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United States Requests Dispute Settlement Panel in Tuna Dolphin NAFTA Choice of Forum Dispute

09/24/2010

WASHINGTON, D.C. – The Office of the United States Trade Representative announced today that the United States has requested that the North American Free Trade Agreement (NAFTA) Free Trade Commission establish a dispute settlement panel regarding Mexico’s decision not to move its “dolphin safe” labeling dispute from the World Trade Organization (WTO) to the NAFTA, as requested by the United States and as required by Article 2005 of the NAFTA. The NAFTA requires that in certain types of disputes, if the defending party makes such a request, the NAFTA rather than any other forum should be the sole venue of the dispute. In this case, that means that the NAFTA – rather than the WTO – is the proper forum to hear a challenge by Mexico to U.S. “dolphin safe” labeling provisions for tuna and tuna products.

“We regret that Mexico continues to move forward with its WTO proceeding,” said Nkenge Harmon, a USTR spokesperson. “In the NAFTA, the United States, Canada and Mexico agreed to give a defending party the right to choose NAFTA dispute settlement in circumstances such as these, and we are seeking to enforce this right,” said Harmon.

The U.S. dolphin safe labeling provisions at issue in the WTO dispute establish conditions under which tuna products may voluntarily be labeled “dolphin safe” and provide that tuna sellers may not label their products as “dolphin safe” if the tuna is caught by intentionally encircling (“setting on”) dolphins with purse seine nets. Many Mexican fishing vessels use this technique to fish for tuna.

Mexico’s challenge to the U.S. dolphin safe labeling provisions meets the criteria in the NAFTA choice of forum. This provision states that certain disputes which pertain to matters arising under both the WTO Agreement and the standards-related provisions of the NAFTA, and which concern human, animal or plant life or health or the environment and raise factual issues concerning the environment or conservation, shall be heard – at the responding party’s option – solely under the NAFTA’s dispute settlement procedures.

NAFTA rules provide that once a responding party invokes the choice of forum provision, the complaining party must withdraw from the WTO proceedings and may pursue the dispute solely under the NAFTA.

BACKGROUND

On March 9, 2009 Mexico requested that a WTO panel be established to review Mexico’s claims that U.S. law limiting the use of the “dolphin safe” label on tuna and tuna products is inconsistent with U.S. obligations under the WTO Agreement. In response, the United States invoked the NAFTA choice of forum provision (Article 2005(4) of the NAFTA) on March 24, 2009. However, Mexico continued to pursue its request for a WTO panel, and on April 20, 2009 the WTO Dispute Settlement Body established a WTO panel to review Mexico’s claims.

The United States and Mexico held consultations on the choice of forum dispute in December 2009. When consultations did not resolve the dispute, the United States requested the NAFTA Free Trade Commission, which is composed of the NAFTA countries’ trade ministers or their designees, meet to discuss the matter. The Commission met on May 7, 2010 but was also unable to resolve the dispute.

Under NAFTA rules, a dispute settlement panel is established immediately upon delivery of the request to the Commission.