The epic struggle for dolphin-safe tuna: to be continued - a case for accommodating nonprotectionist eco-labels in the WTO.

• Author: Sullivan, Lauren

ABSTRACT

In May 2012, the World Trade Organization (WTO) struck down the United States' dolphin-safe tuna labeling standard as a barrier to trade that is prohibited by the Technical Barriers to Trade Agreement (TBT). The analysis in the US-Tuna II report questions the validity of standardized eco-labels enforced by WTO Member States, which are an increasingly popular means to achieve environmental and consumer protection. This Note considers the merits of state-backed eco-labeling schemes, the implications of the US-Tuna II report for the WTO's approach to nontrade interests, and potential accommodations within the current WTO framework for eco-labels. It ultimately suggests that WTO dispute resolution bodies depart from US-Tuna II; instead of rejecting environmental legislation that has any discriminatory effect upon trade, future decisions should concentrate upon whether the statute is intended to serve a protectionist purpose. It also suggests that the WTO consider awarding monetary aid to ease developing nations' financial or technological burdens in complying with upheld regulations.

TABLE OF CONTENTS I. INTRODUCTION II. US-TUNA II: A CASE STUDY OF THE WTO'S APPROACH TO ENVIRONMENTAL LEGISLATION UNDER THE TBT A. Legislative and Judicial History of the DPCIA B. The Labeling Standard as a Technical Regulation C. DPCIA as a Violation of the "no less favored nation" Requirement D. US-Tuna II's Result III. US-TUNA II'S IMPLICATIONS FOR CONSUMER PROTECTION AND ENVIRONMENTAL OBJECTIVES A. Empirical Evidence on the Debated Success of Eco-labeling B. The Purpose of State-Mandated Eco-labeling Standards C. The Growth of State-Backed Labeling Standards D. Opposition to State-Backed Eco-labeling Standards E. Environmental and Consumer Protection Concerns as Legitimate Policy Goals IV. THE WTO'S QUANDRY REGARDING NONTRADE INTERESTS A. The WTO's Obstacles in Accommodating Nontrade Interests B. US-Tuna II: A Shift in the WTO Appellate Body's Stance on Environmental Interests V. PROPOSED SOLUTION: REINTERPRETING THE TBT'S APPLICATION TO STATE ECO-LABEL STANDARDS AND MONETARY AID A. Enacting Change Without Amending the WTO Agreements B. Proposed Judicial Review: Distinguishing Environmental from Protectionist Motivations C. Requiring a Reasonable Foundation of Scientific Support D. Awarding Monetary Aid to Unsuccessful Challenging Parties VI. CONCLUSION I. INTRODUCTION

In May 2012, the Dispute Settlement Body of the World Trade Organization (WTO) struck down the United States' dolphin-safe tuna labeling standards as a violation of the Technical Barriers to Trade Agreement (TBT). The dolphin-safe tuna label's standards were set in the Dolphin Protection Consumer Information Act (DPCIA), which mandated that sellers use the label only if their products were caught by proscribed fishing methods. (1) The standards themselves were the enormously popular product of a decade of legislative drafting, agency interpretation, and court review. (2)

In United States-Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (US-Tuna II), the WTO Appellate Body (Appellate Body) (3) held that the United States' dolphin-safe labeling standard was a "technical regulation" and therefore subject to compliance with the TBT. (4) It then ruled that the labeling standard violated the TBT because it would affect international trade; while American producers had already achieved compliance, the majority of Mexican vessels engage in fishing methods that disqualify them from using the dolphin-safe labels. (5) In addition, the Appellate Body examined the scientific data Congress itself used when determining eco-labeling standards were necessary but found the evidence did not justify the legislation. (6) The Appellate Body did not inquire into whether the DPCIA was enacted with a discriminatory purpose. (7)

The US-Tuna II case has potentially far-reaching implications for state-enforced eco-labeling standards. First, if the WTO upholds its interpretation of the TBT going forward, the decision confirms academic suspicion that all state-backed eco-labeling standards will likely fall within the provisions of the TBT. At the time of writing, over nineteen individual states have enacted green-labeling standards or guidance, and eco-labeling has generally garnered support as a market-based means of promoting environmental conservation. (8) If the WTO's judicial bodies hold to the interpretation of the TBT's provisions in US-Tuna II, it may effectively eliminate eco-labeling as a tool for achieving nontrade goals.

