the dolphin-safe label is not accorded “immediately and unconditionally” to like products originating in the territories of all WTO Members. In this regard, the United States attempts to argue that the regulatory distinctions drawn by the labelling conditions and requirements of the Amended Tuna Measure do not result in any detrimental impact on the competitive opportunities for “like” products originating in Mexico. In support of this argument, the United States relies upon findings by the original panel – which were expressly rejected and reversed by the Appellate Body in the original proceedings – for the proposition that it is the “choice” of fishing method, rather than the regulatory distinction drawn by the labelling conditions and requirements of the Amended Tuna Measure, that is the reason why access to the dolphin-safe label is denied to Mexican tuna products.274

2. Article I:1 Prohibits Conditions to the Granting of an Advantage that Result in a Detrimental Impact on the Competitive Opportunities of a Member

200. In EC – Seal Products, the Appellate Body held that Article I:1 of the GATT 1994 prohibits conditions to the granting of an advantage – including regulatory distinctions drawn between like imported products – that “have a detrimental impact on the competitive opportunities for like imported products from any Member”275 (emphasis original). Further, the Appellate Body held that the existence of such a detrimental impact is sufficient on its own to demonstrate a violation of Article I:1 (emphasis added).276 Specifically, the Appellate Body explained that:

[W]e consider that Article I:1 prohibits Members from conditioning the extension of an “advantage”, within the meaning of Article I:1, on criteria that have a detrimental impact on the competitive opportunities for like imported products from any Member. A panel is not required, under Article I:1, to assess whether the detrimental impact of a measure on competitive opportunities for like imported products stems exclusively from a legitimate regulatory distinction. Such an assessment is a necessary analytical element of Article 2.1 of the TBT Agreement, but not of Article I:1 of the GATT 1994.277 (emphasis added)

274 See, e.g., United States’ first written submission, para. 286, citing Panel Report, US – Tuna II (Mexico), para. 7.334 (“The fact is that the original panel was entirely correct when it determined that any discrepancy in access to the label between Members is due to the different choices that Members have made, rather than the requirements of the challenged measure”).


276 Ibid., paras. 5.91, 5.93.

277 Ibid., para. 5.93.


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201. Moreover, the Appellate Body simply affirmed that “where a measure modifies the conditions of competition between like imported products to the detriment of the third-country imported products at issue, it is inconsistent with Article I:1.”278

202. In Mexico’s first written submission, as discussed in detail above in the context of the “treatment no less favorable” analysis under Article 2.1 of the TBT Agreement, Mexico has demonstrated that the conditions and requirements set forth in the Amended Tuna Measure result in a de facto detrimental impact on the competitive opportunities for Mexican tuna products in the U.S. market vis-à-vis like imported tuna products originating in other countries by effectively denying the advantage of access to the dolphin-safe label to tuna products of Mexican origin.279

203. In the original proceedings, the Appellate Body found that the lack of access to the advantage of the dolphin-safe label for tuna products containing tuna caught by setting on dolphins had a detrimental impact on the competitive opportunities of Mexican tuna products in the U.S. market.280 Further, the Appellate Body proceeded to find that the relevant regulatory distinction causing this detrimental impact was the difference in labelling conditions and requirements 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.281 As explained in Mexico’s first written submission, these findings apply equally to the Amended Tuna Measure.282 Nothing in the Amended Tuna Measure has reduced or minimized the detrimental impact on imported Mexican tuna products caused by the regulatory distinction imposed in the original Tuna Measure. Rather, the regulatory distinction remains substantially the same, and, as a consequence, tuna products of Mexican origin continue to be effectively excluded from the U.S. market.283

204. For these reasons, the fourth element of the legal test is satisfied, and Mexico has established a prima facie case that the Amended Tuna Measure is inconsistent with Article I:1 of the GATT 1994.

3. The Arguments of the United States are Without Merit and Contrary to the prior Ruling of the Appellate Body

205. In its first written submission, the United States argues that the “conditions of eligibility” for access to the advantage conferred by the dolphin-safe label do not result in a detrimental impact on the competitive opportunities of Mexican tuna products in the U.S. market because these conditions relate to fishing methods rather than to the national origin of the tuna

278 Ibid., para. 5.91.


280 Appellate Body Report, US –Tuna II (Mexico), paras. 233, 235 (“In our view, the factual findings by the Panel clearly establish that the lack of access to the ‘dolphin-safe’ label of tuna products containing tuna caught by setting on dolphins has a detrimental impact on the competitive opportunities of Mexican tuna products in the US market”).

281 Ibid., paras. 240, 284.




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products,284 and any country, including Mexico, could theoretically take advantage of the opportunity to access the dolphin-safe label by choosing to use a fishing method that is not disqualified.285 In this regard, the United States expressly relies upon findings made by the original panel in its “treatment no less favourable” analysis under Article 2.1 in respect of the original measure, including, e.g.: “the original panel correctly determined that the original measure distinguishes among tuna products not based on origin but based on the method by which the tuna was caught, a distinction that ‘is not inherently tied to the ‘national’ origin of the fish’286; and “[t]he fact is that the original panel was entirely correct when it determined that any discrepancy in access to the label between Members is due to the different choices Members have made, rather than the requirements of the challenged measure”287 (emphasis added). The United States advances these arguments and contends that the original panel was “correct” notwithstanding the Appellate Body’s express disagreement with, and rejection of, this line of reasoning.

206. In the original proceedings, the Appellate Body reversed the panel’s conclusion that “the requirement of not setting on dolphins embodied in the US dolphin-safe provisions as a condition for access to the label does not suggest that this requirement in itself, places Mexican tuna products at a disadvantage as compared to US and other imported tuna products”.288 Specifically, the Appellate Body disagreed with the panel’s reasoning with respect to the “treatment no less favorable” analysis under Article 2.1, stating that:

An enquiry into whether a measure comports with the “treatment no less favourable” requirement in Article 2.1 does not hinge on whether the imported products could somehow get access to an advantage, for example, by complying with all applicable conditions. Rather, as explained above, a determination of whether imported products are accorded “less favourable treatment” within the meaning of Article 2.1 of the TBT Agreement calls for an analysis of whether the contested measure modifies the conditions of competition to the detriment of imported products. Contrary to what the Panel appears to have assumed, the fact that a complainant could comply or could have complied with the conditions imposed by a contested measure does not mean that the challenged measure is therefore consistent with Article 2.1 of the TBT Agreement.

[…]

In its analysis, the Panel appears to juxtapose factors that “are related to the nationality of the product” with other factors such as “fishing and

284 United States’ first written submission, paras. 288 (“But here, the conditions of eligibility relate to fishing methods”), 284 (“The amended measure, of course, is even further divorced from national origin”).

285 United States’ first written submission, paras. 282, 285.

286 United States’ first written submission, para. 283, citing Panel Report, US – Tuna II (Mexico), para. 7.305.

287 Ibid., para. 286, citing Panel Report, US – Tuna II (Mexico), paras. 7.334.



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purchasing practices, geographical location, relative integration of different segments of production, and economic and marketing choices.” In so doing, the Panel seems to have assumed, incorrectly in our view, that regulatory distinctions that are based on different “fishing methods” or “geographical location” rather than national origin per se cannot be relevant in assessing the consistency of a particular measure with Article 2.1 of the TBT Agreement. The Panel’s approach is difficult to reconcile with the fact that a measure may be de facto inconsistent with Article 2.1 even when it is origin-neutral on its face. As the Appellate Body explained in US – Clove Cigarettes, in making a determination of whether a measure is de facto inconsistent with Article 2.1, “a panel must carefully scrutinize the particular circumstances of the case, that is, the design, architecture, revealing structure, operation, and application of the technical regulation at issue, and, in particular, whether that technical regulation is even-handed.” The Panel failed to conduct such an analysis in the present case. Contrary to the Panel, we consider that in an analysis of “less favourable treatment” under Article 2.1, any adverse impact on competitive opportunities for imported products vis-à-vis like domestic products that is caused by a particular measure may potentially be relevant.289

207. As the Appellate Body made these findings in the context of the “treatment no less favourable” analysis under Article 2.1 of the TBT Agreement, they provide a complete response to the original panel’s statements in relation to the Article 2.1 analysis in the original proceeding. Clearly then, the Appellate Body has effectively rejected the line of reasoning relied upon and followed by the United States in its first written submission. As a consequence, the arguments advanced by the United States regarding the determination of detrimental impact for the purposes of Article I:1 of the GATT 1994 are without merit.

4. The Unilateral Action of the United States in Applying the Amended Tuna Measure’s Labelling Conditions and Requirements Supports a Finding of Detrimental Impact under Article I:1 of the GATT 1994

208. As previously discussed in the context of Article 2.1 of the TBT Agreement,290 the consequences of the United States’ unilateral action in designing and applying the dolphin-safe labelling conditions and requirements of the Amended Tuna Measure provide further support for the de facto detrimental impact on the competitive opportunities of imported Mexican tuna products in the U.S. market vis-à-vis like tuna products imported from other countries. Specifically, the Amended Tuna Measure’s unilateral dolphin-safe regime has the intentional effect of exerting pressure on Mexico to change its tuna fishing practices,291 even though these practices are already fully compliant with the highly successful AIDCP dolphin-safe labelling regime, as agreed through multinational negotiations between the United States, Mexico and the

289 Appellate Body Report, US – Tuna II (Mexico), paras. 221, 225.

290 See Section III(B)(3). 291 See Appellate Body Report, US – Tuna II (Mexico), para. 226.


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other members of the IATTC. To the extent that Mexico refuses to acquiesce to the unilateral extraterritorial pressure imposed by the United States, the vast majority of its tuna products are denied the advantage of access to the dolphin-safe label in the U.S. market, even while they are entirely qualified for the AIDCP dolphin-safe label elsewhere.

