Article XX of WTO in the light of the Tuna Dolphin Case

This article has been written by Mustafa Chitalwala., a student of Symbiosis Law School, Pune.

In the process of globalization and international competitiveness, the application of national legislation and policies is increasingly important both for trade regulation and conservation of resources. Since the 1970s, there have been ongoing trade disputes between Mexico (and other tuna exporters) against the United States. The complaints were taken to General Agreement on Tariffs and Trade (GATT) committee, and it is 1995 successor; the World Trade Organization (WTO). The case became known as Tuna-Dolphin I, Tuna-Dolphin II, and US-Tuna II (Mexico). Complaints concerned the USA embargo on yellowfin tuna and yellowfin tuna product imports that used purse-seine fishing methods and the labeling thereof. Purse-seine fishing has resulted in a high number of dolphin kills.

The Disputes between Mexico and the US over tuna and dolphins have come to assume particular importance in how many environmentalists view the GATT and the WTO. The US had imposed an embargo on Mexican tuna in support of its Marine Mammal Protection Act (MMPA). However, in 1991 GATT ruling: MMPA in contravention of trade rules and restriction based on process methods as opposed to product attributes the GATT rules did not allow one country to take trade action to attempt to enforce its domestic laws in another country — even to protect animal health or exhaustible natural resources. The ruling never was imposed due to NAFTA’s negotiations.

When tuna is fished using purse seine nets, dolphins can become unintentionally trapped and suffocate. The US Marine Mammal Protection Act (MMPA) sets out standards for the protection of dolphins in the Eastern Tropical Pacific Ocean. If a country exporting tuna to the US cannot prove that its standards meet those enshrined in US law, then the US must embargo all imports of tuna and tuna products from that country and any intermediary countries that purchase tuna from the country subject to the embargo as well. The US embargoed tuna from Mexico, Venezuela, and Vanuatu, as well as several intermediary countries because their methods used to catch the tuna in these countries did not meet the requirements of the MMPA.

In 1991 Mexico alleged that the US embargo on their tuna exports was inconsistent with the provisions of GATT. The dispute settlement panel found that article III requiring that imported products be accorded a no less favorable treatment than domestic products had indeed been violated. The US could not curtail imports of tuna from Mexico simply because the fishing method employed did not satisfy regulators in the US standards.

The dispute settlement panel also declined to uphold the embargo under article XX since although the article dealt with measures necessary to protect animals and exhaustible natural resources, this did not permit a country to enforce measures falling outside its territorial jurisdiction. The argument of the dispute panel aimed to avoid countries attempting to impose ethical standards on other countries over which they have no jurisdiction. Although the US and Mexico ultimately decided to settle their dispute bilaterally, the tuna dolphin case seemed to have troubling consequences[1].

Specifically,  Article XX of GATT introduced several exceptions to foreign trade as environmental exemptions. Article XX of the GATT includes a range of international trade exceptions[2]. These environmental regulations are not enforced in a method that would constitute a means of arbitrary or unjustifiable discrimination amongst countries to limit foreign trade, such as those for the preservation of national security, human, animal or plant existence or safety, public morality, natural resource conservation, protections or escape clauses[3].

 For the purpose of research, amongst the exceptions, this part focuses only on the two exceptions are related to the environment, such as Article XX (b) and (g).

(b) necessary to protect, human, animal or plant life or health;

(g) relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic product or consumption. Since these measures adopted before the MEAs, measures under Article XX are not directly is challenged in any fora.

Environmental impacts often cross-national boundaries. Surely a country can have a legitimate interest in environmental events occurring in areas outside its legal jurisdiction. Furthermore, the dispute resolution panel seemed not to distinguish between environmental resources, which were not in the jurisdiction of any state such as atmospheric or oceanic resources, and those that were within the jurisdiction of a state. The GATT secretariat soon after made it explicitly clear that it was “not possible under GATT rules to make access to one’s own market dependent on the domestic environmental policies or practices of the exporting country”.

Another issue raised involved the US Dolphin Protection Consumer Information Act. This required that if tuna and tuna products are to be labeled dolphin friendly, then they must meet specific dolphin protection standards. By contrast, this practice, which applied to tuna products irrespective of their country of origin, was found to be consistent with GATT provisions. The European Union also brought a case against the US in an attempt to overturn the US embargo on tuna products from countries that trade tuna with Mexico. This case was also upheld.

Conclusion

Article XX of GATT allows greater leeway in the use of environmentally motivated trade restrictions to protect human, animal or plant life or health and conservation of natural resources. Article XX of GATT offers several exceptions to international trade. Such environmental measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries to restrict international trade, such as those for ensuring national security, protecting a human, animal or plant life or health, public morals, conservation of natural resources, safeguards or escape clauses

The panel reported to GATT members concluded:

1. That the US could not embargo imports of tuna products from Mexico simply because Mexican regulations on the way tuna was produced did not satisfy US regulations. (But the US could apply its regulations on the quality or content of the tuna imported.) This has become known as a “product” versus “process” issue.
2. That GATT rules did not allow one country to take trade action to attempt to enforce its domestic laws in another country — even to protect animal health or exhaustible natural resources. The term used here is “extra-territoriality”.

[1] Wto.org. 2010. WTO | Understanding The WTO – The Environment: A New High Profile. [online]Available at: <https://www.wto.org/english/thewto_e/whatis_e/tif_e/bey2_e.htm>.

[2] General Agreement on Tariffs and Trade, 30 October 1947, 61 Stat. A3, 55 U.N.T.S. 187.

[3] See Article XX of GATT, General Exceptions – 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: