5:50 AM Jul 21, 1994

COUNCIL MEMBERS FOR ADOPTION OF TUNA PANEL RULING

Geneva 20 July (Chakravarthi Raghavan) -- The GATT Council heard Wednesday calls from a number of delegations for the adoption of the report of the GATT panel, ruling for the second time against the United States over its regulations restricting tuna imports.

Mexico, Asean, Japan, Australia, Argentina, Brazil, Venezuela, India and Chile were among those who spoke in support of the EU's proposal for adoption of the panel ruling.

But with the US clearly opposed, even though it did not speak on the merits but side-tracked the issue with the call for NGO participation, no action was taken. It will now come up at the next GATT Council meeting, scheduled for October. At that time, Mexico has indicated, it might bring up adoption of the first panel ruling too.

This is the second panel ruling against the United States law and regulations under the 1972 Marine Mammal Protection Act. The regulations banned tuna imports from countries that do not meet US standards on tuna fishing practices -- purse-seine fishing technology to catch tuna fish, which in certain parts of the Pacific Ocean, swim below the dolphin. The US standards for foreign fishing vessels are related to the average annual catch of the US fishing boats, determined at the end of the season.

Apart from this primary ban, which Mexico challenged before GATT and got a ruling in its favour in 1991, the US regulations also have a secondary ban -- banning imports of tuna or tuna products from countries that do not impose similar 'primary import' bans on tuna from countries using technology and standards below those of the US, but export tuna products to US, even if these be of tuna caught in line with the US standards.

In the Mexican complaint case, the panel had found that both the primary and secondary bans violated Art XI of the GATT (discriminatory quotas) and was not one that could be justified under Art. XX, General Exception clause of GATT.

But Mexico, which was then in the throes of its NAFTA negotiations with the United States, reached a compromise with the US, to seek a mutually satisfactory solution and not pursue the case at the GATT.

However, the Mexican delegation indicated Wednesday that such a solution has still not been reached and that at the next GATT Council meeting, might bring up the ruling of the first panel and seek the termination of the primary embargo against its tuna exports to the US which that panel had declared illegal. The decision whether to seek inscription of the first panel ruling on the GATT Council agenda for its October meeting, the Mexican delegate added, would depend on whether the US showed clear and concrete indications that the problem was on the way to solution for ending the tuna embargo.

The EU had brought a complaint against the US over the secondary embargo, and the ruling of the second panel was on this.

This panel too found both primary and secondary embargoes were discriminatory quotas under Art XI and hence illegal.

The second panel though suggested that Art XX (b) and (g) exceptions could be invoked, whether or not the (exhaustible natural) resource to be saved was located outside the territorial jurisdiction of the contracting party invoking them with respect to the dolphins located in the Pacific Ocean in an area outside its territorial jurisdiction.

However, the panel said, this provision could not be invoked if the purpose was to force another country to change its laws within its own jurisdiction.

The issue in the dispute, the Panel said, was not the validity of the environmental objectives of the US to protect and conserve dolphins. The issue was whether, in the pursuit of its environmental objectives, the US could impose trade embargoes to secure changes in policies pursued by other contracting parties within their own jurisdiction.

On this basis, and on the basis of recognized methods of interpretation, the panel said that contracting parties in agreeing to provide each other under Art. XX exceptions the right to take trade measures to protect health and life of plants, animals and persons or aimed at the conservation of exhaustible natural resources, had not agreed to accord each other the right to impose trade embargoes for such purposes.

There have been some controversies about the consistency of the conclusion of the two panels involving the same facts and issues in the US measure.

The first panel ruling had not been adopted by the Council. But even if it had, in terms of strict international law and practice, while GATT panels and the Council or CPs tend to follow earlier rulings and decisions, there is no such requirement as in many domestic jurisdictions.

GATT sources however clarified that both panel's were consistent and that neither panel had really had based its findings explicitly on the location of the resource to be protected or conserved.

The first panel found that the Art XX exceptions could not justify "extra-territorial" measures which were otherwise inconsistent with the GATT. This was generally taken also to mean that the environment protection measures to conserve resources could not be taken outside a contracting party's jurisdiction.

