Reproduced, with permission, from:Schools of yellowfin tuna often swim beneath schools of dolphins in the eastern tropical Pacific Ocean. As a result, when tuna are fished with purse seine nets, dolphins can be trapped in the nets and will die unless released. The United States' Marine Mammal Protection Act (MMPA) sets dolphin protection standards - involving a ceiling limit on dolphin catches - for the domestic fishing fleet and for countries whose fishing boats harvest yellowfin tuna in the eastern tropical Pacific Ocean. If a country exporting such tuna to the United States cannot prove to the United States authorities that its tuna fleets meet the dolphin protection standards set out in the law, the United States government must embargo all imports of yellowfin tuna and tuna products from that country and from "intermediary" countries that purchase tuna from the country subject to the direct embargo. Under this law, the United States government has prohibited imports of yellowfin tuna and tuna products from Mexico, Venezuela and Vanuatu, and from the intermediary countries of Costa Rica, France, Italy, Japan and Panama.
In February 1991, Mexico asked for a GATT dispute settlement panel, arguing that the United States' embargo on yellowfin tuna and tuna products was inconsistent with GATT provisions. The United States argued that the GATT's national treatment provision (Article III) permitted the enforcement at the border of dolphin protection standards set out in the MMPA. The panel found that the standard of Article III - namely, that imported products be accorded no less favourable treatment than domestic products - required a comparison between products of the exporting and importing countries, and not a comparison between production regulations of the exporting and importing countries that had no effect on the product as such. Therefore, the United States could not embargo imports of tuna products from Mexico simply because Mexico's regulations affecting the production of tuna did not satisfy United States regulations.
The United States also argued that the import embargo could be justified under the Article XX exceptions clauses for measures otherwise inconsistent with GATT obligations, which protect animal health or exhaustible natural resources. However, the Panel found that Article XX does not permit a contracting party to take trade measures to enforce its own laws regarding animals or exhaustible natural resources outside its jurisdiction.
The reasoning behind these findings was as follows. If the United States' arguments were accepted, than any country could ban imports of a product from a country merely because the exporting country pursues environmental or health policies different from its own. This would create a very large loophole in the GATT for any country unilaterally to apply trade restrictions not for the purpose of enforcing its own laws within its jurisdiction, but to impose the standards set out in its laws on other countries. In such a situation, the potential for protectionist abuses would be very great. It would certainly work against the main objective of the multilateral trading system - to provide stable and predictable market access opportunities through agreed rules and disciplines.
The Panel's task was limited to examination of this matter in the light of existing GATT obligations. It was not asked whether either party's environmental policies as such were appropriate. In finding that a country may not restrict imports of a product solely because it originates in a country whose environmental policies are different, the Panel stressed the all-or-nothing choice which Article XX presents. If the GATT contracting parties wished to permit environmental trade restrictions such as those under the United States dolphin protection law, they would need to agree on limits to prevent abuse. Since Article XX does not provide such limits, the Panel stated that it would be better to amend or supplement the provisions of the General Agreement or to provide a waiver, since each of these alternatives would provide an opportunity for the contracting parties to develop and negotiate provisions to minimize the risk of excessive use and abuse.
Another issue Mexico had raised before the Panel concerned the United States' Dolphin Protection Consumer Information Act, which requires that if tuna products are labeled "Dolphin safe", they must meet certain dolphin protection standards. The Panel found that this labeling practice was not inconsistent with GATT provisions, because it was designed to prevent deceptive advertising practices on all tuna products, whether imported or domestically produced.
Copies of the panel report are available on request from the GATT Secretariat.