209. In US – Shrimp, the Appellate Body held that “it is not acceptable, in international trade relations” for one WTO Member to use a trade-restrictive measure to require other WTO Members to adopt its regulatory regime without taking into account the different conditions which may occur in the territories of the other Members.292 In that case, the Appellate Body held that the United States had unilaterally applied a measure without first making the appropriate enquiries or entering into the multilateral negotiations.293 In the present circumstances, however, the United States has unilaterally designed and applied the Amended Tuna Measure’s dolphin-safe labelling conditions and requirements in a manner that is contrary to the AIDCP dolphin-safe labelling regime established by multilateral agreement. In doing so, the United States either failed to take into account or deliberately ignored both the conditions that may occur in the territories of other IATTC and WTO Members,294 namely Mexico, and the specific policies and measures adopted by those countries for the purposes of protecting and conserving dolphins and other marine species, namely the AIDCP dolphin-safe labelling regime.295

210. Considering the tremendous and continuing success of the AIDCP dolphin-safe labelling regime in reducing the harm caused to dolphins in the ETP to statistically insignificant levels, it is difficult to reconcile the consequences of the United States’ unilateral action to prevent AIDCP-compliant tuna products from using the dolphin-safe label in the U.S. market with the declared policy objectives of the measure at issue.

211. These circumstances support the de facto detrimental impact on the competitive opportunities of imported Mexican tuna products in the U.S. market in comparison to like tuna products imported from other countries for the purposes of Article I:1 of the GATT 1994.

5. Conclusion regarding Article I:1 of the GATT 1994

212. For the foregoing reasons, Mexico has established a prima facie case that the Amended Tuna Measure is inconsistent with Article I:1 of the GATT 1994, and the United States has not rebutted this case.

D. The Amended Tuna Measure is Inconsistent with Article III:4 of the GATT 1994

213. The United States’ response to Mexico’s claim under Article III:4 of the GATT 1994 is to propose an untenable interpretation of its text. Mexico’s interpretation and application of this provision is based on the long-standing body of WTO and GATT 1947 findings related to the


293 See, e.g., ibid., paras. 164-169.

294 See Appellate Body Report, US – Shrimp, paras. 164-165.

295 See Appellate Body Report, US – Shrimp, para. 163.


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interpretation of the GATT Article III:4, which was recently affirmed by the Appellate Body in EC – Seal Products.296 There is no legal basis to change that interpretation.

1. The Requirements of Article III:4 of the GATT 1994

214. In its first written submission, Mexico demonstrated each of the three elements required to establish an inconsistency with Article III:4, including: (i) the imported tuna products from Mexico are “like” domestic tuna products in the United States;297 (ii) the Amended Tuna Measure is a “law, regulation or requirement affecting the internal sale, offering for sale, purchase, transportation, distribution, or use” of the like tuna products at issue;298 and (iii) the imported tuna products from Mexico are accorded “less favourable” treatment than that accorded to like domestic tuna products in the United States.299 The United States does not contest that Mexico has satisfied the first two elements of the legal test.300 Accordingly, Mexico has established a prima facie case with respect to the first two elements of its claim under Article III:4 of the GATT 1994.

215. The United States alleges that Mexico has failed to satisfy the third element of the test, that is, that the Amended Tuna Measure accords to imported tuna products from Mexico treatment that is “less favourable” than that accorded to domestic tuna products in the U.S. market.301 The position taken by the United States appears to be that it is not sufficient for Mexico to demonstrate that the Amended Tuna Measure has a detrimental impact on the competitive opportunities for imported tuna products from Mexico vis-à-vis domestic tuna products in the U.S. market because a further “discrimination analysis”302 is required in order to establish “less favourable” treatment under Article III:4. In this regard, the United States argues that: “Mexico completely ignores the original panel’s well-reasoned discrimination analysis, which Mexico apparently considers to be entirely irrelevant to the analysis of its Article III:4 claim.”303 As affirmed by the Appellate Body in EC – Seal Products, such a “discrimination analysis” is indeed irrelevant to the analysis of Mexico’s claim under Article III:4.304 Further, the United States ignores the findings of the Appellate Body in the original proceeding which expressly rejected and reversed the findings of the Panel to which the United States refers.305

296 Appellate Body Report, EC – Seal Products, paras. 5.98-5.110.




300 United States’ first written submission, paras. 279, 280.


302 United States’ first written submission, paras. 298-299, 300. In light of the findings of the Appellate Body in EC – Seal Products and US – Tuna II (Mexico), the arguments advanced by the United States in these paragraphs of its first written submission are of no relevance or merit. See e.g. Appellate Body Report, US – Tuna II (Mexico), paras. 221 and 225; Appellate Body Report, EC – Seal Products, paras. 5.104, 5.108-5.110.



305 See Appellate Body Report, US – Tuna II (Mexico), paras. 221, 225.


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216. In Thailand – Cigarettes (Philippines), the Appellate Body explained that the relevant question for the purpose of determining whether a measure accords “less favourable” treatment to imported products within the meaning of Article III:4 is whether the “regulatory distinctions” drawn between the imported and domestic like products result in a detrimental impact on the competitive opportunities of the imported products:

[T]he mere fact that a Member draws regulatory distinctions between imported and like domestic products is, in itself, not determinative of whether imported products are treated less favourably within the meaning of Article III:4. Rather, what is relevant is whether such regulatory differences distort the conditions of competition to the detriment of imported products. If so, then the differential treatment will amount to treatment that is “less favourable” within the meaning of Article III:4.306 (emphasis added)

217. In EC – Seal Products, the Appellate Body resolved the issue of “whether, for the purposes of establishing a violation of Article III:4, a finding that a measure has a detrimental impact on competitive opportunities for imported products, compared to like domestic products, is dispositive.”307 In determining that such a finding of detrimental impact is indeed dispositive of a violation of Article III:4, the Appellate Body held that no further analysis of whether the detrimental impact stems exclusively from a legitimate regulatory distinction (i.e., a “discrimination analysis”) was required:

[W]e consider that the “treatment no less favourable” standard under Article III:4 of the GATT 1994 prohibits WTO Members from modifying the conditions of competition in the marketplace to the detriment of the group of imported products vis-à-vis the group of like domestic products. We do not consider, as argued by the European Union, that for the purposes of an analysis under Article III:4, a panel is required to examine whether the detrimental impact of a measure on competitive opportunities for like imported products stems exclusively from a legitimate regulatory distinction.308 (emphasis added)

218. Further, the Appellate Body affirmed that whether the detrimental impact of a measure is unrelated to the foreign origin of the imported products is irrelevant to the analysis of a claim under Article III:4, and, hence, no “additional inquiry” in this respect is necessary:

[I]n US – Clove Cigarettes, the Appellate Body explained its earlier finding in Dominican Republic – Import and Sale of Cigarettes. The Appellate Body explicitly rejected the notion that its finding in Dominican Republic – Import and Sale of Cigarettes stands for the proposition that,

306 Appellate Body Report, Thailand – Cigarettes (Philippines), para. 128, as cited in Appellate Body Report, EC – Seal Products, para. 5.109. See also Appellate Body Report, Korea – Various Measures on Beef, para. 137; Appellate Body Report, US – Tuna II (Mexico), para. 214.




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under Article III:4, panels should conduct an inquiry into whether the detrimental impact of a measure on imports is unrelated to the foreign origin of the imported products. The Appellate Body buttressed this explanation of its finding in Dominican Republic – Import and Sale of Cigarettes by pointing out that, subsequent to its finding in that case, it had, in the context of a claim under Article III:4 in Thailand – Cigarettes (Philippines), “eschewed an additional inquiry” as to whether the detrimental impact of a measure on imports is related to the foreign origin of the products.309 (emphasis added)

219. Thus, the arguments advanced by Mexico in its first written submission are entirely in accordance with the correct interpretation of Article III:4, which has been developed in a long series of WTO and GATT 1947 reports,310 and most recently affirmed in EC – Seal Products.311 Under that interpretation, a measure confers “less favourable” treatment where it modifies conditions of competition in the relevant market to the detriment of imported products compared to like domestic products.312 Contrary to the position taken by the United States, there is no need to make an additional determination whether the detriment reflects discrimination against like imported products, including an “additional inquiry” as to whether the detrimental impact is related to the foreign origin of the products.

220. As previously discussed in the context of Mexico’s claim under Article I:1 of the GATT 1994 (above), the Appellate Body determined in the original proceedings that the original Tuna Measure modified the conditions of competition in the U.S. market to the detriment of Mexican tuna products under the “less favourable” treatment analysis of Article 2.1 of the TBT Agreement.313 The Appellate Body stated its conclusions in this respect as follows:

309 Appellate Body Report, EC – Seal Products, para. 5.104. These findings, together with the findings of the Appellate Body in US – Tuna II (Mexico) at paras. 221 and 225 provide a complete answer to the United States’ arguments that Mexico’s claim should fail merely because the regulatory difference resulting from the Amended Tuna Measure’s differing labelling conditions and requirements is origin-neutral on its face – e.g., “[t]he requirements do not differ based on the nationality of the vessel or processor”. See, e.g., United States’ first written submission, para. 297.

310 See e.g. Appellate Body Report, Korea – Various Measures on Beef, para. 137; Appellate Body Report, Thailand – Cigarettes (Philippines), para. 128; and Appellate Body Report, US – Clove Cigarettes, footnote 372 to para. 179.