The second panel has found that Art XX exceptions cannot justify measures aimed at changing policies of other contracting parties within their jurisdiction, only at implementing policies within a contracting party's own jurisdiction. It has thus confirmed or opened up the possibility that a contracting party could invoke Art XX exceptions with respect to resources or living things outside of the territorial jurisdiction of a country.

At the Council Wednesday, the EU sought the adoption of the panel report and recommendations and made the point that the EU was not opposed to the US objectives, but only to the methods adopted. The EU shared the US concerns over the environment, but questioned the US measures used and in particular invoking the Art XX exceptions to impose embargoes. The GATT and its system would be in jeopardy if such embargoes, involving an unilateralist approach were to be permitted, the EC chief delegate Leng argued.

He noted in this connection that the wider issues of trade and environment linkages were being discussed in the Sub-Committee of the WTO Preparatory Committee and that was the arena for contracting parties to discuss cooperative measures to prevent such disputes.

In supporting the EU's request, Mexico also presented a note that suggested that measures for the reduction in dolphin catch rate and saving the dolphins, through adoption of different technologies, had begun earlier and independent of the US actions.

The problems which began in 1975 and continued until October 1990 related to protectionism in tuna trade, with US imposing some 22 embargoes on tuna imports from a large number of countries and which was for commercial protectionism, and with arguments based on access to resources in exclusive economic zones. Twentyone of the tuna import bans then were retaliatory measures against countries that stopped US fishing vessels fishing illegally in their waters.

"Protectionism at that time," the Mexico said, "acted in the name of a supposed right of access to those resources. Now, protectionism is disguised under the umbrella of ecological protection."

The Mexican background note also brought out that for decades US Tuna fishing boats fished in the ETP (eastern Tropical Pacific) -- the single zone subject to the Marine Mammal Protection Act (MMPA), the legislative cornerstone of the US embargo. But as a result of the El Nino phenomenon, tuna stocks in the 1980s were displaced to other seas. The US fishing fleet moved, under fishing access agreements negotiated with some South Pacific countries, to these seas where no ecological considerations were required (of the fishing vessels). Only five US vessels were left in the ETP.

It was after this that the MMPA was modified by the US Congress to make it more rigorous and its implementation made mandatory with new amendments that showed a clear case of protectionist trade discrimination and not a case of ecological protection of dolphins as had been made to appear for the public.

Mexico asked why the US measures had not been taken when the vast majority of the US fleet were in the ETP and the then (1972) incidental level of dolphin catches was 368,000 a year -- as against the current 1993 level of 3600.

Twenty years before the US pseudo-ecological dolphin-tuna embargo, when the US fleet were registered a high dolphin kill rate, it was Mexico that had drawn attention to the dolphin mortality problem. Between 1986 and 1990, Mexico had reduced its own dolphin mortality by 70 percent -- a trend that had continued since then, with Mexico's total incidental capture of dolphins in 1993 reduced to 2001 animals. Mexican catch rate had been reduced from a 15 animals per net 'set' in 1986 to an average now of 0.45 dolphins in first quarter of 1994 -- all achieved without decreasing the number of sets or the total level of tuna caught.

Mexico had supported in 1989, the UN Assembly resolution calling for a world-wide ban on large-scale drift netting. In 1992, with the FAO, it had sponsored and hosted an International Conference on Responsible Fishing to promote preservation of marine environment with all fishing techniques, all marine species and all over the world, not merely ETP.

The total dolphin population in the ETP was now estimated to be 9.5 million, with a four percent reproduction rate. The Mexican fleet catch was only 0.01 percent. The alternative fishing technologies suggested are ecologically unacceptable since their use is possible only on young tuna before their reproduction and imply catching other marine species accompanying the tuna -- mahi-mahi, sharks, wahoos, billfishes and sea turtles.

In comparison, the US Congress in its 1986 law authorised the US fleet to kill 20.500 dolphins and during the consideration of the 1988 MMPA, the US fleet was repeatedly praised in the Congress for a kill rate of "only 16,000 dolphins".

Mexico also brought out that none of the dolphin species mentioned in the MMPA were endangered species according to the CITES. The incidental dolphin mortality rate were due to other fishing techniques -- gilnet or driftnet, more pernicious than purse seine net which caught only the adult tuna that are associated with dolphins.