Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

UNITED STATES – MEASURES CONCERNING THE IMPORTATION, MARKETING AND SALE OF TUNA AND TUNA PRODUCTS

RECOURSE TO ARTICLE 21.5 OF THE DSU BY MEXICO

(WT/DS381)

First Written Submission of the United Mexican States

8 April 2014

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

TABLE OF CONTENTS

TABLE OF CONTENTS ...... i

CASES CITED IN THIS SUBMISSION ...... v

TABLE OF ACRONYMS USED IN THIS SUBMISSION ...... vii

LIST OF EXHIBITS ...... ix

I. INTRODUCTION ...... 1

A. Background of Proceeding ...... 2

B. “Measure taken to comply” for the Purposes of the Article 21.5 Proceeding...... 3

II. THE AMENDED TUNA MEASURE ...... 5

A. The Dolphin Protection Consumer Information Act ...... 5

1. The Definition and Scope of the Dolphin-Safe Certification ...... 8

a. Certification of “Dolphin-Safe” under the Statute for Tuna Products Made with Tuna from the ETP ...... 8

b. Certification of “Dolphin-Safe” under the Statute for Tuna Products Containing Tuna Caught Outside the ETP...... 12

c. Certification of “Dolphin-Safe” under the Statute for Tuna Products Containing Tuna Caught with Driftnets on the High Seas ...... 12

2. Requirements for Independent Observers ...... 15

3. Requirements for Documentation ...... 15

4. Relation of the DPCIA to the Regulations ...... 15

B. U.S. Code of Federal Regulations, Title 50, Part 216, Subpart H ...... 16

1. Certification of “Dolphin-Safe” ...... 16

2. Separation of Dolphin-Safe from Non-Dolphin-Safe Tuna ...... 17

3. Independent Observers ...... 18

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

a. Observer Requirements for Mexican Large Purse Seine Vessels ...... 18

(1) AIDCP Requirements for Observers ...... 20

(2) Implementation in Mexican Law ...... 22

b. Lack of Observer Requirements for Tuna Products Not Containing ETP Tuna ...... 22

4. Monitoring, Verification, Tracking and Audit Requirements ...... 24

a. Documentation Requirements for U.S. Tuna Products Containing Tuna Sourced from U.S. Vessels Fishing in the ETP ...... 24

b. Documentation Requirements for Tuna Sourced from Mexican Large Purse Seine Vessels ...... 25

(1) Requirements for ETP Tuna Products ...... 25

(a) AIDCP Tracking Requirements ...... 26

(b) Implementation in Mexican Law ...... 30

c. Documentation Requirements for Tuna Products Made from Non-ETP Tuna ...... 32

C. The Hogarth Ruling ...... 32

D. The 2013 Final Rule...... 32

III. BACKGROUND INFORMATION ON THE GLOBAL TUNA INDUSTRY, ALTERNATIVE FISHING METHODS, AND STATUS OF DOLPHIN POPULATIONS IN the ETP ...... 33

A. Fishers Set Nets on Dolphins Outside the ETP, and Other Fishing Methods Kill and Seriously Injure Dolphins ...... 34

1. Overview ...... 35

2. Fishers Intentionally Set Purse Seine Nets on Marine Mammals outside the ETP ...... 38

3. Gillnet Fishing Kills and Injures Dolphins ...... 42

4. Longline Fishing Kills and Injures Dolphins ...... 44

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

5. Trawl Fishing Kills and Injures Dolphins ...... 53

B. Tracking Procedures for Dolphin-Safe Tuna ...... 54

1. Tuna Processing and Tracking by the Mexican Industry ...... 54

2. Tuna Processing Elsewhere ...... 58

a. Brokering of Tuna Breaks the Chain of Custody ...... 58

b. Absence of Tracking Measures Outside the ETP ...... 60

(1) Lack of Requirements for non-ETP Vessels ...... 60

(2) Lack of Requirements for non-ETP Tuna Processors ...... 62

C. Status of Dolphin Populations in the ETP ...... 63

IV. LEGAL ARGUMENT ...... 65

A. The Panel Must Rule on all of Mexico’s Violation Claims ...... 65

B. The Amended Tuna Measure is Inconsistent with Article 2.1 of the TBT Agreement ...... 66

1. Technical Regulation ...... 67

a. The Amended Tuna Measure Applies to an Identifiable Product or Group of Products ...... 67

b. The Amended Tuna Measure Lays Down One or More Characteristics of the Product ...... 68

c. Compliance with the Product Characteristics Required by the Amended Tuna Measure is Mandatory ...... 69

2. Like Products ...... 71

3. Treatment no Less Favourable ...... 71

a. The Amended Tuna Measure Modifies Competitive Opportunities to the Detriment of Imports ...... 72

(1) Design and Structure of the Amended Tuna Measure ...... 72

(2) The Features of the Relevant Market ...... 72

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United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

(3) The Denial of Competitive Opportunities for Mexican Tuna Products ...... 74

b. The Detrimental Impact Reflects Discrimination against Imports ...... 75

(1) The Relevant Regulatory Distinction ...... 75

(2) The Differences in Labelling Conditions and Requirements are Not Legitimate ...... 76

(a) Applicable Law ...... 76

(b) Findings of the Appellate Body in the Original Proceedings ...... 77

4. Conclusions on Mexico’s Article 2.1 Claim ...... 96

C. The Amended Tuna Measure is Inconsistent with Article I:1 of the GATT 1994 ...... 96

1. Like Products ...... 97

2. Advantage, Favour or Privilege on a Product Originating in Other WTO Members ...... 97

3. Accorded Immediately and Unconditionally To the Like Product Originating in the Territories of All Other Members ...... 98

4. Conclusions ...... 98

D. The Amended Tuna Measure is Inconsistent with Article III:4 of the GATT 1994 ...... 99

1. Like Products ...... 99

2. Laws, Regulations and Requirements Affecting Their Internal Sale, Offering for Sale, Purchase, Transportation, Distribution or Use ...... 100

3. Less Favourable Treatment ...... 101

4. Conclusions ...... 102

V. CONCLUSION ...... 102

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

CASES CITED IN THIS SUBMISSION

Short title Full case title Argentina – Hides and Panel Report, Argentina – Measures Affecting the Export of Bovine Hides Leather and the Import of Finished Leather, WT/DS155/R and Corr.1, adopted 16 February 2001, DSR 2001:V, 1779 Australia – Salmon Appellate Body Report, Australia – Measures Affecting Importation of Salmon, WT/DS18/AB/R, adopted 6 November 1998, DSR 1998:VIII, 3327 Border Tax Adjustments Report of the Working Party on Border Tax Adjustments, adopted 2 December 1970, BISD 18S/97 Canada – Autos Appellate Body Report, Canada – Certain Measures Affecting the Automotive Industry, WT/DS139/AB/R, WT/DS142/AB/R, adopted 19 June 2000, DSR 2000:VI, 2985 Canada – Wheat Panel Report, Canada – Measures Relating to Exports of Wheat and Exports and Grain Treatment of Imported Grain, WT/DS276/R, adopted 27 September 2004, Imports upheld by Appellate Body Report, WT/DS276/AB/R, DSR 2004:VI, 2817 China - Auto Parts Panel Reports, China – Measures Affecting Imports of Automobile Parts, WT/DS339/R / WT/DS340/R / WT/DS342/R / and Add.1 and Add.2, adopted 12 January 2009, upheld (WT/DS339/R) and as modified (WT/DS340/R / WT/DS342/R) by Appellate Body Reports WT/DS339/AB/R / WT/DS340/AB/R / WT/DS342/AB/R, DSR 2009:I, 119 - DSR 2009:II, 625 Dominican Republic – Appellate Body Report, Dominican Republic – Measures Affecting the Import and Sale of Importation and Internal Sale of Cigarettes, WT/DS302/AB/R, adopted 19 Cigarettes May 2005, DSR 2005:XV, 7367 EC – Asbestos Appellate Body Report, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, adopted 5 April 2001, DSR 2001:VII, 3243 EC – Bananas III Appellate Body Report, European Communities – Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted 25 September 1997, DSR 1997:II, 591 EC – Sardines Appellate Body Report, European Communities – Trade Description of Sardines, WT/DS231/AB/R, adopted 23 October 2002, DSR 2002:VIII, 3359 EC – Seal Products Panel Report, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products, WT/DS400/R, WT/DS401/R and Add.1, 25 November 2013 EC – Tariff Preferences Appellate Body Report, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R, adopted 20 April 2004, DSR 2004:III, 925 India – Autos Panel Report, India – Measures Affecting the Automotive Sector, WT/DS146/R, WT/DS175/R and Corr.1, adopted 5 April 2002, DSR 2002:V, 1827

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

Italy – Agricultural GATT Panel Report, Italian Discrimination Against Imported Agricultural Machinery Machinery, adopted 23 October 1958, BISD 7S/60 Korea – Various Appellate Body Report, Korea – Measures Affecting Imports of Fresh, Measures on Beef Chilled and Frozen Beef, WT/DS161/AB/R, WT/DS169/AB/R, adopted 10 January 2001, DSR 2001:I, 5 US – COOL Appellate Body Reports, United States – Certain Country of Origin Labelling (COOL) Requirements, WT/DS384/AB/R / WT/DS386/AB/R, adopted 23 July 2012 US – Clove Cigarettes Appellate Body Report, United States – Measures Affecting the Production and Sale of Clove Cigarettes, WT/DS406/AB/R, adopted 24 April 2012 US – FSC (Article 21.5 Appellate Body Report, United States – Tax Treatment for “Foreign Sales – EC) Corporations” – Recourse to Article 21.5 of the DSU by the European Communities, WT/DS108/AB/RW, adopted 29 January 2002, DSR 2002:I, 55 US – Tuna II (Mexico) Appellate Body Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/AB/R, adopted 13 June 2012 US – Tuna II (Mexico) Panel Report, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, WT/DS381/R, adopted 13 June 2012, as modified by Appellate Body Report WT/DS381/AB/R

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

TABLE OF ACRONYMS USED IN THIS SUBMISSION

Acronym Full Name 2013 Final Rule Enhanced Document Requirements to Support Use of the Dolphin Safe Label on Tuna Products; Final Rule 78 Fed. Reg. 40997 (July 9, 2013)

BCI Business confidential information

AIDCP Agreement on the International Dolphin Conservation Program

ATA American Tunaboat Association

C.F.R. Code of Federal Regulations

DMLs Dolphin Mortality Limits

DPCIA Dolphin Protection Consumer Information Act

DSB Dispute Settlement Body

DSU Understanding on Rules and Procedures Governing the Settlement of Disputes

GATT 1994 General Agreement on Tariffs and Trade 1994

EPO Eastern Pacific Ocean

ETP Eastern Tropical Pacific

EEZ Exclusive Economic Zones

FAD Fish Aggregating Device

FAO United Nations Food and Agriculture Organization

IATTC Inter-American Tropical Tuna Commission

ICCAT International Commission for the Conservation of Atlantic Tunas

IDCP International Dolphin Conservation Program

IDCPA International Dolphin Conservation Program Act

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United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

IOTC Indian Ocean Tuna Commission

IRP International Review Panel

ISSF International Seafood Sustainabilty Foundation

MMPA Marine Mammal Protection Act

NAD National Advertising Division

NAFTA North American Free Trade Agreement

NMFS National Marine Fisheries Service

NOAA National Oceanic and Atmospheric Administration

PNG Papa New Guinea

PLTRT Pelagic Longline Take Reduction Team

RFMOs Regional Fishery Management Organizations

SPREP South Pacific Regional Environment Programme

SPTC South Pacific Tuna Corporation

TBT Agreement Agreement on Technical Barriers to Trade

TTF Tuna Tracking Form

U.S.C. United States Code

WCPFC Western and Central Pacific Fisheries Commission

WCPO Western and Central Pacific Ocean

WTO World Trade Organization

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United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

LIST OF EXHIBITS

Number Title

U.S. Department of State, Dolphin Conservation Agreement Wins Award at MEX-1 United Nations Food and Agriculture Organization, Media Note, November 22, 2005 MEX-2 Letter from Vice President Al Gore to Representative Gilchrest (June 3, 1996) Report On The International Dolphin Conservation Program, Document MOP- MEX-3 28-05 (October 18, 2013) International Dolphin Conservation Program, Scientific Advisory Board, MEX-4 “Updated Estimates of Nmin and Stock Mortality Limits”, 7th Meeting, 30 October 2009, Document SAB-07-05 MEX-5 AIDCP, 22nd Meeting of the Parties, Minutes (30 Oct. 2009) Read, Drinker, & Northridge, “Bycatch of Marine Mammals in U.S. and Global MEX-6 Fisheries,” in 20 Conservation Biology (2006) MEX-7 2013 Final Rule, 78 Fed. Reg. 40997 (July 9, 2013) MEX-8 16 USC § 1385 MEX-9 16 U.S.C. § 1414a MEX-10 64 Fed. Reg. 24590 (May 7, 1999) (“Initial Finding”) MEX-11 Brower v. Daley, 93 F. Supp.2d 1071, 1087 (N.D. Cal. 2000) MEX-12 Brower v. Evans, 257 F.3d 1058 (9th Cir. 2001) MEX-13 68 Fed. Reg. 2010 (January 15, 2003) (“Final Finding”) MEX-14 Earth Island Inst. v. Evans, 2004 U.S. Dist. LEXIS 15729 (N.D. Cal. 2004) MEX-15 Earth Island Inst. v. Hogarth, 484 F.3d 1123 (9th Cir. 2007) MEX-16 Earth Island Inst. v. Hogarth, 494 F.3d 757 (9th Cir. 2007) Letter from Penelope D. Dalton, Assistant Administrator for Fisheries, to Mark MEX-17 Robertson (Sept. 14, 2000) Young and Iudicello, “Worldwide Bycatch Of Cetaceans,” U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Marine MEX-18 Fisheries Service (NOAA Technical Memorandum NMFS-OPR-36) July 2007 (“Bycatch Report”) National Oceanic and Atmospheric Administration, “List of Fisheries for 2013”, MEX-19 78 Fed. Reg. 53336 (August 29, 2013) MEX-20 50 CFR § Part 216 2012 Report Of The Secretary Of Commerce to the Congress of the United States MEX-21 Concerning U.S. Actions Taken On Foreign Large-Scale High Seas Driftnet Fishing MEX-22 NOAA Form 370

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

MEX-23 5 U.S.C. § 706(2)(C) MEX-24 Bowen v. Georgetown Univ. Hosps., 488 U.S. 204, 208 (1988) Letter from Bumble Bee Foods LLC, Chicken of the Sea International and MEX-25 Starkist Co. to National Marine Fisheries Service (May 1, 2013) MEX-26 65 Fed. Reg. 26585 (May 8, 2000) MEX-27 75 Fed. Reg. 34106 (June 16, 2010) NOAA Fisheries, “Tuna/Dolphin Embargo Status Update”, available at MEX-28 http://www.nmfs.noaa.gov/pr/dolphinsafe/embargo2.htm MEX-29 Inter-American Tropical Tuna Commission, Quarterly Report (April-June 2013) Agreement on the International Dolphin Conservation Program, as amended Oct. MEX-30 2009 Norma Oficial Mexicana de Emergencia NOM-EM-002-PESC-1999, Pesca MEX-31 responsable de túnidos. Especificaciones para la protección de delfines. Requisitos para la comercialización de túnidos en territorio nacional. Norma Oficial Mexicana NOM-001-SAG/PESC-2013. Pesca responsable de MEX-32 túnidos. Especificaciones para las operaciones de pesca con red de cerco. MEX-33 Letter of ATA to National Marine Fisheries Service (April 29, 2013) Letter of Davis Wright Tremaine LLP to National Marine Fisheries Service MEX-34 (April 30, 2013) Department of Commerce, “United States Tuna Cannery Receipts January - MEX-35 December 2013 and Comparison” AIDCP, “Resolution To Adopt The Modified System For Tracking And MEX-36 Verification Of Tuna” (20 June 2001) Statement of Mario G. Aguilar, Commissioner of Fisheries and Aquaculture MEX-37 (CONAPESCA) MEX-38 Declaration of P. Donley, Civ. No. CO3-0007 (March 7, 2003) MEX-39 Kobe II Bycatch Workshop Background Paper U.S. National Marine Fisheries Service, An Annotated Bibliography Of MEX-40 Available Literature Regarding Cetacean Interactions With Tuna Purse-Seine Fisheries Outside Of The Eastern Tropical Pacific Oceans (November 1996) Secretariat of the Pacific Community, “The Western And Central Pacific Tuna MEX-41 Fishery: 2006 Overview And Status Of Stocks,” 2008 Secretariat of the Pacific Community, Status of Tuna Stocks and Management MEX-42 Challenges in the WCPO Proposed Conservation And Management Measure: Mitigating Fishing Impacts MEX-43 on Cetaceans, Paper Prepared by Australia, WCPFC7-20 I O-DP/17 (15 November 2010) MEX-44 New York Times, “A Small Victory for Whale Sharks” (Dec. 6, 2012)

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

Australia and Maldives, “On The Conservation Of Whale Sharks (Rhincodon MEX-45 Typus)”, IOTC–2013–S17–PropD[E] (April 5, 2013) MEX-46 In the Matter of Matthew James Freitas, et al. (“Freitas case”) MEX-47 Congressman E Faleomavaega, press release (March 1, 2011) MEX-48 FAO, “Gillnets and Entangling Nets” MEX-49 FAO, “Tuna Driftnet Fishing” K.S.S.M. Yousuf, et al., “Observations On Incidental Catch Of Cetaceans In MEX-50 Three Landing Centres Along The Indian Coast,” Marine Biodiversity Records, Vol. 2 (2009) M. Moazzam, “Status report on bycatch of tuna gillnet operations in Pakistan,” MEX-51 IOTC 8th Session of the Working Party on Ecoystems and Bycatch (2012) M. Gomercic, et al., “Bottlenose dolphin (Tursiops truncatus) depredation MEX-52 resulting in larynx strangulation with gill-net parts,” Marine Mammal Science, 25(2): 392–401 (April 2009) MEX-53 FAO, Industrial Tuna Longlining MEX-54 OECD Glossary of Statistical Terms D. Hamer, S. Childerhous & N. Gales, “Odontocete bycatch and depredation in longline fisheries: A review of available literature and of potential solutions,” MEX-55 Marine Mammal Science, 28(4): E345–E374 (October 2012) (“Odontocete Bycatch”) MEX-56 FAO Species Identification Guide, Marine Mammals of the World M. Tetley, J. Kiszka & E. Hoyt, “Defining hotspots for toothed cetaceans MEX-57 involved in pelagic longline fishery depredation in the western Indian Ocean: a preliminary approach”, IOTC-2012-WPEB08-40 (28 Aug. 2012) MEX-58 NOAA Fisheries Office of Protected Resources, “False Killer Whale” Hui Malama I Korol et al. v. National Marine Fisheries Service et al., Complaint MEX-59 for Declaratory Judgment and Injunctive Relief, Civil No. CV09 00112 (March 17, 2009) NOAA, False Killer Whale, Take Reduction Team and Plan, “Frequently Asked MEX-60 Questions” NOAA Fisheries, Office of Protected Resources, “Pelagic Longline Take MEX-61 Reduction Team” U.S. National Oceanic and Atmospheric Administration (NOAA), “Pelagic MEX-62 Longline Take Reduction Team Key Outcomes Memorandum”, August 21-23, 2012 (“Key Outcomes Memorandum”) MEX-63 NOAA, “Pelagic Observer Program” MEX-64 Turtle Restoration Project, “Pillaging the Pacific” (November 16, 2004)

United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

Eds. M. Donoghue, R. Reeves & G. Stone, “Report Of The Workshop On MEX-65 Interactions Between Cetaceans And Longline Fisheries,” New England Aquarium Aquatic Forum Series Report 03-1 (May 2003) R. Baird & A. Gogone, “False Killer Whale Dorsal Fin Disfigurements as a MEX-66 Possible Indicator of Long-Line Fishery Interactions in Hawaiian Waters,” Pacific Science (October 2005) MEX-67 Earthjustice, “False Killer Whales: Wounded by Longline Fishing” Respuesta a los comentarios y modificaciones efectuadas al Proyecto de Modificación a la Norma Oficial Mexicana NOM-023-PESC-1996, Que regula el MEX-68 aprovechamiento de las especies de túnidos con embarcaciones palangreras en aguas de jurisdicción federal del Golfo de México y Mar Caribe, publicado el 15 de octubre de 2013. MEX-69 FOA, “Trawl Nets” U.K. House of Commons, Environment, Food and Rural Affairs Committee, MEX-70 “Caught in the net: by-catch of dolphins and porpoises off the UK coast”, printed January 21, 2004 A. Ross and S. Isaac, “The Net Effect? A Review of Cetacean Bycatch in pelagic MEX-71 trawls and other fisheries in the north-east Atlantic” (Whale and Dolphin Conservation Society) (2004) L. Nunny, The Price of Fish: A review of cetacean bycatch in fisheries in the MEX-72 north-east Atlantic (Whale and Dolphin Conservation Society) (2011) MEX-73 Statement of Mexican industry A. Hamilton et. al., Market and Industry Dynamics in the Global Tuna Supply MEX-74 Chain, FFA, June 2011 M. McCoy, A Survey of Tuna Transshipment in Pacific Island Countries, Gillet, MEX-75 Preston and Associates, Inc., June 2012 MEX-76 16 U.S.C. § 1387 Department of Commerce, “Evaluating Bycatch”, NOAA Technical MEX-77 Memorandum NMFS-F/SPO-66 (October 2004) MEX-78 Wall Street Journal, “Un-American Tuna” (March 16, 2014) Advertising Self-Regulatory Council, “NAD Refers Advertising Claims from MEX-79 Chicken of the Sea to Regulatory Agencies for Further Review” MEX-80 Council of Better Business Bureaus, National Advertising Division MEX-81 M. Maunder, “Evaluating Recent Trends in EPO Dolphin Stocks” V. Restrepo, Chair’s Report of the ISSF Tuna-Dolphin Workshop (October 25- MEX-82 26, 2012) MEX-83 Confidential statement BCI Programa Nacional de Aprovechamiento del Atún y Protección de Delfines, MEX-84 Statement of Chief Researcher

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MEX-85 NMFS import statistics MEX-86 Globefish Highlights: A quarterly update on world seafood markets, issue 2/2011 MEX-87 National Marine Fisheries Service, “Processed Fishery Products” MEX-88 16 U.S.C. §1371 MEX-89-A Statement on behalf of Mexican producer BCI MEX-89-B Statement on behalf of Mexican producer BCI MEX-89-C Statement on behalf of Mexican producer BCI

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United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

I. INTRODUCTION 1. This proceeding, under Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), concerns a disagreement as to the consistency with the WTO covered agreements of measures taken to comply with the recommendations and rulings of the Dispute Settlement Body (DSB) in the dispute United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (Tuna dispute). 2. In the original proceedings, Mexico demonstrated that the multilateral Agreement on International Dolphin Conservation Program (AIDCP) has been a tremendous success, reducing dolphin mortality in the Eastern Tropical Pacific (ETP) to a statistically insignificant level while allowing the use of a fishing method that promotes sustainability of tuna stocks and limiting harm to other species of sea life.1 Mexico also showed that the alternative method of fishing on fish aggregating devices (FADs) promoted by the United States in the dispute settlement proceeding is extremely harmful to tuna stocks because that method captures juvenile tuna. FAD fishing also results in highly destructive bycatch of billfish, turtles, sharks, and other species.2 3. The effectiveness of the AIDCP continues. Mortalities of dolphins in the ETP remain at minimal levels – well under the thresholds the United States applies to marine mammal mortalities in its own fisheries. Moreover, as discussed in detail below, the latest evidence indicates that the two “depleted” dolphin stocks on which the United States originally based its determination not to change the definition of dolphin-safe to conform to that of the AIDCP are believed to be growing. By its determination not to change the definition, the United States disqualifies AIDCP-compliant fishing methods from being used to catch dolphin-safe tuna. Notwithstanding material changes in the evidence concerning the status of dolphin populations in the ETP since the determination was made, the U.S. provisions at issue do not permit a re- evaluation of that determination. 4. Meanwhile, as will be discussed in more detail below, scientists have estimated that globally, hundreds of thousands of cetaceans die from entanglement in fishing gear each year, including in U.S. fisheries.3 This reflects the fact that outside of the ETP, there are virtually no protections for dolphins. Yet Mexican tuna products continue to be denied the dolphin-safe label, while tuna products from tuna fisheries other than the ETP can be easily labeled dolphin- safe by importing them with an unverified copy of a simple statement from a ship’s captain claiming that the tuna is dolphin-safe, with no tracking requirements to verify the source of the tuna and its dolphin-safe status, and without accounting for the substantial adverse impact that the fishing methods used to catch the tuna have on dolphins. The balance of competitive

1 See, e.g., Panel Report, US – Tuna II (Mexico), paras. 4.10 – 4.12, 7.609-7.612. See U.S. Department of State, Dolphin Conservation Agreement Wins Award at United Nations Food and Agriculture Organization, Media Note (November 22, 2005) (Exhibit MEX-1) (Exhibit MEX-1 in original proceedings). 2 See, e.g., Panel Report, US – Tuna II (Mexico), para. 4.10; Letter from Vice President Al Gore to Representative Gilchrest (June 3, 1996) (Exhibit MEX-2) (Exhibit MEX-62 in original proceedings). 3 See Read, Drinker, & Northridge, “Bycatch of Marine Mammals in U.S. and Global Fisheries”, 20 Conservation Biology (2006) 163 (Exhibit MEX-6) (Exhibit MEX-39 in original proceedings).

1 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

opportunities between Mexican tuna products and like products from the United States and other countries is being upset on the premise that these other products are dolphin-safe when, in fact, this status cannot be proven. For tuna caught outside the ETP, there are no controls to ensure that a dolphin-safe designation is accurate. As a consequence, not only do the measures taken by the United States to comply with the recommendations and rulings of the DSB lack even- handedness, they provide misleading information to U.S. consumers about the dolphin-safe status of the tuna products that they consume. 5. On 13 June 2012, the DSB adopted the Appellate Body Report on United States - Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (WT/DS381/AB/R) and the Panel Report (WT/DS381/R), as modified by the Appellate Body Report. The DSB ruled that the U.S. “dolphin-safe” labelling provisions were inconsistent with Article 2.1 of the Agreement on Technical Barriers to Trade (TBT Agreement) and recommended that the United States bring its measure into conformity with its obligations under that Agreement. 6. Key aspects of the Appellate Body’s reasoning in determining that the US dolphin-safe labeling provisions were not consistent with the non-discrimination principle embodied in Article 2.1 of the TBT Agreement are the findings that “US ‘dolphin-safe’ labelling provisions modify the conditions of competition in the US market to the detriment of Mexican tuna products and are not even-handed in the way in which they address the risks to dolphins arising from different fishing techniques in different areas of the ocean.”4 7. On 9 July 2013, the United States published in its Federal Register a Final Rule entitled “Enhanced Document Requirements to Support Use of the Dolphin Safe Label on Tuna Products” (2013 Final Rule). In Mexico’s view, the action taken by the United States does not bring its measure into compliance with the WTO Agreements, and also perpetuates a tragic situation for dolphins worldwide and the global marine environment. A. Background of Proceeding 8. At its meeting on 13 June 2012, the DSB adopted the Appellate Body Report and the Panel Report as modified by the Appellate Body Report, pertaining to the Tuna dispute. The Panel and Appellate Body found that the U.S. “dolphin-safe” labelling provisions (Tuna Measure) are inconsistent with Article 2.1 of the TBT Agreement because they provide “less favourable treatment” to Mexican tuna products than that accorded to tuna products of the United States and tuna products originating in other countries.5 The DSB recommended that the United States bring the Tuna Measure into conformity with the United States’ obligations under that Agreement.6 9. In its statement at the meeting of the DSB held on 25 June 2012, the United States announced its intention to implement the DSB’s recommendations and rulings in this dispute and stated that it would need a reasonable period of time to do so.7 On 2 August 2012, Mexico and

4 See Appellate Body Report, US – Tuna II (Mexico), para 298. 5 Appellate Body Report, US – Tuna II (Mexico), paras. 299 and 407(b). 6 Appellate Body Report, US – Tuna II (Mexico), para. 408. 7 Minutes of DSB Meeting held on 25 June 2012, WT/DSB/M/318, 27 August 2012, para. 51.

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the United States informed the DSB that additional time was required to discuss a mutually agreed reasonable period of time (RPT) for the United States to implement the recommendations and rulings of the DSB.8 On 17 September 2012, Mexico and the United States informed the DSB that they had agreed that the RPT was 13 months from 13 June 2012, the date of adoption of the DBS’s recommendations and rulings. The RPT expired on 13 July 2013.9 10. On 9 July 2013, the United States published in its Federal Register a Final Rule entitled “Enhanced Document Requirements to Support Use of the Dolphin Safe Label on Tuna Products” (2013 Final Rule).10 The 2013 Final Rule made certain changes to the prior regulations at Sections 216.91 and 216.93. Although the “effective date” of the Final Rule was stated to be July 13, 2013 (the deadline for compliance with the RPT)11, the notice accompanying the publication of the Final Rule also stated that the United States would not require compliance until 1 January 2014.12 Moreover, notwithstanding that the “Dolphin Protection Consumer Information Act” (DPCIA), codified in Title 16, Section 1385 of the United States Code, was part of the measure found by the Panel and the Appellate Body to be inconsistent with Article 2.1 of the TBT Agreement, the United States did not modify the statute. It only modified the implementing regulations. B. “Measure taken to comply” for the Purposes of the Article 21.5 Proceeding 11. Mexico considers that, in this dispute, the “measure taken to comply with the recommendations and rulings” of the DSB, to which Mexico refers collectively as the “Amended Tuna Measure”, comprises: a) Section 1385 (“Dolphin Protection Consumer Information Act”), as contained in Subchapter II (“Conservation and Protection of Marine Mammals”) of Chapter 31 (“Marine Mammal Protection”), in Title 16 of the U.S. Code; b) U.S. Code of Federal Regulations, Title 50, Part 216, Subpart H (“Dolphin Safe Tuna Labeling”), as amended by the 2013 Final Rule; c) The court ruling in Earth Island Institute v. Hogarth, 494 F.3d 757 (9th Cir. 2007); and

8 Communication from Mexico and the United States concerning Article 21.3(c) of the DSU, WT/DS381/16, 6 August 2012. 9 Agreement under Article 21.3(b) of the DSU, WT/DS381/17, 19 September 2012. 10 2013 Final Rule, 78 Fed. Reg. 40997 (July 9, 2013) (Exhibit MEX-7). 11 As Mexico will describe in this submission, the United States unilaterally granted itself a further extension to the RPT by expressly delaying the enforcement of the measure it has introduced to bring itself into compliance. This unilateral extension is not permitted by the relevant provisions of the WTO and has significant systemic implications for the implementation of rulings in accordance with decisions of the DSU. Such a unilateral extension should therefore be strongly discouraged. 12 2013 Final Rule, 78 Fed. Reg. 40997, 40998 (July 9, 2013) (Exhibit MEX-7).

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d) Any implementing guidance, directives, policy announcements or any other document issued in relation to instruments (a) through (c) above, including any modifications or amendments in relation to those instruments. 12. The Amended Tuna Measure, like the original Tuna Measure, imposes discriminatory requirements for access to the United States’ “dolphin-safe” label in violation of several key provisions of the WTO Agreements. As Mexico will further elaborate, the Amended Tuna Measure constitutes a means of arbitrary or unjustifiable discrimination against Mexican tuna products and is a disguised restriction on international trade. 13. The Amended Tuna Measure is inconsistent with Article 2.1 of the TBT Agreement because it continues to accord to Mexican tuna products treatment less favourable than that which is accorded to like tuna products of the United States and to like tuna products originating in other countries, by modifying the conditions of competition in the U.S. market to the detriment of Mexican tuna products. The detrimental impact of the measure continues to reflect discrimination against imported products because it does not stem exclusively from a legitimate regulatory distinction. The facts and circumstances related to the design and application of the relevant regulatory distinction – i.e., the differences in labeling conditions and requirements – demonstrate a lack of even-handedness because: (i) Mexico's AIDCP-compliant fishing method is disqualified as a method for catching dolphin-safe tuna when other fishing methods are qualified for catching dolphin-safe tuna even though they have adverse effects on dolphins that are equal to or greater than Mexico’s method; (ii) the disqualification of AIDCP-compliant fishing is permanent and cannot be reviewed in the light of positive changes in dolphin stocks in the ETP; (iii) the record-keeping and verification requirements for tuna caught inside the ETP are comprehensive, reliable and accurate, whereas there are no comparable requirements for tuna caught outside the ETP, which makes the information on the dolphin-safe status of that tuna unreliable and inaccurate; and (iv) in the ETP, the initial designation of the dolphin-safe status of tuna at the time of capture is reliable and accurate because it is done by independent, specially- trained, AIDCP-approved observers whereas, outside of the ETP, the initial designation is unreliable and inaccurate because it is done by the captain of the vessel, who is not qualified to make the designation, may not be directly involved in the setting of nets and capturing of fish, and has financial and other incentives not to declare non-dolphin-safe sets. 14. The Amended Tuna Measure is inconsistent with Article I:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994) because it continues to confer on tuna products originating in other countries an advantage in the form of access to the dolphin-safe label which is not accorded immediately and unconditionally to like tuna products originating in Mexico. 15. The Amended Tuna Measure is inconsistent with Article III:4 of the GATT 1994 because it continues to accord to Mexican tuna products treatment less favourable than that accorded to like tuna products of U.S. origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. 16. As explained below, in section IV.A of this submission, it is necessary, in order to resolve this dispute, for the Panel to rule on all of Mexico’s claims under Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994.

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II. THE AMENDED TUNA MEASURE 17. In the original proceeding, the Panel reasoned that the legal instruments identified by Mexico in its panel request “set out the terms of the U.S. ‘dolphin-safe’ labelling scheme” and considered it appropriate therefore to treat them as a single measure for purpose of its analysis of Mexico’s claims and its findings.13 The DPCIA and the Hogarth ruling maintain a close legal and substantive link with the 2013 Final Rule and remain integral parts of the Amended Tuna Measure. 18. As discussed in more detail below, the Amended Tuna Measure entailed changes only to the implementing regulations, and not to either the DPCIA or the Hogarth ruling. 19. Key aspects of the original Tuna Measure were maintained in the Amended Tuna Measure, particularly that tuna caught by setting on dolphins is not eligible for a dolphin-safe label. The Appellate Body described the measures at issue, which continue to be applicable: Taken together, the DPCIA, the implementing regulations, and the Hogarth ruling set out the requirements for when tuna products sold in the United States may be labelled as “dolphin-safe”. More specifically, they condition eligibility for a “dolphin-safe” label upon certain documentary evidence that varies depending on the area where the tuna contained in the tuna product is harvested and the type of vessel and fishing method by which it is harvested. In particular, tuna caught by "setting on" dolphins is currently not eligible for a “dolphin-safe” label in the United States, regardless of whether this fishing method is used inside or outside the Eastern Tropical Pacific Ocean (the "ETP"). The DPCIA and the implementing regulations also prohibit any reference to dolphins, porpoises, or marine mammals on the label of a tuna product if the tuna contained in the product does not comply with the labelling conditions spelled out in the DPCIA….14 A. The Dolphin Protection Consumer Information Act 20. In the original proceeding, the Panel reviewed the most pertinent aspects of the DPCIA. Those provisions remain unchanged and are described below. 21. Subsection (d) of Section 1385 states: (d) LABELING STANDARD (1) It is a violation of section 5 of the Federal Trade Commission Act (15 U.S.C. 45) for any producer, importer, exporter, distributor, or seller of any tuna product that is exported from or offered for sale in the United States to include on the label of that product the term “dolphin safe” or any other term or symbol that falsely claims or suggests that the tuna

13 Appellate Body Report, US – Tuna II (Mexico), para. 2 (referring to Panel Report, US – Tuna II (Mexico), para. 7.24). 14 Appellate Body Report, US – Tuna II (Mexico), para. 172.

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contained in the product were harvested using a method of fishing that is not harmful to dolphins if the product contains tuna harvested-- (A) on the high seas by a vessel engaged in driftnet fishing; (B) outside the eastern tropical Pacific Ocean by a vessel using purse seine nets– (i) in a fishery in which the Secretary has determined that a regular and significant association occurs between dolphins and tuna (similar to the association between dolphins and tuna in the eastern tropical Pacific Ocean), unless such product is accompanied by a written statement, executed by the captain of the vessel and an observer participating in a national or international program acceptable to the Secretary, certifying that no purse seine net was intentionally deployed on or used to encircle dolphins during the particular voyage on which the tuna were caught and no dolphins were killed or seriously injured in the sets in which the tuna were caught; or (ii) in any other fishery (other than a fishery described in subparagraph (D)) unless the product is accompanied by a written statement executed by the captain of the vessel certifying that no purse seine net was intentionally deployed on or used to encircle dolphins during the particular voyage on which the tuna was harvested; (C) in the eastern tropical Pacific Ocean by a vessel using a purse seine net unless the tuna meet the requirements for being considered dolphin safe under paragraph (2); or (D) by a vessel in a fishery other than one described in subparagraph (A), (B), or (C) that is identified by the Secretary as having a regular and significant mortality or serious injury of dolphins, unless such product is accompanied by a written statement executed by the captain of the vessel and an observer participating in a national or international program acceptable to the Secretary that no dolphins were killed or seriously injured in the sets or other gear deployments in which the tuna were caught, provided that the Secretary determines that such an observer statement is necessary. (2) For purposes of paragraph (1)(C), a tuna product that contains tuna harvested in the eastern tropical Pacific Ocean by a vessel using purse seine nets is dolphin safe if— (A) the vessel is of a type and size that the Secretary has determined, consistent with the International Dolphin Conservation Program, is not capable of deploying its purse seine nets on or to encircle dolphins; or

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(B) (i) the product is accompanied by a written statement executed by the captain providing the certification required under subsection (h); (ii) the product is accompanied by a written statement executed by- (I) the Secretary or the Secretary's designee; (II) a representative of the Inter-American Tropical Tuna Commission; or (III) an authorized representative of a participating nation whose national program meets the requirements of the International Dolphin Conservation Program, which states that there was an observer approved by the International Dolphin Conservation Program on board the vessel during the entire trip and that such observer provided the certification required under subsection (h); and (iii) the statements referred to in clauses (i) and (ii) are endorsed in writing by each exporter, importer, and processor of the product; and (C) the written statements and endorsements referred to in subparagraph (B) comply with regulations promulgated by the Secretary which provide for the verification of tuna products as dolphin safe.15 22. In the original proceeding, the Panel summarized the various criteria and categories as follows: 2.7 The DPCIA provisions refer to four criteria to establish five basic categories of circumstances in which tuna may be caught. These criteria are: location (inside or outside the eastern tropical Pacific Ocean or ETP); fishing gear (with or without the use of purse seine nets); type of interaction between tuna and dolphins schools (there is or there is no regular or significant association between tuna and dolphins schools) and the level of dolphin mortalities or injuries (there is or there is no regular and significant mortality or serious injury). The five categories that result from the combined application of these criteria are described in subparagraphs (A) to (D) of subsection 1385(d)(1) of the DPCIA provisions. 2.8 These subparagraphs refer to tuna caught: A) On the high seas by a vessel engaged in driftnet fishing;

15 16 U.S.C. § 1385(d) (Exhibit MEX-8).

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B) Outside the ETP by a vessel using purse seine nets: (i) in a fishery in which the US Secretary of Commerce has determined that there is a regular and significant tuna- dolphin association similar to the association between dolphins and tuna in the ETP; (ii) in any other fishery (other than a fishery described in subparagraph (D)). C) In the ETP by a vessel using purse seine nets; and D) In a fishery other than the ones described in the previous categories that is identified by the US Secretary of Commerce as having a regular and significant mortality or serious injury of dolphins.16 (emphasis original) 23. The three major categories of requirements of the DPCIA are (i) the definition/scope of “dolphin-safe,” (ii) the obligation to have independent observers ensuring compliance, and (iii) specification of the documentation needed to support the certification. 1. The Definition and Scope of the Dolphin-Safe Certification a. Certification of “Dolphin-Safe” under the Statute for Tuna Products Made with Tuna from the ETP 24. In accordance with subsection (d)(1)(C) of the statute, as quoted above, a tuna product containing tuna caught inside the ETP can be labeled as dolphin-safe only if the product is supported by:  a statement by the vessel’s captain providing certification under subsection (h), i.e., that no tuna were caught on the trip in which such tuna were harvested using a purse-seine net intentionally deployed on or to encircle dolphins, and that no dolphins were killed or seriously injured during the sets in which the tuna were caught;  a statement by the onboard, independent and AIDCP-approved observer, also providing certification under subsection (h);  a statement by the Secretary of Commerce, a Secretary’s designee, a representative of the Inter-American Tropical Tuna Commission (IATTC), or a representative of a nation whose national program meets the requirements of the AIDCP, stating that an AIDCP-approved observer was onboard during the entire trip. 25. The statute contemplated the possibility that the U.S. definition of “dolphin-safe tuna” could be made consistent with the definition in the AIDCP – namely, that no dolphins were killed or seriously injured during the set in which the tuna was caught. In other words, the

16 Panel Report, US – Tuna II (Mexico), paras. 2.7-2.8.

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requirement that no dolphin sets were made during the vessel’s voyage would be eliminated, based on the success of the AIDCP in protecting dolphins. 26. As reflected in subsections (g) and (h) of Section 1385,17 this potential change in the dolphin-safe labelling standard for the ETP was made contingent on the outcome of studies of dolphin populations in the ETP. As summarized by the Panel and reflecting the interpretation of the law in the Hogarth case: Subparagraph (h)(2) of the DPCIA provisions conditions the applicability of subparagraph (h)(1) to the existence of a finding by the US Secretary of Commerce that the intentional deployment on or encirclement of dolphins with purse seine nets is not having a significant adverse impact on any depleted dolphin stock in the ETP. Subparagraph (g) required the Secretary of Commerce to conduct this task in two stages resulting in an initial and a final finding on the impact of setting on dolphins in the ETP.18 (emphasis original) 27. The Secretary’s study mandated in the legislation was to consist of two different projects: (i) population abundance surveys of depleted dolphin stocks under 16 U.S.C. § 1414a(2), and (ii) stress studies under 16 U.S.C. § 1414a(3).19 The stress studies were to include: a review of relevant stress-related research and a three-year series of necropsy samples from dolphins obtained by commercial vessels; a one-year review of relevant historical demographic and biological data related to dolphins and dolphin stocks in the ETP; and an experiment involving the repeated chasing and capturing of dolphins by means of intentional encirclement. 28. A finding that there was no evidence of significant adverse impact  if allowed to take effect  would have made Mexican tuna and tuna products harvested by setting on dolphins in the ETP in accordance with AIDCP requirements eligible for the “dolphin-safe” label in the U.S. marketplace. 29. In May 1999, the Department of Commerce published its initial finding pursuant to the statute.20 In the Initial Finding, the Department of Commerce determined that there was insufficient evidence to conclude that intentional encirclement of dolphins with purse-seine nets was having a significant adverse effect on what the United States labeled as “depleted” dolphin stocks in the ETP. However, the underlying report asserted that dolphin populations had not recovered and stated that it remained possible that the fishing method was the reason. 30. Certain non-governmental organizations (NGOs) challenged the Initial Finding in the District Court for the Northern District of California, with the U.S. Government defending the actions of the Department of Commerce. The District Court granted the plaintiffs’ motion for summary judgment, holding that the Department of Commerce abused its discretion when it

17 16 U.S.C. § 1385 (Exhibit MEX-8). 18 Panel Report, US – Tuna II (Mexico), para. 2.16. 19 16 U.S.C. § 1414a (Exhibit MEX-9) (Exhibit MEX-25 in original proceedings). 20 64 Fed. Reg. 24590 (May 7, 1999) (“Initial Finding”) (Exhibit MEX-10) (Exhibit MEX-26 in original proceedings).

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triggered a change in the dolphin-safe label standard on the ground that it lacked sufficient evidence of no significant adverse impacts.21 31. The Court of Appeals for the Ninth Circuit affirmed the lower court’s decision, holding that the agency should not have made what the Court characterized as a default finding of no adverse impact in the absence of conclusive scientific data.22 32. The Department of Commerce then did additional studies and, in a Final Finding issued in December 2002, reached the same conclusion that it had previously reached in the Initial Finding.23 33. The district court held that the Final Finding was unlawful on the basis of its view that the Department of Commerce had not fully complied with the requirements for the scientific studies.24 The Ninth Circuit again affirmed the district court in July 2007. 34. The Ninth Circuit itself summarized the effect of its ruling as follows: We, therefore, instruct the district court to limit its mandate to one that directs the Secretary to vacate the agency’s Final Finding of no significant adverse impact. This means as a practical matter that pursuant to the current statute, there will be no change in tuna labeling standards absent new Congressional directive. The label of “dolphin-safe” will continue to signify that the tuna was not harvested with purse-seine nets, and that no dolphins were killed or seriously injured when the tuna were caught.25 35. The court subsequently revised its opinion so that the last sentence above was changed to say: “the label of ‘dolphin safe’ will continue to signify that the tuna was harvested in compliance with the requirements of 16 U.S.C. § 1385.”26 36. After the district court’s initial decision, the Assistant Administrator For Fisheries of the Department of Commerce sent a letter to a representative of the Mexican industry that stated, among other things, as follows: The Secretary of Commerce and I are both very disappointed with the ruling because it halted implementation of the new U.S. labeling standard, developed as a part of the Panama Declaration to protect dolphins in the

21 Brower v. Daley, 93 F. Supp.2d 1071, 1087 (N.D. Cal. 2000) (Exhibit MEX-11) (Exhibit MEX-27 in original proceedings). 22 Brower v. Evans, 257 F.3d 1058 (9th Cir. 2001) (Exhibit MEX-12) (Exhibit MEX-28 in original proceedings). 23 68 Fed. Reg. 2010 (January 15, 2003) (“Final Finding”) (Exhibit MEX-13) (Exhibit MEX-80 in original proceedings). 24 Earth Island Inst. v. Evans, 2004 U.S. Dist. LEXIS 15729 (N.D. Cal. 2004) (Exhibit MEX-14) (Exhibit MEX-29 in original proceedings). 25 Earth Island Inst. v. Hogarth, 484 F.3d 1123 (9th Cir. 2007) (Exhibit MEX-15) (Exhibit MEX-30 in original proceedings). 26 Earth Island Inst. v. Hogarth, 494 F.3d 757 (9th Cir. 2007) (Exhibit MEX-16) (Exhibit MEX-31 in original proceedings).

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ETP. As you know, much hard work went into the development of the Panama Declaration to protect dolphins in the ETP. As you know, much hard work went into the development of the Agreement on the International Dolphin Conservation Program and the new U.S. labeling standard, and the United States firmly believes that binding, international agreements are key to the protection of dolphins and the long-term conservation of marine resources in the ETP. On May 18, 2000, the U.S. Department of Justice (DOJ) filed an appeal in the Brower v. Daley case, and I assure you that NMFS [National Marine Fisheries Service] is working closely with the DOJ to reach a satisfactory decision.... However, pending the decision on the appeal, yellowfin tuna harvested in the ETP by large purse seine vessels and imported into the United States will be considered “dolphin safe” only if no intentional setting on dolphins occurred during the trip ....”27 37. After the Ninth Circuit’s ruling, however, the U.S. Government declined to seek review by the Supreme Court, and accordingly the Ninth Circuit’s decision became final and binding. 38. Because the U.S. courts rejected the determination of the Secretary of Commerce, the certification standard in subsection (h)(2) continues to apply to all vessels that fish for tuna inside the ETP, including the Mexican fleet. The captain’s certification under this provision must state that “no tuna were caught on the trip in which such tuna were harvested using a purse- seine net intentionally deployed on or to encircle dolphins, and that no dolphins were killed or seriously injured during the sets in which the tuna were caught”. 39. As the Panel summarized: [U]nder the DPCIA provisions that are currently applicable, tuna harvested in the ETP by a large vessel using purse-seine nets may be labelled dolphin-safe if the captain and an observer approved by the IDCP certify that no dolphins were killed or seriously injured during the sets in which the tuna were caught and that no purse seine net was intentionally deployed on or used to encircle dolphins during the same fishing trip. This certification must be accompanied by a written statement executed by the Secretary of Commerce (or designee), a representative of the Inter- American Tropical Tuna Commission or an authorized representative of a participating nation whose national program meets the requirements of the IDCP, and the endorsement by the exporters, importers and processors required in subparagraphs (d)(2)(B)-(C) of Section 1385 of the DPCIA provisions.28 40. The situation described above is maintained by the Amended Tuna Measure. The statute does not provide for the possibility that Department of Commerce could conduct another study

27 Letter from P. Dalton, Assistant Administrator for Fisheries, to M. Robertson (September 14, 2000) (Exhibit MEX-17) (Exhibit MEX-32 in original proceedings). 28 Panel Report, US – Tuna II (Mexico), para. 2.20.

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of the populations of the two allegedly “depleted” dolphin stocks that could lead to a change in the definition of “dolphin-safe label” for ETP tuna, such that it would not be necessary to certify that nets were not intentionally set around dolphins. b. Certification of “Dolphin-Safe” under the Statute for Tuna Products Containing Tuna Caught Outside the ETP 41. The United States has not made a determination that any fishery other than the ETP has a regular and significant association between tuna and dolphins, or that any non-purse seine fishery has regular and significant dolphin mortality.29 For that reason, the following requirements apply:  For tuna caught outside the ETP using purse seine nets, a self-certification by the captain of the vessel that a purse seine net was not intentionally deployed on or used to encircle dolphins during the particular voyage on which the tuna was harvested.  For tuna caught without the use of purse seine nets (e.g., longline or trawl), no certification is required at all.  For tuna by a vessel less than 400 short tons, no certification is required at all. As discussed below, these requirements have been modified by the 2013 Final Rule. The DPCIA nonetheless was not amended and the above provisions remain in effect. c. Certification of “Dolphin-Safe” under the Statute for Tuna Products Containing Tuna Caught with Driftnets on the High Seas 42. The DPCIA purports to prohibit the use of the “dolphin-safe” label on tuna caught “on the high seas by a vessel engaged in driftnet fishing.” However, in actual operation this restriction has no meaning, because it has never been implemented by the Department of Commerce. 43. Specifically, a United Nations resolution called for an end to large scale driftnet fishing on the high seas by the end of 1992.30 Driftnet fishing in Exclusive Economic Zones (EEZs) is not prohibited by the United Nations resolution.31 Indeed, the United States itself allows fishing with driftnets in its EEZ.32

29 Panel Report, US – Tuna II (Mexico), para. 2.23. 30 Young and Iudicello, “Worldwide Bycatch Of Cetaceans”, U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service, NOAA Technical Memorandum NMFS-OPR-36 (July 2007), p. 69 (Exhibit MEX-18) (Exhibit MEX-5 in original proceedings) (hereinafter the “Bycatch Report”). 31 Bycatch Report, p. 69 (Exhibit MEX-18) (“The December 31, 1992 deadline affects the high seas of the world’s oceans and seas, including enclosed seas and semi enclosed seas. It should be noted, though, that much driftnetting continues, within EEZs, in many nations including the U.S.”). 32 See, e.g., National Oceanic and Atmospheric Administration, List of Fisheries for 2013, 78 Fed. Reg. 53336 (August 29, 2013), references to California thresher shark/swordfish drift gillnet fishery, California Footnote continued on next page

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44. Moreover, the U.S. restrictions on imports of fish caught with driftnets on the high seas do not apply automatically. To trigger the enforcement mechanism, a country must be designated by the Department of Commerce as a nation fishing with large scale driftnets.33 As explained in a recent report by the Department of Commerce, the only country ever to have been so designated is Italy, and there is no embargo of Italian seafood; rather, a special certification is required for fish from Italy, which is unrelated to dolphins: The Secretary of Commerce identified Italy on March 19, 1999, pursuant to the High Seas Driftnet Fisheries Enforcement Act as a nation that conducts, or authorizes its nationals to conduct, large-scale pelagic driftnet fishing on the high seas beyond the EEZ of any nation. On July 15, 1999, the United States and Italy formally agreed on measures to effect the immediate termination of Italian large-scale high seas driftnet fishing. For this reason, the United States did not impose trade sanctions on Italian fish, fish products, and sport fishing equipment pursuant to the Act. Although the 1999 agreement expired, as a deterrent, the United States has continued to apply the provision of the High Seas Driftnet Fisheries Enforcement Act that denies entry of Italian large-scale driftnet vessels to U.S. ports and navigable waters. Since May 29, 1996, the United States has also required Italy to provide documentary evidence pursuant to the Dolphin Protection Consumer Information Act (16 U.S.C. 1371(a)(2)(E)) that certain fish and fish products it wishes to export to the United States are not harvested with large-scale driftnets on the high seas.34 (emphasis added) 45. The Department of Commerce’s Form 370 is the procedural mechanism through which the United States purports to enforce certain regulations on imported tuna and other fish.35 It includes certifications to support the dolphin-safe status of fish, but none of them mention the word “driftnet.” Form 370 has a distinct certification, unrelated to dolphin-safe status, as follows:

Footnote continued from previous page yellowtail, barracuda, and white seabass drift gillnet fishery, Alaska Peninsula/Aleutian Islands salmon drift gillnet fishery, Alaska Prince William Sound salmon drift gillnet fishery, Alaska Southeast salmon drift gillnet fishery, Washington Puget Sound Region salmon drift gillnet fishery, Bristol Bay salmon drift gillnet fishery on page 58881, and Alaska Cook Inlet salmon drift gillnet fishery on pages 53350-51 (Exhibit MEX-19). 33 50 CFR § 216.24(f)(7) (2012) (Exhibit MEX-20). 34 2012 Report Of The Secretary Of Commerce to the Congress of the United States Concerning U.S. Actions Taken On Foreign Large-Scale High Seas Driftnet Fishing, p. 20 (Exhibit MEX-21). 35 NOAA Form 370 (Exhibit MEX-22).

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As discussed above, only imports of fish from Italy are subject to this certification. The “instructions” on the Form 370 explain: 7. HIGH SEAS DRIFTNET CERTIFICATION - If the shipment includes fish harvested by vessels of, or exported from, a nation identified by NOAA [National Oceanic and Atmospheric Administration] in a Federal Register notice as a nation fishing with large-scale driftnets, a responsible government official of the large-scale driftnet nation must certify here.36 This instruction is consistent with the explanation in the above-referenced Department of Commerce report on driftnet fishing. 46. The absence of implementation of the dolphin-safe requirements is not because high seas driftnet fishing has been eradicated. For example, the Department of Commerce reports that:  “Sightings, boardings, and fishing vessel seizures from 2003 to 2012 indicate that the high seas driftnet threat in the North Pacific Ocean has primarily shifted fishing effort from salmon to squid, sharks, and albacore tuna.”37 (emphasis added)  “During the inspection [of a vessel in the North Pacific Ocean], the USCG [U.S. Coast Guard] boarding team found a significant amount of driftnet onboard (a verbal statement by the master estimated the total length of net to measure over 10 nm [nautical miles] when deployed), along with approximately 30 metric tons of albacore tuna, 5 to 6 metric tons of shark carcasses, and 500 kilograms of detached shark fins.”38  “In 2009, EU purse seiners observed dense concentrations of Iranian driftnet vessels and networks of large driftnets (estimated by EU skippers to be 3.5 to 5.5 nm long) north of the Equator between 2° N and 14° N. Iran identified a fleet of 752 driftnet vessels operating outside Iran’s EEZ to the Indian Ocean Tuna Commission (IOTC) in 2009.”39 47. Accordingly, under the Amended Tuna Measure:  Tuna caught in driftnets in EEZs is eligible to be dolphin-safe.  Tuna caught in driftnets on the high seas, other than by the Italian fleet, is eligible to be imported and to be labelled dolphin-safe.

