The Appellate Body of the WTO had recently delivered the Tuna Report about which I have blogged here and here. The Report was adopted by the Dispute Settlement Body. One would assume, in the context of dispute settlement proceedings, that an Appellate Body decision brings to closure issues raised in the dispute and the next stage of compliance would be the focus. However, increasingly in WTO disputes (whether it is the Airbus Boeing dispute, Cloves Cigarette dispute and now the Tuna dispute), the Appellate Body decision is not resulting in a finality to the proceedings. Parties to the dispute continue to canvas their their original positions and do not perceive the need to change their domestic policy in consonance with the Appellate Body decision. Complex issues of what would constitute compliance to the decision or whether the measures undertaken are in fact "compliance" have taken centre stage.
The recent contentions of Mexico and the U.S. at the adoption of the Tuna Report that reflected similar sentiments of "non-finality" was interesting:
Mexico maintained, inter alia:
"In Mexico’s opinion, the reports had also correctly considered that the “dolphin safe” labelling was a technical regulation as per the TBT Agreement. With regard to non-discrimination, Mexico welcomed the Appellate Body’s reversal of the panel’s finding that the US measures were not inconsistent with Article 2.1 of the TBT Agreement. The Appellate Body found that the US measures were inconsistent with Article 2.1 as they granted Mexican tuna products less favourable treatment to that granted to like products originating in the US and other countries. With regard to Article 2.2 of the TBT Agreement, Mexico was disappointed with the Appellate Body’s reversal of the panel’s finding that the US dolphin safe labelling provisions were more trade restrictive than necessary to fulfil the US legitimate objectives. ...
Mexico hoped that the US would implement the DSB’s recommendations."
The U.S. response in the DSB was:
"With regard to Article 2.1, the US agreed that to determine whether imported products were accorded less favourable treatment would require an analysis of whether the measure at issue modified the conditions of competition to the detriment of imported products. However, the US was of the view that the Appellate Body had misapplied this concept and had ignored the fact that the Mexican and US tuna product producers were in the same situation and the adverse effects resulted from the private choices made by the individual producers. The US was also concerned about the Appellate Body’s finding that WTO committee decisions can be subsequent agreements that must be read into the covered agreements."Hence, would this also be a protracted "compliance" issue that looks likely in the Cloves Cigarettes case or will the U.S. comply with the modification of their prohibition. Another contentious issues in the context of Mexico's claim in the WTO was whether it was right in doing so in the context of the avenues available under NAFTA. Did the NAFTA preclude Mexico from pursuing a WTO remedy?
Robert Howse commenting on this blog earlier with reference to the dispute and the NAFTA rule said:
"Dear Srikar, on the NAFTA issue take a look at Article 2005, paragraphs 1 and 4. It makes clear that any dispute " (a) concerning a measure adopted or maintained by a Party to protect its human, animal or plant life or health, or to protect its environment, and (b) that raises factual issues concerning the environment, health, safety or conservation, including directly related scientific matters," must be taken to NAFTA not the WTO, where it arises under both Agreements, at the request of the responding party (and the US so requested).
The US seems to have reiterated this position in the proceedings:I don't see why some group of states can't agree among themselves to choose a particular method to solve a dispute, which is different from that specified in a multilateral treaty to which they are parties, provided that they do not affect the rights of third states under the multilateral treaty, who are not privy to this special arrangement."
What was interesting was Mexico's response to the NAFTA bar:" The US regretted Mexico’s decision to continue with the WTO dispute settlement given that NAFTA parties had agreed that certain disputes involving both the WTO Agreement and the standards-related provisions of NAFTA would be heard solely under NAFTA’s dispute settlement procedures. With respect to procedure, the US noted and expressed its disappointment that the Appellate Body had issued its report outside the 90-day period as stipulated in Article 17.5 of the DSU. The US reiterated its commitment to fulfilling the legitimate objectives of the Dolphin Protection Consumer Information Act."
"In response to the US statement regarding NAFTA’s dispute settlement procedures, Mexico said that the US had refused to have panellists sit in disputes and this was a technically complex dispute requiring a detailed analysis. Mexico noted that the US itself had brought a previous dispute (Mexico-Corn Syrup) to the WTO and thus found the US behaviour contradictory. "Do two wrongs make a right? Is a particular act of a country (in this case the US step of going to the WTO) sufficient precedent even if it was not permitted? Can Mexico justify its act of approaching the WTO because the U.S. had done so in an earlier case? Or does the U.S. have the right to question Mexico's step to approach the WTO when it has itself done so earlier? Were the circumstances different then? Which forum decides this? Could the Panel or Appellate Body of the WTO have gone into the issue of their jurisdiction and have not maintained Mexico's complaint? What does the Vienna Convention on the Law of Treaties have to say about this? This would be a discussion for another day.