1. IDENTIFICATION

2. LEGAL CLUSTERS

3. GEOGRAPHIC CLUSTERS

4. TRADE CLUSTERS

5. ENVIRONMENT CLUSTERS

6. OTHER FACTORS

I. Identification

1. The Issue

Four countries affected by U.S. sanctions in 1997 brought a formal dispute to World Trade Organization (WTO) over shrimp import requirements. For several decades, protection of wildlife has been promoted in the United States primarily under the Endangered Species Act (ESA). The more ESA policies have tried to modify human activities, however, the more resistance against seems to grow. In particular, these policies are sometimes perceived as a case of one or more countries attempting to force their own national agenda on others through threat or use of economic and political measures. In one such case, the U.S. has embargoed shrimp from a number of its trading partners for the purpose of protecting sea turtle population as proscribed by the ESA.

2. Description

Sea turtles are an ancient air-breathing reptile that have inhabited the planet far longer than human beings. They live in most of the world's oceans and migrate thousands of miles annually to feeding grounds in temperate regions. There are seven species of sea turtles found around the world. Six of these seven species are covered by the Convention of International Trade on Endangered Species (CITES) and five of them are protected in the 1973 U.S. Endangered Species Act (ESA) as either threatened or endangered species.

The most destructive influence on sea turtles comes from shrimp trawls on the open sea. Since sea turtles are air-breathing reptiles, they drown unless the trawl is pulled out of the water frequently. In spite of protective measures included in the ESA, one project estimated that 124,000 turtles die in these nets of shrimp vessels worldwide every year. In response to this threat, the ESA authorized the U.S. National Marine Fisheries (NMF) to develop sea turtle recovery plans for all five varieties of sea turtles affected. In particular, these plans have required the permanent use of turtle excluder devices (TEDs) on shrimp trawlers operating anywhere in U.S. waters (see TEDS case). The TED is basically a "trap door" in trawling nets that allows large animals like sea turtles and other animals to be filtered out and released back into the ocean. In regard to mortality rates, NMF found in 1981 that proper use of TEDs resulted in an impressive 97% reduction in sea turtles deaths.

In 1987, the U.S. Congress passed Public Law 101-162 which required all shrimp-importing nations to register with the Department of State to certify that they participate in sea turtle protection programs compatible with those in the U.S. However, both the Bush and Clinton Administrations adopted rather narrow interpretations of the law, based largely on geography, where the greatest threat were posed to particular sea turtle populations that feed or nest in U.S. waters. As a result, only 14 Atlantic and Caribbean nations fell subject to this law.

In response to the seemingly never-ending sea turtle tragedy in Pacific and Indian Oceans in 1992 a U.S. nongovernmental organization (NGO) called Earth Island Institute filed a class-action suit in conjunction with other U.S. environmental NGOs against the Departments of State and Commerce. They noted that none of the top shrimp exporters, mainly Asian countries, to the U.S. were subject to this law under thus narrow interpretation. (see SHRIMP case).

On December 29, 1996, the Court of International Trade (CIT) in New York, formerly known as the U.S. Court of Customs ruled in favor of the environmental groups that a law included all foreign counties and directed the U.S. Government "to prohibit not later than May 1996, the importation of shrimp or products of shrimp whenever harvested in the wild. . . by fishing technology which may affect adversely those species of sea turtles."

As a result, in February 1996 the Clinton Administration warned 49 out of 70 shrimp exporting countries that they may be subject to embargo if they do not meet U.S. guidelines vis-a-vis the mandatory use of TEDs. Before the shrimp embargo was put into effect, 36 out of 49 nations warned were found to be in compliance with U.S. law, 15 other nations fished predominately in cold waters where sea turtles rarely venture and eight others only harvest shrimp using manual methods and thus pose no direct threat to wild sea turtle populations.

In October 1996, four Asian counties requested consultations---the first step of the WTO Dispute Settlement Panel process---with the U.S., charging that the impending embargo violate U.S. obligations under the WTO and could result in large-scale trade disruption. Subsequently, Japan, the EU, Hong Kong, and Australia joined in this request, and the Philippines asked for another consultation separately.

In the end, Thailand, Malaysia and Pakistan had their case forwarded to a Dispute Settlement Panel on February 1997. Australia, Colombia, the EU, the Philippines, Singapore, Hong Kong, India, Guatemala, Mexico, Japan, Nigeria, and Sri Lanka expressed their supportive positions. India also asked to have a established panel on the same matter on February 1997 (see Bulletin of Dispute Settlement on the WTO home page about the most updated information of active panels.)