36 NOAA Form 370 (Exhibit MEX-22). 37 2012 Report Of The Secretary Of Commerce to the Congress of the United States Concerning U.S. Actions Taken On Foreign Large-Scale High Seas Driftnet Fishing, p. 6 (Exhibit MEX-21). 38 Ibid., p. 8. 39 Ibid., p. 16.

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2. Requirements for Independent Observers 48. The DPCIA designates when a dolphin-safe certification must be supported by an independent observer. 16 U.S.C. § 1385(d)(2)(B)(ii) provides that for a tuna product containing tuna harvested in the ETP by a purse seine vessel, in addition to the captain’s certification: the product [must be] accompanied by a written statement executed by- (I) the Secretary or the Secretary's designee; (II) a representative of the Inter-American Tropical Tuna Commission; or (III) an authorized representative of a participating nation whose national program meets the requirements of the International Dolphin Conservation Program, which states that there was an observer approved by the International Dolphin Conservation Program on board the vessel during the entire trip and that such observer provided the certification required under subsection (h) ….40 49. The DPCIA contains no such requirements for other tuna products, unless they contain tuna from a purse seine fishery that has a regular and significant association between tuna and dolphins or any non-purse seine fishery that has regular and significant dolphin mortality. As discussed above, the Department of Commerce has not designated any fishery under these categories, so observers are not required for any fishery other than the ETP. 3. Requirements for Documentation 50. The DPCIA specifies what type of documentation is required to support the dolphin-safe certification. In the case of a tuna product containing tuna harvested in the ETP by a purse seine vessel, the DPCIA states that the certifications by the captain and observer must “comply with regulations promulgated by the Secretary which provide for the verification of tuna products as dolphin safe.”41 Those regulations are described below; they incorporate the requirements for tuna tracking to which the members of the AIDCP have agreed. 51. For other tuna products (i.e., non-ETP tuna), the DPCIA contains no requirement to verify the products as dolphin-safe. 4. Relation of the DPCIA to the Regulations 52. Under U.S. law, implementing regulations may not change any of the requirements set out in the authorizing statute, because government agencies lack authority to override the Congress.42 Accordingly, all of the DPCIA’s requirements that were the subject of review by the

40 16 U.S.C. § 1385(d)(2)(B)(ii) (Exhibit MEX-8). 41 16 U.S.C. § 1385(d)(2)(C) (Exhibit MEX-8). 42 In the United States, a statute provides the parameters of a measure, while the regulations implement the statute by providing more detailed rules and procedures. Implementing regulations may not contradict a statute, which has primary authority. Thus, the U.S. Administrative Procedures Act prohibits government agencies from issuing regulations “in excess of statutory jurisdiction, authority, or limitations.” 5 U.S.C. § 706(2)(C) (Exhibit Footnote continued on next page

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Panel and Appellate Body remain in effect today, unchanged. The DPCIA continues to be closely integrated, legally and substantively, with the regulations. The statute is therefore an integral element of the Amended Tuna Measure. Accordingly, the discrimination against Mexican tuna products persists. 53. The United States did nothing to modify the DPCIA in response to the recommendations adopted by the DSB in this dispute. B. U.S. Code of Federal Regulations, Title 50, Part 216, Subpart H 54. The implementing regulations for the DPCIA address the certifications for “dolphin-safe” and also impose specific requirements, which vary depending on whether the tuna is sourced from the ETP or elsewhere, for: segregating tuna; having independent observers on board vessels; and documenting and verifying compliance. 1. Certification of “Dolphin-Safe” 55. For tuna products made from tuna caught by large purse seine vessels in the ETP, the content of the certification requirement is the same as set forth in the DPCIA. The 2013 Final Rule did not change any aspect of the certification requirements for such tuna. 56. For tuna products containing tuna caught outside the ETP with purse seine nets, the original regulations repeated the requirement of the DPCIA that the certification be that nets were not intentionally deployed on or used to encircle dolphins during the particular voyage on which the tuna was harvested. The 2013 Final Rule changed this certification to require an additional statement from the captain of the vessel that no dolphins were killed or seriously injured in the sets in which the tuna were caught.43 57. The original regulations did not require any certification for tuna products containing tuna caught (i) not using purse seine nets or (ii) by smaller vessels. The 2013 Final Rule requires that all such tuna be supported by a captain’s statement that that no dolphins were killed or seriously injured in the sets or other gear deployments in which the tuna were caught.44 58. A question may be raised whether the Department of Commerce has the legal authority to impose the above-described additional certification requirements for tuna caught outside the ETP, which go beyond the requirements of the DPCIA. Nonetheless, in the absence of a challenge to the regulations in the U.S. courts by an appropriate party with standing, the regulations are officially in effect. 59. The three major tuna products in the U.S. market – Starkist, Chicken of the Sea and Bumble Bee – jointly submitted comments on the new requirement for captains’ certifications from vessels not using purse seine nets, saying that such certificates will not be credible:

Footnote continued from previous page MEX-23). The U.S. Supreme Court has ruled that “[i]t is axiomatic that an administrative agency’s power to promulgate legislative regulations is limited to the authority delegated by Congress.” Bowen v. Georgetown Univ. Hosps., 488 U.S. 204, 208 (1988) (Exhibit MEX-24). 43 2013 Final Rule, 50 CFR § 216.91(a)(2)(iii) (Exhibit MEX-7). 44 2013 Final Rule, 50 CFR § 216.93(a)(4) (Exhibit MEX-7).

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The proposed rule will require the industry to reach out and educate thousands of longliners on these dolphin safe rules in multiple languages. Many vessels do not know the ultimate destination for their catch when harvested and a portion may include tuna destined for sashimi markets outside the U.S., yet all captains / vessels would need to make a statement on dolphin mortality or serious injury in event the fish could potentially go to the U.S. market. Another challenge on dolphin mortality statements for longliners and jig boats, in addition to educating a captain in multiple languages as to what constitutes serious injury, is how a “set” with a dolphin mortality is defined as longline and jig boat “sets” are not as cleanly delineated as a purse seine set. Due to the significantly lower observer coverage on longline fleets, the ability for the U.S. to audit and verify a captain’s statement of “no dolphin mortality or serious injury” will be challenging and could weaken the veracity and credibility of the U.S. Dolphin Safe program that we all have worked hard to establish over twenty plus years.45 2. Separation of Dolphin-Safe from Non-Dolphin-Safe Tuna 60. Under the original Tuna Measure, for tuna caught by large purse seine vessels in the ETP only, tuna caught in sets designated as dolphin-safe by the vessel observer must be stored separately from tuna caught in non-dolphin-safe sets from the time of capture through unloading at port.46 Specifically, if tuna was caught in a set during which a dolphin was killed or seriously injured, that tuna must be stored in a “well” on the vessel separate from dolphin-safe tuna. If any dolphin-safe tuna is mixed in the same well with the non-dolphin-safe tuna, all of the tuna in that well must be treated as non-dolphin-safe.47 The required certification includes the statement that “no purse seine net was intentionally deployed on or used to encircle dolphins during the particular voyage on which the tuna were caught”.48 Thus, if the dolphin-set fishing method is used even a single time during a voyage, none of the tuna caught during the voyage may be designated as dolphin-safe, including tuna caught without using dolphin sets. Tuna offloaded to trucks, storage facilities, or carrier vessels must be loaded or stored in such a way as to maintain the identification of the dolphin-safe or non-dolphin-safe tuna as it left the vessel.49 The Amended Tuna Measure made no substantive changes to these requirements. 61. Also under the original Tuna Measure, there were no requirements for segregating dolphin-safe from non-dolphin-safe tuna for any tuna other than that caught by large purse seine vessels in the ETP. Under the Amended Tuna Measure, similar requirements purportedly now apply to all tuna and tuna products.50 However, as discussed below, because of the absence of

45 Letter from Bumble Bee Foods LLC, Chicken of the Sea International and Starkist Co. to National Marine Fisheries Service (May 1, 2013), p. 2 (Exhibit MEX-25). 46 50 CFR § 216.93(c)(1)(i) (2012) (Exhibit MEX-20). 47 50 CFR § 216.93(c)(1)(i) (2012) (Exhibit MEX-20). 48 16 U.S.C. § 1385(h)(2) (Exhibit MEX-8). 49 50 CFR § 216.93(c)(1)(iv) (2012) (Exhibit MEX-20). 50 2013 Final Rule, 50 CFR § 216.93(c)(2) and (3) (Exhibit MEX-7).

17 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014 monitoring, verification, and tracking requirements for non-ETP tuna products, the separation- of-tuna obligations for non-ETP tuna are unenforceable and meaningless. 3. Independent Observers 62. The original Tuna Measure incorporated a key feature of the system for protecting dolphins in the ETP – the required presence of an independent observer on every large purse seine vessel. Like the DPCIA, however, the regulations do not require independent observers on any vessel outside the ETP. a. Observer Requirements for Mexican Large Purse Seine Vessels 63. Under section 216.92(b), which applies to imported yellowfin tuna products, the requirements are as follows: Yellowfin tuna or tuna products harvested in the ETP by vessels of greater than 400 st (362.8 mt) carrying capacity and presented for import into the United States may be labeled dolphin-safe only if the yellowfin tuna was harvested by a U.S. vessel fishing in compliance with the requirements of the IDCP and applicable U.S. law, or by a vessel belonging to a nation that has obtained an affirmative finding under § 216.24(f)(8).51 (emphasis added) 64. The clause emphasized above applies to tuna caught by the Mexican fleet. Section 216.24(f)(8), in turn, sets out the procedures under which a country can obtain an “affirmative finding.” The background of this regulation is as follows. 65. The U.S. Marine Mammal Protection Act (MMPA) provides in relevant part: The Secretary of the Treasury shall ban the importation of commercial fish or products from fish which have been caught with commercial fishing technology which results in the incidental kill or incidental serious injury of ocean mammals in excess of United States standards. For purposes of applying the preceding sentence, the Secretary— (A) shall insist on reasonable proof from the government of any nation from which fish or fish products will be exported to the United States of the effects on ocean mammals of the commercial fishing technology in use for such fish or fish products exported from such nation to the United States; (B) in the case of yellowfin tuna harvested with purse seine nets in the eastern tropical Pacific Ocean, and products therefrom, to be exported to the United States, shall require that the government of the exporting nation provide documentary evidence that—

51 The reference to U.S. vessels in this subsection would apply in a situation in which tuna caught by a U.S. vessel was used to make a tuna product, such as canned tuna, outside the United States, in which case the product would be imported as a foreign-made article.

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* * * (II) the tuna or products therefrom were harvested after the effective date of section 4 of the International Dolphin Conservation Program Act by vessels of a nation which participates in the International Dolphin Conservation Program, and such harvesting nation is either a member of the Inter- American Tropical Tuna Commission or has initiated (and within 6 months thereafter completed) all steps required of applicant nations, in accordance with article V, paragraph 3 of the Convention establishing the Inter-American Tropical Tuna Commission, to become a member of that organization; (ii) such nation is meeting the obligations of the International Dolphin Conservation Program and the obligations of membership in the Inter-American Tropical Tuna Commission, including all financial obligations; and (iii) the total dolphin mortality limits, and per-stock per-year dolphin mortality limits permitted for that nation’s vessels under the International Dolphin Conservation Program do not exceed the limits determined for 1997, or for any year thereafter, consistent with the objective of progressively reducing dolphin mortality to a level approaching zero through the setting of annual limits and the goal of eliminating dolphin mortality, and requirements of the International Dolphin Conservation Program ….52 66. The only import ban actually implemented under this law is for yellowfin tuna and yellowfin tuna products from the ETP. But under the above-quoted law, tuna and tuna products can be imported from countries participating in the AIDCP if that country is meeting its obligations under the AIDCP and the IATTC (including its financial obligations), and if the incidental dolphin deaths caused by that country’s tuna fishing vessels do not exceed the Dolphin Mortality Limits (DMLs) established by the AIDCP.53 67. In April 2000, the Department of Commerce made the first affirmative finding that Mexico had met the requirements of Sections 101(a)(2)(B) and (C) of the MMPA for allowing U.S. imports of yellowfin tuna harvested in the ETP by vessels using purse-seine nets.54 These affirmative findings are valid for five years, and are also reviewed on an annual basis. Mexico’s latest affirmative finding is valid for the period from 2010 to 2015.55 Accordingly, yellowfin

52 16 U.S.C. §1371(a)(2) (Exhibit MEX-88). 53 16 U.S.C. §1371(a)(2) (Exhibit MEX-88); 50 CFR § 216.24(f) (2012) (Exhibit MEX-20). Mexico reviewed the history of the yellowfin tuna embargo in the original proceedings. See Panel Report, US – Tuna II (Mexico), paras. 4.17-4.26. 54 65 Fed. Reg. 26585 (May 8, 2000) (Exhibit MEX-26) (Exhibit MEX-23 in original proceedings). 55 75 Fed. Reg. 34106 (June 16, 2010) (Exhibit MEX-27). See NOAA Fisheries, Tuna/Dolphin Embargo Status Update, available at http://www.nmfs.noaa.gov/pr/dolphinsafe/embargo2.htm (Exhibit MEX-28).

19 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014 tuna products from Mexico are not subject to the embargo – although they are denied the dolphin-safe label. 68. For other tuna products not containing yellowfin tuna and caught by large purse seine vessels in the ETP, including vessels of the Mexican fleet, the U.S. regulations include the following requirements: (i) The tuna or tuna products are accompanied as described in § 216.24(f)(3) by valid documentation signed by a representative of the appropriate IDCP member nation, containing the harvesting vessel names and tuna tracking form numbers represented in the shipment, and certifying that: (A) There was an IDCP approved observer on board the vessel(s) during the entire trip(s); and (B) The tuna contained in the shipment were caught according to the dolphin-safe labeling standards of § 216.91.56 (emphasis added) Thus, the same requirement for an independent observer applies to all tuna caught by large purse seine vessels in the ETP. 69. As discussed below, the AIDCP requires that every large purse seine vessel carry an independent observer, and Mexico has implemented that requirement in its domestic regulations. (1) AIDCP Requirements for Observers 70. Under the AIDCP, every large purse seine vessel fishing for tuna in the ETP must have an independent observer onboard. The observer program is concisely described in a recent quarterly report of the IATTC: The Agreement on the International Dolphin Conservation Program (AIDCP) requires 100-percent coverage by observers on trips by Class-6 purse seiners (vessels with fish-carrying capacities greater than 363 metric tons) that fish for tunas in the eastern Pacific Ocean (EPO). This mandate is carried out by the IDCP On-Board Observer Program, made up of the IATTC’s international observer program and the observer programs of Colombia, Ecuador, the European Union, Mexico, Nicaragua, Panama, Venezuela and the Regional Observer Program (ROP) under the umbrella of the WCPFC, based on a Memorandum of Cooperation (MOC) signed by representatives of the IATTC and the WCPFC. * * * The observers are biologists trained to collect a variety of data on the mortalities of dolphins associated with the fishery, sightings of dolphin herds, catches of tunas and bycatches of fish and other animals, oceanographic and meteorological data, and other information used by the IATTC staff to assess the conditions of the various stocks of dolphins,

56 50 CFR § 216.92(b)(2)(iii) (2012) (Exhibit MEX-20).

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study the causes of dolphin mortality, and assess the effect of the fishery on tunas and other components of the ecosystem. The observers also collect data relevant to compliance with the provisions of the AIDCP and data required for the tuna-tracking system established under the AIDCP, which tracks the “dolphin-safe” status of tuna caught in each set from the time it is captured until it is unloaded (and, after that, until it is canned and labeled).57 71. More specifically, paragraph 3, Annex II of the AIDCP requires that all observers must: a. have completed the technical training required by the guidelines that the Parties establish; b. be a national of one of the Parties or a member of the scientific staff of the IATTC; c. be capable of performing the duties set forth in paragraph 4 of this Annex; and d. be included in a list of observers maintained by the IATTC or, if part of a national observer program, by the Party maintaining such program.58 72. Pursuant to paragraph 4 of Annex 2: The duties of the observers shall be, inter alia: a. to gather all pertinent information on the fishing operations of the vessel to which the observer is assigned as is necessary for implementation of this Agreement; b. to make available to the captain of the vessel to which the observer is assigned all measures established by the Parties pursuant to this Agreement; c. to make available to the captain of the vessel to which the observer is assigned the record of dolphin mortality of that vessel; d. to prepare reports on information gathered in accordance with this paragraph, and provide the vessel captain with the opportunity to include in such reports any information the captain might deem to be relevant; e. to provide such reports to the Director or the pertinent national program, to be used in accordance with Annex VII, paragraph 1, of this Agreement; and f. to perform such other functions as agreed by the Parties59.

57 Inter-American Tropical Tuna Commission, Quarterly Report (April-June 2013), p. 14 (Exhibit MEX-29). 58 Agreement on the International Dolphin Conservation Program, as amended Oct. 2009 (Exhibit MEX-30) (Exhibit MEX-11 in original proceedings). 59 Agreement on the International Dolphin Conservation Program, as amended Oct. 2009 (Exhibit MEX-30).

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(2) Implementation in Mexican Law 73. Mexico has continuously administered its obligations under the AIDCP through domestic regulations. The NOM-EM-002-PESC-1999 was the technical regulation (Norma Oficial Mexicana) governing Mexican tuna fishing in the ETP.60 It established the terms and conditions for tuna fishing vessels in the ETP equipped with purse seines to ensure their sustainable use and limit incidental dolphin mortality. On January 16, 2014, the NOM-001-SAG/PESC-2013 was published in Mexico’s Diario Oficial de la Federación.61 This technical regulation updates NOM-EM-002-PESC-1999. 74. NOM-001-SAG/PESC-2013 section 4.2.10 requires all Mexican tuna vessels with capacity greater than 363 metric tons (400 short tons) fishing in the ETP to have an accredited observer on board. b. Lack of Observer Requirements for Tuna Products Not Containing ETP Tuna 75. Under the Tuna Measure, no requirements for independent observers were imposed other than for large purse seine vessels fishing in the ETP because the Department of Commerce has not designated any other fishery as having either a “regular and significant” association between tuna and dolphins or “regular and significant” dolphin mortalities. The 2013 Final Rule appears to create the possibility that the Department of Commerce could require independent observer verification of dolphin-safe certifications without making such designations. Specifically, the 2013 Final Rule states that observer certifications could be required for purse seine vessels outside the ETP: Where the Assistant Administrator has determined that observers participating in a national or international observer program are qualified and authorized to certify that no purse seine net was intentionally deployed on or used to encircle dolphins during the fishing trip in which the tuna were caught, and that no dolphins were killed or seriously injured in the sets in which the tuna were caught, and where such an observer is on board the vessel …62 76. Similarly, for non-purse seine vessels, the regulations state that an observer’s statement may be required: Where the Assistant Administrator has determined that observers participating in a national or international observer program are qualified and authorized to certify that no dolphins were killed or seriously injured

60 Norma Oficial Mexicana de Emergencia NOM-EM-002-PESC-1999. Especificaciones para la protección de delfines. Requisitos para la comercialización de túnidos en territorio nacional. (Exhibit MEX-31). 61 Norma Oficial Mexicana NOM-001-SAG/PESC-2013. Especificaciones para las operaciones de pesca con red de cerco. (Exhibit MEX-32). 62 2013 Final Rule, 50 CFR § 216.91(a)(2)(iii)(B) (Exhibit MEX-7).

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in the sets or other gear deployments in which the tuna were caught, and where such an observer is on board the vessel….63 77. However, the Department of Commerce has neither made a determination that observers participating in any non-ETP observer program are so qualified and authorized, nor has it announced plans to even consider doing so. It is instructive that the U.S. tuna industry submitted comments on the new regulations stating that there are no observer programs outside the ETP that are qualified. The American Tunaboat Association (ATA) stated: The ATA notes that the proposed rule would provide for the National Marine Fisheries Service to decide if an observer program is qualified and authorized to certify that no dolphins were killed or seriously injured during the purse seine fishing operation. Presently, the Western and Central Pacific Fisheries Commission (WCPFC) requires and coordinates a regional observer program for the international purse seine fleet. However, the observers serving under this regional program undergo no special training in marine mammal behavior or interactions with fisheries, and clearly are not qualified (or authorized) to make such a certification. The WCPFC has a long list of important priorities and work to be done to ensure that the tuna resources are managed well and fished sustainably – a very difficult challenge for an organization with more than 30 countries involved and with scarce human and financial resources. We are very concerned that the proposed rule, along with political lobbying activities, would lead US officials to pressure the WCPFC to work towards having the international observer program become qualified and authorized to make the certification provided for in the US regulations. Such an eventuality would be a scandalous waste of precious time and resources that should be directed towards improved fisheries conservation. And if such a development were actually to occur, it would inevitably give rise to a loss of credibility for the regional observer program, and to other problems weakening the program. Such problems would be increased exponentially if the concept of “intent” is introduced, as contemplated by the proposed regulations.64 78. Similarly, a law firm stating that it represents companies that own U.S.-flag purse seine vessels argued as follows: Should these proposed rules become final, we also see a number of serious issues. First, all our vessels must carry international observers because of obligations under the Western and Central Pacific Fisheries Convention Implementation Act. These observers are trained by separate programs administered by Pacific Island nations. The training programs do not compare to the training and qualification requirements for observers on

63 2013 Final Rule, 50 CFR § 216.91(a)(4)(ii) (Exhibit MEX-7). 64 Letter of ATA to National Marine Fisheries Service (April 29, 2013), p. 2 (Exhibit MEX-33).

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vessels operating in U.S. fisheries. Very little attention is given to marine mammal interaction. For certain, no training is provided as to U.S. laws and regulations concerning marine mammals as is done, for example, in U.S. regulated marine fisheries. We have no confidence that these international observers are qualified to make certifications as to whether a particular fishing set is “dolphin-safe” or not. We are not even certain that, with all the other obligations of these observers, Pacific Island nations would want to take on this unique U.S. program addressing a single biological species. How these observers, given their current level of training, could be used to make split-second decisions that categorize a particular fishing set as “dolphin-safe” where schools of dolphins are not chased is hard to imagine.65 79. The evidence therefore shows that the purported potential requirement for observers outside the ETP is meaningless. 4. Monitoring, Verification, Tracking and Audit Requirements 80. Under the original Tuna Measure, tuna products containing tuna harvested in the ETP have to be supported not only by the required certification, but also by “the documentation requirements for dolphin-safe tuna under § 216.92 and 216.93”. These requirements have been maintained under the Amended Tuna Measure. 81. There are no documentation requirements, other than a captain’s self-certification, for other tuna products. a. Documentation Requirements for U.S. Tuna Products Containing Tuna Sourced from U.S. Vessels Fishing in the ETP 82. For U.S. tuna products, section 216.93 establishes a “tracking and verification program” for large U.S. purse seine vessels fishing in the ETP (but not elsewhere) which is designed to be consistent with the AIDCP. For large U.S. purse seine vessels fishing for tuna in the ETP, there is a procedure requiring the use of “tuna tracking forms.” As explained in section 216.93(a): Tuna tracking forms. Whenever a U.S. flag tuna purse seine vessel of greater than 400 st (362.8 mt) carrying capacity fishes in the ETP, IDCP approved Tuna Tracking Forms (TTFs), bearing a unique number assigned to that trip, are used by the observer to record every set made during that trip. One TTF is used to record dolphin-safe sets and a second TTF is used to record non-dolphin-safe sets. The information entered on the TTFs following each set includes the date, well number, weights by species composition, estimated tons loaded, and additional notes, if any. The observer and the vessel engineer initial the entry as soon as possible following each set, and the vessel captain and observer review and sign both TTFs at the end of the fishing trip certifying that the information on

65 Letter of Davis Wright Tremaine LLP to National Marine Fisheries Service (April 30, 2013), p. 3 (Exhibit MEX-34).

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the forms is accurate. TTFs are confidential official documents of the IDCP, consistent with Article XVIII of the Agreement on the IDCP, and the Agreement on the IDCP Rules of Confidentiality.66 Thus, the requirement for tuna tracking forms does not apply to U.S. vessels operating outside the ETP, nor to U.S. vessels fishing in the ETP that are not large purse seine vessels. 83. As demonstrated in the original proceeding, U.S. canneries use very little tuna from the ETP. U.S. statistics indicate that in 2013 tuna from the ETP constituted about one percent of the tuna used to make tuna products in U.S. canneries.67 Accordingly, the requirement for ETP tuna tracking forms imposes extremely little, if any, burden on the U.S. processing industry. b. Documentation Requirements for Tuna Sourced from Mexican Large Purse Seine Vessels 84. There are separate rules for “imported” tuna products containing ETP tuna. Moreover, the regulations address yellowfin tuna products and other tuna products in separate subsections because of the embargo that the United States has adopted for yellowfin tuna from certain countries, as previously discussed. Nonetheless, the dolphin-safe documentation requirements are the same for all tuna products containing tuna caught by large purse seine vessels fishing in the ETP. (1) Requirements for ETP Tuna Products 85. As discussed above, section 216.92(b), which applies to imported tuna products made with yellowfin tuna harvested in the ETP, requires tuna to be harvested by a “vessel belonging to a nation that has obtained an affirmative finding under § 216.24(f)(8).” As also discussed above, the Department of Commerce has issued and maintained an “affirmative finding” that Mexico is in compliance with the AIDCP. 86. For other tuna products that do not contain yellowfin tuna and that are caught by a large purse seine vessel in the ETP, the U.S. regulations provide the following requirement for recordkeeping: The tuna was harvested by a U.S. vessel fishing in compliance with the requirements of the IDCP and applicable U.S. law, or by a vessel belonging to a nation that is a Party to the Agreement on the IDCP or has applied to become a Party and is adhering to all the requirements of the Agreement on the IDCP Tuna Tracking and Verification Plan ….68 (emphasis added) 87. Thus, the same requirements for tracking and verification for yellowfin tuna products also apply to non-yellowfin tuna products.

66 50 CFR § 216.93(a) (2012) (Exhibit MEX-20). 67 The U.S. report shows that out of a total of 191,947 tons, only 1,988 tons were sourced from the ETP. (Of the 1,988 tons sourced from the ETP, only 167 tons were sourced from U.S. vessels). The rest was sourced from the Western Pacific, the Atlantic Ocean and the Indian Ocean. Department of Commerce, “United States Tuna Cannery Receipts January - December 2013 and Comparison” (Exhibit MEX-35). 68 50 CFR § 216.92(b)(2)(i) (2012) (Exhibit MEX-20).