311 Appellate Body Report, EC – Seal Products, paras. 5.99-5.130.

312 The Appellate Body established in US – Clove Cigarettes, US – Tuna II and US – COOL a two-step approach for assessing whether the elaboration or adoption of a technical regulation accords “less favourable treatment” in the sense of Article 2.1 of the TBT Agreement. First, it must be determined whether the measure at issue modifies the conditions of competition in the relevant market to the detriment of imported products as compared to like domestic products and products originating in any other country. Second, where such a detrimental impact is demonstrated, it must be further demonstrated that the impact reflects discrimination against imported products, by considering whether the detrimental impact on imports stems exclusively form the legitimate regulatory distinction. The legal test to determine whether a measure accords “less favourable treatment” in the sense of Article III:4 of the GATT implies a single step.

313 Appellate Body Report, US – Tuna II (Mexico), paras. 235 (“In our view, the factual findings by the Panel clearly establish that the lack of access to the ‘dolphin-safe’ label of tuna products containing tuna caught by setting on dolphins has a detrimental impact on the competitive opportunities of Mexican tuna products in the US market”),



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[W]e concluded earlier that the detrimental impact of the measure on Mexican tuna products is caused by the fact that most Mexican tuna products contain tuna caught by setting on dolphins in the ETP and are therefore not eligible for a “dolphin-safe” label, whereas most tuna products from the United States and other countries that are sold in the US market contain tuna caught by other fishing methods outside the ETP and are therefore eligible for a “dolphin-safe” label. The aspect of the measure that causes the detrimental impact on Mexican tuna products is thus the difference in 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.314

221. As explained in Mexico’s first written submission, these findings apply equally to the Amended Tuna Measure.315 None of the amendments in the Amended Tuna Measure have reduced or eliminated the detrimental impact on imported Mexican tuna products caused by the above-referenced difference in the dolphin-safe labelling conditions and requirements in the original Tuna Measure. As a consequence, for the same reasons stated by the Appellate Body in the original proceedings, most Mexican tuna products that contain tuna caught by setting on dolphins in the ETP continue to be ineligible for a dolphin-safe label in the U.S. market, while most tuna products from the United States and other countries that contain tuna caught by other fishing methods outside the ETP continue to be eligible for a dolphin-safe label. Consequently, the regulatory difference imposed under the Amended Tuna Measure continues to have the same detrimental impact on competitive opportunities for imported Mexican tuna products vis-à-vis domestic tuna products (as well as tuna products originating in other countries) in the U.S. market. The Amended Tuna Measure accords to imported Mexican Tuna products treatment that is “less favourable” than that accorded to like domestic products in the U.S. market.

222. For the foregoing reasons, the third element of the legal test is satisfied, and Mexico has therefore established a prima facie case that the Amended Tuna Measure is inconsistent with Article III:4 of the GATT 1994.


240 (“we consider that it is the measure at issue that modifies the competitive conditions in the US market to the detriment of Mexican tuna products”). Where a measure is found to modify the conditions of competition in the U.S. market to the detriment of Mexican tuna products for the purposes of “less favourable” treatment under Article 2.1, this finding may be applied to the analysis under Article III:4 of the GATT 1994.




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2. The Unilateral Action of the United States in Applying the Amended Tuna Measure’s Labelling Conditions and Requirements Supports a Finding of Detrimental Impact under Article III:4 of the GATT 1994

223. As previously discussed in the context of Article 2.1 of the TBT Agreement316 and Article I:1 of the GATT 1994,317 the intended extraterritorial effects resulting from the manner in which the United States’ has unilaterally designed and applied the Amended Tuna Measure’s dolphin-safe labelling conditions and requirements constitutes further support for the de facto detrimental impact on the competitive opportunities of imported Mexican tuna products in the U.S. market vis-à-vis like tuna products of U.S. origin. Specifically, the Amended Tuna Measure’s unilateral dolphin-safe regime has the intentional effect of exerting pressure on Mexico to change its tuna fishing practices,318 notwithstanding that these practices already fully comply with the multilaterally negotiated and agreed AIDCP dolphin-safe labelling regime. To the extent that Mexico refuses to acquiesce to the unilateral extraterritorial pressure imposed by the United States, the vast majority of its tuna products are prohibited from using the dolphin-safe label in the U.S. market, even though such products are entirely qualified to use the AIDCP dolphin-safe label. As a consequence, Mexican tuna products suffer a competitive disadvantage in the U.S. market relative to like tuna products of U.S. origin.

224. This situation provides further support for the de facto detrimental impact on the competitive opportunities of imported Mexican tuna products in the U.S. market in comparison to like tuna products of U.S. origin for the purposes of Article III:4 of the GATT 1994.

3. Conclusion regarding Article III:4 of the GATT 1994

225. Mexico has established a prima facie case that the Amended Tuna Measure is inconsistent with Article III:4 of the GATT 1994, and the United States has not rebutted this case.

E. The Inconsistencies with Articles I:1 and III:4 cannot be Saved by Article XX of the GATT 1994

226. Article XX provides for certain limited and conditional exceptions to the substantive obligations set forth in the GATT 1994.319 In addition, the burden of establishing that an otherwise GATT-inconsistent measure satisfies the requirements of one of the exceptions in Article XX lies with the party invoking the defense.320

227. Article XX sets forth requirements both in its chapeau and in its ten delineated subparagraphs. The chapeau of Article XX applies to all Article XX exceptions, and requires that any measure that is otherwise inconsistent with the GATT 1994 must not be “applied in a

316 See Section III(B)(3).

317 See Section III(C)(4).

318 See Appellate Body Report, US – Tuna II (Mexico), para. 226.


320 Appellate Body Report, US – Gasoline, pp. 22-23.


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manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade.”

228. The Article XX subparagraphs set out a list of "exceptions" that allow WTO Members to take specific measures, that may be contrary to, or more restrictive than their WTO obligations, in order to enforce other measures that are aimed at specified policy objectives.

229. As noted by the Appellate Body in US – Gasoline, the analysis under Article XX is “two-tiered: first, provisional justification by reason of characterization of the measure under [one or more subparagraphs]; second, further appraisal of the same measure under the introductory clauses of Article XX.” 321

1. The Amended Tuna Measure, Considering its Objectives, does not fit into the General Exceptions provided in Subparagraphs (b) and (g) of GATT Article XX

230. The United States has confirmed in this proceeding that the Amended Tuna Measure pursues the same two objectives as the original measure: (i) ensuring that consumers are not misled or deceived about whether tuna products contain tuna caught in a manner that adversely affects dolphins, and (ii) contributing to the protection of dolphins by ensuring that the U.S. market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins.322

231. Because the objectives remain the same, the findings of the original Panel on the objectives of the original measure are applicable to the Amended Tuna Measure.

232. At the panel stage in the original proceeding, Mexico did not agree with the characterization of the objectives of the measure stated by the United States. The Panel analyzed further the characterization of the legitimate objectives of the measure in its analysis under Article 2.2 of the TBT Agreement. The Panel noted the Appellate Body’s previous findings considered that “a panel’s analysis is not bound by a Member’s characterization of the objectives of its own measures. Such categorization must be made in an independent and objective fashion, based on the evidence in the record”.323

233. The Panel also stated that its “analysis will be guided by the description of the objectives of the measures by both parties, as well as by the structure and design of the US dolphin safe provisions.”324 The Panel clarified that “at this stage of the analysis our enquiry is limited to the question of what the objective or purpose of the measures is, and does not seek to address the separate question of what the measures actually do or do not do in pursuance of this objective” (emphasis original).325

321 Ibid.

322 United States’ first written submission, para.14.

323 Panel Report, US – Tuna II (Mexico), para. 7405.




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234. Proceeding with an analysis of the objectives on this basis, the Panel identified two objectives: the “consumer information objective” (the primary objective) and the “dolphin protection objective” (the secondary objective). Further, the Panel found a direct correlation between these two objectives.326

235. With respect to the first objective, the Panel considered the structure and design of the measure, and accepted “the United States' contention that its measures aim, inter alia, at ‘ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins’.”327 With regard to the second objective, the Panel determined that this objective was dependent in large part on the achievement of the first objective, concluding that:

To the extent that, as described, the US dolphin safe provisions operate on the basis of incentives created by consumer choice, 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.328 (emphasis added)

236. It is clear from the Panel’s Report that the original Tuna Measure, with respect to its stated objectives, was not designed or applied as a measure necessary for the protection of dolphins or for the conservation of dolphins (as exhaustible natural resources) within the meaning of subparagraphs (b) and (g), respectively, of Article XX of the GATT 1994.

237. In the present proceedings, the United States invokes the exceptions set out under subparagraphs (b) and (g) of Article XX in order to justify the Amended Tuna Measure’s inconsistencies with the United States’ obligations under the GATT 1994. In considering this defence, the Panel must review whether the Amended Tuna Measure meets the requirements of each of these exceptions.

238. In Mexico’s view, the primary “consumer information objective” bears no relationship with the exceptions set out under subparagraphs (b) and (g) considering that it is unsuccessful in providing accurate information to U.S. consumers about whether tuna products contain tuna that was caught in a manner that adversely affected dolphins.

239. The secondary “dolphin protection objective” is dependent upon the achievement of the primary objective. As explained below, since the measure fails to fulfil its primary objective, it cannot fulfil its secondary objective. As a consequence, it is difficult to understand how the measure can to contribute to the protection or conservation of dolphins. Thus, the Amended Tuna Measure does not fall within the categories of the general exceptions enumerated in subparagraphs (b) and (g) of Article XX.





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240. It is Mexico’s view that, considering the Amended Tuna Measure’s objectives, it cannot be characterized as a measure “necessary” to protect animal life or health under Article XX(b) nor can it be characterized as a measure that “relates to the conservation” of exhaustible natural resources under Article XX(g).

2. The Amended Tuna Measure does not Satisfy the Requirements of Article XX(b) of the GATT 1994

241. In the circumstances of this dispute, to determine whether the Amended Tuna Measure is justified under Article XX(b), a Panel needs to examine: (i) whether the policy reflected in the measure falls within the range of policies designed to achieve the objective or, put differently, or whether the policy objective is for the purpose of "protect[ing] …animal… life or health"; and (ii) whether the measure is “necessary” to achieve the said objective; and (iii) whether the measure is applied in a manner that is consistent with the chapeau of Article XX.329

242. As discussed above, the Amended Tuna Measures has the same two policy objectives as the original measure.330

a. The Amended Tuna Measure does not Fall within the Range of Policies Designed to Protect Animal Life or Health under Article XX(b)

243. In undertaking an analysis to determine whether the measure at issue falls within one of the general exceptions enumerated under Article XX(b), a panel will examine both the design and structure of the measure in order to determine whether its objective is the protection of animal life or health.

244. In its first written submission, the United States relies on the Panel findings in the original proceeding regarding Article 2.2 of the TBT Agreement, stating that the these findings apply equally to the Article XX(b) analysis.331 The Panel findings relied upon by the United States related to whether the objectives of the original measure were legitimate within the meaning of Article 2.2 of the TBT Agreement.

245. Article 2.2 of the TBT Agreement lists examples of objectives that can be legitimate. Accordingly, objectives that a Member can seek to establish as legitimate under this provision are broader than the objectives that a Member can invoke to justify a GATT-inconsistent measure pursuant to the exception set out under Article XX(b).

246. The primary objective of the Amended Tuna Measure is intended to ensure that consumers are not misled or deceived about whether tuna products contain tuna caught in a manner that adversely affects dolphins, while the secondary objective is intended to contribute to

329 Panel Report, EC-Tariff Preferences, para. 7.197. See also Panel Report, China – Raw Materials, para. 7.495.




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the protection of dolphins by ensuring that the U.S. market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins.332

247. As was found by the Panel, and affirmed by the Appellate Body, there is a direct correlation between these two objectives.333

248. Specifically, the Panel found that the original measure operated on the basis of incentives created by consumer choice, and that achievement of the secondary objective was therefore dependent in large part on the achievement of the primary objective.334 The Panel also noted that “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).335 Further, the Panel found that methods of fishing other than dolphin sets cause dolphin mortalities.336 The Panel also found that the structure and design of the original measure suggested that the U.S. dolphin-safe provisions appeared to be directed towards discouraging the use of fishing techniques that have harmful effects on dolphins.337

249. If consumers cannot accurately distinguish tuna products that contain tuna that was caught using a fishing technique that is harmful to dolphins or in a gear deployment in which dolphins were killed or seriously injured, then such tuna products will enter the U.S. market with the dolphin-safe label and consumer choice will not contribute to the protection of dolphins from harmful tuna fishing practices. This is precisely the situation that has resulted from the manner in which the Amended Tuna Measure’s dolphin-safe labelling conditions and requirements are designed and applied.

250. Mexico has presented substantial evidence that tuna fishers intentionally set nets on marine mammals outside the ETP, including dolphins, and that other methods of fishing for tuna are causing many thousands of dolphin mortalities and serious injuries. As there are no effective record-keeping, tracking and verification requirements or procedures in relation to tuna caught by fishing vessels outside the ETP, it is highly likely to the point of certainty that tuna products containing non-dolphin-safe tuna entering the U.S. market inaccurately labelled as dolphin-safe.338 Therefore, U.S. consumers cannot accurately distinguish between tuna products

332 Appellate Body Report, US- Tuna II (Mexico), para. 325 (“[I]n reviewing the Panel’s application of Article 2.2 to the facts of this case, we recall its finding that the objectives at issue 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’”.) (internal footnotes omitted) (emphasis added).



335 Ibid.

336 Panel Report, US – Tuna II (Mexico), paras. 7.520-7.523.

337 Panel Report, US – Tuna II (Mexico), paras. 7.424 and 7.595.

338 See Section (III)(B)(4)(e)(2).


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containing tuna that was caught in a manner harmful to dolphins and tuna products containing tuna that was caught under circumstances in which dolphins were harmed. As a consequence, the secondary objective of the Amended Tuna Measure cannot be accomplished.

251. Article XX(b) focuses on the protection of human, animal or plant life or health. The meaning of “to protect” in Article XX(b) concerns the existence of health risk and the protection from or against certain dangers or risks.339 It has been demonstrated that dolphins are at risk from tuna fishing outside the ETP due to the use of fishing techniques other than setting on dolphins. However, these fishing techniques are not being discouraged under the Amended Tuna Measure despite their harmful effects on dolphins.

252. The Amended Tuna Measure does not fulfill the objectives it claims to address and, therefore, it does not protect animal life or health within the meaning of Article XX(b) of the GATT 1994. The United States has not shown that the Amended Tuna Measure fulfils the objective that it claims to address.340

b. The Amended Tuna Measure is not “Necessary” to Fulfil the Invoked Policy Objective

253. Article XX(b) requires the measure at issue to be “necessary” to achieve the objective that it pursues. On the continuum between a measure that is “indispensable” and a measure that merely makes a contribution to the achievement of its objective, the meaning of “necessary” for the purposes of Article XX(b) of the GATT 1994 requires a measure to be “significantly closer” to “indispensable”.

254. As noted by the Panel in China-Raw Materials:

A panel must thereafter ensure that a measure is "necessary" to fulfil the invoked policy objective. Article XX(b) requires that a Member's measure is "necessary" to achieve the objective it pursues. The degree of necessity envisioned was examined by the Appellate Body in Korea – Various Measures on Beef, where it concluded that a “necessary” measure is, in a continuum, located significantly closer to the pole of “indispensable” than to the opposite pole of simply “making a contribution to”.341 (internal footnotes omitted)

255. In the original proceedings the Panel noted that “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.” This finding

339 Panel Report, EC-Seals, para. 5.197.

340 Panel Report, China-Raw Materials, para. 7.511 (“[T]his is not to say that Members can only succeed in justifying their measures under Article XX(b) by producing one or more instruments stating explicitly that a challenged measure has been put in place because it is necessary to protect human, animal or plant life or health, or that such instrument details the manner in which its objective will be achieved. However, in our view, a Member must do more than simply produce a list of measures referring, inter alia, to environmental protection and polluting products. It must be able to show how these instruments fulfil the objective it claims to address.”).

341 Panel Report, China-Raw Materials, para. 7.480.


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applies equally to the Amended Tuna Measure, on the basis that it pursues the same objectives as the original measure.

256. If the Amended Tuna Measure cannot provide consumers with a means by which to accurately distinguish between tuna products containing tuna that was caught in conditions that were harmful to dolphins and tuna products containing tuna that was caught in conditions that were not harmful to dolphins, then it is not fulfilling its primary objective of ensuring that consumers are not misled or deceived about whether tuna products contain tuna caught in a manner that adversely affects dolphins. It is also not fulfilling its secondary objective of contributing to the protection of dolphins.

257. Such a measure is far from “indispensable”.

258. In Brazil –Tyres, the Appellate Body recalled that:

[I]n order to determine whether a measure is “necessary” within the meaning of Article XX(b) of the GATT 1994, a panel must consider the relevant factors, particularly the importance of the interests or values at stake, the extent of the contribution to the achievement of the measure's objective, and its trade restrictiveness. If this analysis yields a preliminary conclusion that the measure is necessary, this result must be confirmed by comparing the measure with possible alternatives, which may be less trade restrictive while providing an equivalent contribution to the achievement of the objective. This comparison should be carried out in the light of the importance of the interests or values at stake. It is through this process that a panel determines whether a measure is necessary.342

259. The Appellate Body found that this exercise implies a “weighing and balancing” analysis, noting that “the weighing and balancing is a holistic operation that involves putting all the variables of the equation together and evaluating them in relation to each other after having examined them individually, in order to reach an overall judgment.”343

260. The burden of demonstrating that a measure provisionally justified on the basis that it falls within one of the exceptions set out in the individual paragraphs of Article XX rests on the party invoking the exception.344 Therefore, the United States bears the burden of demonstrating that the measure is “necessary” within the meaning of Article XX (b).

(1) Relevant Factors

261. In its submission the United States simply suggest, without further elaboration, that the Amended Tuna Measure satisfies such an analysis and that the protection of dolphins is an important objective.345

342 Appellate Body Report, Brazil – Tyres, para. 178.

343 Appellate Body Report, Brazil – Tyres, para. 182.




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262. Mexico does not dispute that the protection of dolphins is an important objective. Mexico’s position is that the Amended Tuna Measure does not fulfill this objective when consumers cannot accurately distinguish tuna caught in conditions that are harmful to dolphins from tuna caught in conditions that are not harmful to dolphins.

263. The Amended Tuna Measure does not account for the harmful effects of other tuna fishing methods on dolphins and other marine mammals outside the ETP. Pursuant to the Amended Tuna Measure, tuna caught by these methods is eligible to be labelled as dolphin-safe. The Panel recognized that:

[I]n light of the evidence presented in these proceedings, the Panel is not persuaded that the threats arising from the use of fishing methods other than setting on dolphins to catch tuna outside the ETP are insignificant, as the United States suggests, be it in terms of observed mortality or serious injury, or even, in at least some cases, in terms of sustainability of the populations. Nor are we persuaded that they are demonstrated to be lower than the similar threats faced by dolphins in the ETP. As a result, granting access to dolphin-safe label to tuna products containing tuna caught in this manner creates a genuine risk that consumers may be misled about whether that tuna was caught by using a technique that does not adversely affect dolphins.346

264. If the United States had analyzed carefully all the relevant factors, it would have adopted a measure to comply that seriously took into consideration the fact that dolphins are killed and seriously injured outside the ETP.

