TUNA2 Case

GATT Tuna2 (TUNA2)


          CASE NUMBER:        129 
          CASE MNEMONIC:      TUNA2 
          CASE NAME:          Tuna-Dolphin, 2nd Case
A. IDENTIFICATION
1. The Issue
The U.S. Marine Mammal Protection Act placed bans on imports of tuna harvested by a method called purse seining which results in killings of marine mammals in excess of U.S. standards. It placed embargoes on countries such as Mexico to restrict imports from countries that import tuna from Eastern Tropical Pacific and export that tuna to the United States. It was in the first panel (GATT I) that Mexico challenged the MMPA (see TUNA case).

GATT found that the United States violated Article XI of GATT, by adopting quantitative restrictions on imports. The United States in turn used GATT's Article III:4 as an instrument in arguing the restrictions were internal regulations. This argument was rejected by GATT I's panel on the grounds that Article III restrictions were only to be applied to "products" and not "processes" by which products were produced. Thus, the panel concluded that Article III:4 was not relevant. Three years later the GATT Tuna-Dolphin II case occurred, a separate panel from the first, and it came to the same conclusion about Article III:4. GATT II decided the embargoes were not helpful in furthering U.S. conservation objectives. Also, these objectives could have been achieved only if the primary exporter changed its policies and practices. France and the EC were among the 34 countries who demanded that the GATT Council adopt a dispute panel report condemning the U.S. legislation on banning imports of "non-dolphin friendly tuna", or in other words tuna caught with purse seine driftnets. They argued that "the issue needs a multilateral base because if one nation enforces strict regulations for protection of dolphins," then the actions of all nations will be obstructed.

2. Description
The tuna/dolphin controversy provides a useful and current case study in the conflict between global free trade and international environmental protection. Furthermore, there are numerous laws in the United States and in other industrialized countries which rely on trade measures to achieve environmental objectives. Effective international agreements are not quickly made, and in turn irreparable harm such as species loss may occur. As for one of environment's most well known dilemmas; the dolphin/tuna story, the reconciliation of global free trade goals and international environmental protection are to be addressed.

Fishing induced dolphin mortality could be eliminated by prohibiting the use of purse-seine gear in fishing for yellowfin tuna associated with dolphins. There is little likelihood that all the nations fishing in the Eastern Tropical Pacific Ocean (ETP) would agree to the prohibition since purse-seining is the only economically efficient means of gathering tuna. The act of purse-seining begins where dolphin schools are encircled with mile long nets that "purse" the fish, dolphins and other sea life by drawing the cable attached to the net, thus gathering all the contents. The animals become trapped and eventually drown. This technique has incidentally killed over 6 million dolphins over the years from the time of the first purse-seine net invention.

Different environmental regulations have mushroomed out of this one problem. The main imposers of environmental improvement have been by the MMPA (Marine Mammal Protection Act), the EPA (Environmental Protection Agency), and GATT (General Agreement on Tariffs and Trade), they have all worked diligently to reduce dolphin mortalities. Deaths caused by US vessels are now reduced to less than 1,000 annually due to the environmental eyes watching. However, vessels flying foreign flags such as the Mexican one are estimated to exceed 50,000 deaths per year.

In GATT I, Mexico challenged the US MMPA's restrictions on fishing operations. The U.S. created standards so that other countries seeking to export tuna harvested in the ETP to the US have to adopt similar environmental programs as the US. Mexico won the case in that the U.S. violated Article XI of GATT. The US argued that the restrictions were internal regulations enforced at the point of entry as permitted by Article III:4; nevertheless, GATT I's panel put aside this argument aside on grounds that Article III restrictions could only be applied to products and not processes by which the product was produced.

This conclusion was reached in part by analogizing internal regulations to internal taxes, which may also be applied at the point of entry under Article III:2. This article noted that taxes levied directly on products were eligible for border adjustments (those taxes collected at the point of entry). On the other hand, certain taxes not directly levied on products were not eligible for border adjustment. The panel did not mention that there was disagreement as to the eligibility of certain other taxes not levied directly on products, including taxes on capital equipment, energy, machinery, and transport. These taxes would seem to have had provided a closer analogy as to regulations affecting production processes of the tuna. Also, since regulating dolphin mortality incidental to fishing operations does not affect the final product, the panel concluded Article III:4 did not apply. Next, the panel realized the US embargo was really a quantitative restriction prohibited under Article XI. The panel for GATT I concluded at that point that a country can only control the production or consumption of a natural resource if the production is within its own jurisdiction. This is a crucial issue taken into GATT II's case as well.