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88. The AIDCP requires that member nations implement detailed tracking systems for dolphin-safe tuna, and Mexico has done so. (a) AIDCP Tracking Requirements 89. Compliance with the AIDCP brings with it strict obligations to comply with the tuna tracking system of the AIDCP – the same tracking system that the U.S. regulations implement for U.S. vessels through section 216.93(a), as described above. The AIDCP requirements are described in the AIDCP’s “Resolution To Adopt The Modified System For Tracking And Verification Of Tuna” (20 June 2001), which states in pertinent part: The national authority of the Party under whose jurisdiction a fishing vessel operates shall be responsible for tracking the tuna caught, transported, or unloaded by that vessel, but may, by mutual consent, delegate the observation of unloadings and transfers to the national authority of the Party in which the unloading or transfer takes place. The national authority of the Party in which the tuna is processed becomes responsible for the tracking and verification of the dolphin-safe status of all such tuna when it enters a processing plant located in the jurisdiction of that Party, regardless of the flag of the catcher vessel, and for communicating the information to the Secretariat.69 90. The rules for tracking dolphin-safe tuna are very detailed and comprehensive, and apply from the moment of capture of the tuna all the way through unloading of the tuna, and then to the processing and marketing of the tuna products containing that tuna. Mexico quotes the full procedures below because they are crucial to understanding the steps that are necessary to ensure that a tuna product validly contains tuna that was caught without harm to dolphins: 3. TUNA TRACKING FORM (TTF) The Secretariat shall be responsible for producing the TTFs, which shall be in both English and Spanish, in sufficient quantity to be used throughout the Agreement Area by all the Parties; for distributing the forms to the national authorities; for training a representative of each national authority in the proper use and handling of the form; and for maintaining physical control of all completed TTFs, once they are returned to the Secretariat by the national authority in accordance with its national laws and regulations. 1. TTFs utilized during a trip shall be identified by a unique number, which shall be the IATTC cruise number to which it corresponds, and shall have provision for recording and endorsing information concerning each set made during a fishing trip which would enable the contents of any of the vessel’s wells to be identified as dolphin safe or non-dolphin safe.

69 AIDCP, “Resolution To Adopt The Modified System For Tracking And Verification Of Tuna” (20 June 2001) (Exhibit MEX-36) (Exhibit MEX-55 in original proceedings).

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2. Dolphin safe and non-dolphin safe tuna caught in the course of a trip shall be recorded on separate TTFs. 3. The Secretariat shall issue the TTFs to observers, except that in cases where the Party with jurisdiction over the vessel has a national observer program in operation, the pertinent national authority shall issue the TTFs to observers of its national observer program. The cruise number shall be recorded on the TTF at the beginning of each trip, and all tuna caught during that trip shall be recorded on the relevant TTF. 4. After a trip, the original TTF(s), with total confirmed quantities of tuna unloaded or transferred from that trip, shall be retained by the competent national authority, as follows: a. If the tuna is to be processed within the territory of the Party under whose jurisdiction the fishing vessel operates, the original TTF(s) shall be submitted to the national authority of that Party; b. If the tuna is to be processed within the jurisdiction of a Party other than the Party under whose jurisdiction the fishing vessel operates, at the completion of unloading the tuna the responsibility for tracking passes to the national authority of the Party in whose territory the tuna is to be processed. In such a case, the original TTF(s) is (are) submitted to the national authority of the Party under whose jurisdiction the tuna is to be processed, and a copy of the TTF(s) is (are) provided to the national authority of the Party under whose jurisdiction the vessel operates. 5. Within ten days of receipt of a TTF, the competent national authority shall transmit the TTF to the Secretariat. 6. TTFs shall be treated by the competent national authority as confidential official documents of the IDCP, consistent with Article XVIII of the AIDCP, and the AIDCP Rules of Confidentiality. 4. FISHING OPERATIONS 1. At sack-up during each set, and prior to brailing or loading of tuna aboard the vessel and into wells, the observer determines whether or not dolphin mortality or serious injury has occurred in the set and notifies the captain immediately of his determination. 2. On the basis of the observer’s determination, the tuna is designated either dolphin safe or non-dolphin safe. The tuna is brailed and loaded into a prepared well or wells which already contain either dolphin safe tuna or non-dolphin safe tuna, as applicable, or into a prepared but empty well or wells which shall then be designated dolphin safe or non-dolphin safe, as applicable. 3. At the completion of brailing, when there is no further question as to whether the tuna is dolphin safe or not, the observer, in consultation with the engineer, shall record on the appropriate TTF the species and

27 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

estimated quantity of tuna loaded into each well used in that set. Both the observer and the engineer shall initial the entry for each set. 4. Within a reasonable period after the completion of loading of non- dolphin safe tuna, the observer may confirm the number(s) of the well(s) receiving the tuna by noting the subsequent change in temperature in the well(s). 5. Transfers of tuna from the net of one fishing vessel to another fishing vessel at sea in the course of a trip shall be documented on the TTF(s), specifying the quantity, species, and dolphin safe status of the tuna being transferred. The transfer shall be documented on the TTF(s) of both the transferring and receiving vessels. 6. At the end of each fishing trip, when no more sets are to be made, the observer and the captain shall review the TTF(s), make any additional notes, and both will sign the form. 5. UNLOADING 1. The captain, managing owner, or agent of a vessel returning to port to unload part or all of its catch shall provide sufficient notice of the vessel’s intended place and schedule of unloading to the competent national authority to allow for preparations to be made for monitoring the unloading of that tuna. 2. If a trip terminates when a vessel enters port to unload part of its catch, new TTF(s) shall be assigned to the new trip, and the information concerning any tuna retained on the vessel shall be recorded as the first entry on the TTF(s) for the new trip. If the trip is not terminated following a partial unloading, the vessel shall retain the original TTF(s) and shall submit a copy of that TTF(s), with original signatures, to the national authority of the Party where the tuna was unloaded. In either case, the species, dolphin safe status, and amount of tuna unloaded shall be noted on the respective original TTF(s). 3. If tuna is unloaded from a fishing vessel in port and subsequently loaded aboard a carrier vessel for transport to a processing location, the Party under whose jurisdiction the fishing vessel operates shall be responsible for obtaining the TTF(s), retaining documentation of the unloading, including recording of the total confirmed scale weight if the tuna is weighed at that time, verifying that the dolphin safe tuna is kept separated from the non-dolphin safe tuna during the carrier loading and transporting process, and transmitting all relevant documentation to the Secretariat. Dolphin safe tuna and non-dolphin safe tuna may be stored in the same hold on a carrier vessel provided that the two are kept physically separate, using netting or similar material, and the non-dolphin safe tuna is clearly identified as such. 4. If the tuna is unloaded directly to a processing facility, the national authority of the Party in whose area of jurisdiction the tuna is to be

28 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

processed shall be responsible for retaining documentation of the unloading of the tuna and recording of the separate confirmed scale weight for dolphin safe and non-dolphin safe tuna. The competent national authority shall be responsible for returning the original TTF to the Secretariat for entry of the information into a database and for continued tracking of that tuna, and a copy of the TTF(s) shall be forwarded to the national authority of the Party under whose jurisdiction the fishing vessel operates if different from the State where the tuna is processed. 5. If the tuna is unloaded within the jurisdiction of a State not party to the Agreement, the national authority of the Party under whose jurisdiction the vessel operates shall make arrangements with the State in whose jurisdiction unloading occurs to certify the dolphin safe status of the tuna being unloaded and to ensure that the TTF(s) are transferred to the Secretariat. 6. Dolphin safe and non-dolphin safe tuna shall be unloaded from fishing or carrier vessels into separate bins. Each bin shall be identified with the corresponding TTF number, the dolphin safe status of the tuna, and confirmed scale weight for the tuna in that bin. 7. Each sale of a portion of the catch shall reference the corresponding TTF number, which will accompany the tuna through every step of processing. In the event of transfers of ownership after the national authority has transferred to the Secretariat possession of the TTF(s), the national authority of the transferring Party shall be responsible for reporting any such transfers of ownership to the Secretariat, specifying the TTF number(s), the species and quantity (scale weight) of tuna being transferred, and the recipient. 8. The Parties shall determine means by which to document, within this system, tuna unloaded by purse-seine vessels operating in the Agreement Area but not covered by the AIDCP. Tracking shall include confirmation of unloaded weight and, at the discretion of each Party, review of the vessel logbook. 6. STORAGE, PROCESSING, AND MARKETING The Parties may establish tracking and verification procedures for storage, processing, and marketing of tuna and tuna products that best fit the business practices within their own territories, as long as those procedures include the following requirements: a. Any change in ownership of any unprocessed tuna covered by a TTF number shall be handled in accordance with Section 5, paragraphs 3, 4 and 7, and shall be reported to the Secretariat by the competent national authority. b. During processing, dolphin safe and non-dolphin safe tuna shall not be processed on the same lines at the same time.

29 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

c. Processors shall maintain records complete enough to allow the lot numbers of processed tuna to be traced back to the corresponding TTF number. d. Processed dolphin safe tuna destined for export shall be accompanied by a certification of its “dolphin safe” status issued by the competent national authority, including reference to the corresponding TTF number, provided that such documentation shall not reference details of fishing operations, except as relates to identification of types of fishing gear. Any Party may utilize a certification concerning the “dolphin safe” status of tuna in accordance with the AIDCP, the System for Tracking and Verification of Tuna, and the procedures for Certification and Labeling of Dolphin Safe Tuna. 7. PERIODIC AUDITS AND SPOT CHECKS Consistent with the principles and objectives of the AIDCP concerning multilateral cooperation in the management and implementation of this program, the national programs established by the Parties, to track and verify tuna harvested by vessels in the Agreement Area, along with the data management and certification program described within Sections 2, 3, 5 and 6 above, shall include periodic audits and spot checks for caught, landed and processed tuna products, mechanisms for communication and cooperation between and among national authorities, and timely access by the Secretariat to relevant data. * * * *70 (b) Implementation in Mexican Law 91. Mexico implemented the AIDCP tuna tracking requirements through the regulation NOM-EM-002-PESC-1999, which was issued in December 199971 and subsequently updated through NOM-001-SAG/PESC-2013.72 As discussed above, the United States has verified Mexico’s compliance with the AIDCP continuously since 2000. 92. In a statement contained in Exhibit MEX-37, Mario G. Aguilar, Mexico’s Commissioner of Fisheries and Aquaculture (CONAPESCA), explains the detailed requirements that apply to the tracking and verification of AIDCP dolphin-safe tuna caught by the Mexican fleet. For example: The observer determines whether there were any mortalities or injuries to dolphins and prepares a full report on each net set in the form of a Tuna Tracking Form (TTF). The tuna is loaded from the net into designated wells on the fishing vessel, with tuna captured in sets with any mortality or

70 AIDCP, “Resolution To Adopt The Modified System For Tracking And Verification Of Tuna” (20 June 2001) (Exhibit MEX-36). 71 Norma Oficial Mexicana de Emergencia NOM-EM-002-PESC-1999 (Exhibit MEX-31). 72 Norma Oficial Mexicana NOM-001-SAG/PESC-2013 (Exhibit MEX-32).

30 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

injury to dolphins being loaded into segregated non-dolphin safe wells, as confirmed and sealed by the observer. Well location; quantity; species; set number; time, date and location of capture; and all bycatch information is entered into the TTF by the observer and also countersigned by the fishing captain. When the vessel arrives in port, and prior to unloading, the observer delivers the original Tuna Tracking Form (TTF) to the competent authority of the country of landing, under the following considerations: a) For tuna captured by a Mexican-flagged vessel landing in its national territory, the observer delivers the original TTF to the competent authority of the country of landing (PNAAPD) [the Mexican National Tuna Harvesting and Dolphin Protection Program]. b) For tuna captured by a Mexican-flagged vessel landing in another country, the observer delivers the original TTF to the PNAAP or the competent authority of the country of landing and, if appropriate, sends copy to the PNAAPD. c) For tuna captured by a foreign-flagged vessel and, upon prior authorization from the Direction General for Fisheries and Aquaculture Management for landing and processing in Mexico, the observer delivers the original TTF to the PNAAP and a copy of the TTF will be forwarded to the competent authority of the vessel's flag country. d) A copy of the TTF received by the national authority will be forwarded to the IATTC Secretariat within no more than 10 days. * * * a) PNAAPD conducts spot checks and technical visits to the plants intending to export tuna, to carry out a physical and documentary inspection of the tuna processing and record systems, as well as to verify the tracking process itself. These visits may be in the form of process audits, considering revisions to the amounts of tuna captured, the industrial process itself or at the request of plant authorities. These tracking audits may also be requested by importing countries through the IATTC, PNAAPD or the National Commission on Fishing and Aquaculture to verify the AIDCP dolphin-safe tuna of a particular can of tuna. b) Upon inspection of the tuna, the corresponding AIDCP dolphin safe certificate shall be issued either by PNAAPD or by an accredited and approved third party.

31 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

c) PNAAPD, in coordination with the Inter-American Tropical Tuna Commission (IATTC), maintains a database containing all information related to the TTF certificates of the Mexican tuna fleet.73 93. Accordingly, for Mexican tuna products to be eligible for the dolphin-safe label under the Amended Tuna Measure: the tuna must be certified as having being been caught without killing or seriously injuring a dolphin in the set in which the tuna was caught and that dolphin sets have not been used during the entire voyage in which the tuna was caught; an independent observer must verify that the certification is accurate; and the certification must be supported by the above-described extensive tracking system, which is audited by the Mexican government. c. Documentation Requirements for Tuna Products Made from Non-ETP Tuna 94. There are no documentation requirements for any type of non-ETP tuna products other than the captain’s self-certification. In particular, there is no requirement for a tuna tracking system at all. C. The Hogarth Ruling 95. As described above, the Court of Appeals for the Ninth Circuit overruled the Department of Commerce’s final findings under the DPCIA, which would have allowed the definition of “dolphin-safe” for tuna caught in the ETP to be changed.74 96. The U.S. government did not appeal the decision in Hogarth to the Supreme Court of the United States, and there is now no legal mechanism available to change the decision, absent new legislation enacted by the U.S. Congress. In addition, the DPCIA does not provide for the possibility of another determination by the Department of Commerce on whether dolphin sets are affecting the populations of the two dolphin stocks labeled by the United States as “depleted”. Therefore the decision of the Ninth Circuit Court of Appeals in Hogarth has the effect of permanently denying Mexican tuna products the benefit of the “dolphin-safe” label in the U.S. marketplace, and this ruling remains an integral element of the Amended Tuna Measure. D. The 2013 Final Rule 97. As discussed above, the United States did not modify the DPCIA. The revised regulations published on 9 July 2013 made only a few changes to the prior regulations, which are discussed above. 98. An important feature of the new regulations is that they delayed implementation of the changes. In the notice publishing the regulations, the National Oceanic and Atmospheric Administration (NOAA) announced that it would not require “100% compliance” for almost six additional months. It stated:

73 Statement of Mario G. Aguilar, Commissioner of Fisheries and Aquaculture (CONAPESCA) (Exhibit MEX-37). 74 As Mexico demonstrated in the original proceedings, the United States actually changed the definition for about three weeks in 2003, and then changed it back under pressure from the plaintiffs to await the court’s decision. See Declaration of P. Donley, Civ. No. CO3-0007 (March 7, 2003) (Exhibit MEX-38) (Exhibit MEX-70 in original proceedings).

32 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

However, NMFS understands that it may not be feasible for all of the affected entities to achieve 100% compliance immediately, and that some entities will need time to make the necessary changes to achieve full compliance with the new provisions for all tuna product labeled dolphin- safe. Therefore, through January 1, 2014, NMFS will conduct an industry education and outreach program on the provisions and requirements of this rule. NMFS has determined that this allocation of resources will ensure that the industry effectively and rationally implements this final rule.75 99. Because NMFS did not enforce the 2013 Final Rule at all until January 1, 2014, the additional requirements for a captain’s self-certification became relevant only after the “grace period” expired. In effect, therefore, the United States unilaterally granted itself a further extension to the RPT by not enforcing the measure that it has introduced for the purpose of bringing itself into compliance. The position taken by the United States – that implementation is achieved when a WTO Member announces that it will enforce rules at some point in the future – would imply that the deadlines established by an RPT can be ignored without any legal consequences. That position has significant systemic implications for the implementation of rulings in accordance with decisions of the DSU, and should therefore be strongly discouraged. 100. The captains’ certifications are not publically available, and there is no transparency regarding how non-ETP vessels and processors verify compliance. Accordingly, it is unclear whether during the grace period the Department of Commerce allowed importers to avoid submitting certifications for non-ETP tuna and tuna products, or whether it rather tolerated false certifications. 101. In fact, as discussed below, the United States lacks any mechanism to verify the authenticity of dolphin-safe certifications for tuna caught outside the ETP. A key aspect of the Amended Tuna Measure is that, for tuna caught outside the ETP, the United States still allows the use of the dolphin-safe label when dolphins were killed and seriously injured, and even when nets were set around dolphins. The changes made by the 2013 Final Rule are merely cosmetic. When viewed in the light of the operation of tuna fisheries outside the ETP, these changes cannot be considered substantive.

III. BACKGROUND INFORMATION ON THE GLOBAL TUNA INDUSTRY, ALTERNATIVE FISHING METHODS, AND STATUS OF DOLPHIN POPULATIONS IN THE ETP 102. As discussed below, dolphin mortalities are a significant problem outside the ETP. Fishers set nets on dolphins outside the ETP, and fishing methods other than the dolphin set method kill and seriously injure dolphins. Moreover, outside the ETP, tuna is frequently brokered through intermediaries and there are no mandatory procedures for tracking the dolphin- safe status of tuna. 103. Meanwhile, the latest evidence indicates that the dolphin stocks in the ETP that the United States designated as “depleted” are actually growing at their maximum expected rates,

75 2013 Final Rule, 78 Fed. Reg. at 40997 (Exhibit MEX-7).

33 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

contrary to what the United States believed in 2002, when the Department of Commerce made its “Final Findings.” 104. These issues are discussed in detail below. A. Fishers Set Nets on Dolphins Outside the ETP, and Other Fishing Methods Kill and Seriously Injure Dolphins 105. During the original proceedings, the Panel found that there were associations between dolphins and tuna outside the ETP, and that methods of fishing other than dolphin sets cause dolphin mortalities. For example, the Panel stated: 7.520 The evidence submitted to the Panel suggests that the association between schools of tunas and dolphins does not occur outside the ETP as frequently as it does within the ETP. This evidence further suggests that although there are indications that intentional setting on dolphins occurs outside the ETP, there are “no records of consistent or widespread fishing effort on tuna-dolphin associations anywhere other than in the ETP”. However, there are clear indications that the use of certain tuna fishing techniques other than setting on dolphins may also cause harm to dolphins. 7.521 For instance, the use of unassociated purse-seine sets or FADs to catch tuna may result, in certain cases, in substantial dolphin bycatch. Trawl fishing is another method that may be employed to harvest tuna, and that may also produce dolphin bycatch. Similarly, the use of driftnets to catch tuna in coastal areas within Exclusive Economic Zones is considered “a highly destructive practice” and one of “the greatest threats to populations of small cetaceans” in certain areas of the world. A report prepared by the Committee on Porpoise Mortality from Tuna Fishing established under auspices of the National Research Council thus observes that “[a]lthough purse seining for yellowfin tuna associated with dolphins in the ETP is the primary focus of this report, other methods, including additional purse-seining modes, are used for catching yellowfin. Some of these methods are known to kill dolphins, as are other techniques of fishing for other fish species (Northridge, 1984, 1991).” The report identifies longline, log and school fishing as the most important of the other fishing methods known to kill dolphins. 7.522 There are reports on dolphin bycatch resulting from tuna fishing operations in European fisheries. There are also reports on dolphin mortalities arising from tuna fishing activities fisheries in Asia and Africa. For instance, a study commissioned by the NOAA of the US Department of Commerce refers to the case of 1,700 bottlenose dolphins and 1,000 spinner dolphins being caught in one year in the western central Pacific by gillnet, driftnets and purse-seine fisheries, including coastal gillnets fishing for tuna. The study also states that “[i]n the Philippines, scientists estimated that about 2000 dolphins – primarily spinner, pan-tropical spotted, and Fraser's – were being killed each year by a fleet of five tuna purse seiners using fish aggregating devices”. Moreover, the study also

34 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

stresses the “need to continue efforts to assess incidental catch in the tuna purse seine and drift gillnet fisheries” in the western central Pacific. 7.523 The Panel also notes that, based on the number of documented incidental bycatch of dolphins and other small cetaceans in the western central Pacific, the same study identified the need to address the western central Pacific tuna-dolphin interactions as a second tier priority for agency action. This study refers to examples of observed dolphin mortalities in the western central Pacific, which equate or exceed the number of dolphin observed mortalities in the ETP in recent years (which amount to approximately 1000 to 1200 deaths per year).76 106. Mexico has collected substantial additional evidence showing that (i) tuna fishers intentionally set nets on marine mammals outside the ETP, and (ii) other methods of fishing for tuna are causing many thousands of dolphin mortalities. This evidence, as well as evidence from the original proceedings, is reviewed below. 1. Overview 107. It is well-accepted and scientifically documented that dolphins and other marine mammals are killed as bycatch in all of the world’s major tuna fisheries. 108. The five major intergovernmental regional fishery management organizations (RFMOs) for tuna – the Commission for the Conservation of Southern Bluefin Tuna, the Inter-American Tropical Tuna Commission (IATTC), the International Commission for the Conservation of Atlantic Tunas (ICCAT), the Indian Ocean Tuna Commission (IOTC), and the Western and Central Pacific Fisheries Commission (WCPFC) periodically hold joint meetings to exchange information. These meetings are known as the “Kobe” conferences (named after the location of the first such meeting). 109. In 2010, the “Kobe II Bycatch Workshop” was held in Australia, with participation of representatives of the five RFMOs. The “Background Paper” published in connection with this meeting acknowledged, among other things, that:  The association of tuna and dolphins has been observed and documented in ocean regions other than the ETP.77  “In addition to tuna fishery interactions with dolphins, the ICCAT, the IOTC, and the IATTC have all documented purse seine fishers setting on tuna associated with large whales.”78  “Tens to hundreds of thousands of [marine mammals] are killed each year through entanglement in fishing gear.”79

76 Panel Report, US – Tuna II (Mexico), paras. 7.520-7.523 (footnotes omitted). 77 Kobe II Bycatch Workshop Background Paper, available at http://www.tuna-org.org/Documents/ Aus/Kobe_II_Bycatch_Workshop_Marine%20Mammal_FINAL_ENG.pdf, p. 2 (Exhibit MEX-39). 78 Ibid., p. 2. 79 Ibid., p. 1.

35 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

 Nearly all of the RFMOs have reports of marine mammal interactions with longline fishing, and “[b]ycatch can occur as a result of depredation events in longline fisheries via hooking and/or entangling of marine mammals (including mouth-hooking, ingestion of hooks, and entanglement of flippers or flukes).” Further, “RFMO members have reported the bycatch (including mortality and serious injury) of whales and dolphins in longline gear in fisheries for tuna and swordfish in both the western Atlantic and central Pacific Oceans.”80  “It is generally accepted that, wherever gillnets are deployed, there is likely some degree of marine mammal bycatch…. In tuna gillnet fisheries off Sri Lanka, India, Yemen, Iran, and Pakistan, there is some indication that levels of marine mammal bycatch (e.g., spinner, spotted, common, Risso’s, and bottlenose dolphins) may be substantial.… Coastal gillnets may also be used to catch tuna within the IATTC and ICCAT convention areas.”81 110. The Background Paper compared the features of marine mammal protection in the RFMOs in the following chart, which confirms that the IATTC is the only RFMO that comprehensively addresses protection of dolphins and other marine mammals.82

80 Ibid., p. 2. 81 Ibid., p. 2. 82 Ibid., p. 9.

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MARINE MAMMALS CCSBT IATTC /AIDCP ICCAT IOTC WCPFC Provision Recommendation to Mitigate the Resolution 00/02 Impact on Ecologically Related Species (2008) (no explicit reference to marine mammals) 4.1 Binding No Yes N/A Yes N/A 4.2 Stated management objective Not explicit. (Use of ERS Rec. to Yes, to reduce and eventually mitigate incidental harm to ERS eliminate dolphin mortality caused by fishing for SBT uncertain) 4.3 Implementation of IPOA No N/A N/A N/A N/A 4.4 Prescribed vessel applicability and No Yes, for purse seine vessels N/A N/A N/A area of application larger than a fixed capacity 4.5 Use of multiple mitigation measures No Yes N/A N/A N/A 4.6 Standards for mitigation measures No Yes N/A N/A N/A 4.7 Reporting and information sharing Yes Yes, requirement to report N/A N/A N/A requirements observer data 4.8 Research and review of mitigation No Yes, through the International N/A Encourages participation in, N/A measures Review Panel (IRP) and and presentation of results research through the Science of, a survey of predation of Advisory Board (SAB) longline caught fish in 2001 4.9 Estimate bycatch and/or assess Yes (for ERS in general) Yes, via 100% observer N/A N/A N/A impacts coverage 4.10 Review for effectiveness and Yes Yes, through the IRP N/A N/A N/A revision 4.11 Safe handling and live release No Prohibition of brailing live N/A N/A N/A dolphins 4.12 Carcass retrieval No N/A N/A N/A N/A 4.13 Collection and use of observer data Not explicit. No requirement to Yes, extensive use of N/A Not explicit N/A provide observer data observer data 4.14 Reporting interactions and Not explicit. (Use of ERS Rec. Yes, bycatch is estimated N/A N/A N/A estimating bycatch uncertain) using observer data 4.15 Compliance requirements No Yes N/A N/A N/A 4.16 Consultation or cooperation w/ Yes, to comply with WCPFC and N/A N/A N/A N/A other RFMOs and IGOs IOTC measures when fishing for SBT in those areas. 4.17 Support for developing nations No N/A N/A N/A N/A

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111. Further details are provided below regarding the harm to dolphins caused to dolphins outside the ETP by tuna fishing. 2. Fishers Intentionally Set Purse Seine Nets on Marine Mammals outside the ETP 112. There has been a widely repeated claim that the association between dolphins and tuna in the ETP is “unique”, and that dolphin sets rarely occur elsewhere. The evidence demonstrates otherwise. 113. An Administrative Report of the National Oceanic and Atmospheric Administration (NOAA) states that “[a]lthough several of the references in this bibliography suggest that tuna do not associate with dolphins in the Atlantic, Indian, and western Pacific Oceans as systematically as they do in the eastern tropical Pacific, tuna-dolphin associations have been sighted and deliberately set upon in these areas”.83 The Report recognizes that “the available data are difficult or impossible to standardize because of the inconsistency in methods with which the data were collected and in the durations of such data collection efforts.”84 The Report summarizes that “an obvious problem with concluding … that incidental mortality of dolphins in tuna purse-seines outside the ETP is minimal is that many of the existing reports have been produced by groups with vested interests in one or another viewpoint: groups related to commercial fishing interests will obviously hope to find little evidence of tuna-dolphin problems similar those occurring in the ETP…”.85 114. More recently, the Secretariat of the Pacific has published an evaluation of the impact of the Western and Central Pacific Ocean (WCPO) fishery on cetaceans. This report states: For the WCP–CA, incidences of capture of marine mammals in the equatorial purse-seine and area-specific longline fisheries were summarised from observer data to identify (where possible) the main species caught and provide an indication of the level of fishery interaction. However, it is important to note that no attempt has been made to apply these data to provide overall estimates for the fishery. This work would require a more detailed analysis of observer coverage rates of individual fleets and consideration of appropriate spatial and temporal stratification. It is intended to undertake such an analysis during the next year. There is a relatively high level of observer coverage in the equatorial purse-seine fishery, with 33,319 sets observed in the last 11 years (1995– 2005). Marine mammals were caught in a very small proportion of these observed sets, mainly from sets targeting tuna schools associated with either whales or dolphins. Most of the marine mammals caught in these

83 U.S. National Marine Fisheries Service, “An Annotated Bibliography Of Available Literature Regarding Cetacean Interactions With Tuna Purse-Seine Fisheries Outside Of The Eastern Tropical Pacific Oceans” (November 1996), p. 2 (Exhibit MEX-40) (Exhibit US-10 in original proceedings). 84 Ibid., p. 2. 85 Ibid., p. 38.

