Monday, July 30, 2012

To comply or not to comply - Dolphin safe labeling in the U.S.

The Dolphin Safe Tuna case at the WTO has generated considerable debate and discussion in terms of the interpretation of the TBT Agreement as well as the next steps related to compliance for the U.S. The WTO Appellate Body had ruled against the labeling scheme as being inconsistent wit Article 2.1 of the TBT Agreement since it treated Mexican tuna products less favorably than U.S. tuna products. The case also raises the issue of the right forum for the dispute since NAFTA mandates the disputes of such a nature to be brought before it's adjudicatory process.  I have blogged about the case here, here and here.

ASIL Insights has a piece recently that highlights the importance of the case for WTO jurisprudence. Elizabeth Trujillo in her piece titled "The WTO Appellate Body Knocks Down U.S. “Dolphin-Safe” Tuna Labels But Leaves a Crack for PPMs" explains in great detail the interpretation of various provisions of the TBT Agreement and its impact on non-product related process and production measures (PPMs).
"US—Tuna II is a landmark case for the trade and environment relationship and, more specifically, for the future adjudication of technical regulations under the TBT Agreement. In finding the U.S. labeling scheme inconsistent with TBT Article 2.1, the Appellate Body effectively characterized a measure based on non–product–related PPMs as a discriminatory technical regulation. However, the case leaves open the applicability of the TBT Agreement to PPM-based regulations in general—a controversial issue especially for developing nations because of the effect such regulations may have on market access of their products."
I am not going into the details of the AB report here as this has already been done. the focus of this post is an interesting reference to views in the U.S. not to comply with this decision. Eyes on Trade has referred to them here. A letter from a few U.S. Senators has urged the U.S. Administration not to abandon the labeling scheme:
"We are deeply disappointed by the WTO's final ruling, but we stand firmly committed to the Dolphin-Safe label. Let us be clear - Congress has no intention of repaying or weakening the current law applying to this label. Therefore, we request your assistance in developing a solution of complying with the ruling that maintains the current level of protection for dolphins."
Can the U.S. "develop a solution" that both complies with the WTO ruling as well as does not change the labeling scheme? Would extending the same certification standards and regulatory strictness to non-Eastern Tropical Pacific (ETP) regions be sufficient to ensure compliance?

The issue of compliance in WTO law is a complex one. What constitutes compliance in the present case. Striking down the labeling scheme would be one way to comply with the ruling. But would it be the only way? Are there other innovative ways to comply with the ruling, yet maintaining the same labeling scheme? This once again brings out the fact that a country can creatively engage with the WTO system to protect one's perceived national interest. How the U.S. would comply in this case is a matter of conjecture at this stage. Domestic interests and compulsions would probably shape the nature and form of U.S. compliance in this case.

The more important point is that even after a WTO ruling has been given there is debate internally in the country as to whether there should be compliance. In other words, the options before a member in a WTO dispute does not end with the WTO ruling. With strategic lawyering and creative interpretations, one may still continue with the old measure but remain in compliance. This, however, also raises issues about the efficacy of the WTO DSM which is based on a rule based system and an adjudicatory process hat ensures compliance or retaliation. It is one thing not to comply and face retaliation as per the DSU, but quite an other thing to continue with the measure that was held to be violative but to claim compliance.

Interesting times for WTO jurisprudence.

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