(2) The Amended Tuna Measure does Not Contribute to the Objective that it Pursues

265. The United States further argues that the Amended Tuna Measure satisfies the necessity analysis on the basis that the original panel and the Appellate Body confirmed that the original Tuna Measure contributed to the objective and, as such, so does the Amended Tuna Measure.347

266. The Appellate Body has explained that a contribution exists when there is a genuine relationship of ends and means between the objective pursued and the measure at issue, and that a panel, considering Article 11 of the DSU, must analyze the contribution of the measure at issue to the realization of the ends pursued by it, in accordance with the requirements of Article XX of the GATT 1994.348

267. Contrary to the arguments advanced by the United States, the Appellate Body confirmed the Panel’s finding in the original proceedings that the original Tuna Measure, “at best, partially fulfills their stated objective of protecting dolphins by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins.”349 With



348 Appellate Body Report, Brazil – Retreaded Tyres, para. 145.

349 Panel Report, US – Tuna II (Mexico), para. 7.599 (emphasis original).


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respect to the primary objective of the original Tuna Measure, the Panel found that, for tuna caught outside the ETP, U.S. consumers could still be misled to believe that a tuna product did not contain tuna that was caught in conditions involving the serious injury or death of a dolphin, when this may in fact have been the case. The Panel also found that, to the extent that the original Tuna Measure would guarantee an absence of serious dolphin injuries or mortalities in relation to tuna caught in the ETP, but not in relation to tuna caught outside the ETP, this created an ambiguity as to the meaning of the guarantee provided by the label. As a consequence, the Panel found that the secondary objective could only be partially fulfilled as well. The Panel concluded that: “[t]o the extent that the measures fail to allow the consumer to accurately distinguish between tuna caught in conditions harmful to dolphins and other tuna, the related fishing techniques cannot be discouraged or encouraged in a manner that accurately reflects this distinction”350

268. The original Panel had before it considerable evidence that fishing for tuna outside the ETP has substantial adverse effects on dolphins. In the present proceeding, Mexico has supplemented the record with additional evidence concerning the serious deficiencies in the process by which tuna caught outside the ETP is initially designated as dolphin-safe, (i.e., the absence of an independent observer) as well as the gaps in the record-keeping, tracking and verification requirements and procedures in relation to same. Thus, the actual contribution of the original Tuna Measure to the achievement of its objectives was even lower than that found by the original Panel.

269. The Amended Tuna Measure has the same objectives as the Original Tuna Measure and continues, at best, to only partially fulfill these objectives. The Amended Tuna Measure allows tuna products containing tuna caught in fisheries outside the ETP by fishing methods other than setting on dolphins to use the dolphin-safe label in the U.S. market on the basis of unverified self-certifications by fishing vessel captains that the tuna was caught in accordance with the Amended Tuna Measure’s dolphin-safe labelling conditions and requirements regardless the substantial adverse impact that such fishing methods have on dolphins and other marine mammals. In the absence of tracking requirements that enable authorities to verify the source of the tuna and assess the accuracy its “dolphin-safe” status, the Amended Tuna Measure creates even greater ambiguity in relation to the meaning of the guarantee provided by the label than that which was found in the original proceedings. Thus, U.S. consumers cannot accurately distinguish dolphin-safe tuna from non-dolphin-safe tuna, and the primary objective cannot be fulfilled. As a consequence, the secondary objective cannot be fulfilled because it depends on the ability of U.S. consumers to make an informed choice when purchasing tuna products in order to ensure that the U.S. market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins.

270. For the foregoing reasons, the Amended Tuna Measure, like the original measure, does not contribute to the objectives that it pursues.

350 Appellate Body Report, US – Tuna II (Mexico), para. 327. See also Panel Report, US – Tuna II (Mexico), paras. 7563, 7.564 and 7.594.


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(3) Trade Restrictiveness

271. In examining the trade restrictiveness of a measure, the Panel in China- Raw Materials observed:

[t]he Appellate Body in Korea – Various Measures on Beef considered the measure's effect “on international commerce”. Essentially, ”[t]he less restrictive the effects of the measure, the more likely it is to be characterized as ‘necessary’”. In the event of a very restrictive measure, the respondent Member must demonstrate that:

[t]he measure is carefully designed so that the other elements to be taken into account in weighing and balancing the factors relevant to an assessment of the “necessity” of the measure will “outweigh” such restrictive effect.351 (footnotes omitted)

272. The Amended Tuna Measure, like the original measure, does not fulfill the two objectives that it claims to address, as consumers cannot accurately distinguish between dolphin-safe tuna and non-dolphin-safe tuna; fishing methods other than setting on dolphins that are harmful to dolphins are not being discouraged; the captain self-certifications for those other methods is inherently unverifiable, unreliable, and inaccurate; and independent observers in oceans other than the ETP.

273. Thus, it is clear that the Amended Tuna Measure is trade restrictive because: (i) it does not allow setting on dolphins in accordance with the AIDCP as a fishing method that can be used to catch tuna in the ETP in a “dolphin-safe” manner, while, at the same time, it allows other fishing methods that cause harmful effects on dolphins; (ii) it imposes strict record-keeping, tracking and verification requirements and procedures for tuna caught in the ETP by setting on dolphins in accordance with the AIDCP, but requires only inherently unverifiable, unreliable and inaccurate captain self-certifications in relation to tuna caught outside the ETP, regardless of the fishing method used to harvest the tuna, and imposes no effective tracking requirement or mechanism from the time when the tuna is caught through to the time that it enters the United States; and (iii) it requires that certifications be conducted by mandatory independent observers for tuna caught in the ETP by setting on dolphins in accordance with the AIDCP, but imposes no equivalent requirements for tuna caught outside the ETP, regardless of the fishing method used to harvest the tuna.

274. These differences clearly do not outweigh the restrictive effect of the Amended Tuna Measure. As Mexico has explained, there are no assurances that the tuna products labelled dolphin-safe that are being sold in the U.S. market are, in fact, dolphin-safe.

c. Less Trade Restrictive Alternative Measures

275. The Appellate Body has noted that one aspect of the “weighing and balancing process comprehended in the determination of whether a WTO-consistent alternative measure” is reasonably available is the extent to which the alternative measure “contributes to the realization

351 Panel Report, China- Raw Materials, para. 7.487.


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of the end pursued”.352 The burden rests with Mexico as a complaining party to identify possible alternatives to the measure at issue that the United States could have taken.353

276. During the original proceedings, the Panel observed that the objective of the original Tuna Measure was articulated by the United States in general terms, “[w]ithout making any distinctions among fisheries, suggesting its intention to discourage the use of harmful techniques in all tuna fisheries regardless of their location”.354 This also applies to the Amended Tuna Measure, as it pursues the same objectives as the original Tuna Measure.

277. The Amended Tuna Measure allows the use of fishing techniques that have harmful effects on dolphins, other than setting on dolphins. Yet, tuna caught using these other fishing techniques can be used in products that are labelled dolphin-safe without being supported by a reliable record-keeping, tracking and verification system to ensure the accuracy of the information conveyed on the label.

278. There are less trade-restrictive alternative measures reasonably available to the United States that can achieve the objectives that it pursues, particularly where the objectives of the Amended Tuna Measure, like the original measure, involves enabling U.S. consumers to make informed choices with respect to the tuna products that they purchase and consume.

279. The less trade restrictive alternatives to the Amended Tuna Measure are described below.

(1) Establishment of a Label Verified By A Unbiased Recordkeeping Verification Requirements Supported by Independent Observers

280. The first proposed less trade restrictive alternative for the United States would be the establishment of a dolphin-safe label that is consistently verified by unbiased recordkeeping and verification requirements supported by independent observers.

(a) Less Trade Restrictive

281. Establishing independent observer and tracking systems outside the ETP that are equivalent to those maintained under the AIDCP would balance the conditions and requirements for tuna products, regardless of where produced. That would reduce the de facto discrimination against Mexican tuna products currently resulting from the imposition of differing requirements on ocean regions, and would therefore be less trade-restrictive.355 Specifically, this alternative would contribute to the realization of the end pursued “[w]ithout making any distinctions among fisheries”.356

352 Appellate Body Report, EC – Asbestos, para. 172.

353 See Appellate Body Report, US – Gambling, para. 156.

354 Panel Report US – Tuna II (Mexico), para. 7.595 (emphasis original).

355 The discrimination would not be completely eliminated unless the United States dropped its complete ban on use of dolphin sets.

356 Panel Report US – Tuna II (Mexico), para. 7.595.


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(b) Equivalent Contribution to the Relevant Legitimate Objective

282. This alternative would provide consumers accurate and verifiable information that the tuna contained in tuna products was caught without observed dolphin mortalities or injury. In this scheme, just as in the ETP, an independent observer who was onboard the vessel during the entire voyage would certify that (i) the tuna was not caught in association with dolphins at any time during a particular fishing voyage, and (ii) that no dolphins were killed or seriously injured during the set or other gear deployment in which the tuna were caught. The observer would also validate tuna tracking documentation to ensure that particular lots of tuna caught in a dolphin-safe manner was not mixed with tuna not verifiably caught in such a manner.

(c) Reasonably available

283. This alternative is reasonably available for the United States. The Amended Tuna Measure allows the Department of Commerce to require certifications of observers.357 Moreover, the U.S. President recently published a directive that requires U.S. agencies to focus their resources on improving coordination with foreign governments, stating as follows:

It shall also be the policy of the United States to promote legally and sustainably caught and accurately labeled seafood and to take appropriate actions within existing authorities and budgets to assist foreign nations in building capacity to combat IUU fishing and seafood fraud. In addition, agencies shall identify opportunities to enhance domestic and international efforts to combat global IUU fishing and seafood fraud.358

It would be consistent with this policy for the United States to enter into agreements with other, non-ETP nations to establish mechanisms for accurately tracking tuna and placing trained independent observers on tuna fishing vessels.

(2) Allow the use of Alternative Labels for Tuna Products While Requiring Publication of Full Information about Dolphin Protection and Sustainability

284. A second less trade restrictive alternative would allow alternative labelling schemes while imposing requirements on all of them – including for the current U.S. label – to give consumers full and accurate information about the fishing method used, the risks of bycatch caused by that fishing method, the sustainability of the fishing method, measures taken to protect dolphins and the type of tracking and verification system that backs up the protection scheme.

285. Thus, this alternative would require the United States to publicize that its current dolphin-safe label does not assure that dolphins were not killed or injured outside the ETP, and that it promotes the use of non-sustainable fishing methods such as FAD fishing. It would also allow

357 See 2013 Final Rule, 50 CFR § 216.91(a)(4)(ii) (Exhibit MEX-7) and Section 1385(d)(1)(D) of the DPCIA (Exhibit MEX-8).

358 Presidential Memorandum, Section 1(b) (Exhibit MEX-108).


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the use of the AIDCP label, provided that full information was available to consumers on the AIDCP program.359

286. Therefore, in this second alternative, U.S. consumers would have different options of labels that would provide accurate information to consumers about the fishing method that was used to catch the tuna, the risks that such fishing method entails, its sustainability, the measures taken to protect dolphins and the type of tracking and verification system that verifies the impact of the fishing method.

(a) Less Trade Restrictive

287. The allowance of other labels in the United States, coupled with a requirement to provide consumers detailed information on what the labels mean, would be less trade restrictive because it would allow consumers to make their own decisions about whether Mexican tuna products are produced in an environmentally appropriate manner, and therefore would provide more reasonable opportunities to access to major commercial channels of distribution in the U.S. market.360

(b) Equivalent Contribution to the Relevant Legitimate Objective

288. This alternative would contribute to the realization of the two stated objectives of the Amended Tuna Measure. It would provide consumers with precise and accurate information regarding potential effects of fishing methods on dolphins, including for tuna products made with non-ETP tuna. It would therefore make a greater contribution to the stated objectives of the Amended Tuna Measure.

(c) Reasonably Available

289. The coexistence of different types of other labels generally is accepted and is clearly reasonably available. The proposed requirement for publication of detailed information on what the labels mean (including the current U.S. label) is consistent with the U.S. President’s initiative to “implement new and existing measures, such as voluntary, or other, traceability programs, … and ensure accurate labeling for consumers” (emphasis added).361

3. Article XX(g) of the GATT 1994 Does not Apply to the Amended Tuna Measure

290. The United States’ invocation of the general exception related to the conservation of exhaustible natural resources in Article XX(g) as a means of provisionally justifying the

359 See Procedures for AIDCP Dolphin Safe Tuna Certification (20 June 2001) (Exhibit MEX-115) (Exhibit MEX-56 in original proceeding).

360 The discriminatory aspects of the measure at issue in this proceeding involve not only the denial of the dolphin-safe label to Mexican tuna products, but also the conditions under which the label is authorized for the tuna products of other countries. Moreover, Mexico has proposed changes in the aspects of the measure applied outside the ETP, in respect of the information provided to consumers about the meaning of the U.S. dolphin-safe label. Under these circumstances, it is appropriate for the Panel to evaluate the impact of this alternative both on conditions within the ETP and outside the ETP.

361 Presidential Memorandum (Exhibit MEX-108).


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Amended Tuna Measure also fails. A review of the facts and previous findings of this Panel and the Appellate Body do not assist the United States in its defense.

291. Article XX(g) concerns measures relating to the conservation of exhaustible natural resources. In US – Shrimp, the Appellate Body adopted an evolutionary approach by clarifying the concept of exhaustible natural resources. The Appellate Body found that:

The words of Article XX(g), “exhaustible natural resources”, were actually crafted more than 50 years ago. They must be read by a treaty interpreter in the light of contemporary concerns of the community of nations about the protection and conservation of the environment.362

292. The Appellate Body also recognized that “the preamble of the WTO Agreement – which informs not only the GATT 1994, but also the other covered agreements – explicitly acknowledges ‘the objective of sustainable development …’.”363

293. To determine if the Amended Tuna Measure is justified under Article XX(g), the United States bears the burden of demonstrating that the Amended Tuna Measure: (i) relates to the conservation of an exhaustible natural resource, and (ii) is made effective in conjunction with restrictions on domestic production or consumption.

294. Article XX(g) ultimately lays down a single test. A measure’s compliance with Article XX(g) can be determined only on the basis of a holistic assessment; as a result of the unitary nature of the test, facts and arguments may be relevant in more than one part of the analysis.364

a. The Amended Tuna Measure does not Relate to the Conservation of an Exhaustible Natural Resource

(1) Dolphin are Exhaustible Natural Resources

295. Mexico does not dispute that dolphins are exhaustible natural resources.

(2) The Amended Tuna Measure does not Relate to the Conservation of Dolphin

296. Although dolphins are exhaustible natural resources, the Amended Tuna Measure does not relate to the “conservation” of these resources.

297. First, the Amended Tuna Measure, as in the original measure, is not intended to conserve dolphin stocks in the course of tuna fishing operations in the ETP365 or to promote recovery of dolphin stocks. Indeed, the United States recognized in the original proceedings that:

... its objective was not to achieve a specific number or rate of dolphin mortality, but rather generally to reduce the adverse effects of setting on dolphins to catch tuna by ensuring that the US market is not used to encourage setting on dolphins. The United States added that “[s]eeking to


363 Appellate Body Report, US – Shrimp, paras. 128-131.

364 Panel Report, China – Rare Earths, para. 7.240.

365 See Panel Report, US – Tuna II (Mexico), para. 7.394.


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protect dolphins from these adverse effects might also be considered as seeking to conserve dolphin populations”.366

298. In fact, the evidence shows that the two dolphin stocks in the ETP that the United States claims are depleted – the northeastern offshore spotted dolphin and the eastern spinner dolphin – are, in fact, recovering.367 It is more accurate and fairer to say that, rather than the U.S. measure, it is the AIDCP-compliant tuna fishing operations of Mexico in the ETP that have made a meaningful contribution to the conservation of dolphins in the ETP.368

299. Second, dolphins are not being “conserved” in any way outside the ETP because, as Mexico’s evidence has demonstrated, there is virtually no effective protection of dolphins outside the ETP.

300. For a measure to “relate to” conservation, it must bear a relationship to the goal of conservation. The Appellate Body has interpreted this phrase as requiring that a measure have a “substantial relationship”369 with conservation, such that it is not “merely incidentally or inadvertently aimed at” conservation.370

The Appellate Body has also described this relationship as “a close and genuine relationship of ends and means,”371

which requires an examination of the relationship between the general structure and design of a measure and the policy goal that it purports to serve.372 In China – Rare Earths, the panel found that “while measures need not be primarily aimed at conservation, they must still bear a substantial, close, and real relationship to the conservation objective”.373

301. The word “conservation”, in turn, means “the preservation of the environment, especially of natural resources”.374

302. In China – Rare Earths, the panel also determined that the term “conservation”, within the meaning of Article XX(g), does not simply mean placing a moratorium on the exploitation of natural resources, but includes also measures that regulate and control such exploitation in accordance with a Member’s development and conservation objectives.375 However, the panel also clarified that this concept



368 The United States in its first written submission states the following: “the United States supports the AIDCP because it recognizes that setting on dolphins to catch tuna occurs and that the conservation measures called for under the AIDCP are an effective means to reduce observed dolphin mortalities during dolphin sets. The United States has periodically proposed or supported efforts to strengthen implementation of the AIDCP.” See United States’ first written submission, para. 57.

369 Appellate Body Report, US – Gasoline, p. 18.


371 Appellate Body Report, US – Shrimp, para. 135

372 Appellate Body Report, US – Gasoline, para. 136.


374 Appellate Body Report, China – Raw Materials, para. 355.



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is not … a general right to regulate and control a natural resource market for any purpose; natural resource products that will necessarily enter the market and are available for sale are subject to GATT disciplines in the same way as any other product. As the Appellate Body recognized in US – Softwood Lumber IV, natural resource products that will necessarily enter the market and are available for sale are subject to GATT disciplines in the same way as any other product.376

303. It is clear from the evidence in this dispute that the Amended Tuna Measure does not have a substantial, close, and real relationship to the conservation or preservation of dolphins. In addition to the two points discussed above, the United States acknowledges that the conservation of dolphins is only an indirect objective of the Amended Tuna Measure:

As the original panel found, the U.S. measure’s objective is to protect dolphins “from all of these adverse effects [observed mortalities and other effects of setting on dolphins] . . . by ensuring that the US market is not used to encourage setting on dolphins to catch tuna.” Conserving dolphin populations is an objective of the measure only indirectly, in so far as addressing adverse effects on dolphins “might also be considered as seeking to conserve dolphin populations.” In other words, the U.S. position in this dispute does not depend on whether dolphin populations in the ETP are recovering. (emphasis added)377

304. Moreover, in the original proceeding, the Panel found that the protection of dolphins was a secondary objective, which achievement depended in large part on the achievement of the primary consumer information objective.378 The Panel also found that the original measure “may, at best, only partially fulfill their stated objective of protecting dolphins by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins”.379 Although the Appellate Body reversed the Panel’s finding that the original measure was inconsistent with Article 2.2 of the TBT Agreement, the Panel’s findings regarding the actual degree of contribution to the achievement of the objectives of the original measure, as designed and applied,380 were not reversed.381 As explained above, in the context of Article XX(b), the evidence before the Panel in the present proceedings demonstrates that the Amended Tuna Measure’s contribution to the achievement of its objective is even less than that which was found by the original Panel in relation to the original Tuna Measure in the original proceedings.