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sets were not identified beyond the taxonomic order and the fate of most of the observed marine mammals was unknown (Table 1). Overall, a small number of dead marine mammals were observed in the fishery.86 115. No data have been made publicly available – even projections – on the overall interaction of this fishery with marine mammals. Nonetheless, the key point is that observers witnessed dolphin and whale sets being made, indicating that there is an association between tuna and marine mammals in the WCPO. Moreover, according to the U.S. fishing industry, observers in the WCPO – and indeed everywhere except the ETP – are not trained to watch for marine mammal interactions, nor is it even part of their responsibilities; accordingly, there are good reasons to believe that these figures are significantly underestimated. Finally, the “relatively high level of observer coverage” resulted in about 3,019 sets observed annually from 1995 to 2005 (33,319 divided by 11). That represents about 3 percent of the 100,000 purse seine sets that are made in the WCPO annually.87 116. Other sources confirm that nets are intentionally set on marine mammals in the WCPO. For example, on November 10, 2010, Australia sent a letter to the Executive Director of the WCPFC that stated: The FAD closure report presented to the sixth session of the Technical and Compliance Committee (TCC6) reveals several interactions with species of special interest including false killer whales [a species of dolphin], pilot whales [a species of dolphin] and whale sharks. This could indicate that vessels are intentionally or unintentionally setting their nets around these species. Australia and New Zealand are very concerned about these reports.88 117. In 2012, the WCPFC adopted a measure to protect whale sharks (a type of fish), in recognition of evidence that purse seine nets were being purposely set around whale sharks. In an article on this development, the New York Times reported that: In some cases, the whale sharks are accidental victims, their presence undetected until they are captured. But Australian officials have reported that 3.2 percent of all purse seine nets are deliberately set on whale sharks or cetaceans (whales, dolphins, and porpoises).89 118. In April 2013, Australia and the Maldives presented a proposal to the IOTC to adopt a measure to protect whale sharks. The Australian paper included the following statement:

86 Secretariat of the Pacific Community, “The Western And Central Pacific Tuna Fishery: 2006 Overview And Status Of Stocks”, (2008), pp. 59-60 (Exhibit MEX-41) (Exhibit MEX-98 in original proceedings). 87 Secretariat of the Pacific Community, “Status of Tuna Stocks and Management Challenges in the WCPO”, slide 21 (Exhibit MEX-42) (Exhibit MEX-94 in original proceedings). 88 “Proposed Conservation And Management Measure: Mitigating Fishing Impacts on Cetaceans”, Paper Prepared by Australia, WCPFC7-20 I O-DP/17 (15 November 2010), p. 1 (Exhibit MEX-43) (Exhibit MEX-105 in original proceedings). 89 New York Times, “A Small Victory for Whale Sharks” (December 6, 2012) (Exhibit MEX-44).

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Similar interactions with whale sharks and cetaceans have also been recorded in the Indian Ocean region. In observer data collected between 1986–1992 from Soviet purse seine fishing vessels in the western Indian Ocean, 494 purse seine sets were observed over the seven year period with 27 intentionally set on whale sharks or cetaceans. The types of cetaceans interacted with include Balaenoptera borealis (sei whales), Balaenoptera physalus (fin whales), Balaenoptera brydei (Bryde’s whale), Balaenoptera musculus brevicauda (pygmy blue whales) and Physeter macrocephalus (sperm whales) – all of which are listed in Appendix I of both CITES and CMS, except Bryde’s and pygmy blue whales. The research noted that under-reporting by purse seine vessels is likely to be significantly under- estimating the impact of purse seine fishing on whales in the Indian Ocean.90 This paper focuses on whale sharks and whales rather than dolphins, but provides further evidence that there are intentional sets on marine mammals outside the ETP.

119. The fact that vessels claim to fish only on FADs does not mean that dolphins are not being harmed. For example, a report on bycatch of dolphins sponsored by the Department of Commerce states: Spinner and Fraser’s dolphins experience substantial bycatch in Philippine fisheries. In the Philippines, scientists estimated that about 2,000 dolphins—primarily spinner, pan-tropical spotted, and Fraser’s—were being killed each year, probably at unsustainable levels, by a fleet of five tuna purse-seiners using fish-aggregating devices.91 120. A recent enforcement action taken by the Department of Commerce against U.S. vessels further validates that fishers intentionally set nets on dolphins in the WCPO. The case at issue, entitled In the Matter of Matthew James Freitas, et al. (hereinafter “Freitas case”), involved five U.S.-flagged vessels that fish in the WCPO with FADs, and all of which are managed by the South Pacific Tuna Corporation (SPTC).92 All five vessels were penalized for using FADs during a period when the WCPFC had established a “closure period” during which FADs could not be used. Two vessels were also penalized for setting purse seine nets on marine mammals, in violation of the U.S. MMPA. NOAA had obtained information from regional observers from Micronesia and the Solomon Islands who were onboard the vessels to monitor compliance with the FAD restrictions pursuant to the rules of WCPFC; it was fortuitous that two of them observed the setting of nets on marine mammals, as the WCPFC does not prohibit such settings and it was not part of their responsibilities or training to watch for such activity.

90 Australia and Maldives, “On The Conservation Of Whale Sharks (Rhincodon Typus)”, IOTC–2013–S17– PropD[E] (April 5, 2013) (Exhibit MEX-45). 91 Bycatch Report, p. 112 (Exhibit MEX-18). 92 Exhibit MEX-46.

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121. Although the Freitas case refers to the animals as “whales”, it also provides details that the animals were pilot whales93 and false killer whales,94 which, as discussed above, are species of dolphin. 122. With regard to one of the vessels (the F/V Ocean Conquest) charged with violating the MMPA, the judge held: It is simply implausible given the credible eyewitness testimony of Mr. Lioliomola that the crew did not see the whale before the set was made given the distance of the whale from the vessel. The F/V Ocean Conquest Respondents’ actions cannot be construed as incidental and non- intentional. It is more likely than not that the F/V Ocean Conquest Respondents intentionally set on the whale. This conclusion is especially valid given the fact that Respondents’ counsel argued throughout that he does not believe that intentional sets on whales were prohibited by the regulations. A set like this around a live whale unquestionably constitutes a “taking” for MMPA purposes. Given the intentional, purposeful nature of the set on the whale, such a taking is not exempt under the incidental take provisions of the MMPA. The MMPA violation against the F/V Ocean Conquest Respondents is therefore found PROVED.95 (emphasis original) 123. The other vessel (F/V Ocean Encounter) was charged with four counts of setting on whales. The judge similarly found that the sets were intentional.96 124. Remarkably, the maximum penalty for intentionally setting nets on marine mammals under the MMPA was only $11,000. The Ocean Conquest respondents therefore were fined $11,000, and the Ocean Encounter respondents $44,000, for their respective sets on marine mammals.97 These fines were minimal in relation to the value of the tuna harvested during the voyage, and therefore provide no incentive for compliance. Of course, non-U.S. flagged vessels are not subject to any penalties at all for setting nets on dolphins, killing dolphins, and/or falsely reporting tuna to be dolphin-safe. 125. According to the U.S. Congressman representing American Samoa, SPTC (the company that manages the vessels) is partially owned by the company that owns Chicken of the Sea and by the chief executive officer of Bumblebee.98 He also verifies that SPTC vessels offload their catch to tuna carriers that consolidate the catch of multiple vessels. This practice of

93 Freitas case, p. 32 (Exhibit MEX-46). 94 Freitas case, p. 33 (Exhibit MEX-46). 95 Freitas case, p. 46 (Exhibit MEX-46). 96 Freitas case, pp. 46-50 (Exhibit MEX-46). 97 Freitas case, pp. 78-79 (Exhibit MEX-46). 98 Congressman E. Faleomavaega, press release (March 1, 2011), available at http://faleomavaega.house.gov/ media-center/press-releases/washington-dc-faleomavaega-supports-us-coast-guards-draft-policy-which (Exhibit MEX-47).

41 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014 transshipping – and its impact on the ability to trace the source of tuna – is discussed in a later section of this submission. 3. Gillnet Fishing Kills and Injures Dolphins 126. As explained by the Fisheries and Aquaculture Department of the United Nations Food and Agriculture Organization (FAO): Gillnets and entangling nets are strings of single, double or triple netting walls, vertical, near by the surface, in midwater or on the bottom, in which fish will gill, entangle or enmesh. Gillnets and entangling nets have floats on the upper line (headrope) and, in general, weights on the ground-line (footrope). Gillnets or entangling nets consist in single or, less commonly, double (both are known as “gillnets”, strictly speaking) or triple netting (known as "trammel net") mounted together on the same frame ropes.99 127. As also explained by the FAO, drifting gillnets are used to catch tuna: The drifting gillnet is a wall of fine, large-meshed synthetic netting with a line of corks at the top and a series of leads or a steel chain at the bottom to maintain it vertical in midwater, in general, not far below the surface. It is normally set at dusk and hauled at dawn. The length of drifting gillnets deployed by fishermen targeting tuna or other large pelagic fish such as swordfish are commonly several kilometers whereas the height ranges from 20 to 30 m. * * * This fishing technique is used, among other, by the following fishing fleets: Sri Lanka, India, Philippines, India, Indonesia, China, Belize, Honduras, Japan, Panama, Rep. of Korea, Taiwan, Maldives, Belize, France, Netherlands Antilles, Seychelles, Spain, Italy. Drifting gillnets are used to catch different species of tunas in the South east Asia, Western and Central Indian, Western Mediterranean (Tirrenian, Ligurian, St. Sicily).100 128. In 2004-2005, the Central Marine Fisheries Institute in India conducted a study to quantify the number of cetaceans incidentally caught as by-catch by local fishers. The study states that drift gillnets are popular among fishermen, as they are effective in catching seerfish, tunas and sharks. The study concluded that such fishing operations could be killing about 10,000 cetaceans including dolphins every year, which it considered “alarmingly high.” Specifically: According to a marine fisheries census, 14,183 motorized gillnetters are operating along the Indian coast (CMFRI, 2006). In recent years, the length of the gillnet has been increased and the fishing grounds have been extending to oceanic waters. The total number of dolphins killed by fishing operations in the Indian Seas must be quite substantial considering

99 FAO, “Gillnets and Entangling Nets”, available at http://www.fao.org/fishery/geartype/107/en (Exhibit MEX-48). 100 FAO, “Tuna Driftnet Fishing”, available at http://www.fao.org/fishery/fishtech/1011/en (Exhibit MEX-49).

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the extent of operation of these nets. Considering that 44 cetacean kills were recorded in 80 days by ~400 gillnetters, we could be looking at alarmingly high numbers of around 9000–10,000 cetaceans killed every year by 14,183 motorised gill-netters in about 240 days of operation in the Indian waters. This could still be an under-estimate, as our observations were restricted to only 3 hours per day. This estimate is considerably higher than the estimates (1000–1500) by Lal Mohan (1994). Increase in the number and efficiency of gillnetters has perhaps increased mortality in the last 15 years. To arrive at a better estimate of marine mammal mortality along the Indian coast, it is important to undertake surveys covering more fish landing centres for longer duration.101 129. A report prepared for the IOTC in 2012 on the gillnet tuna fishery in the coastal waters of Pakistan included the following information: Dolphins seem to be more frequent in getting entangled in tuna gillnets. Indo-pacific humpback dolphin are more frequently entangled in gillnets placed in coastal waters where rarely a few black finless porpoises are also reported to be entangled. Spinner dolphin, pantropical spotted dolphin and bottlenose dolphins seems to entangle in tuna gillnets deployed in offshore waters. Other species of dolphins occurring in Pakistan are also prone for entanglement in gillnets. According to fishermen, most of dolphins entangled in gillnet die immediately. Since dolphins are considered sacred by fishermen, therefore, live dolphins are immediately released and those dead are thrown back. Although it is not possible to accurately estimate the number of dolphins killed every year in tuna gillnet fisheries of Pakistan but based on limited information collected recently (Moazzam, 2012) it is estimated that 25- 35 dolphins are killed every month.102 130. There have also been reports of substantial dolphin bycatch in tuna gillnet fishing operations in Europe.103 131. Even when dolphins do not immediately drown in a gillnet, interactions with the net causes dolphins to die later. The following photograph and caption are from the report “Bottlenose dolphin (Tursiops truncatus) depredation resulting in larynx strangulation with gillnet parts”, published in Marine Mammal Science:104

101 K.S.S.M. Yousuf et al., “Observations On Incidental Catch Of Cetaceans In Three Landing Centres Along The Indian Coast”, Marine Biodiversity Records, Vol. 2 (2009), p. 4 (Exhibit MEX-50). 102 M. Moazzam, “Status report on bycatch of tuna gillnet operations in Pakistan”, IOTC 8th Session of the Working Party on Ecoystems and Bycatch (2012), available at http://www.iotc.org/files/ proceedings/2012/wpeb/IOTC-2012-WPEB08-13.pdf, p. 7 (Exhibit MEX-51). 103 See, e.g., Bycatch Report, p. AA-15 (Exhibit MEX-18) (“In 1996 and 1998 respectively, the Irish driftnet fishery for albacore caught 356 and 2,522 common dolphins”). 104 M. Gomercic et al., “Bottlenose dolphin (Tursiops truncatus) depredation resulting in larynx strangulation with gill-net parts”, Marine Mammal Science, Vol. 25, No. 2 (April 2009) 392, p. 396 (Exhibit MEX-52).

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Figure 4. Gill-net part causing larynx strangulation and protruding from the mouth of a bottlenose dolphin. 4. Longline Fishing Kills and Injures Dolphins 132. The FAO explains that: “A drifting longline consists of a mainline kept near the surface or at a certain depth by means of regularly spaced floats with relatively long snoods with baited hooks evenly spaced on it.105” Longline vessels can set lines up to 150 km (over 90 miles) in length, with thousands of hooks.106 133. The association between dolphins and longline fishing is well-established. In the past, analyses of this issue tended to focus on negative effects on fishing caused by “depredation” – i.e., the consuming by marine mammals of both bait and target fish on longline hooks – but it is now widely recognized that dolphins are severely harmed by such interactions. 134. For example, a recent study summarized that: Operational interactions between odontocetes and the longline industry is a global problem. The odontocete populations involved are at risk of population decline due to the incidence of by-catch mortality. The longline fisheries involved are at risk of becoming economically unviable due to the incidence of catch depredation. Identifying and developing mitigation strategies is a priority for ensuring the future sustainability of odontocete populations and longline fisheries.107

105 FAO, “Industrial Tuna Longlining”, available at http://www.fao.org/fishery/fishtech/1010/en (Exhibit MEX-53). 106 OECD, “Glossary of Statistical Terms”, available at http://stats.oecd.org/glossary/detail.asp?id=1557 (Exhibit MEX-54). 107 D. Hamer, S. Childerhous & N. Gales, “Odontocete bycatch and depredation in longline fisheries: A review of available literature and of potential solutions,” Marine Mammal Science, Vol. 28, No. 4 (October 2012) E345, p. E345 (Exhibit MEX-55) (hereinafter “Odontocete Bycatch”).

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“Odontocetes” refers to cetaceans in the suborder Odontoceti, or “toothed whales.” It includes all species of dolphins and porpoises.108 135. The report further explains: The occurrence of operational interactions between cetaceans and commercial fishing operations is a well known phenomenon that occurs worldwide (Northridge, 1984, 1991; Reeves and Leatherwood, 1994; Donoghue et al., 2003; Gilman et al., 2006). This phenomenon has attracted considerable attention in the literature and has been categorised as either trophic (i.e. biological) or operational (i.e. direct) in nature (Beddington et al., 1985; Northridge and Hofman, 1999; Shaughnessy et al., 2003; Kaschner, 2004; Hamer et al., 2008).109 136. Another recent study examined the whale and dolphin species involved in pelagic longline depredation in the tropical and subtropical waters of the western Indian Ocean. The report states: Depredation by predators on pelagic and bottom longlining is a global issue that can have negative impacts both for the species and the fishing industry (Rosa and Secchi 2007). False killer (Pseudorca crassidens) and short-finned pilot whales (Globicephala macrorhynchus) are the known cetacean species involved in depredation in the tropical waters of the SWIO [Southwest Indian Ocean], while the killer whale (Orcinus orca) is involved in depredation events off South Africa (Petersen and Williams 2007). In addition, longline fishermen frequently report Risso’s dolphin (Grampus griseus) as responsible of bait depredation, particularly in the Mozambique Channel (Kiszka 2012).110 False killer whales, pilot whales and Risso’s dolphins are all species of dolphin. 137. The report draws a connection between where these species are found and where pelagic longline fishing areas exist in the Indian Ocean, stating: For the first time, this preliminary study highlights the probable existence of density hotspots for false killer whales, short-finned pilot whales and Risso’s dolphins in the western Indian Ocean. For all species, it appears that the Seychelles, the Mozambique Channel and, at a lesser extent, the Mascarene Islands constitute major areas for these species. These areas also constitute major pelagic longline fishing areas in the western Indian Ocean. Therefore, our study clearly underlines the probably high level of

108 FAO Species Identification Guide, Marine Mammals of the World, available at http://www.vliz.be/imisdocs/publications/255680.pdf, pp. 64-67 (Exhibit MEX-56). 109 Odontocete Bycatch, pp. E345-46 (Exhibit MEX-55). 110 M. Tetley, J. Kiszka & E. Hoyt, “Defining hotspots for toothed cetaceans involved in pelagic longline fishery depredation in the western Indian Ocean: a preliminary approach”, IOTC-2012-WPEB08-40 (18 August 2012), available at www.iotc.org/files/proceedings/2012/wpeb/IOTC-2012-WPEB08-40.pdf, p. 1 (Exhibit MEX-57) (hereinafter “Hotspots for toothed cetaceans”).

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spatial interactions between these cetacean species and pelagic longline fisheries.111 Other reports discussed below further confirm that dolphins are attracted to longline fishing operations. 138. Unfortunately, there are no comprehensive programs to monitor the harm caused to dolphins by longline fishing. Difficulties also arise from the fact that the lines can be as long as 90 miles in length, which would impair the ability of observers to see the deaths and injuries as they are occurring. There is no doubt, however, that longline fishing operations kill and maim dolphins. 139. The United States itself has designated the longline tuna fishery in the area of the U.S. State of Hawaii as threatening the population of false killer whales (a species of dolphin) in that region, which are classified as “endangered” and “depleted”.112 In response to a lawsuit by non- governmental organizations challenging the failure of NOAA to take action to protect the marine mammals in this fishery,113 NOAA eventually agreed to establish a “take reduction plan”. Yet this tuna is eligible for a dolphin-safe label. 140. In a document available from NOAA’s website, NOAA explains the background as follows: Q: What is a false killer whale? A: The false killer whale (Pseudorca crassidens) is a member of the oceanic dolphin family. False killer whales are found worldwide, mainly in tropical and warm-temperate waters. Three stocks of false killer whales have been identified in the central Pacific - the Hawaii Pelagic, Hawaii Insular, and Palmyra Atoll Stocks. False killer whales feed on tuna and other commercially-important pelagic fish species. * * * Q: What is take? A: The Marine Mammal Protection Act (MMPA) defines “take” as “to harass, hunt, capture, or kill, or attempt to harass, hunt, capture, or kill any marine mammal.” The MMPA prohibits take of marine mammals. Serious injuries and mortalities are considered take. Q: What is the problem? A: During Hawaii-based longline fishing operations, false killer whales can become hooked or entangled in fishing gear and, as a result, may

111 Hotspots for toothed cetaceans, p. 5 (Exhibit MEX-57). 112 See NOAA Fisheries Office of Protected Resources, “False Killer Whale”, available at http:// www.nmfs.noaa.gov/pr/species/mammals/cetaceans/falsekillerwhale.htm (Exhibit MEX-58). 113 Hui Malama I. Korol et al. v. National Marine Fisheries Service et al., Complaint for Declaratory Judgment and Injunctive Relief, Civil No. CV09 00112 (March 17, 2009) (Exhibit MEX-59).

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become seriously injured or killed. These “takes” often occur when false killer whales are preying on the longline catch or bait. Currently, these takes are occurring at a level that is unsustainable for the Hawaii Pelagic and Main Hawaiian Islands Insular stocks (i.e., takes exceed a threshold called the “Potential Biological Removal” level, or PBR, for each stock). In response, the MMPA [Marine Mammal Protection Act] requires NOAA Fisheries to convene a Take Reduction Team (TRT) to draft a plan for reducing mortalities and serious injuries of false killer whales that occur incidental to commercial fishing activities.114 The below photograph is from the above referenced NOAA document:115

114 NOAA, “False Killer Whale, Take Reduction Process Frequently Asked Questions”, available at www.fpir.noaa.gov/Library/PRD/FKW%20TRT/False%20Killer%20Whale%20TRT%20FAQ_2.10.pdf, pp. 1 and 2 (Exhibit MEX-60). 115 Ibid., p. 3.

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141. The United States has also designated the “Atlantic pelagic longline fishery” – in an area off the eastern coast of the United States – as a fishery harmful to marine mammals that requires a “take reduction plan” and formed a Pelagic Longline Take Reduction Team (PLTRT).116 142. In 2012, the NMFS convened a meeting of the PLTRT to discuss its monitoring plan. The report on the meeting contained the following statement: Though there has been no discernible trend in pilot whale [a species of dolphin] abundance (20,396 animals based on the 2011 survey), there has been a recent increase in serious injuries and mortalities (up to 298 animals over the past year in all Atlantic areas). The increase may be a function of environmental variability or random factors, though L.

116 See NOAA Fisheries, “Office of Protected Resources, Pelagic Longline Take Reduction Team”, available at http://www.nmfs.noaa.gov/pr/interactions/trt/pl-trt.htm (Exhibit MEX-61).

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Garrison did note that historic takes have tended to fluctuate and peak every five years or so. The results of vessel surveys conducted during summer 2011 resulted in a small decrease in the best estimate of abundance, and, therefore, PBR is anticipated to decline from 172 animals to 136 in the next update of the annual stock assessment reports. This figure is preliminary, however, and subject to refinement.117 In other words, about 1.5% of the estimated population was stated to be killed or seriously injured annually by the longline fishery. There is no explanation of how the figures were obtained. The United States does not maintain a comprehensive observer program for its longline fleet operating off the U.S. coast in the Atlantic; the coverage is only eight percent.118 143. The take reduction plan includes restrictions on the use of lines that are longer than 20 miles, which are believed to reduce potential harm to marine mammals. The PLTRT document discusses the fact that less than 50 percent of observed sets comply with that limitation, and that the restriction is unenforceable because the U.S. Coast Guard has other priorities and does not enforce the rules.119 144. A report published by the Sea Turtle Restoration Project on longline fishing estimates that over 18,000 dolphins are killed annually by longline fishing in the Pacific Ocean.120 The report bases its estimate on an extrapolation of data from the Hawaii longline fishery. The report cautions that the number is likely underestimated: The estimate in Figure 10 is based on bycatch rates from observed Hawaiian tuna or swordfish vessels. However, it is important to note that the data does not include species that may have become entangled in the gear and broken free during the time the gear is employed. Marine mammals dragging broken longline gear is commonly observed and may severely impact individuals and species.121 145. A forum sponsored by the Oak Foundation, the U.S. Marine Mammal Commission, and the New England Aquarium and the South Pacific Regional Environment Programme (SPREP) was held in Samoa in November 2002 to review the available information on cetacean interactions with longlines. A published report about the forum included summaries of background papers prepared by participants. A summary of a report on the Taiwanese longline fishery for tuna and billfish included the following comments:

117 U.S. National Oceanic and Atmospheric Administration (NOAA), “Pelagic Longline Take Reduction Team Key Outcomes Memorandum” (August 21-23, 2012), available at www.nmfs.noaa.gov/pr/pdfs/interactions/pltrt_august2012_memo.pdf, pp. 4-5 (Exhibit MEX-62) (hereinafter “Key Outcomes Memorandum”). 118 See NOAA, Pelagic Observer Program, available at http://www.sefsc.noaa.gov/fisheries/observers/ pelagic.htm (Exhibit MEX-63). 119 Key Outcomes Memorandum, pp. 3, 5 and 22 (Exhibit MEX-62). 120 Sea Turtle Restoration Project, “Pillaging the Pacific” (November 16, 2004), available at http://www.seaturtles.org/pdf/Pillaging.5.final.pdf (Exhibit MEX-64). 121 Sea Turtle Restoration Project, “Pillaging the Pacific” (November 16, 2004), p. 28 (Exhibit MEX-64).

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A survey of cetaceans landed at the Tungkang and Nanfang Ao fishing ports was conducted in 1994 and 1995. Seventy-six and 24 cetaceans observed at Tungkang and Nanfang Ao, respectively, came from longline vessels. Of these, 23 had been hooked in the mouth or throat region, 11 had been entangled, 53 had been harpooned, and the nature of the interactions with longline fishermen was unknown for 13 carcasses (due to their condition). Almost all of the common bottlenose dolphins (Tursiops truncatus) and rough-toothed dolphins (Steno bredanensis) had been hooked, whereas most of the pantropical spotted (Stenella attenuata), spinner (S. longirostris) and striped (S. coeruleoalba) dolphins appeared to have died after becoming entangled in lines. A Risso’s dolphin (Grampus griseus) had been hooked. * * * …. Most of the cetaceans taken are likely discarded at sea or consumed onboard because the legal protection of cetaceans in Taiwan under the Wildlife Conservation Law makes it risky to land them. Therefore, the number of carcasses recorded at the fishing ports should be considered an underestimate of the number killed. It was concluded that the level of cetacean mortality in longline fisheries is considerably higher than generally assumed.122 146. The PLTRT document also reported on research regarding the effect on pilot whales (a species of dolphin) when they get hooked in the mouth by longlines: Using heads from deceased stranded pilot whales, the research sought to understand both the force required to pull the hook through the animal’s lip, as well as to assess the damage done to the marine mammal’s mouth. One key finding: Certain stainless steel hooks (e.g., Mustad 16/0 and 18/0 circle hooks) sliced through and exited a pilot whale’s lip (typically resulting in a wound that would be expected to be deemed a “non-serious” injury). Conversely, Korean carbon circle hooks bent but did not slice through the lip, meaning that the animal would still have trailing gear and possible jaw fractures and the injury would likely be coded as serious.123 The PLTRT discussed that plans to encourage use of “weak hooks” to protect marine mammals had to take into account the importance of not interfering with the profitability of the fishing operations.124

122 M. Donoghue, R. Reeves & G. Stone, eds., Report Of The Workshop On Interactions Between Cetaceans And Longline Fisheries, New England Aquarium Aquatic Forum Series Report 03-1 (May 2003), pp. 3-4 (Exhibit MEX-65). 123 Key Outcomes Memorandum, pp. 6-7 (Exhibit MEX-62). 124 Key Outcomes Memorandum, p. 6 (Exhibit MEX-62) (“Team member comments included the following: (1) recognize that no statistical difference in target catch can still mean lost income for fishermen if the catch rate falls just a few percentage points (in the False Killer Whale TRT, for example, this concern was expressed around Footnote continued on next page

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147. Another report discusses the damage to dolphin’s dorsal fins caused by longline fishing. Observer reports from the Hawai‘i long-line fishery have noted that false killer whales struggle vigorously when hooked (E. Forney, pers. comm.), and a photograph of one hooked false killer whale [a species of dolphin] from this fishery shows a linear mark extending posteriorly from the mouth along the side of body (Figure 2), presumably an abrasion from struggling against the longline. All three of the animals we documented with completely or partially bent-over fins had injuries at the leading edge base of the fin. Such injuries are consistent with line or fishing gear injuries documented from other cetaceans (see, e.g., Norris 1992, Wells et al. 1998, Robbins and Mattila 2001). We suggest that the major dorsal fin disfigurements we have documented from Hawai‘i false killer whales are most likely a result of long-line interactions such as this, with an animal struggling against a longline rolling against the gear and injuring or severing the dorsal fin in such struggles.125 148. Longlines also get tangled on dolphins’ tails, as shown by the photograph below:126

Footnote continued from previous page the potential loss of large, valuable ‘marker’ fish, which exert a disproportionate effect on the profitability of a given trip) ….”). 125 R. Baird & A. Gogone, “False Killer Whale Dorsal Fin Disfigurements as a Possible Indicator of Long- Line Fishery Interactions in Hawaiian Waters” Pacific Science (October 2005), available at http://www.nmfs.noaa.gov/pr/interactions/injury/pdfs/day2_1155_baird_gorgone.pdf, p. 597 (Exhibit MEX-66). 126 Earthjustice, “False Killer Whales: Wounded by Longline Fishing”, available at http://earthjustice.org/slideshows/false-killer-whales-wounded-by-longline- fishing#/sites/default/files/slideshows/09-2010/fkw_04_700px.jpg (Exhibit MEX-67).