According to a simulation conducted by the U.S. Department of Commerce and designed to measure the impact of TEDs, a 0.7% catch reduction among U.S. shrimpers due to their adoption (the minimal estimate derived from actual yield reductions) would result in $1 million in lost in revenue. However, no data for foreign country is currently available. Also, any shortfall in wild-catch shrimp imports may be masked by an immediate increase in aqua-culturally-produced product and therefore makes clear estimates extremely difficult to calculate. In addition, a real lack of accurate data which breaks down import figures by wild-catch and aquaculture sectors makes it almost impossible to gauge whether the embargo on non-certified shrimp will be felt by consumers. On the side of environmental benefits from this embargo, a simple calculation (assuming 97% of annual estimated124,000 sea turtle died worldwide due to shrimp vessels could be saved by TEDs), gives a sort of idea that as many as 120,000 sea turtles can be survived every year all over the world. However, both the number of sea turtle died in the shrimp nets and the effectiveness of TEDs vary in areas and time, therefore, this number is only guess at most.

3. Related TED Cases

(1)Shrimp and Sea Turtle case

(2) TEDS case

(3) Green case

(4)Mangrove case

(5) Hawksbill case

(6) Greektur case

(7) Indian Shrimp case

Related Cases (GATT/WTO dispute panel)

(1) Tuna case

(2) Tuna (2) case

(1) Clean Air Act case

Key Word:

(1): Trade Product = SHRIMP

(2): Bio-geography = OCEANS

(3): Environmental Problem = Species Loss Sea [SPLS]

4. Draft Author: Misa Kemmiya, Summer 1997

II. Legal Clusters

5. Discourse and Status: DISagree and INPROGress

Most of the countries impacted by the U.S. shrimp embargo disagreed with the measure. The dispute has been raised in a WTO Dispute Settlement Panel. Plaintiff countries complained that the U.S. trade restrictions violated Article I, III, and XIII of the GATT 1994 (see Table 1) and should be removed immediately. Their argument was that the U.S. shrimp embargo violates the Most Favored Nation (MFN) status because the U.S. refused to offer same MFN status to all its trading partners. Article III of the WTO specifically requires that "like products" (imported products that are physically similar to domestic ones) must be treated equally. The Asian nations contended that the U.S. shrimp embargo is illegal as it discriminates based on production process---in this case the method of harvest. Finally, such quantitative restrictions are illegal because they are applied outside of the U.S. jurisdiction. In response to the panel request, the U.S. Trade Representative (USTR) and the State Department will defend the embargo at upcoming arbitration sessions. Most likely, they will defend U.S. actions under the WTO Article XX and specifically sections (b) and (g) which admit exceptions to the general rules. Article XX, section (b) outlines exceptions necessary for the protection of animal life or health, while section (g) relates to the conservation of exhaustible natural resources. The USTR is also likely to appeal WTO to reexamine prohibitions on trade restriction based on production processes and methods of harvest, because production process is the very type on which most environmental regulations rely. For a list of related articles, see Table 1.

Table 1: Related GATT 1994 Articles

	GATT Articles
Article I	requires most favored nation (MFN) treatment for all GATT members
Article III	requires that GATT contracting parties may employ domestic regulations affecting the import of other contracting parties, so long as these regulations do not discriminate between foreign and domestic products
Article XIII	requires that quantitative restrictions must be applied on a non-discriminatory manner
Article XX (b)	covers exceptions necessary to protect human, animal or plant life or health
Article XX (g)	covers exceptions relates to the conservation of exhaustible natural resources if such measures are made in line with similar domestic regulations

6. Forum and Scope: WTO and MULTILATERAL

Though this case begun with application of a U.S. domestic law (seeTEDScase). The conflict soon expanded to the WTO. There are several multinational and international laws involved in sea turtle protection---including CITES (prohibition of sea turtle trade, see SHRIMPcase) and the emerging Inter-American Convention for the Protection and Conservation of Sea Turtles (22 nations in the Western hemisphere signed it, but none have ratified it to date).

7. Decision Breadth:

The result of the Turtle and Shrimp dispute could impact 110 member countries of the WTO. So far, the impact of this shrimp embargo has directly affected the 49 countries warned by the U.S. government and the 13 nations among them have been embargoed. Strictly speaking, the main actors involved in the WTO Dispute Settlement Panel are the United States, four Asian countries as plaintiffs and 11 other countries which have thrown their weight behind the complaints of the four main plaintiff states.

8. Legal Standing: TREATY

An agreement among any of the 110 WTO member countries is called an executive agreement. The WTO was established in 1994 as the successor organization of the GATT, which itself was founded in 1947. Fundamental to the organization is the fact hat WTO members have committed themselves to refrain from unilateral action against perceived violations of the trade rules and have pledged to seek recourse in the new dispute settlement system and abide by its procedures and its rulings. The Dispute Settlement Body of the WTO has more binding power than its predecessor component in the GATT in that it grants all parties involved the power of appeal through a standing Appellate Body. Parties involved must then negotiate compensation or change the law judged as illegal in accordance with the panel or the Appellate Body's report. If they cannot reach an agreement on these points, the Dispute Settlement Panel can then authorize a variety of retaliatory measures. If the panel rules in favor of the plaintiff states, the U.S. can be forced to change the Endangered Species Act to allow the imports, or offer compensation to nations affected for the value of lost trade during the embargo. In the case that the U.S. does not obey the ruling of the WTO, trade partners may actually take retaliatory trade measures against the U.S. It is doubtful, however, that smaller countries will risk taking such measures. As a practical matter, the U.S. does not want to de-stabilize the sensitive regime of free trade regime which it has work so hard to encourage.

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: Asia

b. Geographic Site: East Asia

c. Geographic Impact: USA

10. Sub-National Factors: NO

11. Type of Habitat: OCEAN

IV. Trade Clusters

12. Type of Measure: Import Ban [IMBAN]

This measure bans the importation of shrimp from countries which do not have active sea turtle protection programs compatible to those in place in the U.S. The law itself does not require the use of a TED, but the meaning of such programs implicitly requires its use.

13. Direct v. Indirect Impacts: DIRect

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product:YES SHRIMP

b. Indirectly Related to Product: YES SEA TURTLE

c. Not Related to Product: NO

d. Related to Process:YES Species Loss Sea [SPLS] The Endangered Species Act bans the importation of shrimp that are harvested in a manner which is harmful to sea turtles.

15. Trade Product Identification: SHRIMP

"Shrimp" includes both unprocessed and processed shrimp alike. This does not include, (1) aqua-culturally raised shrimp (2) shrimp that live in cold waters devoid of wild sea turtles, and (3) shrimp that are caught by manual methods are not in subject to this embargo.

Shrimp is the most popular seafood in the U.S., and its demand has been steadily increasing in recent years. Capital investment in shrimping vessels and trawling equipment has been increasing, but as with most of other kinds of fisheries, this investment has not resulted in any substantial increase in yield. This is because most traditional shrimping waters have been overexploited by growing---and increasingly competitive---fishing fleets.

16. Economic Data

Impact on shrimp fisheries due to sea turtle protection: A Turtle Excluder Device (TED) runs approximately U.S. $200 to $400. In addition to this start-up cost, a reduction in shrimp hauls has also been a concern. According to a simulation conducted by the U.S. Department of Commerce and designed to measure the impact of TEDs, a 0.7% catch reduction among U.S. shrimpers (the minimal estimate derived from actual yield reductions) would result in 0.4 million pounds reduction in landing and $1 million in lost in revenue. On contrary, the largest reduction in the U.S. shrimp catch was reported as 10%, which translates into a loss of as much as $13.3 million. As such, the estimate of cost in U.S. shrimp industry alone varied with areas and time. Given the fact that no data for foreign country is currently available, it is nearly impossible to interpret how foreign shrimp industries will fare from the impact of TEDs.

17. Impact of Trade Restrictions: LOW

18. Industry Sector: FOOD

19. Exporters and Importers:

V. Environment Clusters

20. Environmental Problem Type: Species Loss Sea [SPLS]

21. Name, Type, and Diversity of Species

Name: Sea Turtles (Hawksbill, Green, Leatherback, Kemp's Ridley and Loggerhead)

Type: ANIMAL/Vertebrate/Reptile

There are seven species found around the world. Six of these species are covered by the 1973 CITES. Five out of seven species live in the U.S. waters and have been listed as either threatened or endangered species under the Endangered Species Act. Under this particular law, threatened species are defined as those "likely to become endangered in the foreseeable future," while endangered species are these in imminent danger of extinction.

Kemp's Ridley is in the most endangered sea turtle species at present time; their population has gradually---but steadily---dropped from some 40,000 nesting females in the late 1940's to 10,000 in 1960's, and down to just 500 during the 1980's, only one percent of its population in 1947. In 1986, the International Union for Conservation of Nature and Natural Resources (IUCN) identified the Kemp's Ridley sea turtle as one of the 12 most endangered animal species on the planet.

22. Resource Impact and Effect: HIGH and PRODuct

Since TEDs can reduce mortality of sea turtles by as much as 97%, sea turtle protection programs in numerous countries (some 70) with TEDs regulation could save enormous amounts of sea turtles worldwide.

23. Urgency of Problem: HIGH

All five species of sea turtles have been listed as either endangered or threatened by both the CITES and the Endangered Species Act for more than two decades. Some scientists fear that even at current levels, some species may lack the breeding/genetic resources to remain indefinitely viable even if populations do stabilize.

24. Substitutes: Like products

Although minced fish treated with chemicals have been used as a reasonable lobster substitute, the common substitute for wild shrimp has been similar shrimp grown in aquacultural ponds. As shrimp stocks declined in almost all the world's oceans, shrimp farming has been mushrooming since the 1980s even without the added impetus of the threat of embargoes. At the same time however, shrimp farming has been strongly criticized as significant cause of marine pollution and environmental degradation. Shrimp ponds are major sources of pollutants, including feed wastes, feces, fertilizers, antibiotic, and pesticide. Sea turtles have been endangered not only by shrimp trawlers, but also by loss of their nesting sites and their very habitat. Mangrove forests have been cleared for shrimp ponds, but these forests provide a vital habitat and nesting sites for many sea turtles (see MANGROVEcase). As such, intensive aquaculture activities are taking a heavy total on sea turtle populations. So great is the temptation to follow short-cut to economic success by intensive aquacultural farming that nations seem willing to jeopardize their very lifeblood---safe water for drinking and agriculture. As such, some NGOs in developing countries criticized this shrimp embargo on the grounds that while the ban was made in the name of sea turtle protection, it does little to ensure the long-term environmental subjectability turtles and marine habitats alike.

VI. Other Factors

Sea turtles have been used in many societies, meat for food, shell for ornamentation, and skin for leather (see Hawksbil case) . Also, turtles have been revered as sacred by numerous religions throughout the world. Although many countries established their own protection programs, sea turtles are still captured and used for commercial and subsistence purposes in many areas. An in accordance with basic rules of economics, as the number of sea turtle population becomes smaller, their value becomes higher. On the other hand, increasing sea turtle mortality rates are also largely due to increasing demand for shrimp in Western countries and Japan. This increase in demand in these wealthy countries stems from new cultural attitudes in that many people see shrimp as a healthy substitute to red meat.

26. Trans-Boundary Issues: YES

27. Rights: YES

Commercial rights of shrimp fishermen and distributors could be compromised significantly if the U.S. embargo goes into effect. If countries subject to the U.S. law enforced TEDs installment, fishermen would be forced to pay the additional costs for TEDs, and their maintenance and resulting reductions in yields would likewise be their burden. In effect, if these countries cannot meet the U.S. requirement, their fishermen and distributors lose their right to sell their shrimp to the U.S. market. From a broader perspective, at risk in this sea turtle and shrimp case may be the very sovereign rights of countries and their right to self-determination of domestic commercial policies, which best suit their needs. Since this shrimp embargo forces other nations to change their regulations to ones compatible to the U.S., many nations affected have claimed that their sovereign rights have been invaded by U.S. environmental activists. Specifically, developing nations tend to perceive environmental mandates as thinly-veiled forms of trade protectionism.

28. Relevant Literature

Charnovitz, Steve, "Dolphins and Tuna: An Analysis of the Second GATT Panel Report", ELR News and Analysis, October 1994.

Crouse, Deborah and Michael Weber, Delay and Denial: A Political History of Sea Turtles and Shrimp Fishing, Center for Marine Conservation, April 1995.

C.W.Caillouet and Landry A.M., Question and answer sessions and panel discussions (comments by E. Kilma, et al.), TAMU-SG-89-105. Texas A&M University Sea Grant College Program, Galveston, Texas, 1989.

Garvey, Schubert and Barer, Opinion in Shirmp Embargo Litigation, A Partnership of Professional Corporations, Washington,

Kibel, Paul, "Justice for the Sea Turtle: Marine Conservation and the Court of International Trade," UCLA Journal of Environmental and International Trade, Winter 1996/1997.

National Marine Fisheries Service, The Turtle Excluder Device (TED): A Guide to Better Performance, NOAA Technical Memorandum NMFS, SEFSC-266, April 1995.

Sea Turtle Restoration Project, Viva La Tortuga, The Earth Island Institute news letter, No. 1, 1995 and No.2, 1996.

United States Court of International Trade, Slip Op. 96-62, April 10, 1996.