GATT Tuna-Dolphin

CASE NUMBER: 2
CASE MNEMONIC: TUNA
CASE NAME: GATT Tuna Dolphin

1. Issue

The United States banned imports of Mexican tuna because Mexico had not taken steps to reduce the number of Eastern Pacific Tropical dolphins killed each year due to tuna fishing. Mexico appealed the case to a General Agreement on Tariffs and Trade (GATT) dispute settlement panel. The panel eventually ruled in favor of Mexico. The ruling was in part due to the discriminatory manner in which the United States implemented the measure and, in part, due to the GATT resistance to cases where the process of production is a major factor. Furthermore, the panel found that the U.S. labeling of "Dolphin Free" tuna did not conform to GATT standards. The case was, in the end, solved bilaterally between the United States and Mexico.

2. Measure: Import Standard

The U.S. Congress passed the Marine Mammal Protection Act (MMPA) in 1972.1 The act intended to reduce the dolphin kills "to levels approaching zero" by legally requiring U.S. tuna fishermen to incorporate certain fishing techniques and technology.2 Furthermore, the act established a permit system, setting a fixed ceiling for dolphin kills and limiting the taking rate for species that were endangered. To ensure that these regulations were adhered to, the MMPA also required U.S. vessels to carry federal observers.3

Congress appointed the Secretary of Commerce to ensure that the kill rates of the importing countries did not exceed 2 times the taking rate of the U.S. fleet in 1989 and 1.25 times the U.S. rate in 1990. If countries did not meet these standards the Secretary was required to implement a direct tuna embargo. To further ensure compliance with the MMPA's Direct Embargo Provision, Congress included the Intermediary Nation Provision, the Pelly Amendment, and the Dolphin Protection Consumer Information Act (DPCIA). The Intermediary Nation Provision (101(a)(2)(c)) stated that intermediary countries exporting tuna caught by other nations to the United States, must prove to the Secretary that they have prohibited tuna and tuna products from harvesting countries that have been directly banned by the United States. If the intermediary country did not ban these products within sixty days of the import embargo, and if the Secretary did not receive proof of this in 90 days, then the Secretary was required to implement an embargo against this country on the 91st day.

The Pelly Amendment, under MMPA 101(a)(2)(D), stated that after either ban had been implemented for six months, the Secretary was required to notify the President of the United States. This triggered the President's discretionary power to impose a ban on all fish products for a period determined by the President and sanctioned by GATT.

A third act, the Dolphin Protection Consumer Information Act (DPCIA), stated that producers, importers, exporters, distributors, or sellers of tuna products could only include a dolphin safe label if the tuna were harvested in a manner that was not harmful to dolphin. Therefore, tuna caught by purse seine vessels in the ETP, or tuna taken on the high seas by drift net fishing, could not be labeled as dolphin safe.

Despite the U.S. Congress' attempt to ensure that foreign tuna importers complied with the provisions of the MMPA, by 1990 the Secretary of Commerce still had not issued comparable findings or implemented the bans. The State Department and the Commerce Department opposed the embargoes in the interests of good foreign relations. Consequently, Earth Institute filed suit in the Federal District Court in San Francisco against Commerce to ensure that the direct and indirect tuna import bans were enforced. The court ruled in favor of the Institute and directed the government to execute these provisions. The U.S. government appealed this decision, but the Ninth Circuit Court of Appeals unanimously upheld the district courts ruling and on February 22, 1991, ordering the U.S. to enact the embargo against Mexico and any other country that violated the MMPA.

3. Exporter and Importer: MEXICO and USA

Mexico was most impacted by the U.S. measure. The measure generated a second case by France, whose raw tuna imports, processed in France, were also forbidden by the United States.

4. Trade Impact

With the anticipated inception of the ban, Mexico's exports of tuna to the United States fell from $13 million in 1989 to $3.2 million in 1990. It bottomed out at $1.2 million in 1991 and has gradually risen to $4.0 million in 1994 (see Figure 3). Presumably, the rise indicates the increase in the fleet that has been re-capitalized to meet the dolphin-safe requirements.

France has followed on Mexico's complaint with one of their own against the United States. France's imports of unprepared or raw tuna from Mexico was $5.1 million in 1989 and none recorded for the 1991-94 period. The U.S. action also applied to French prepared tuna exports. U.S. imports of canned tuna from France fell from $8.1 million to zero for the 1990-94 period.

Mexico and the European Community (EC) maintain that they have lost a large percentage of trade due to the tuna bans on Mexico and other countries. The EC asserts that its tuna exports to the United States have decreased its revenue by 4 million European Currency Units.4

5. Other Economic Impacts

During the period of 1990/1991, the U.S. implemented tuna embargoes on Mexico, Venezuela, Ecuador, Panama, and Vanatu.5 Since then, Ecuador and Panama complied with U.S. standards, and the embargoes were lifted. However, Mexico resisted the dolphin safe-measures and continued to kill an estimated 50,000 dolphin every year.6 There were two parties directly affected in the case (United States and Mexico) and nine indirectly (Venezuela, Vanatu, Spain, Cayman Islands, Costa Rica, El Salvador, Panama).

6. Environmental Impacts

The Commerce Department estimated the kill rates for vessels from Mexico, Venezuela, Vanatu, Spain and the Cayman Islands,Costa Rica, El Salvador, and Panama were two to four times higher (100,000 per year) than U.S. kill rates.7 Mexico killed an estimated 50,000 dolphins every year.8 Dolphin deaths declined from nearly 100,000 in 1989 to 3,600 in 1993, a substantial drop.9

7. References

1. Lesley Scheele and Dean Wilkinson, "Background Paper on the Eastern Tropical Pacific Tuna/Dolphin Issue," Greenpeace (April 1988), 1.

2. Robert F. Housman and Durwood J. Zaelke, "The Collision of the Environment and Trade: The GATT Tuna-Dolphin Decision," (mimeograph), 8.

3. The permit system is based on the dolphins optimal sustainable population of each species. If the number decreases below this level, the taking of dolphin must stop. See 16 U.S.C. 1361 (2).

4. "European Boycott Urged on Mexican Tuna," LDC Debt Report/Latin America Markets, 4/21 (June 10, 1991), 9.

5. "Panel Ruling on Dolphin Protection and the Environment," Before the Subcommittee on Health and the Environment of the House Energy and Commerce Committee, 27 September 1991, 3.

6. Stuart Auerbach, "Raising a Roar Over A Ruling," The Washington Post (October 1, 1991), D6.

7. "Panel Ruling on Dolphin Protection and the Environment," Before the Subcommittee on Health and the Environment of the House Energy and Commerce Committee, 27 September 1991, 2.

8. Stuart Auerbach, "Raising a Roar Over A Ruling," The Washington Post (October 1, 1991), D6.

9. Warren Christopher, "Fact Sheet: Mexico's Marine Conservation Efforts," Dispatch, May 1, 1994, 19