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149. Thus, even when dolphins do not immediately die from an interaction with a longline, they are at risk to suffer from maiming of their mouths, dorsal fins and other body parts, as well as from eventual drowning when they cannot free themselves from the lines. There is no reason to believe that these effects are limited to the regions where there has been specific research; rather, it must be presumed that many thousands of dolphins are being similarly killed and maimed in the Western Pacific, the East Atlantic, the Indian Ocean, and other areas where longlines are used to fish for tuna. 150. Mexican longline vessels fishing in the Gulf of Mexico for tuna are subject to comprehensive regulations that require an independent observer on every vessel to monitor fishing practices. To Mexico’s knowledge, it is the only country that requires 100 percent observer coverage of its longline vessels; the United States has no such regulation. 151. Mexico is in the process of publishing an updated and revised regulation on longline fishing, NOM-023-SAG/PESCA-2014. According to Mexican internal procedures required to issue a technical regulation, the responses to public comments were published on 24 March

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2014.127 The final NOM-023-SAG/PESCA-2014 is expected to be published in April 2014. As explained in the responses to public comments, the revised version of NOM-023-SAG/PESCA- 2014 will highlight the importance of responsible exploitation of yellowfin tuna without affecting its sustainability, while preserving the overall ecosystem and other biological resources, such as dolphins and other marine mammals, sea turtles and birds. Also, the revised version of NOM-023-SAG/PESCA-2014 will mandate the release of any dolphin that may be incidentally captured during fishing operations. Compliance with the NOM will be supported by the observers’ reports. 5. Trawl Fishing Kills and Injures Dolphins 152. As explained by the FAO: The trawl nets are cone-shaped net (made from two, four or more panels) which are towed, by one or two boats, on the bottom or in midwater (pelagic). The cone-shaped body ends in a bag or coded. The horizontal opening of the gear while it is towed is maintained by beams, otter boards or by the distance between the two towing vessels (pair trawling). Floats and weights and/or hydrodynamic devices provide for the vertical opening. Two parallel trawls might be rigged between two otter boards (twin trawls). The mesh size in the codend or special designed devices is used to regulate the size and species to be captured.128 153. Dolphins are regularly captured in trawl nets. For example, a report included in a 2004 study prepared for the United Kingdom’s House of Commons stated: More recently, an Irish study of a trial pelagic pair trawl fishery for albacore tuna observed 30 dolphins being caught in a single haul, with 145 cetaceans caught by just four pairs of trawlers in a single season. During 2001 observers placed on UK pair trawlers targeting the winter sea bass fishery recorded a catch of 53 dolphins in 116 hauls.129 154. A 2004 report summarizes another study of trawl fishing: During 1993-1995 observer studies were conducted in pelagic trawl fisheries operating seasonally in the area from the Bay of Biscay north to south-west Ireland and in the western approaches to the English Channel. Dolphin catches were recorded in four of the 11 fisheries studied: the Dutch horse mackerel fishery, the French hake fishery, the French albacore tuna fishery and the French sea bass fishery, although it is emphasized that zero observed bycatch in the remaining fisheries does not imply there is no bycatch in them (Morizur et al. 1999). The species

127 Respuesta a los comentarios y modificaciones efectuadas al Proyecto de Modificación a la Norma Oficial Mexicana NOM-023-PESC-1996 (Exhibit MEX-68). 128 FOA, “Trawl Nets”, available at http://www.fao.org/fishery/geartype/103/en (Exhibit MEX-69). 129 U.K. House of Commons, Environment, Food and Rural Affairs Committee, “Caught in the net: by-catch of dolphins and porpoises off the UK coast”, printed January 21, 2004, Memorandum submitted by Whale and Dolphin Conservation Society, EV-26-27 (Exhibit MEX-70) (Exhibit MEX-99 in original proceedings).

53 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

caught were common dolphin, Atlantic white-sided dolphin and a probable bottlenose dolphin. This study made no attempt to extrapolate from the observations to a total cetacean bycatch. However, the report notes that the size of the European fleet and the amount of fishing effort mean that the total number of animals caught may be significant.130 (emphasis added) 155. A 2011 update of that report included the following information: During the entire study period of the PETRACET project which looked at pelagic trawls in the western Channel, Celtic Sea and Bay of Biscay (ICES areas VII and VIII), 93 cetaceans were taken in 21 of 952 observed fishing operations. It is estimated that between 1900 and 1950 cetaceans are bycaught in fisheries operating in these areas each year. 96% of them are likely to be common dolphins. It is important to note that this study was focused on fisheries which have high levels of bycatch i.e. bass, tuna and anchovy and therefore estimates of bycatch may be biased upwards (Northridge et al., 2006).131 (emphasis added) 156. Clearly dolphins and other marine mammals are at grave risk in tuna fisheries outside the ETP and from fishing methods other than dolphin sets, yet the United States has done nothing to discourage American consumers from purchasing such tuna. B. Tracking Procedures for Dolphin-Safe Tuna 157. To understand both the complexity and necessity of a tracking system for dolphin-safe tuna, it is crucial to review how tuna is sourced, handled and tracked during the manufacturing process. There are significant differences between the procedures followed by the Mexican industry and those of other countries. 1. Tuna Processing and Tracking by the Mexican Industry 158. As described above, the AIDCP has strict and comprehensive requirements for the tracking and verification of dolphin-safe tuna. Mexico long ago fully implemented those requirements. The tuna contained in Mexican tuna products can be traced back to the TTF information, which itself has been verified by an independent observer. 159. The major Mexican producers are vertically integrated. Specifically, they have their own fishing fleets, which deliver tuna to their processing facilities within Mexico. Thus, the chain of ownership over the tuna caught by the Mexican fleet is maintained from the time of harvesting through the processing of the tuna into tuna products and the eventual marketing of the tuna products. As described in the statement of the Mexican tuna industry in Exhibit MEX-73, production in Mexico includes the following relevant steps:

130 A. Ross and S. Isaac, “The Net Effect? A Review of Cetacean Bycatch in pelagic trawls and other fisheries in the north-east Atlantic”, Whale and Dolphin Conservation Society (2004), available at http://www.wdcs.org/submissions_bin/neteffect.pdf, p. 15 (Exhibit MEX-71). 131 L. Nunny, “The Price of Fish: A review of cetacean bycatch in fisheries in the north-east Atlantic”, Whale and Dolphin Conservation Society (2011), available at http://www.wdcs.org/submissions_bin/price_of_ fish.pdf, p. 16 (Exhibit MEX-72).

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 When a vessel arrives, the tuna is scooped out of the wells and unloaded into bins. Each bin has a card that shows from which well on the vessel the tuna was stored and the tuna tracking form (TTF) number. The bins are then moved into freezers where they remain until they are ready for processing.  Next, the tuna are taken from the bins and placed on racks. The racks are numbered and the TTF numbers and bin numbers are cross referenced into the paperwork that follows the tuna.  The racks are rolled into steam cookers and the tunas are cooked. After the tunas cool somewhat, they are put onto a production line where they are loined. “Loining” is the process of filleting the four loins of meat from the central bone of the tuna.  The loins are then moved to an adjacent production line where they are cleaned and broken down. The tuna pieces are moved onto a conveyer belt.  The tuna is added to cans and the cans proceed through the automated line to receive oil, water or other flavorings. The cans are sealed with a lid and washed, and a code number is sprayed on the top of the can. The code denotes such information as production line, time, species, packing medium/seasoning/etc. This information, in turn, can be used to track the tuna back to the vessel and specific bin from which it was unloaded.  The cans are stacked and loaded into bins that are then rail-loaded into steam retorts, where they are heated to kill any bacteria inside and make them shelf stable. The cans then move to labeling and packing and palletizing machines. They are then moved to the shipping/warehouse area for distribution. 160. The Mexican industry’s statement132 provides the following photographs and captions that illustrate the careful tracking of each lot of tuna from the unloading of the vessel through the production process.

132 See Statement of the Mexican Industry (Exhibit MEX-73).

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Dolphin-safe tuna being brailed off the vessel Tuna placed into bins

Label on bin showing vessel, well, date, weight, Labeled bins segregated in cold storage and species.

Frozen tuna on labeled racks prepared for cooking. Labels show production lot, vessel and tracking reference numbers.

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Tuna being loined and cleaned on segregated line. As the tuna is removed from the labeled racks, numbers are input at the front of the production line to track the tuna by lot and weight.

Cans are labeled with tracking information as they are sealed and placed in bins for sterilization in the retort.

Cans are enter the labeling line segregated by production lot. They are labeled and boxed, and the boxes are computer labeled with the same tracking code as that which appears on the cans inside.

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2. Tuna Processing Elsewhere 161. As discussed below because of the extensive use of intermediaries (brokers) in the global tuna industry, it would be difficult to trace the dolphin-safe status of tuna even if there were enforceable requirements to do so outside the ETP. As also discussed below, there are no verifiable procedures or requirements for such tracking for non-ETP vessels and non-ETP tuna processors. a. Brokering of Tuna Breaks the Chain of Custody 162. Unlike the Mexican industry, most major tuna products companies in other countries are not vertically integrated. They purchase tuna from third party companies, and in many cases the tuna has passed through at least two parties before it is processed. 163. For example, processors in Thailand (the largest exporter of tuna products to the United States) obtain 80 percent of their supply of tuna from the world’s three major tuna trading companies: FCF, TriMarine, and Itochu.133 Those three companies have different business models. Tri-Marine has a network of company-owned and affiliated fishing vessels,134 but still acquires the great majority of its tuna from third parties.135 FCF does not invest in fishing vessels, though some of its shareholders are believed to hold significant ownership positions in Taiwan’s purse seine and large-scale longline tuna fleets.136 Itochu does not own any fishing or carrier fleet vessels and instead time charters them or purchases space onboard carriers on the spot market.137 164. For both longline and purse seine fishing, an important role is played by refrigerated fish carriers, who consolidate the catch of multiple fishing vessels. Some of these are believed to be engaged in transshipment at sea. One study has reported: The beneficial ownership of refrigerated fish carriers is not easy to determine. Vessels are often registered under offshore shell companies or through other means that mask the identity of actual owners, a common practice in the utilization of flags of convenience in the international shipping business.138 165. Transfers to carriers involve transshipments. The term “transshipment” is defined in the Convention on the Conservation and Management of Highly Migratory Fish Stocks in the Western and Central Pacific Ocean as “the unloading of all or any of the fish on board a fishing vessel to another fishing vessel at sea or in port.”139 There are Conservation and Management

133 A. Hamilton et. al., “Market and Industry Dynamics in the Global Tuna Supply Chain”, FFA (June 2011), p. 26 (Exhibit MEX-74). 134 Ibid., p. 136. 135 Ibid., p. 139. 136 Ibid., p. 145. 137 Ibid., p. 150. 138 M. McCoy, “A Survey of Tuna Transshipment in Pacific Island Countries”, Gillet, Preston and Associates, Inc. (June 2012), p. 18 (Exhibit MEX-75) (hereinafter “Survey of Tuna Transshipment”). 139 Ibid., p. 12.

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Measures (CMM) which provide conditions under which activities such as transshipment are to be conducted. 166. For longline fishing, transshipment at sea is permitted. It is viewed as commercially beneficial because it saves the fleets the time of having to return to port to unload the catch and obtain supplies, thus increasing available fishing days and resulting in greater capacity.140 For example, some Pacific Island countries allow a vessel to provide “catch consolidation,” by coming to port with the catch of multiple vessels. Such a carrier may serve seven or eight longliners during one catch consolidation trip.141 Transshipment at sea can be particularly vulnerable to “tuna laundering,” where “black boats” may conduct illegal, unauthorized and unrestricted (IUU) fishing and then transfer their catch to licensed vessels to transship.142 167. For purse seiners in the Western and Central Pacific Ocean, transshipment at sea is generally prohibited subject to certain exceptions.143 For example, Papa New Guinea’s (PNG) license conditions generally provide that all transshipment must be done at a PNG’s designated port under the supervision of an observer or Fisheries Officer and that an unloading carrier is required to fill out a catch unloading form.144 However, that there are exceptions; for example, “group seine operations” from PNG and the Philippines are eligible for exemption.145 Also, the term “Port” includes offshore locations such as certain terminals and installations.146 168. Some reporting is required for unloading vessels and carriers, including a transshipment declaration.147 The level of scrutiny port officials apply to such documentation plays a role in determining which port purse seiners desire to use.148 169. At times there are not enough observers to carry out these tasks, or they are not trained in monitoring transshipment.149 For example, to effectively monitor transshipment amounts and reconcile any discrepancies would require a monitor on both the purse seiner and the carrier, which is rare.150 Also, even the Western and Central Pacific Ocean Fisheries Convention does not impose a requirement on port states to report on the transshipment activities in their ports.151

140 Survey of Tuna Transshipment, p. 27 (Exhibit MEX-75). 141 Ibid., p. 16. 142 Ibid., p. 55. 143 Ibid., p. 12. 144 Ibid, p. 15. 145 Ibid, p. 13. 146 Ibid, p. 13. 147 Ibid, p. 13. 148 Ibid, p. 23. 149 Ibid, pp. 47-48. 150 Ibid, p. 48. 151 Ibid, p. 45.

59 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

In any event, it has been indicated that observers likely cannot detect IUU fishing and fish laundering.152 170. Importantly, the reporting required for transshipments does not address the U.S. dolphin- safe requirements. There are no authorities with responsibility to monitor whether captains’ certificates match to a particular lot of tuna, or whether that tuna has been mixed with uncertified tuna in a storage well. b. Absence of Tracking Measures Outside the ETP 171. As discussed above, where the vessels have not caught the tuna in the ETP, there is no requirement for dolphin-safe tuna tracking, no TTF forms, and no means to verify the accuracy of the information about how the tuna was caught and whether or not dolphins were killed or seriously injured during the capture of the tuna. 172. The Department of Commerce purports to have a “tuna tracking and verification program”. However, with respect to processors and retailers, the “program” simply entails checking to see if tuna and tuna products, when imported into the United States, were accompanied by a Form 370 with the correct box checked and a copy of a captain’s certificate. Except for tuna caught in the ETP, there is no procedure through which the Department of Commerce can verify – or rely on another country to verify – that a tuna product represented to contain dolphin-safe tuna actually does so. Other than the AIDCP – which applies only to tuna caught and/or processed in the ETP – the United States has no international agreements obligating other countries to enforce or verify compliance with dolphin-safe standards. Other than in the ETP, there is no way to determine whether a captain’s claim not to have set nets around dolphins during an entire voyage is accurate, whether a claim that no dolphins were killed or seriously injured in a particular set in which the tuna was caught is accurate, whether tuna caught in a dolphin-safe set has been kept segregated from tuna caught in a non-dolphin-safe set, or even whether a certification accompanying imported tuna products matches up correctly to the vessel and voyage that caught the tuna. 173. Because of the absence of controls and tracking mechanisms for non-ETP vessels, tuna processors outside of Mexico in other countries cannot verify (let alone segregate and track) dolphin-safe tuna after they receive it. 174. These issues are explained in more detail below. (1) Lack of Requirements for non-ETP Vessels 175. The U.S. MMPA, independent of the Amended Tuna Measure, requires U.S. vessels to report the “taking” of marine mammals outside the ETP.153 However, in the absence of independent observers to monitor compliance, the effectiveness of that requirement is questionable. Non-U.S. vessels, of course, have no obligation to report such incidents to the Department of Commerce.

152 Ibid., pp. 54-55. 153 16 U.S.C. § 1387(e) (Exhibit MEX-76).

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176. Indeed, it is well-recognized that observers are necessary to obtain accurate information. A report on global marine mammal bycatch prepared jointly by the Duke University Marine Laboratory and the University of St. Andrews included the following comment: Few U.S. fishers report marine mammal bycatch voluntarily, although they are required to do so by the Marine Mammal Protection Act. For example, in 1990 fishers reported a bycatch of 74 harbor porpoises in the Gulf of Maine, whereas the total bycatch extrapolated from an observer program was 2900 (CV = 0.32) (Bisack & DiNardo 1992; Weber 2002:159). It is widely accepted that accurate estimation of bycatch rates in any fishery requires an independent observer scheme (Northridge 1996).154 177. The Department of Commerce reached the same conclusion in a 2004 report on bycatch monitoring programs, in which it stated: The MMPA’s Marine Mammal Authorization Program has as its primary focus the self-reporting of marine mammal incidental mortality and serious injury. Under the MMPA, all fishermen participating in a state or federal fishery that operates in U.S. waters are required to report all injuries and mortalities of marine mammals associated with fishing operations to NMFS within 48 hours of returning to port. This requirement was enacted by the 1994 amendments to the MMPA, and replaced a marine mammal logbook reporting requirement that had been in place for all Category I and II fisheries since 1989 (the Marine Mammal Exemption Program). However, the Program has not succeeded in obtaining reliable marine mammal bycatch data. Despite fairly good outreach and the distribution of reporting forms to all state and Federally-permitted fishermen each year, compliance with the reporting requirement is thought to be very low (Patricia Lawson, NMFS Office of Protected Resources, pers. comm.). Compliance with the previous Marine Mammal Exemption Program logbook requirement varied from fishery to fishery, but overall was also very low (Credle 1993).155 178. Testimony in the recent enforcement action in the Freitas case discussed above, involving unreported setting of purse seine nets on whales by U.S. tuna fishing vessels and illegal FAD fishing, further validates that without independent observers, a captain’s certificate is unreliable. 179. Specifically, as explained previously, all of the purse seine vessels involved in that case are managed by the company SPTC. During the administrative hearing process, the Chief Financial Officer of SPTC testified that SPTC did not track tuna to a particular capture set: 68. Ms. Schlife indicated that SPTC got paid by the amount of total tonnage for the trip - not by discrete sets and it was not possible to relate

154 Read, Drinker, & Northridge, “Bycatch of Marine Mammals in U.S. and Global Fisheries”, 20 Conservation Biology (2006) 163, p. 167 (Exhibit MEX-6). 155 Department of Commerce, “Evaluating Bycatch”, NOAA Technical Memorandum NMFS-F/SPO-66 (October 2004), p. 28 (Exhibit MEX-77).

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any particular fish sold for the trip to a particular, individual set. Tr. at 118:3-123:3; 127:10-129:4 (August 23, 2012).156 Thus, it is impossible for those vessels to comply with the Amended Tuna Measure’s requirement that tuna caught in a set that harms dolphins be segregated from tuna caught in dolphin-safe sets. 180. The Freitas case also verified that the vessels’ captains have no or limited involvement in fishing activities. For example, the ruling summarized one captain’s testimony as follows: 156. Captain Maughan had “nothing to do with setting the nets or saying about fish” - which was the fishing master's responsibility. Tr. at 57:18-22 (August23, 2012).157 181. The testimony of SPTC’s Vice President of Vessel Operations indicated that SPTC’s captains have limited knowledge of their responsibilities relating to setting nets on marine mammals: Tr. At 107:1-111:24 (August 24, 2012) (Mr. Virissimo stated that it was SPTC policy not to intentionally set on whales due to MMPA restrictions. However, he was not sure of the SPTC captains’ understanding of the legal requirements).158 182. Under the Amended Tuna Measure, the determination whether tuna qualifies to be dolphin-safe is purportedly based on a vessel captain’s certification that no dolphins were killed or seriously injured during the set in which the tuna was caught, and that nets were not set on dolphins during the entire voyage in which the tuna was caught. Because the captains in the Freitas case were not actually involved in the fishing operations, lacked a clear understanding of the legal requirements, and made no effort to segregate tuna by set, they would not be able to make a credible certification. Yet all of the tuna caught during the voyages at issue would have been sold as dolphin-safe. 183. It is important to emphasize that the Freitas case involved U.S.-flagged vessels. Foreign- flagged vessels are not subject to U.S. jurisdiction and have even less incentive to comply with the Amended Tuna Measure. (2) Lack of Requirements for non-ETP Tuna Processors 184. The two canneries in American Samoa apparently receive at least some tuna directly offloaded from the vessels that caught the tuna, and in such cases could verify that a captain’s statement matched the vessel. However, there is no tuna tracking system for such tuna, so there is no other documentation available to verify that the tuna was caught in dolphin-safe sets, or kept separate from non-dolphin-safe tuna.

156 Freitas case, p. 18 (Exhibit MEX-46). 157 Freitas case, p. 26 (Exhibit MEX-46). 158 Freitas case, p. 44 (Exhibit MEX-46).

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185. Other U.S. canneries – in particular the cannery of Bumblebee in California and the cannery of Chicken of the Sea in Georgia – import tuna loins from Thailand, not whole fish.159 Because the tuna from which those loins were made were landed, skinned and boned in another country, it would be even more difficult to track them to a specific vessel, voyage and storage well – if any effort were being made to do so. 186. As discussed above, virtually no ETP tuna is used by U.S. processors and ETP tuna products have a very small share of the U.S. market. Accordingly, the overwhelming majority of tuna products sold in the U.S. market as “dolphin-safe” lack documentation of compliance from any moment earlier than import into the United States. The Form 370 and captain’s certificate for such products are “self-judging” and not subject to any form of documented verification requirements, in contrast to tuna products from the ETP. 187. In January 2014, the National Advertising Division (NAD) referred a complaint (filed by the Animal League Defense Fund) regarding the accuracy of Chicken of the Sea’s advertising claims that it uses only dolphin-safe tuna to the U.S. Federal Trade Commission, the California Department of Consumer Affairs, and the California Office of the Attorney General for investigation.160 NAD is the investigative unit of the U.S. advertising industry’s system of self- regulation, which is administered by the Council of Better Business Bureaus.161 C. Status of Dolphin Populations in the ETP 188. The AIDCP regime remains extremely effective. The incidental mortality of dolphins in the ETP tuna fishery in 2012 was only 870 animals, an 11.8 percent decrease from the 986 mortalities recorded in 2011.162 189. As was addressed in the original proceedings, the primary excuse of the United States for refusing to change the definition of “dolphin-safe” to conform to the AIDCP was that the populations of the two dolphin stocks it considers to be “depleted” – the northeastern offshore spotted and eastern spinner dolphins – were not recovering at a rate the United States considered acceptable.163 In 2009, however, the United States agreed with AIDCP to increase the DMLs for these two dolphin stocks, reflecting the more recent evidence that the populations of the stocks are, in fact, growing.164

159 Wall Street Journal, “Un-American Tuna” (March 16, 2014) (Exhibit MEX-78). 160 Advertising Self-Regulatory Council, “NAD Refers Advertising Claims from Chicken of the Sea to Regulatory Agencies for Further Review”, available at http://www.asrcreviews.org/2014/01/nad-refers-advertising- claims-from-chicken-of-the-sea-to-regulatory-agencies-for-further-review/ (Exhibit MEX-79). 161 See Council of the Better Business Bureaus, “National Advertising Division”, available at http://www.bbb.org/council/the-national-partner-program/national-advertising-review-services/national -advertising-division/ (Exhibit MEX-80). 162 AIDCP, “Report On The International Dolphin Conservation Program”, Document MOP-28-05 (October 18, 2013), available at https://www.iattc.org/Meetings/Meetings2013/Oct/pdfs/MOP-28-05-Report-on-IDCP.pdf, p. 3 (Exhibit MEX-3). 163 See, e.g., Panel Report, US – Tuna II (Mexico), paras. 4.72 and 4.357. 164 Exhibit MEX-4 (Exhibit MEX-91 in original proceedings) contains a 2009 report of the AIDCP’s Scientific Advisory Board on updated estimates of stock mortality limits from the 2008 U.S. abundance estimate for the two dolphin stocks at issue: the northeastern spotted dolphin and the eastern spinner dolphin stocks. Based on the fact Footnote continued on next page

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190. The populations of those two stocks were also the subject of a scientific workshop held by the International Seafood Sustainability Foundation (ISSF) in October 2012, as part of its evaluation of the rating for sustainability that it would assign to the ETP tuna fishery. Specifically, the purpose of the workshop was to “review the current state of scientific knowledge regarding impact of the dolphin‐associated tuna purse seine fishery in the Eastern Pacific Ocean”. 191. The workshop evaluated the latest estimates of the populations of the depleted stocks in the ETP, which was prepared using data from the Department of Commerce. The estimates indicate that the dolphin stocks are growing at or above the expected rate: The Bayesian log‐linear model as recommended in a recent review of the methods used to assess the status of the dolphin stocks in the eastern Pacific Ocean (Punt in press) estimates a high annual rate of increase for the eastern spinner dolphin stock and a moderate rate of increase for the northeastern spotted dolphin stock. This model is similar to that applied by IATTC (2001) to data for 1979‐1998, which concluded that both stocks increased in abundance between 1979 and 1998, but lacked information to test the hypothesis that the growth rate after 1991 was less than that between 1975‐1991. Under the hypothesis that the stocks are considered highly depleted, density dependence should not substantially influence the rate of increase and the estimates in this report would relate to the intrinsic rate of increase. If the stocks are less depleted and are experiencing density dependence, then the estimates will be an under estimate of the intrinsic rate of increase.165 192. The report of the Chairman of the workshop concluded, on the basis of this and other information, that the ISSF should maintain its “green” rating for the environmental sustainability of the dolphin-associated tuna purse seine fishery in the Eastern Pacific Ocean. The report included the following comments: After considering the presentations and discussions, there was general agreement that direct mortality of dolphins in the fishery has been reduced to levels below those prescribed as sustainable. There also appeared to be general agreement that even if the direct mortality were underestimated by an order of magnitude, such levels would still be sustainable. * * *

Footnote continued from previous page that the populations of these stocks are significantly larger than previously believed, the report recommended increases in the DMLs for those stocks. The United States agreed to these increases: from 648 to 793 for the northeastern spotted dolphin, and from 518 to 655 for the eastern spinner dolphin. See AIDCP, Scientific Advisory Board, “Updated Estimates of Nmin and Stock Mortality Limits”, 7th Meeting (30 October 2009), Document SAB- 07-05 (Exhibit Mex-4) (Exhibit MEX-91 in original proceedings). See also AIDCP, 22nd Meeting of the Parties, Minutes (30 October 2009), item 8 on p. 4 and Appendix 8 on p. 10 (Exhibit MEX-5) (Exhibit MEX-117 in original proceedings). 165 M. Maunder, “Evaluating Recent Trends in EPO Dolphin Stocks” (Exhibit MEX-81).