Another issue raised in GATT I and relevant in GATT II was Article XX sections b, d and g. The United States argued that even if the restrictions placed on them were prohibited in other provisions of GATT, the restrictions could be utilized as exceptions to the general obligations of Article XX(b), (d), and (g). Article XX states that "...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, or a disguised restriction on international trade, nothing in this agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures". Section B enforces the humanitarian rights of the matter saying, nothing shall prevent the protection of humans, animals, health, etc.; Section D measures the securement of compliance with laws which are consistent with the provisions of the above agreement; Section G relates to the conservation of exhaustible natural resources, in this case dolphin, when dealing with restrictions of consumption and production. From these laws, Panel 1 concluded that Article XX(b) was not to be used extra-jurisdictionally. Furthermore, if the extra-jurisdictionality rule was useful, the measures brought before the panel were not "necessary" as in conjunction with Article XX. Necessary according to GATT means that no GATT consistent measures (the cooperation efforts of all countries to protect dolphins in the process of tuna fishing) were available at the time.

In looking at the MMPA regulations, the panel found that the US' measures were too unpredictable to be considered as "necessary" to protect dolphins since the rate of Mexican dolphin takings as compared to the US' were linked together. "Mexican authorities could not know in advance whether they were in compliance with the MMPA." Article XX(g) couldn't be applied extra-jurisdictionally as well because the panel interpreted the rules as being taken in "conjunction with restrictions on domestic production or consumption to mean that they must be primarily aimed at rendering "effective" those restrictions." A country can only control its production/consumption only if it is under its jurisdiction. Article XX(g) must not have been meant to have been applied extra-jurisdictionally. In addition, the US measures did not meet Article XX(g) requirements in that they relate to conservation of the natural resource, dolphins. At the same time section D was thrown out since the MMPA was clashing with GATT.

In June, 1992, the EEC (mainly France) requested GATT to establish a dispute resolution panel to review US restriction policies dealing with the import of tuna under the federal MMPA. In 1994, the panel announced that the US embargo violated the GATT prohibition of quantitative restrictions. The MMPA prohibits the taking of marine mammals (dolphins) in the act of tuna fishing where purse seine nets are used. This bar is inclusive of those nations that import tuna from nations that do both exporting/importing of tuna. In GATT II, the United States is not entitled under GATT to use trade measures to force other countries to adopt its own domestic policies, environmental or otherwise. To satisfy the terms of the US law, it is not enough to kill fewer dolphins, a country also has to adopt fishing methods which conform to those used by US fishing fleets.

The latest panel report on GATT II relates to the secondary tuna embargo, only this time the France has replaced Mexico. It adopts somewhat of a different reasoning from GATT I. The three man panel says GATT rules do not in principle disbar countries from using trade measures to protect "the global commons" or environmental resources outside their jurisdiction. The panel argues that these measures have to be designed directly in order to protect the resource in question, dolphins. Further, they do not have to satisfy the criterion that no other more GATT consistent measure is available. On both counts, it is saying that the US embargo is a failure. The United States is in an appealing position of undermining its own environmental protections, such as its embargo on imports of tuna caught by methods that also kill dolphins. "The US is shooting itself in the foot by attacking EU's law." The US views it as "we have our obligations and the European's have theirs". Article XX(g) was interpreted by the second panel as such:
1. Article XX(g) must be invoked to further policies to conserve exhaustible natural resources.

2. "must be related to the conservation of exhaustible natural resources and made effective in conjunction with the restrictions on domestic production or consumption."

3. The measure can not be 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.
Utilizing the components of Article XX seen above, the panel rejected the EEC's contention that dolphins are not an exhaustible natural resource. The depletion of the stocks of dolphins are not relevant at any given time. The main issue here is whether the resource could be depleted, and they can be. Next, Article XX(g) was reviewed. Panel 2 stated the article could be applied extra- jurisdictionally and they also concluded that Article XX(g) didn't support the protection of resources located within the territory of the country invoking it. The article lacked limitation when it came to the location of the living things being protected, i.e. dolphins. Looking at Article XX(g) part 2, panel 2 added to panel 1's decision in that under both the primary and intermediate nation embargoes GATT's basic problem with the Marine Mammal Protection Act, is that it requires other nations to change internal policies. With the Mexican case, the United States insisted that Mexico was to make the same calculations and adopt same solutions, or else lose its opportunity to offer their tuna to American consumers. Since then the tuna-dolphin case has since become a potent symbol of friction between environmental and trade policies and of the heat it can generate. GATT seems to have been bothered by the broad brush of the U.S. measure:
the tuna is embargoed simply on the basis of a country's policies, regardless of whether an individual tuna may have been caught without harming dolphins.

3. Related Cases
Keyword Clusters
(1): Trade Product = FISH
(2): Bio-geography = OCEANS
(3): Environmental Problem = Species Loss Sea [SPLS]
4. Draft Author: Diane McMahon

B. LEGAL Cluster

5. Discourse and Status: DISagreement and INPROGress
Since the mammals involved in this case are universal property and involve fishing vessels from all around the world, cooperation is based on an international forum of countries.

6. Forum and Scope: GATT and MULTIlateral

7. Decision Breadth: 103
The GATT II Agreement demonstrated like the GATT I case that trade measures used for environmental purposes face stiff barriers from GATT panels and their rulings. In reality the GATT II Tuna/Dolphin case could impact 103 members. However, the main actors in this controversy are the United States and France.

8. Legal Standing: TREATY
The agreement is an executive agreement, and not a formal treaty. GATT opened for signature in 1947 and was signed by 23 countries and went into force in 1948. The senate has never formally approved the GATT or acted to implement it. Nevertheless, it is often regarded as a binding treaty obligation by the United States. Because of the limits of the international legal system- particularly in the area of enforcement, many countries are both unilaterally and multilaterally resorting to trade restrictions as enforcement tools for environmental treaties and laws.

C. GEOGRAPHIC Cluster

9. Geographic Locations
a. Geographic Domain: PACIFIC b. Geographic Site: Eastern Pacific [EPAC] c. Geographic Impact: USA

10. Sub-National Factors: NO

11. Type of Habitat: OCEAN

D. TRADE Cluster

12. Type of Measure: Import Standard [IMSTD]

13. Direct vs. Indirect Impacts: DIRect

14. Relation of Trade Measure to Resource Impact
a. Directly Related: YES TUNA
b. Indirectly Related: YES DOLPHin
c. Not Related: YES SHRIMP
d. Process Related: YES Species Loss Sea [SPLS]
15. Trade Product Identification: FISH
Although tuna are freshly caught from ocean waters, the market often takes 75 percent of the catch to be allotted as canned tuna fish in its final form. Currently, the world's leading exporters of tuna are Mexico and Venezuela followed by several European countries.

16. Economic Data
One estimate is that is will cost $25 million for the cost of adopting dolphin safe fishing techniques and refitting Mexican and Foreign (Non-U.S.) tuna boats with dolphin safe nets. The output of the Mexican fishing industry was $450 million (Mexico).

17. Impact of Measure on Trade Competitiveness: LOW

18. Industry Sector: FOOD

19. Exporters and Importers: USA and FRANCE

20. Environmental Problem Type: Species Loss Land [SPLL]

21. Name, Type, and Diversity of Species

Name: Delphinus Delphis (Common Dolphin), Baja Neritic (Common Whitebellies), Lagenorhynchus Obliquidens (Pacific White Sided Dolphin)
Type: Animal/Mammal/Cetacea
Diversity: Ocean

22. Resource Impact and Effect: HIGH and Regulatory

23. Urgency and Lifetime: HIGH and 10-20 years

24. Substitutes: LIKE products
Dolphin safe tuna processors reveal on tuna cans: "this product has utilized environmentally safe actions." At the same time, the fishing industries can create tuna fish "like products" that taste like tuna and are easier to catch and less detrimental to the environment in the process.

F. OTHER Factors

25. Culture: NO

27. Rights: YES
The rights of the dolphins are clearly an issue. Animal rights groups and environmental groups argue the dolphins are victims of human behavior and industries, likewise, some may go further to say tunas have rights too.

27. Trans-boundary Issues: NO
28. Relevant Literature
Cone, Marla.  "US Lists Tropical Pacific Dolphin Species As
     Depleted", Los Angeles Times, November 2, 1993, A3: 5.
Environment 35/9.  November, 1993.  21-22
Ferguson, Tim.  "One Entangling Edible in the GATT Fight", The
     Wall Street Journal, November, 23, 1993, A17.
Goldberg, Donald.  "GATT Tuna/Dolphin II: Environmental
     Protection Continues to Clash with Free Trade."  Center
     for International Environmental Law 2.  Washington, DC. 
     June, 1994, 1-6
Joseph, James.  International Management of Tuna, Porpoise and
     Billfish.  University of Washington Press, Seattle, 1979.
Mayer, Don.  "International Environmental Protection and the
     GATT:  The Tuna/Dolphin Controversy", American Business
     Law Journal 31.  September, 1993.  187-244
Noah, Timothy.  "Tuna Boycott is Ruled Illegal by GATT Panel",
     Wall Street Journal, May 23, 1994.  A3:6
Parrish, Michael.  "Judge Grants Ban On Imports in Dolphin-Safe
     Tuna Case."  Los Angeles Times.  January 14, 1992. D2:4.
Robberson, Tod.  "In Mexico, A Tempest Over Tuna", Washington
     Post, January 8, 1993, A12.
Stammer, Larry.  "White House Urges End to Ban on Mexican Tuna,"
     Los Angeles Times, March 5, 1992, A3:1

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