305. For these reasons, the Amended Tuna Measure does not relate to the conservation of natural resources.






381 See Appellate Body Report, US – Tuna II (Mexico), para. 327.


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b. The Amended Tuna Measure is not Made Effective in Conjunction with Restrictions on Domestic Production or Consumption

306. The clause “if such measures are made effective in conjunction with restrictions on domestic production or consumption” is appropriately read as a requirement that the measure at issue impose restrictions, not only in respect of imported products, but also with respect to domestic products. As such, the clause constitutes a requirement of “even-handedness” in the imposition of restrictions upon the production or consumption of exhaustible natural resources that are undertaken with the objective of conversation.

307. In China – Raw Materials, the Appellate Body found:

Article XX(g) further requires that conservation measures be “made effective in conjunction with restrictions on domestic production or consumption”. The word “effective” as relating to a legal instrument is defined as “in operation at a given time”. We consider that the term “made effective”, when used in connection with a legal instrument, describes measures brought into operation, adopted, or applied. The Spanish and French equivalents of “made effective” – namely “se apliquen” and “sont appliquées” – confirm this understanding of “made effective”. The term “in conjunction” is defined as “together, jointly, (with)”. Accordingly, the trade restriction must operate jointly with the restrictions on domestic production or consumption. Article XX(g) thus permits trade measures relating to the conservation of exhaustible natural resources when such trade measures work together with restrictions on domestic production or consumption, which operate so as to conserve an exhaustible natural resource. By its terms, Article XX(g) does not contain an additional requirement that the conservation measure be primarily aimed at making effective the restrictions on domestic production or consumption.382

308. The United States does not elaborate on what kind of restriction on domestic production or consumption has been adopted. It is not possible for the United States to do so because no such restriction exists. As Mexico has established, the Amended Tuna Measure has insufficient record-keeping, tracking and verification requirements in relation to tuna caught outside the ETP and tuna products containing same. Furthermore, the dolphin-safe certification requirements for tuna products containing tuna caught outside the ETP are themselves inherently unverifiable, unreliable, inaccurate, unenforceable and, thus, meaningless.383

309. The “even-handedness” requirement embodied in Article XX(g) “scrutinizes whether the measure at issue is truly undertaken for the purposes of conservation”. This “even-handedness” requirement is satisfied where the regulating Member can show that, in addition to its GATT-inconsistent measures, it has also imposed real conservation restrictions on the domestic production or consumption of the resource that is the subject of its GATT-inconsistent measures.

382 Appellate Body Report, China – Raw Materials, para. 356.



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These domestic measures must distribute the burden of conservation between foreign and domestic consumers in an “even-handed” or balanced manner. However, “even-handedness” under subparagraph (g) does not require the Panel to assess the effects of the concerned restrictions; instead, the relevant “balance” or “even-handedness” under subparagraph (g) is structural or regulatory. In short, the balanced or “even-handed” nature of the domestic and foreign restrictions should be evident from the design, structure, and architecture of the challenged measure.

310. The Amended Tuna Measure does not impose any real restrictions on the tuna that is harvested by the U.S. fleet outside the ETP, for the purposes of conservation within the meaning of Article XX(g) of the GATT 1994 or otherwise.

4. The Requirements of the Chapeau of Article XX are not Met

311. As noted by the Appellate Body in US – Gasoline, in the event that the panel determines that the Amended Tuna Measure satisfies the requirements of either or both of the exceptions enumerated under subparagraphs (b) and (g) of Article XX of the GATT 1994, the Panel will then inquire whether or not the Amended Tuna Measure is “applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade”.384

312. In EC- Seal Products, the Appellate Body affirmed that “the function of the chapeau of Article XX of the GATT 1994 is to prevent the abuse or misuse of a Member’s right to invoke the exceptions contained in the subparagraphs of that Article.”385

313. The burden of establishing conformity with the relevant subparagraph and the chapeau lie with the party invoking the defense.386

314. In order to establish that the Amended Tuna Measure is designed and applied in a manner that constitutes “arbitrary or unjustifiable discrimination between countries where the same conditions prevail”, three elements must be demonstrated:

(a) The application of the measure at issue must result in discrimination;

(b) The discrimination must be arbitrary or unjustifiable in character; and

(c) This discrimination must occur between countries where the same conditions prevail.387

315. Mexico addresses each of these three elements below.

a. The Same Relevant Conditions Prevail in Different Countries

316. The examination of whether the Amended Tuna Measure is applied in a manner that constitutes “arbitrary or unjustifiable discrimination between countries where the same






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conditions prevail” necessitates an assessment of whether the “conditions” prevailing in the countries between which the measure discriminates are “the same.”388 In interpreting the assessment of this element, the Appellate Body in EC – Seal Products held that:

As we see it, only “conditions” that are relevant for the purpose of establishing arbitrary or unjustifiable discrimination in the light of the specific character of the measure at issue and the circumstances of a particular case should be considered in the chapeau. The question is thus whether the conditions prevailing in different countries are relevantly “the same”.389 (italics emphasis original; underline emphasis added)

317. For the purpose of determining which of the “conditions” prevailing in different countries are relevant in the context of the chapeau, the Appellate Body held that the subparagraphs of Article XX under which a measure has been provisionally justified provide pertinent context, while the type or cause of the violations that have been found to exist in relation to the substantive provisions of the GATT 1994 may also provide useful guidance.390

318. As previously discussed, the United States seeks to justify the Amended Tuna Measure under subparagraphs (b) and (g) of Article XX. In the context of the present circumstances, provisional justification under subparagraph (b) contemplates that the Amended Tuna Measure is “necessary to protect … animal (i.e., dolphin) … health”, while provisional justification under subparagraph (g) contemplates that the Amended Tuna Measure relates to the conservation of dolphins as a “natural resource”. To the extent that the Amended Tuna Measure is found to be provisionally justified under either or both of these subparagraphs, the “pertinent context” is therefore the “protection” and “conservation” of dolphins in relation to certain adverse effects suffered by dolphins as a result of commercial tuna fishing.391

319. Taking this “pertinent context” into account, there are two prevailing conditions that the Amended Tuna Measure seeks to address. The first is the adverse effects on dolphins caused by commercial tuna fishing. As Mexico has demonstrated, dolphins suffer observed and unobserved adverse effects – including serious injury or death – as a result of commercial tuna fishing operations throughout the fisheries of the world (i.e., both within and outside the ETP) by every country with a commercial tuna fishing fleet.392 Hence, the relevant prevailing condition of adverse effects on dolphins caused by commercial tuna fishing is the same for all countries that are engaged in commercial tuna fishing and, as a consequence, for all countries that use the tuna harvested by such commercial tuna fishing in the production of finished tuna products.393 This



390 Appellate Body Report, EC – Seal Products, paras. 5.300-5.301, 5.317.

391 This analysis finds some consistency with the second stated objective of the Amended Tuna Measure: “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”. See Appellate Body Report, US – Tuna II (Mexico), paras. 242 and 325, citing Panel Report, US – Tuna II (Mexico), para. 7.401.

392 See Section II(A)(2).

393 Considering that the violations in relation to the provisions of the GATT 1994 include not only the national treatment obligation under Article III:4, but also the most-favoured-nation obligation under Article I:1, it is



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leads to the second prevailing condition, which is that because of these widespread effects, every country producing tuna products produces at least some tuna products which contain tuna that was caught in a manner that caused adverse effects on dolphins.

320. Therefore, the conditions prevailing in the different countries “that are relevant for the purpose of establishing arbitrary or unjustifiable discrimination in the light of the specific character of the measure at issue”394 are relevantly “the same” within the meaning of the chapeau of Article XX.

b. The Amended Tuna Measure is Designed and Applied in a Manner that results in Discrimination

321. The United States argues that the Amended Tuna Measure does not result in “discrimination” for the purposes of the chapeau to Article XX. This assertion is based upon the premise that, on its face, the Amended Tuna Measure is “neutral as to nationality.”395 The arguments advanced by the United States entirely ignore, and fail to engage with, the de facto discrimination resulting from the regulatory difference under the Amended Tuna Measure’s differing labelling conditions and requirements, the design and application of which effectively denies access to the dolphin-safe label to most tuna products from Mexico.

322. As stated by the Appellate Body, discrimination within the meaning of the chapeau to Article XX “results … when countries in which the same conditions prevail are differently treated.”396 Mexico recognizes the past findings of the Appellate Body that “a finding that a measure is inconsistent with one of the non-discrimination obligations of the GATT 1994, such as those contained in Articles I and III, is thus not dispositive of the question of whether the measure gives rise to ‘arbitrary or unjustifiable discrimination between countries where the same conditions prevail’ under the chapeau of Article XX of the GATT 1994.”397 However the Appellate Body in EC – Seal Products recently confirmed that “[t]his does not mean, however, that the circumstances that bring about the discrimination that is to be examined under the chapeau cannot be the same as those that led to the finding of a violation of a substantive provision of the GATT 1994”.398

323. The application of the Amended Tuna Measure continues to de facto discriminate against Mexican tuna products. As previously stated, the lack of access to the advantage of the dolphin-safe label for tuna products containing tuna caught by setting on dolphins has a detrimental


appropriate to take into account all countries that produce tuna products for the U.S. market in determining which of the “conditions” prevailing in different countries are relevant in the context of the chapeau. See e.g. Appellate Body Report, US – Shrimp, para. 150, citing United States – Gasoline, pp. 23-24.


395 See United States’ first written submission, paras. 332-334.

396 Appellate Body Report, EC – Seal Products, para. 5.303, citing Appellate Body Report, US – Shrimp, para. 165.




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impact on the competitive opportunities of Mexican tuna products in the U.S. market. Nothing in the Amended Tuna Measure has reduced or minimized the detrimental impact on imported Mexican tuna products caused by the regulatory distinction imposed in the original Tuna Measure. Rather, the differences in labelling conditions and requirements remain substantially the same, and, as a consequence, tuna products of Mexican origin continue to be effectively excluded from the U.S. market.