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Unfortunately, there was not general agreement about whether indirect effects are allowing recovery at the expected rate (what is to be “expected” is itself a subject of debate). Some participants felt that continued chase and capture could be having adverse impact on the stocks’ rebuilding rate. While most participants agreed that adverse impacts by the mechanisms identified were plausible, especially at the individual level, as these indirect impacts have not been quantified in a population context, the overall impacts remain largely hypothetical. Various studies have produced quantitative results that could potentially serve as the basis for estimates of population-level effects, pending availability of specific data on the fishery. However, this has not been done. In addition, some of the physiological research presented on indirect effects is not being done on the species of concern, but on other dolphins instead, which further adds to the differing views.166 193. The Chairman explained his personal evaluation of the evidence of indirect effects as follows: Indirect effects have been considered through fitting population models to the survey abundance data, and testing various hypotheses about alternative growth rates and alternative levels of mortality. One of the models that best explains the survey data is one that fixes the population growth rate at 4% per year, and allows for mortality to be 22 times higher than the observed mortality. Even in this case, the fitted population trends were increasing.167 194. Under the Amended Tuna Measure, the Department of Commerce lacks authority to evaluate any evidence regarding dolphin stocks and their recovery, including the evidence referred to above, which has become available since its Final Finding was published in 2002.

IV. LEGAL ARGUMENT 195. The Amended Tuna Measure is inconsistent with the obligations of the United States under: (i) Article 2.1 of the TBT Agreement; (ii) Article I:1 of the GATT 1994; and (iii) Article III:4 of the GATT 1994. A. The Panel Must Rule on all of Mexico’s Violation Claims 196. In order to resolve this dispute, it is necessary for the Panel to rule on all of Mexico’s claims under Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994. The scope and content of the obligations under these provisions are not the same. 197. In US – Tuna II (Mexico), the Appellate Body clarified the boundaries of judicial economy. It criticized the panel for exercising false judicial economy by not ruling on Mexico’s claims under Articles I and III:4 of the GATT 1994, stating:

166 V. Restrepo, “Chair’s Report of the ISSF Tuna-Dolphin Workshop” (October 25-26, 2012), p. 3 (Exhibit MEX-82). 167 Ibid., p. 12.

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To us, it seems that the Panel’s decision to exercise judicial economy rested upon the assumption that the obligations under Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994 are substantially the same. This assumption is, in our view, incorrect. In fact, as we have found above, the scope and content of these provisions is not the same.168 198. The Appellate Body then re-affirmed its prior clarification of the boundaries of judicial economy as stated in Australia – Salmon: The principle of judicial economy has to be applied keeping in mind the aim of the dispute settlement system. This aim is to resolve the matter at issue and “to secure a positive solution to a dispute.” To provide only a partial resolution of the matter at issue would be false judicial economy. A panel has to address those claims on which a finding is necessary in order to enable the DSB to make sufficiently precise recommendations and rulings so as to allow for prompt compliance by a Member with those recommendations and rulings “in order to ensure effective resolution of disputes to the benefit of all Members.”169 (footnotes omitted) 199. In US – Tuna II (Mexico), the Appellate Body concluded that “panels may refrain from ruling on every claim as long as it does not lead to a ‘partial resolution of the matter’” (emphasis added).170 This finding is particularly relevant in the present dispute, given the differences in the scope and content of Articles 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994. 200. Although the Appellate Body has taken major steps to clarify the scope and content of Articles 2.1 of the TBT Agreement in US – Clove Cigarettes, US – COOL and US – Tuna II (Mexico), aspects of the obligations in Articles 2.1 of the TBT Agreement and the relationship between this provision and Articles I:1 and III:4 of the GATT 1994 have not yet been ruled on by the Appellate Body. If the Panel does not make all of the necessary findings under Mexico’s other claims and there is an appeal, the Appellate Body would be unable to complete the analysis of those claims, and there would only be a partial resolution of the dispute. B. The Amended Tuna Measure is Inconsistent with Article 2.1 of the TBT Agreement 201. Article 2.1 of the TBT Agreement requires WTO Members to accord national treatment and most-favoured nation treatment to imported products in respect of technical regulations. Article 2.1 provides: Members shall ensure that in respect of technical regulations, products imported from the territory of any Member shall be accorded treatment no

168 Appellate Body Report, US – Tuna II (Mexico), para. 405. 169 Appellate Body Report, US – Tuna II (Mexico), para. 403, quoting Appellate Body Report, Australia – Salmon, para. 223. 170 Appellate Body Report, US – Tuna II (Mexico), para. 404 (emphasis added).

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less favourable than that accorded to like products of national origin and to like products originating in any other country. 202. For a violation of the national treatment and the most-favoured nation obligation in Article 2.1 to be established, the following elements must be satisfied: (i) the measure at issue must be a “technical regulation” within the meaning of Annex 1.1; (ii) the imported products at issue must be like the domestic product and the products of other origins; and (iii) the treatment accorded to imported products must be less favourable than that accorded to like domestic products and to like products originating in other countries.171 1. Technical Regulation 203. The Amended Tuna Measure is a “technical regulation”. In the original proceedings, the Appellate Body confirmed the Panel’s finding that the original Tuna Measure is a “technical regulation” within the meaning of Annex 1.1 of the TBT Agreement.172 For the same reasons as those on which the Panel’s and Appellate Body’s findings were based in respect of the original Tuna Measure, the Amended Tuna Measure continues to be a “technical regulation” for the purposes of Article 2 because it fulfills the criteria set out in Annex 1.1 of the TBT Agreement.173 204. A determination of whether a particular measure constitutes a technical regulation must be made in the light of the features of the measure and the circumstances of the case.174 In order to qualify as a “technical regulation” within the meaning of the definition in Annex 1.1, a document must:  apply to an identifiable product or group of products;  lay down one or more characteristics of the product; and  require mandatory compliance with the product characteristics.175 205. Like its predecessor, the Amended Tuna Measure satisfies each of the foregoing requirements and qualifies as a “technical regulation”. a. The Amended Tuna Measure Applies to an Identifiable Product or Group of Products 206. The elements of the Amended Tuna Measure (i.e., the DPCIA, the implementing regulations, as amended, and the Hogarth ruling) expressly apply to “tuna” and “tuna products”.176 In the original proceedings, the Appellate Body acknowledged the Panel’s finding

171 Appellate Body Report, US – Tuna II (Mexico), para. 202. 172 Appellate Body Report, US – Tuna II (Mexico), paras. 199 and 407(a). 173 See Appellate Body Report, EC – Sardines, para. 176. See also Appellate Body Report, US – Tuna II (Mexico), para. 183. 174 Appellate Body Report, US – Tuna II (Mexico), paras. 188, 190 and 199. See also Appellate Body Report, EC – Asbestos, para. 64; Appellate Body Report, EC – Sardines, paras. 192 and 193 175 Appellate Body Report, US – Tuna II (Mexico), paras. 183-188. See also Appellate Body Report, EC – Sardines, para. 176. 176 See Panel Report, US – Tuna II (Mexico), paras. 7.60-7.62. See also paras. 7.56-7.57.

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that the “measure at issue applies to an ‘identifiable’ product or group of products, namely, ‘tuna products’ as defined in the DPCIA and section 216.3 of Title 50 of the United States Code of Federal Regulations”177 (emphasis added). The United States did not contest the Panel’s findings in this respect.178 Indeed, in the original proceedings before the Panel, the United States did not disagree that the U.S. “dolphin-safe” provisions apply to an identifiable group of products, i.e., tuna products.179 207. As the 2013 Final Rule did not modify the DPCIA or section 216.3 of Title 50 of the United States Code of Federal Regulations, the terms and definitions of “tuna” and “tuna products” remain unchanged in the Amended Tuna Measure, and continue to apply just as they did in the original measure.180 Accordingly, these terms refer to the same identifiable product or group of products, i.e., “tuna products”, in the Amended Tuna Measure that they referred to in the original measure.181 208. As a consequence, the analysis and determination of this criterion by the Panel and the Appellate Body in respect of the original measure remains applicable to the Amended Tuna Measure presently at issue. As the latter continues to apply to the same prima facie identifiable product or group of products – i.e., “tuna products” – the first criterion of the “technical regulation” test under Annex 1.1 is fulfilled. b. The Amended Tuna Measure Lays Down One or More Characteristics of the Product 209. Like the original Tuna Measure, the Amended Tuna Measure continues to set out the conditions under which tuna products may be labeled “dolphin-safe”. It therefore establishes “labelling requirements, as they apply to a product, process or production method” within the meaning of Annex 1.1 to the TBT Agreement.182 Again, neither the provisions of the Amended Tuna Measure nor the factual circumstances in which the measure applies have changed in any respect that is material to this criterion. Hence, the analysis and determination of this criterion by the Panel and the Appellate Body in respect of the original Tuna Measure remains applicable to the measure presently at issue. 210. The Amended Tuna Measure not only continues to impose substantially the same conditions that were imposed by its predecessor on the circumstances in which tuna must be harvested, stored, and processed in order to qualify for “dolphin-safe” labelling in the United States, but it also purports to create further requirements for, inter alia, tuna caught outside the ETP and tuna caught by a broader range of fishing vessels and harvesting methods.183 Like its

177 Appellate Body Report, US – Tuna II (Mexico), para. 179, citing Panel Report, US – Tuna II (Mexico), para. 7.62. 178 Appellate Body Report, US – Tuna II (Mexico), para. 179. 179 Panel Report, US – Tuna II (Mexico), para. 7.57. 180 See, e.g., Panel Report, US – Tuna II (Mexico), paras. 7.60-7.62. 181 See, e.g., 50 CFR §§ 216.90, 216.92 and 216.93 (Exhibit MEX-20). 182 See Appellate Body Report, US – Tuna II (Mexico), para. 179, citing Panel Report, US – Tuna II (Mexico), para. 7.78. 183 See Section II of this submission.

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predecessor, the essential function of the Amended Tuna Measure is therefore to lay down “labeling requirements, as they apply to a product, process or production method”. As a consequence, the Amended Tuna Measure falls expressly within the definition of “technical regulation” that is set out under Annex 1.1. 211. In EC – Asbestos, the Appellate Body found that labelling is itself a product characteristic within the meaning of Annex 1.1 of the TBT Agreement.184 By continuing to lay down conditions and requirements regarding the use of “dolphin-safe” labelling on tuna products in the United States, the Amended Tuna Measure therefore continues to lay down “product characteristics” within the meaning of Annex 1.1. Hence, the Amended Tuna Measure continues to satisfy, for the same reasons as its predecessor, the second criterion of the legal test under Annex 1.1 of the TBT Agreement. c. Compliance with the Product Characteristics Required by the Amended Tuna Measure is Mandatory 212. As recognized by the Appellate Body in EC – Asbestos, “a ‘technical regulation’ must regulate the ‘characteristics’ of products in a binding or compulsory fashion”.185 For the same reasons as those given by the Panel Majority and the Appellate Body in respect of the original Tuna Measure,186 the “dolphin-safe” labelling requirements set out under the Amended Tuna Measure continue to be “mandatory” within the meaning of Annex 1.1 of the TBT Agreement. As a consequence, the Amended Tuna Measure fulfills the third criterion of the “technical regulation” test for the purposes of the TBT Agreement. 213. In the original proceedings, the Appellate Body upheld the Panel Majority’s finding that the original Tuna Measure established labelling requirements “with which compliance is mandatory”.187 In rejecting the United States’ arguments to the contrary, the Appellate Body held that: [T]he measure at issue sets out a single and legally mandated definition of a “dolphin-safe” tuna product and disallows the use of other labels on tuna products that do not satisfy this definition. In doing so, the US measure prescribes in a broad and exhaustive manner the conditions that apply for making any assertion on a tuna product as to its “dolphin-safety”, regardless of the manner in which that statement is made. As a consequence, the US measure covers the entire field of what “dolphin- safe” means in relation to tuna products. For these reasons, we find that the Panel did not err in characterizing the measure at issue as a “technical

184 Appellate Body Report, EC – Asbestos, para. 67; Appellate Body Report, EC – Sardines, paras. 187-193. See also Panel Reports, US – COOL, para. 7.213. 185 Appellate Body Report, EC – Asbestos, para. 68. 186 See, e.g., Appellate Body Report, US – Tuna II (Mexico), paras. 193-199; Panel Report, US – Tuna II (Mexico), paras. 7.113-7.145. 187 Appellate Body Report, US – Tuna II (Mexico), paras. 179, 199. For the Panel’s determination that the original Tuna Measure established labelling requirements, “compliance with which is mandatory”, see Panel Report, US – Tuna II (Mexico), para. 7.145.

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regulation” within the meaning of Annex 1.1 to the TBT Agreement.188 (emphasis in original) 214. In making this determination, the Appellate Body considered the following characteristics of the original Tuna Measure to be significant: “the US measure establishes a single and legally mandated set of requirements for making any statement with respect to the broad subject of ‘dolphin-safety’ of tuna products in the United States”;189 “the US ‘dolphin-safe’ labelling provisions set out ‘certain requirements that must be complied with in order to make any claim relating to the manner in which the tuna contained in [a] tuna product was caught, in relation to dolphins’”;190 “the US measure provides for specific enforcement mechanisms.... In addition, the measure at issue sets out active surveillance mechanisms to guarantee compliance with its norms and imposes sanctions in case of wrongful labelling”;191 “the US measure not only sets out certain conditions for the use of a label, but, in addition, it enforces a prohibition against the use of any other label containing the terms ‘dolphin-safe’, ‘dolphins’, ‘porpoises’, or ‘marine mammals’ on a tuna product that does not comply with the requirements set out in the measure.... In effect, the measure at issue establishes a single definition of ‘dolphin-safe’ and treats any statement on a tuna product regarding ‘dolphin-safety’ that does not meet the conditions of the measure as a deceptive practice or act”;192 and “while it is possible to sell tuna products without a ‘dolphin-safe’ label in the United States, any ‘producer, importer, exporter, distributor or seller’ of tuna products must comply with the measure at issue in order to make any ‘dolphin-safe’ claim”.193 215. The foregoing characteristics, as identified and considered by the Panel and the Appellate Body in respect of the original Tuna Measure, remain unchanged under the Amended Tuna Measure. None of the amendments have in any way diminished, relieved, or otherwise affected the mandatory nature of the “dolphin-safe” labelling requirements. As a consequence, the analysis of this criterion by the Panel and the Appellate Body in the original proceedings remains applicable to the Amended Tuna Measure. Further, the 2013 Final Rule expressly indicates that it is “mandatory” as of the date on which it comes into effect (i.e., July 13, 2013).194 The

188 Appellate Body Report, US – Tuna II (Mexico), para. 199. 189 Appellate Body Report, US – Tuna II (Mexico), para. 193. 190 Appellate Body Report, US – Tuna II (Mexico), para. 193, citing Panel Report, US – Tuna II (Mexico), para. 7.143. 191 Appellate Body Report, US – Tuna II (Mexico), para. 194. 192 Appellate Body Report, US – Tuna II (Mexico), para. 195. 193 Appellate Body Report, US – Tuna II (Mexico), para. 196. 194 2013 Final Rule, pp. 40998, 41000 (“The effective date of this regulation is July 13, 2013, and the rule is mandatory as of that date”) (emphasis added) (Exhibit MEX-7).

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mandatory nature of the measure is in no way diminished by the fact that the United States unilaterally granted itself a further extension to the reasonable period of time for implementation by not enforcing the 2013 Final Rule until January 1, 2014. 216. As compliance with the labelling requirements remains mandatory under the Amended Tuna Measure, the third and final criterion of the “technical regulation” test is satisfied. 217. For the foregoing reasons, the Amended Tuna Measure fulfills each of the three criteria of the legal test under Annex 1.1 the TBT Agreement, and therefore continues to qualify as a “technical regulation” for the purposes of Article 2 of the TBT Agreement. Hence, the first element of the Article 2.1 analysis is fulfilled. 2. Like Products 218. In respect of the second element of the analysis, the relevant imported products at issue – i.e., tuna products from Mexico – continue to be “like” tuna products of U.S. origin and tuna products originating in any other country within the meaning of Article 2.1 of the TBT Agreement.195 219. Before the Panel in the original proceedings, the United States did not dispute the evidence and arguments put forward by Mexico to demonstrate that the tuna products at issue are “like”.196 On the basis of Mexico’s submissions – which involved an analysis of four general criteria derived from the GATT Working Party Report on Border Tax Adjustments regarding categories of characteristics shared between comparable products197 – the Panel concluded that Mexico had established that Mexican tuna products are “like” tuna products of U.S. origin and tuna products originating in any other country within the meaning of Article 21.5 of the TBT Agreement.198 The United States did not challenge this finding on appeal.199 220. The factual circumstances of the relevant imported and domestic products have neither changed nor been affected in any way by the adoption of the Amended Tuna Measure. Put simply, the same kinds of Mexican tuna products and the same kinds of tuna products of U.S. origin (and tuna products originating in any other country) that were at issue in the original proceedings remain the products at issue in the present proceedings. Hence, the relevant imported and domestic products continue to be “like” within the meaning of Article 2.1 of the TBT Agreement. 3. Treatment no Less Favourable 221. The Appellate Body has established a two-step approach for assessing whether a technical regulation accords less favourable treatment under Article 2.1: (i) whether the measure at issue modifies the conditions of competition in the relevant market to the detriment of

195 See Panel Report, US – Tuna II (Mexico), para. 7.251. 196 Panel Report, US – Tuna II (Mexico), para. 7.213. 197 See Panel Report, US – Tuna (Mexico), paras. 7.235-7.250. 198 Panel Report, US – Tuna II (Mexico), para. 7.251. 199 Appellate Body Report, US – Tuna II (Mexico), para. 202 (“We further note that the United States has not appealed the Panel’s finding that Mexican tuna products are ‘like’ tuna products of United States’ origin and tuna products originating in any other country within the meaning of Article 2.1 of the TBT Agreement”).

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imported products as compared to like domestic products or to like products originating in any other Member; and (ii) whether any detrimental impact reflects discrimination against the imported products.200 a. The Amended Tuna Measure Modifies Competitive Opportunities to the Detriment of Imports 222. As explained by the Appellate Body in US – COOL, when a panel determines whether the operation of a measure, in the relevant market, has a de facto detrimental impact on the group of like imported products, its analysis must take into consideration the totality of the facts and circumstances before it, including any implications for competitive conditions discernible from the design and structure of the measure itself, as well as all features of the particular market at issue that are relevant to the measure’s operation within that market.201 (1) Design and Structure of the Amended Tuna Measure 223. There have been no material changes made in the Amended Tuna Measure to the design and structure of the Tuna Measure that were found by the Panel and the Appellate Body to modify the competitive opportunities in the U.S. market to the detriment of the imported products at issue. The key elements of the design and structure of the measure that operated together to deny competitive opportunities were set out in the provisions of the DPCIA that govern dolphin-safe labeling.202 These elements remain integral components of the Amended Tuna Measure and have not been changed. (2) The Features of the Relevant Market 224. The features of the relevant market remain unchanged. 225. U.S. retailers and consumers are sensitive to the dolphin-safe issue, and tuna products labeled “dolphin-safe” have an advantage in the marketplace. In the original proceedings, the Panel found that the “dolphin-safe” label has “significant commercial value on the US market for tuna product”.203 The Panel also found that “it is the measures themselves that control access to the label and allow consumers to express their preferences for dolphin-safe tuna” and, therefore, access to the “dolphin-safe” label constitutes an “advantage” in the U.S. market.204 These findings were not appealed.205 Access to the dolphin-safe label continues to constitute an advantage in the U.S. market. Major U.S. grocery chains continue to refuse to buy Mexican tuna products because they are unable to sell the brand that does not have the dolphin-safe label.206

200 Appellate Body Report, US – Tuna II (Mexico), para. 231. 201 Appellate Body Reports, US – COOL, para. 286. 202 See Section II.A and II.A.1.a of this submission. 203 Panel Report, US – Tuna II (Mexico), paras. 7.289 and 7.290. 204 Panel Report, US – Tuna II (Mexico), paras. 7.287 and 7.291. 205 Appellate Body Report, US – Tuna II (Mexico), para. 233. 206 Confidential statement (Exhibit MEX-83 BCI).

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226. The Panel also found that: (i) “the Mexican tuna cannery industry is vertically integrated, and the major Mexican tuna products producers and canneries own their vessels, which operate in the ETP”; (ii) “at least two thirds of Mexico’s purse seine tuna fleet fishes in the ETP by setting on dolphins” and is “therefore fishing for tuna that would not be eligible to be contained in a ‘dolphin-safe’ tuna product under the U.S. dolphin-safe labelling provisions”; (iii) “the US fleet currently does not practice setting on dolphins in the ETP”; (iv) “as the practices of the US and Mexican tuna fleets currently stand, most tuna caught by Mexican vessels, being caught in the ETP by setting on dolphins, would not be eligible for inclusion in a dolphin-safe product under the US dolphin-safe labelling provisions”, while “most tuna caught by US vessels is potentially eligible for the label”.207 Referring to these findings and the finding that access to the “dolphin-safe” label constitutes an “advantage”, the Appellate Body concluded that “the factual findings by the Panel clearly establish that the lack of access to the “dolphin-safe” label of tuna products containing tuna caught by setting on dolphins has a detrimental impact on the competitive opportunities of Mexican tuna products in the US market”.208 227. The Mexican tuna industry continues to be vertically integrated and the major Mexican tuna products producers and canneries continue to own their vessels, which operate in the ETP.209 In 2012, the Mexican tuna fishing fleet operating in the ETP was comprised of 39 large purse seine vessels that applied for and were assigned vessel-specific DMLs, and three small vessels (below 400 cubic meters capacity).210 Thus, virtually all of Mexico’s purse seine tuna fleet continues to fish in the ETP by setting on dolphins and is therefore fishing for tuna that would not be eligible to be contained in a dolphin-safe tuna product under the Amended Tuna Measure. The situation of Mexican tuna producers continues without any material changes from the situation they had during the original proceedings.211 The U.S. tuna fleet continues not to fish in the ETP.212 Thus, as the practices of the U.S. and Mexican tuna fleets stand today, most tuna caught by Mexican vessels, being caught in the ETP by setting on dolphins, would not be eligible for inclusion in a dolphin-safe product under the U.S. dolphin-safe labelling provisions, while virtually all tuna caught by U.S. vessels is potentially eligible for the label. 228. The U.S. tuna canning industry uses tuna caught by both domestic and foreign vessels.213 During 2013, approximately 86 percent of the tuna used by U.S. canners was caught in the Western Pacific.214 U.S. canners obtained only about one percent of their supply from the ETP,

207 Panel Report, US – Tuna II (Mexico), paras. 7.310, 7.314 and 7.316-7.317. 208 Appellate Body Report, US – Tuna II (Mexico), para. 235. 209 See statements of Mexican producers (Exhibits MEX-89-A BCI, 89-B BCI, and 89-C BCI). 210 Programa Nacional de Aprovechamiento del Atún y Protección de Delfines, Statement of Chief Researcher (Exhibit MEX-84). 211 Exhibits MEX-89-A BCI, MEX-89-B BCI and MEX-89-C BCI. 212 Panel Report, US – Tuna II (Mexico), paras. 7.316-7.317 and 7.533; Appellate Body Report, US – Tuna II (Mexico), para. 234. 213 Panel Report, US – Tuna II (Mexico), para. 7.533. 214 Department of Commerce, 2013 Cannery Receipts (Exhibit MEX-35). The percentage is calculated by adding the total quantity of “domestic” receipts from the west Pacific (66,020) to the total of “imported” receipts from the west Pacific (100,018), and comparing that figure to total receipts from all ocean regions (66,187 from Footnote continued on next page

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while about six percent was sourced from the Indian Ocean, and about six percent from the eastern and western Atlantic.215 Thus, U.S. canneries used virtually no tuna caught in the ETP. 229. By far, the largest exporter of canned tuna to the United States in 2012 was Thailand (about 54 percent of total imports).216 The fleets supplying Thailand’s canners obtain most of their supply from companies operating in the WCPO.217 230. As during the original proceedings, the three largest tuna product suppliers to the U.S. market are Bumble Bee, Chicken of the Sea and Starkist.218 In 2012, imports of Mexican tuna products in “air tight containers” (the tariff classification description for canned and pouched tuna products) into the United States were valued at $14,492 million, which was less than 2% of total imports of such products of $761,567 million.219 Total U.S. production of canned tuna products in 2012 was $886 million,220 so Mexican imports were less than 1 percent of the total U.S. market.221 (3) The Denial of Competitive Opportunities for Mexican Tuna Products 231. Nothing in the Amended Tuna Measure reduces or minimizes the detrimental impact on imported Mexican tuna products. Those products continue to be effectively excluded from the U.S. market. Mexican tuna producers have stated that there have been no material changes in comparison with the situation during the original procedures.222 232. While all like U.S. tuna products and most tuna products of other countries have access to the “dolphin-safe” label, the Amended Tuna Measure denies access to this label for most Mexican tuna products.223

Footnote continued from previous page domestic vessels plus 125,927 from non-U.S. vessels). Thus 166,038 from the west Pacific is 86.4 percent of the total of 192,114 from all ocean regions. 215 Department of Commerce, 2013 Cannery Receipts (Exhibit MEX-35). 216 NMFS import statistics, available at http://www.st.nmfs.noaa.gov/pls/webpls/trade_prdct_cntry_ ind.results?qtype=IMP&qyearfrom=2012&qyearto=2012&qprod_name=TUNA+%25+ATC+%28%25&qcountry= %25&qsort=COUNTRY&qoutput=TABLE (Exhibit MEX-85). 217 Panel Report, US – Tuna II (Mexico), para. 7.533. 218 “Globefish Highlights: A quarterly update on world seafood markets”, Vol. 2011, No. 2 (2011), available at http://www.globefish.org/upl/Publications/files/GSH_April_2011.pdf, p. 13 (Exhibit MEX-86). 219 NMFS import statistics (Exhibit MEX-85). 220 National Marine Fisheries Service, “Processed Fishery Products”, available at http://www.st.nmfs.noaa.gov/Assets/commercial/fus/fus12/05_process2012.pdf (Exhibit MEX-87). 221 $761,567 million plus $886 million equals $1.648 billion. Of that total, $14.4 million is about nine tenths of one percent. 222 Exhibits MEX 89-A BCI, MEX-89-B BCI and MEX-89 C BCI. 223 Panel Report, US – Tuna II (Mexico), paras. 7.316-7.317 and 7.533; Appellate Body Report, US – Tuna II (Mexico), para. 234.

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233. Accordingly, it is clear that the operation of the Amended Tuna Measure in the relevant market has a de facto detrimental impact on the group of like imported products. The Amended Tuna Measure modifies the conditions of competition in the relevant market to the detriment of the group of imported products as compared to the group of like domestic products or like products originating in any other Member. b. The Detrimental Impact Reflects Discrimination against Imports 234. Based on the two-step approach established by the Appellate Body in US – Tuna II (Mexico), the Panel must analyze whether the above-noted detrimental impact on imports stems exclusively from a legitimate regulatory distinction rather than reflecting discrimination against the group of imported products.224 In making this determination, the Panel must carefully scrutinize the particular circumstances of this dispute, that is, the design, architecture, revealing structure, operation, and application of the Amended Tuna Measure, and, in particular, whether the Amended Tuna Measure is even-handed, in order to determine whether it discriminates against the group of imported products.225 (1) The Relevant Regulatory Distinction 235. Under the Appellate Body’s test, the focus is on the regulatory distinction that accounts for the detrimental impact on Mexican tuna products as compared to U.S. tuna products and tuna products originating in other countries.226 In the original proceedings, the Appellate Body found that the lack of access to the dolphin-safe label of tuna products containing tuna caught by setting on dolphins had a detrimental impact on the competitive opportunities of Mexican tuna products in the U.S. market.227 It went on to find that the relevant regulatory distinction was the difference in labeling conditions and requirements for tuna products containing tuna caught by setting on dolphins in the ETP, on the one hand, and for tuna products containing tuna caught by other fishing methods outside the ETP, on the other hand.228 236. These findings apply equally to the Amended Tuna Measure. The relevant regulatory distinction (i.e., the difference in labeling conditions and requirements) includes the following conditions and requirements of the Amended Tuna Measure:  The disqualification of setting on dolphins in accordance with the AIDCP as a fishing method that can be used to catch tuna in the ETP in a dolphin-safe manner and the qualification of other fishing methods to catch tuna in a dolphin-safe manner;

224 Appellate Body Report, U.S. – Tuna II (Mexico), paras. 214-215 and 225; see also Appellate Body Reports, US – COOL, para. 271; Appellate Body Report, U.S. – Clove Cigarettes, paras. 182 and 215. 225 Appellate Body Report, U.S. – Tuna II (Mexico), paras. 214-215 and 225; see also Appellate Body Reports, US – COOL, para. 271; Appellate Body Report, U.S. – Clove Cigarettes, paras. 182 and 215. 226 Appellate Body Report, US –Tuna II (Mexico), para. 286. 227 Appellate Body Reports, US –Tuna II (Mexico), para. 235. 228 Appellate Body Reports, US –Tuna II (Mexico), paras. 284-286 and 297-298.