Second, the case is arguably the product of the WTO's inability to adopt an official approach to accommodating environmental and other nontrade interests that have incidental effects on trade. (9) US-Tuna II followed a decade-long stalemate within the WTO regarding how, or whether, to accommodate regulations that are based upon environmental interests. (10) The effects of this dissension continue to snowball as WTO members enact more environmental regulation, and accordingly face a growing number of complaints under the TBT. (11)

Third, the decision arguably presents a turn away from the WTO's recent attempts to accommodate nontrade interests within its framework. Like other WTO agreements, the TBT recognizes that its members have the right to enact environmental regulations. (12) Yet in US-Tuna II, the Appellate Body did not consider whether the ecolabel was motivated by a discriminatory purpose. If this analysis is broadly applied, WTO members will be unable to apply marketing standards to foreign suppliers that do not already practice the desired production methods; effectively, adherence to the WTO's interpretation of the TBT would limit countries' ability to protect consumers from foreign producers' potentially deceptive labels and encourage purchases from producers who achieve environmental objectives.

This Note examines the value of state-backed eco-labeling schemes, the potential implications of US-Tuna II for the WTO's approach to accommodating nontrade interests, and potential adjustments within the current WTO framework for eco-labels. Part II describes the Appellate Body's reasoning in US-Tuna II. Part III examines the merits and criticism of state-standardized eco-labels from an economic and policy perspective. Part IV considers the implications of US-Tuna II within the context of the WTO's attempts to accommodate nontrade interests.

Ultimately, this Note suggests in Part V that the WTO accommodate members' regulations, including state-mandated eco-labeling schemes, which are not based upon protectionist interests. Rather than waiting for the diplomatic body (13) to reform its agreements, the WTO adjudicatory bodies (14) should abandon the Appellate Body's precedent in US-Tuna II when interpreting the TBT. Part V also suggests that WTO adjudicatory bodies award monetary aid to challengers of legitimate environmental regulations, thereby promoting conservation efforts extraterritorially and reducing trade barriers.

2. US-TUNA IT. A CASE STUDY OF THE WTO'S APPROACH TO ENVIRONMENTAL LEGISLATION UNDER THE TBT

   1. Legislative and Judicial History of the DPCIA

      The DPCIA demonstrates the potential cooperation and conflicts between domestic policymakers, nongovernmental actors, and international trade interests. Rather than considering only domestic requirements for legislative and administrative justification, the legislative and administrative bodies must ensure their actions conform to the TBT. The DPCIA's messy history of legislative enactment, invalidation, redrafting, and administrative interpretation demonstrates that it is likely difficult for all governmental actors to prioritize WTO compliance when they already face a plethora of domestic environmental and trade interests.

      The demand for dolphin-safe tuna emerged from concern about staggering dolphin fatalities resulting from bycatch in the Eastern Tropical Pacific (ETP). (15) In that region, dolphins and yellowfin tuna have a unique ecological association; the two species travel together throughout that expanse, and dolphins' surfacing makes their movement visible above the surface. (16) Since the 1950s, fishermen used this association to their advantage by "setting on" dolphins; fishermen track pods of dolphins in order to locate tuna schools and then use purse seine nets to ensnare the entire school. (17) The dolphins are often caught as bycatch; they can be released manually, but this takes time and effort, and even then is sometimes not successful. During the 1970s, the public became aware of the high dolphin mortality rates, estimated at that time to be in the hundreds of thousands per year. (18)

      The United States' first attempt to alter tuna-fishing methods took the form of an outright ban upon any tuna imports that did not comply with domestic standards; these standards required that dolphin kills associated with tuna catches decrease to "insignificant levels" and regulatory dolphin protection programs. (19) The Marine Mammal Protection Act arguably created the public's demand for dolphin-safe tuna. (20) That legislation was challenged by Mexico under the General Agreement on Tariffs and Trade (GATT). (21) In United States-Restrictions on Imports of Tuna (US-Tuna I), (22) GATT's appellate judicial body found the regulation to be an invalid restriction on interstate trade. (23) The public's response was nothing short of an outcry, and Congress echoed popular concerns regarding GATT's inability to accommodate environmental and health concerns. (24)

      The demand for dolphin-safe tuna increased through the efforts of environmental activist groups, including the Earth Island Institute, an American not-for-profit conservation organization. (25) Earth Island encouraged the U.S. tuna industry to end the controversial practice of using purse seine nets to capture tuna. (26) Within 4 years, the world's three largest tuna producers, all U.S...