324. As discussed above, it is clear that Mexican tuna products are treated differently than tuna products from other countries under the differing labelling conditions and requirements of the Amended Tuna Measure, despite the fact that the “same conditions prevail”. Although every country producing tuna products produces at least some tuna products which contain tuna that was caught in a manner that caused adverse effects on dolphins, the differing conditions and requirements of the Amended Tuna Measure effectively permit tuna products containing tuna caught outside the ETP in circumstances adverse to dolphins to be inaccurately labelled dolphin-safe in the U.S. market, while effectively blocking access to the U.S. market for most Mexican tuna products containing tuna caught within the ETP on the basis of accurate, independently-verified information about the fishing method that was used to harvest the tuna. This discrimination is clearly demonstrated in the three labelling conditions and requirements of the Amended Tuna Measure that Mexico previously identified in relation to the relevant regulatory distinction under Article 2.1 of the TBT Agreement, namely:

The disqualification of setting on dolphins in accordance with the AIDCP as a fishing method that can be used to catch tuna in the ETP in a dolphin-safe manner, and the qualification of other fishing methods to catch tuna in a dolphin-safe manner;

The record-keeping, tracking and verification requirements for tuna caught in the ETP by setting on dolphins in accordance with the AIDCP, and the different record-keeping, tracking and verification requirements for tuna caught outside the ETP using both the same and different fishing methods; and

The mandatory independent observer requirements for tuna caught in the ETP by setting on dolphins in accordance with the AIDCP, and the absence of such requirements for tuna caught outside the ETP using the same and different fishing methods.399

325. Pursuant to each of these three labelling conditions and requirements under the Amended Tuna Measure, Mexican tuna products are denied access to the U.S. dolphin-safe label while other countries, all of which produce at least some tuna products that contain tuna caught outside the ETP in a manner that adversely affects dolphins, are permitted to use the label. Practically speaking, while all countries produce some tuna product that contain tuna that was caught in a manner that adversely affects dolphins, the Amended Tuna Measure’s labelling conditions and requirements operate so as to de facto prevent only Mexican tuna products from using the dolphin-safe label. This constitutes clearly differential treatment of countries in which the same

399 See, e.g., Mexico’s first written submission, paras. 235-237, 246-304.


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conditions prevail. In accordance with the approach established by the Appellate Body, this necessarily results in “discrimination” within the meaning of the chapeau to Article XX.

326. Further, as discussed above, the Appellate Body has confirmed that the circumstances that bring about discrimination under the chapeau may be the same as those which have led to the finding of a violation of the substantive provisions of the GATT.400 This was the case in EC – Seal Products, and it is also the case in the present proceedings. The difference in the labelling conditions and requirements for tuna caught in the ETP give rise to violations of substantive provisions of the GATT and Article 2.1 of the TBT Agreement. However, it is these same characteristics of the Amended Tuna Measure that also create the conditions under which Mexican tuna products are treated differently, in a way that is discriminatory for the purposes of the chapeau to Article XX.

c. The Discrimination is Arbitrary and Unjustifiable

327. The above-noted discrimination is arbitrary and unjustifiable. As explained above, in the context of Article 2.1, the differences in the three labelling conditions and requirements are not even-handed because they amount to arbitrary and unjustifiable discrimination. “Arbitrary and unjustifiable discrimination” within the meaning of Article 2.1 amounts to “arbitrary and unjustifiable discrimination” under the chapeau to Article XX.

328. In EC-Seal Products, the Appellate Body affirmed the longstanding principle that, the chapeau of Article XX, by its terms, is concerned with the “manner” in which a measure that falls under one of the subparagraphs of Article XX is “applied”. Accordingly, it is relevant to consider the design, architecture, and revealing structure of a measure in order to establish whether the measure constitutes a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail. Confirming the Appellate Body’s approach in US – Shrimp, the Appellate Body in EC – Seal Products stated that this involves a consideration of “both substantive and procedural requirements” under the measure at issue.401

329. As established above, the Amended Tuna Measure is designed and applied in a manner that results in discrimination within the meaning of the chapeau to Article XX. Specifically, the Amended Tuna Measure’s labelling conditions and requirements operate so as to de facto prevent only Mexican tuna products from using the dolphin-safe label.

330. Pursuant to the chapeau to Article XX, a measure that gives rise to discrimination that is arbitrary or unjustifiable cannot be “saved” by the exceptions set out in the subparagraphs to Article XX. Having established that the Amended Tuna Measure is discriminatory for the purposes of the chapeau to Article XX, the analysis now turns to a consideration of whether the resulting discrimination is arbitrary or unjustifiable.

331. As confirmed by the Appellate Body, the nature and quality of arbitrary and unjustifiable discrimination pursuant to the chapeau to Article XX is different from discrimination in the treatment of products pursuant to the substantive obligations of the GATT.402 However, this



402 Appellate Body Report, US – Shrimp, para. 150 (referring to Appellate Body Report, US – Gasoline, p. 23).


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does not mean that the circumstances that bring about the discrimination to be examined under the chapeau cannot be the same as those that led to the violation of a substantive provision of the GATT.403

332. Mexico has already established that the lack of even-handedness inherent in the Amended Tuna Measure constituted arbitrary and unjustifiable discrimination contrary to Article 2.1 of the TBT. The circumstances that gave rise to the breach of Article 2.1 of the TBT, namely the different labelling conditions and requirements which are imposed upon tuna caught in the ETP, are the same which bring about arbitrary and unjustifiable discrimination for the purposes of the chapeau to Article XX.

333. Mexico recognizes that there are distinctions between the discrimination analyses that take place pursuant to Article 2.1 of the TBT and the chapeau to Article XX of the GATT. While Article 2.1 is focused upon the regulatory distinction that accounts for the detrimental impact on imported goods,404 the chapeau to Article XX is much broader in scope. Given that the chapeau to Article XX is concerned with “maintaining a balance between a Member’s right to invoke the exceptions under the subparagraphs of Article XX and the substantive rights of the other Members under the various other provisions of the GATT 1994”,405 all aspects of the Amended Tuna Measure may be taken into consideration for the purposes of assessing arbitrary or unjustifiable discrimination pursuant to the chapeau to Article XX.

334. As has been stated by the Appellate Body, the analysis of whether discrimination is arbitrary or unjustifiable for the purposes of the chapeau “should focus on the cause of the discrimination, or the rationale put forward to explain its existence”.406 This was confirmed by the Appellate Body’s decision in EC – Seal Products, where it was stated that:

one of the most important factors in the assessment of arbitrary or unjustifiable discrimination is the question of whether the discrimination can be reconciled with, or is rationally related to, the policy objective with respect to which the measure has been provisionally justified under one of the subparagraphs of Article XX.407

335. Accordingly, and as outlined earlier in our submissions,408 to the extent that the distinction created by the Amended Tuna Measure is inconsistent with, or actively undermines, the objectives of subparagraphs (b) and (g) to Article XX, it is reflective of arbitrary discrimination. In the context of the Amended Tuna Measure, the policy objective pursued by subparagraphs (b) and (g) is “to contribute 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



405 Ibid., para. 5.311.

406 Appellate Body Report, Brazil – Retreaded Tyres, para. 226.

407 Appellate Body Report, EC – Seals, para. 5.306.

408 See Section III(B)(4)(c)(3).


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dolphins”.409 The Amended Tuna Measure is designed to achieve these objectives by providing consumers with accurate information regarding the dolphin-safe status of tuna contained in the tuna products on the U.S. market. However, the Amended Tuna Measure does just the opposite.

336. As Mexico has established, the three labelling conditions and requirements established pursuant to the Amended Tuna Measure provide consumers with reliable and objective information concerning the dolphin-safe status of tuna caught inside the ETP, while providing inherently unreliable and unverifiable information concerning the dolphin-safe status of tuna caught outside the ETP.

5. The Unilateral Action of the United States in Designing and Applying the Amended Tuna Measure’s Labelling Conditions and Requirements Supports a Finding of Arbitrary or Unjustifiable Discrimination under the chapeau of Article XX of the GATT 1994

337. Finally, what continues to puzzle Mexico most after years of WTO dispute settlement on this matter is why the United States chose to act unilaterally in applying the measures challenged in this dispute without first trying to achieve a multilateral solution.

338. In US – Shrimp, the United States chose to act unilaterally without first trying to negotiate a multilateral agreement, which was found there to be evidence of arbitrary and unjustifiable discrimination. Here the actions of the United States are worse. Here there was no need for the United States first to negotiate a multilateral agreement relating to tuna fishing in the ETP. Here a highly successful multilateral agreement already exists. It is one that has made great strides in reducing incidental dolphin mortality from tuna fishing. It is one that, to its credit, the United States helped establish and helped make a success. The AIDCP is one of the most successful multilateral sustainability programs in the world. Yet, in addressing its remaining concerns about dolphins and tuna fishing, the United States chose to ignore the successful multilateral process under this existing multilateral agreement and, instead, acted unilaterally.

339. Had the United States first tried to address its remaining concerns within the AIDCP and been rebuffed, the legal issue in this dispute might be different. But the United States did not even try. It simply acted on its own in applying an extraterritorial measure. This is arbitrary. This is arbitrary and unjustifiable. This is anything but even-handed.

340. This is a puzzle perplexing to Mexico, which has worked so long, so hard, and so successfully alongside the United States and other countries belonging to the AIDCP to protect dolphins during tuna fishing.

IV. CONCLUSIONS

On the basis of the foregoing, Mexico respectfully requests that the Panel find that the U.S. measures are inconsistent with Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994. Mexico further requests that the Panel find that the general exceptions in Article XX of the GATT 1994 do not apply to the violations of Articles I:1 and III:4.


(wt/ds381) - gob.mx · to article 21.5 of the dsu by india, wt/ds141/ab/rw, adopted 24 april 2003,...

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