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 The record-keeping and verification requirements for tuna caught in the ETP by setting on dolphins in accordance with the AIDCP and the different requirements for tuna caught outside the ETP using both the same and different fishing methods; and  The mandatory independent observer requirements for tuna caught in the ETP by setting on dolphins in accordance with the AIDCP and the absence of such requirements for tuna caught outside the ETP using the same and different fishing methods. 237. When the facts and circumstances related to the design and application of these conditions and requirements are examined,229 it is clear that the detrimental impact on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. Rather, the detrimental impact reflects discrimination against the group of imported products. (2) The Differences in Labelling Conditions and Requirements are Not Legitimate (a) Applicable Law 238. The Appellate Body first introduced the term “legitimate regulatory distinction” in its report in US – Clove Cigarettes, which was issued after Mexico presented its case in the original proceedings in this dispute. Thus, at the time Mexico presented its evidence and argument before the original Panel, it did not have the benefit of the guidance provided by the Appellate Body on the interpretation of Article 2.1, including the term “legitimate regulatory distinction”. Since US – Clove Cigarettes, the Appellate Body has further elaborated upon the meaning of this term in US – Tuna II (Mexico) and US – COOL. The Panel Report in EC – Seal Products is the most recent elaboration on the term’s meaning. 239. In US – Clove Cigarettes, the Appellate Body found that where a detrimental impact on competitive opportunities for imports stems “exclusively” from a legitimate regulatory distinction, such an impact should not be prohibited under Article 2.1.230 It noted that an inquiry into the “even-handedness” of a measure can answer the question of whether the measure discriminates against a group of imported products (i.e., it is not even-handed and is thus prohibited) or, alternatively, whether its detrimental impact on imports stems exclusively from a legitimate regulatory distinction (i.e., it is even-handed and, on this basis, it is permitted).231 In US – Tuna II (Mexico), the Appellate Body clarified that an inquiry into the “even-handedness” of a measure can answer the question of whether the detrimental impact of a measure on imported products stems exclusively from a legitimate regulatory distinction.232 The Appellate Body Reports in US – Clove Cigarettes, US – Tuna II (Mexico), and US – COOL derived the term even-handed from the language of the sixth recital of the TBT Agreement. “Even-handed”

229 In US – COOL, the Appellate Body had to examine “the facts and circumstances related to the design and application of the relevant regulatory distinctions” to determine whether they lacked even-handedness. See Appellate Body Reports, US – COOL, para. 341. 230 Appellate Body Report, US – Clove Cigarettes, paras. 169, 89, 100 and 173-175. 231 Appellate Body Report, US – Clove Cigarettes, paras. 95, 182 and 215. 232 Appellate Body Report, US – Tuna II (Mexico), para. 216.

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appears to be shorthand for the following part of the recital: measures “are not applied in a manner that would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail or a disguised restriction on international trade”, i.e., including (i) arbitrary discrimination, (ii) unjustifiable discrimination, and/or (iii) a disguised restriction.233 Thus, if a regulatory distinction constitutes a means of arbitrary discrimination, unjustifiable discrimination or a disguised restriction, it is not even-handed and, therefore, is not a legitimate distinction. In such circumstances, the detrimental impact cannot be said to stem exclusively from a legitimate regulatory distinction. 240. In EC – Seal Products, the Panel referred to the guidance provided by the Appellate Body regarding an analysis of the requirements under Article 2.1 of the TBT Agreement and the chapeau of Article XX of the GATT 1994, and suggested that the legitimacy of the regulatory distinction should be determined by examining the following three questions: (i) is the distinction rationally connected to the objective of the measure; (ii) if not, is there any cause or rationale that can justify the distinction (i.e., “explain the existence of the distinction”) despite the absence of the connection to the objective of the measure, taking into account the particular circumstances of the current dispute; and, (iii) is the distinction concerned, as reflected in the measure, “designed or applied in a manner that constitutes arbitrary or unjustifiable discrimination”, such that it lacks “even-handedness”?234 241. While the third question appears to encompass the interpretation set out in the Appellate Body’s Reports in US – Clove Cigarettes, US – Tuna II (Mexico), and US – COOL, the first two questions may introduce additional elements to the determination of the legitimacy of a regulatory distinction. Alternatively, given the broad scope of the concept of even-handedness, the Appellate Body’s approach could be interpreted to encompass all three questions posed by the Panel in EC – Seal Products, and the Panel could be viewed as simply breaking out specific elements of the Appellate Body’s approach. 242. For the purpose of this dispute, it does not matter whether the approach of the Panel in EC – Seal Products or the approach of the Appellate Body is applied. As discussed below, all three questions, or simply the third question asked in isolation, lead to the same conclusion. The relevant regulatory distinction in the Amended Tuna Measure is not legitimate. (b) Findings of the Appellate Body in the Original Proceedings 243. In the original dispute, the Appellate Body examined whether the Tuna Measure was even-handed in the manner in which it addresses the risks to dolphins arising from different fishing methods in different areas of the ocean.235 The question before it was whether the United States had demonstrated that the difference in labeling conditions for tuna products containing tuna caught by setting on dolphins in the ETP, on the one hand, and for tuna products containing tuna caught by other fishing methods outside the ETP, on the other hand, was a legitimate

233 Appellate Body Report, US – Clove Cigarettes, para. 95; Appellate Body Report, US – Tuna II (Mexico), paras. 212-213; and Appellate Body Report, US – COOL, paras. 271-272, 293, 340-341, 347 and 349. 234 Panel Report, EC – Seal Productcs, paras. 7.259 and 7.328. 235 Appellate Body Report, Tuna II (Mexico), paras. 232 and 281.

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regulatory distinction.236 The Appellate Body concluded that the United States had not demonstrated that the difference in labelling conditions was “calibrated” to the risks to dolphins arising from different fishing methods in different areas of the ocean.237 It followed from this that the United States had not demonstrated that the detrimental impact of the U.S. measure on Mexican tuna products stemmed exclusively from a legitimate regulatory distinction.238 244. The Appellate Body also observed that the U.S. measure fully addressed the adverse effects on dolphins resulting from setting on dolphins in the ETP, whereas it did not address mortality (observed or unobserved) arising from fishing methods other than setting on dolphins outside the ETP.239 In these circumstances, the Appellate Body was not persuaded that the United States had demonstrated that the measure is even-handed in the relevant respects.240 The Appellate Body found that the United States had not justified as non-discriminatory under Article 2.1 the different requirements that it applies to tuna caught by setting on dolphins inside the ETP and tuna caught by other fishing methods outside the ETP for access to the U.S. “dolphin-safe” label.241 As a consequence, the United States had not demonstrated that the detrimental impact of the U.S. measure on Mexican tuna products stems exclusively from a legitimate regulatory distinction.242 245. The Appellate Body concluded that the U.S. dolphin-safe labeling provisions accord less favourable treatment to Mexican tuna products than that accorded to tuna products of the United States and tuna products originating in other countries and are therefore inconsistent with Article 2.1. (c) The Amended Tuna Measure 246. Notwithstanding that it was able to benefit from the Appellate Body’s elaboration on the interpretation and application of Article 2.1 in US – Clove Cigarettes, US – Tuna II (Mexico) and US – COOL (the reports were issued one year prior to the end of the reasonable period of time for bringing itself into compliance with the DSB recommendations and rulings in this dispute), the United States’ action to bring itself into compliance fails to address all of the differences in labeling conditions and requirements in the Amended Tuna Measure. It is clear from an examination of these differences that the detrimental impact of the Amended Tuna Measure on Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. i) Disqualification/Qualification of Fishing Methods 247. Under the Amended Tuna Measure, the labeling conditions and requirements differ depending on the fishing method used to catch tuna. Setting on dolphins is a fishing method that

236 Appellate Body Report, Tuna II (Mexico), para. 284. 237 Appellate Body Report, Tuna II (Mexico), para. 297. 238 Appellate Body Report, Tuna II (Mexico), para. 297. 239 Appellate Body Report, Tuna II (Mexico), para. 297. 240 Appellate Body Report, Tuna II (Mexico), para. 297. 241 Appellate Body Report, Tuna II (Mexico), para. 298. 242 Appellate Body Report, Tuna II (Mexico), para. 298.

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is “disqualified” from being used to catch dolphin-safe tuna, even if the utilization of this method complies with the stringent AIDCP requirements and there are no dolphin mortalities or serious injuries in the set in which the tuna is caught, as confirmed by an independent on-board observer and certified under the comprehensive tracking and verification system established by the AIDCP and Mexican law. This disqualification is the result of the decision of the Court of Appeals for the Ninth Circuit that declared unlawful the Department of Commerce’s 1999 and 2002 findings that the intentional deployment on or encirclement of dolphins with purse-seine nets was not having a significant adverse impact on any depleted dolphin stock in the ETP.243 These findings by the Department of Commerce were only permitted under the DPCIA to be made between 1 March 1999 and 31 March 1999 (initial finding) and between 1 July 2001 and 31 December 2002 (final finding).244 No further findings were permitted. Thus, the DPCIA does not provide for new findings to be made in the event there is a change in the evidence regarding the depleted status of the dolphin stocks. As a consequence, under the Amended Tuna Measure, AIDCP-compliant fishing is permanently disqualified from being used to catch dolphin-safe tuna. 248. The situation is different for the fishing methods used to catch tuna outside the ETP. With the exception of driftnet fishing for tuna on the high seas by the Italian fleet, all of the other tuna fishing methods (including other driftnet fishing) are qualified to be used to catch tuna in a dolphin-safe manner, even though it is well documented that these methods cause substantial dolphin mortalities and serious injuries. As explained above in section III of this submission, these “qualified” fishing methods have adverse effects on dolphins that are equal to or greater than the disqualified tuna fishing method of setting on dolphins in an AIDCP-compliant manner. For example, the evidence referred to in section III includes the following:  Nets are set on dolphins outside the ETP;245  It is well-accepted and scientifically documented that dolphins are killed as bycatch in all of the world’s major tuna fisheries;246  Scientists have estimated that globally, hundreds of thousands of cetaceans die from entanglement in fishing gear each year, including in U.S. fisheries;247  A report published by the Sea Turtle Restoration Project on longline fishing estimates that over 18,000 dolphins are killed annually by longline fishing in the Pacific Ocean;248  There is substantial dolphin bycatch when using fish-aggregating devices (FADs) in the Philippines, where it is estimated that 2,000 dolphins are killed annually;249

243 See Section II.A.1.a of this submission. 244 16 USC § 1385(g)(1) and (2) (Exhibit MEX-8). 245 See Sections III.A and III.A.2 of this submission. 246 See Section III.A.1 of this submission. 247 See Read, Drinker, & Northridge, “Bycatch of Marine Mammals in U.S. and Global Fisheries”, 20 Conservation Biology (2006) 163 (Exhibit MEX-6). 248 Sea Turtle Restoration Project, “Pillaging the Pacific” (November 16, 2004) (Exhibit MEX-64).

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 Gillnet fishing along the Indian coast is killing about 10,000 cetaceans including dolphins every year which is “alarmingly high”;250  When dolphins do not immediately drown in a gillnet (observed adverse effects), interactions with the net causes dolphins to die later (unobserved adverse effects);251  It is now widely recognized that dolphins are severely harmed by interactions with longline fishing and that adverse effects are both observed and unobserved;252 and  Trawl fishing kills and injures dolphins.253 249. Notwithstanding these substantial adverse effects on dolphins, the other fishing methods are not disqualified from being used to catch “dolphin-safe” tuna. They are qualified to be used to catch dolphin-safe tuna, subject only to the requirement that there are no dolphin mortalities or serious injuries observed in the gear deployments in which the tuna is caught. 250. The facts and circumstances related to the design and the application of the measure at issue – which results not only in the disqualification of Mexico’s primary fishing method from ever being used to catch dolphin-safe tuna, but also in the qualification of other fishing methods to catch “dolphin-safe” tuna – clearly establish that the regulatory distinction, i.e., the difference in labeling conditions and requirements, is not even-handed. As a consequence, the detrimental impact on Mexican imports does not stem exclusively from a legitimate regulatory distinction. 251. As noted above, it does not matter whether the approach of the Panel in EC – Seal Products or the approach of the Appellate Body is applied for the purpose of undertaking a legal assessment of this issue because the outcome is the same in either case. Mexico applies the three questions articulated by the Panel in EC – Seal Products on the understanding that either all three questions, considered together, or the third question alone, considered in isolation, will encompass the approach of the Appellate Body. a) First Question to Determine the Legitimacy of the Regulatory Distinction 252. The first question posed by the Panel in EC – Seal Products to determine the legitimacy of a regulatory distinction is whether the distinction is rationally connected to the objective of the measure. Applying this question to the labelling conditions and requirements that are related to the disqualification or qualification of different fishing methods in different regions as “dolphin-

Footnote continued from previous page 249 See Section III.A.2 of this submission. 250 See Section III.A.3 of this submission. 251 See Section III.A.3 of this submission. 252 See Section III.A.4 of this submission. 253 See Section III.A.5 of this submission.

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safe”, it is clear that the relevant regulatory distinction is not rationally connected to the objective of the measure. 253. In EC – Seal Products, the relevant regulatory distinction concerned two exceptions from the ban on seal products: one that applied to indigenous communities (IC) hunts, and another that applied to marine resource management (MRM) hunts. The Panel found that the objective of the EU Seal Regime was to address the moral concerns of the EU public with regard to the welfare of seals. It found that the same animal welfare concerns as those arising from seal hunting in general also existed in the IC and MRM hunts in particular, as the latter hunts could cause the very pain and suffering for seals that is the source of the EU public’s concern.254 The Panel determined that the IC and MRM hunts posed at least the same risks to the animal welfare of seals as the commercial hunts did.255 For this reason, the Panel concluded that the IC and MRM distinctions did not bear a rational relationship to the objective of addressing the moral concerns of the EU public on seal welfare.256 254. A very similar situation arises in this dispute. Based on the findings of the panel, which were confirmed by the Appellate Body, the objectives of the original Tuna Measure were: (i) “ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins”; and (ii) “contributing to the protection of dolphins, by ensuring that the US market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins”.257 The Amended Tuna Measure maintains the same objectives. As explained above, the “qualified” tuna fishing methods have substantial adverse effects on dolphins. Since these tuna fishing methods have substantial adverse effects and pose substantial risks for dolphins, their qualification for use in catching “dolphin-safe” tuna is inconsistent with the objectives of the Amended Tuna Measure. In this light, the “disqualification” of Mexico’s principal fishing method and the “qualification” of other alternative fishing methods do not bear a rational connection to the objectives of the Amended Tuna Measure. 255. The permanent disqualification of AIDCP-compliant fishing from being used to catch dolphin-safe tuna provides additional evidence that the disqualification or qualification of fishing methods does not bear a rational connection to the objectives of the Amended Tuna Measure. As explained above, the disqualification at issue is the result of the absence of findings by the Department of Commerce that the intentional deployment on or encirclement of dolphins with purse-seine nets was not having a significant adverse impact on any depleted dolphin stock in the ETP. The Amended Tuna Measure does not allow for this question to be reconsidered in the light of prevailing evidence concerning dolphin stocks in the ETP. Thus, for example, the increases in DMLs agreed to by the United States in 2009 and the results of the ISSF scientific workshop on dolphin populations in the ETP in 2012258 cannot be taken into account in determining whether

254 Panel Report, EC – Seal Products, paras. 7.274-7.275 and 7.336-7.340. 255 Panel Report, EC – Seal Products, para. 290. 256 Panel Report, EC – Seal Products, para. 290. 257 Appellate Body Report, US – Tuna II (Mexico), paras. 242 and 325, citing Panel Report, US – Tuna II (Mexico), para. 7.401. 258 See Section III.C of this submission.

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or not to disqualify AIDCP-compliant fishing methods. Accordingly, the disqualification or qualification of fishing methods bears no rational connection to the question of whether there are adverse effects on depleted dolphin stocks. As a consequence, it bears no rational connection to the objectives of the Amended Tuna Measure. b) Second Question to Determine the Legitimacy of the Regulatory Distinction 256. Under the approach of the Panel in EC – Seal Products, given the absence of a rational connection, a second question must be answered. Is there any cause or rationale that can justify the distinction (i.e., “explain the existence of the distinction”) despite the absence of the connection to the objective of the measure, taking into account the particular circumstances of the current dispute? Applying this question to the condition or requirement relating to the disqualification or qualification of fishing methods, it is clear that there is no cause or rationale that can justify the distinction. 257. In asking this question in the EC – Seal Products dispute, the Panel addressed the IC and MRM hunt exceptions separately. With respect to the IC exception, it examined whether the purpose of the IC hunt differed from the purpose of commercial hunts and whether any distinction found in the purpose of the hunt justified the distinction drawn under the measure between commercial hunts (to which the ban applied) and IC hunts (which were exempt from the ban).259 The Panel found that the subsistence aspect of the IC hunts combined with the identity of the hunter as Inuit distinguished the purpose of IC hunts from commercial hunts.260 The Panel observed that the interests to be balanced against the objective of the measure were grounded in the importance, recognized broadly in national and international instruments, of the need to preserve Inuit culture and tradition and to sustain their livelihood, particularly in relation to the significance of seal hunting in Inuit communities.261 The Panel found that the cause or rationale for the exception granted under the EU Seal Regime to products derived from IC hunts was justifiable despite the rational disconnection to protecting seal welfare because it was founded on the unique interests of Inuit and indigenous communities, which were recognized broadly.262 It also found that the evidence showed that Inuit interests had always been raised as an important consideration when adopting a regulation relating to seal products, including the measure at issue.263 Under these circumstances, the Panel was persuaded that the protection of Inuit interests justified the distinction between commercial and IC hunts and that the European Union had explained sufficiently the basis for distinguishing IC hunts from commercial hunts through the IC exception.264

259 Panel Report, EC – Seal Products, para. 7.282. 260 Panel Report, EC – Seal Products, para. 7.289. 261 Panel Report, EC – Seal Products, para. 7.296. 262 Ibid., para. 7.298. 263 Ibid., para. 7.298. 264 Ibid., para. 7.298.

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258. With respect to the MRM exception, it examined the purpose of MRM hunts (i.e., specifically controlling nuisance seals and seal culling) compared to that of commercial hunts and whether any distinction found in the purpose of the hunt justified the distinction drawn under the measure between commercial hunts (to which the ban applied) and MRM hunts (which were exempt from the ban).265 The Panel recognized that MRM hunts took place on an occasional basis, and on a much smaller scale than commercial hunts, and that the primary means to generate income for those conducting MRM hunts was not seal hunting itself.266 However, it was not convinced that the purpose of MRM hunts and the purpose of commercial hunts were of a different character or nature.267 Moreover, the difference that might be found between the commercial aspects of an MRM hunt and those of a commercial hunt was not sufficient to justify the lack of a rational connection between the distinction in question and the objective of addressing the EU public moral concerns on seal welfare.268 The Panel found that the rationale put forward by the European Union based on the purpose of MRM hunts, combined with their small scale and occasional occurrences, did not justify the MRM distinction in the absence of a rational connection to the objective of the measure concerning seal welfare.269 259. Thus, in applying this second question, the Panel in EC – Seal Products examined reasons extraneous to the objective of the measure (e.g., the preservation of Inuit culture and tradition) to justify the distinction despite the absence of the connection to the objective of the measure. Applying this second question to the Amended Tuna Measure, in the light of the substantial adverse effects that the “qualified” fishing methods have on dolphins globally, there are no reasons extraneous to the objective of dolphin protection that provide a cause or rationale to justify allowing tuna caught by these fishing methods to be designated as “dolphin-safe”. 260. Accordingly, it is clear from the application of the first two questions articulated by the Panel in EC – Seal Products that, by reason of the disqualification/qualification condition or requirement, the Amended Tuna Measure’s detrimental impact on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. c) Third Question to Determine the Legitimacy of the Regulatory Distinction 261. Under the approach of the Panel in EC – Seal Products, if the Panel finds that there is a cause or rationale to justify the difference in labeling conditions and requirements that is reflected in disqualified and qualified fishing methods despite the absence of the connection to the objective of the measure, the Panel must ask a third question. Is the distinction designed or applied in a manner that constitutes arbitrary or unjustifiable discrimination, such that it lacks even-handedness? This question encompasses, at least in part, the approach to this issue articulated by the Appellate Body. It is clear from the facts and circumstances of this dispute that

265 Ibid., para. 7.341. 266 Ibid., para. 3.44. 267 Ibid., para. 3.44. 268 Ibid., para. 3.44. 269 Ibid., para. 7.346.

83 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014 this question must be answered in the affirmative. Under the Amended Tuna Measure, the distinction in labelling conditions and requirements relating to the disqualification/qualification of fishing methods is designed and applied in a manner that constitutes arbitrary or unjustifiable discrimination, such that it lacks even-handedness. 262. The rulings of the Appellate Body and Panel on the interpretation and application of Article 2.1 provide guidance on the meaning of even-handedness. In these reports the regulatory distinction was found not to be even-handed for the following reasons:  Clove cigarettes were banned on the basis that their flavouring made them more appealing to young people, while menthol cigarettes were not banned even though they were similarly flavoured and also appealed to young people (US – Clove Cigarettes);270  Different requirements for access to the U.S. dolphin-safe label were applied to tuna caught by setting on dolphins inside the ETP and tuna caught by other fishing methods outside the ETP, even though the use of certain tuna fishing methods other than setting on dolphins outside the ETP may produce, and have produced, significant levels of dolphin bycatch. Moreover, the measure did not address observed mortality, and any resulting adverse effects on dolphin populations, for tuna not caught by setting on dolphins or by high seas driftnet fishing outside the ETP (US – Tuna II (Mexico));271  The manner in which the measure sought to provide information to consumers on origin was arbitrary and it unjustifiably imposed a disproportionate burden on upstream producers and processors. The level of information conveyed to consumers was far less detailed and accurate than the information required to be tracked and transmitted, and confusing information was being conveyed to consumers (US – COOL); 272 and  Although the rationale or cause for the exception from the ban was “subsistence” of Inuit and indigenous communities, the exception was de facto available exclusively to Greenland, where the Inuit hunt bears the greatest similarities to the commercial characteristics of commercial hunts. This suggested that the IC exception was not designed or applied in an even-handed manner so as to make the benefits of the exception available for all potential beneficiaries.273 Moreover, seal products from Sweden, Finland, and possibly the United Kingdom would likely qualify under the MRM exception, while seal products from Canada and

270 Appellate Body Report, US – Clove Cigarettes, para. 225. 271 Appellate Body Report, US – Tuna II (Mexico), para. 298. 272 Appellate Body Report, US – COOL, paras. 346-350. 273 Panel Report, EC – Seals, paras. 7.317-7.319.

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Norway would not.274 This suggested that the exception was designed with the situation of EU member States in mind.275 263. The findings of the Appellate Body in US – Clove Cigarettes and US – Tuna II (Mexico) are directly relevant to the lack of even-handedness of the disqualification/qualification requirement or condition. The Amended Tuna Measure assumes that setting on dolphins in an AIDCP-compliant matter has adverse effects on dolphins that justify disqualification, and this assumption is permanent and will not change, even if evidence establishes that dolphin stocks are not being adversely affected. However, there is no objective scientific study that confirms the adverse effects. Although they were subsequently found unlawful by the courts, the only studies that were undertaken by the Department of Commerce in 1999 and 2002 concluded that setting on dolphins could not be shown to be having an adverse impact on dolphins in the ETP.276 At the same time, the Amended Tuna Measure assumes that catching tuna using other fishing methods does not have adverse effects on dolphins. However, the evidence presented by Mexico in section III of this submission contradicts this assumption and proves that other fishing methods have substantial adverse effects on dolphins that are equal to or greater than those of setting on dolphins in an AIDCP-compliant manner. There is no justification for the different treatment. In the circumstances of this dispute, all tuna fishing methods should be either disqualified or qualified. The finding of the Panel in EC – Seal Products is also relevant. Only the fishing methods predominantly used by the United States’ tuna fleet and the fleets of other countries qualify for dolphin-safe labeling, while the fishing method used by the Mexican fleet does not. This suggests that the distinction is designed with the situation of the fleets of the United States and other countries in mind as distinguished from the Mexican fleet. 264. Accordingly, by reason of the disqualification/qualification condition or requirement, the Amended Tuna Measure’s detrimental impact on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. d) Conclusion 265. In conclusion, by reason of the “disqualification/qualification” element of the relevant regulatory distinction, the Amended Tuna Measure’s detrimental impact on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. The Amended Tuna Measure is therefore inconsistent with Article 2.1 of the TBT Agreement. ii) Record-keeping and Verification Requirements 266. The relevant regulatory distinction – i.e., difference in labeling conditions and requirements – includes record-keeping and verification requirements. These are important because the fundamental character of the Amended Tuna Measure is the distinction between tuna products that are and are not dolphin-safe under the U.S. definition. Consistent with this fundamental character, and in order to achieve the objectives of the Amended Tuna Measure, accurate information must be provided to consumers on whether the tuna contained in a tuna

274 Ibid., paras. 7.350-7.352. 275 Ibid., paras. 7.350-7.352. 276 See section II.A.1.a of this submission.

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product is caught in a manner that adversely affects dolphins. It is only through the provision of accurate information that the label can be made available exclusively to products containing tuna that was not caught in a manner that adversely affects dolphins.277 The United States’ position before the Panel was that the Tuna Measure accurately conveys to consumers that the product does not contain tuna that was caught in a manner that adversely affects dolphins.278 The Panel acknowledged that the provision of accurate information regarding adverse effects on dolphins was central to the Tuna Measure.279 267. In the context of Article 2.1, “accuracy” is central to assessing the even-handedness of the Amended Tuna Measure. If tuna products from the United States or other countries that are not dolphin-safe are permitted to be inaccurately labeled as dolphin-safe, then they will be granted a competitive advantage over Mexican tuna products in circumstances that are inconsistent with the objectives of the Amended Tuna Measure. Such a result will clearly not be even-handed. While accuracy is relevant to the disqualification/qualification element of the regulatory distinction discussed above (e.g., if fishing methods that cause substantial adverse effects to dolphins are “qualified”, the information provided to consumers regarding tuna caught by those methods will not be accurate), it is most relevant to two other elements of the regulatory distinction, namely the record-keeping and verification requirements (addressed in this section) and the independent observer requirements (addressed separately in the next section). 268. Under the Amended Tuna Measure, the record-keeping and verification requirements differ depending on the geographic area in which the tuna are caught. 269. As discussed in section II.B.4 of this submission, strict record-keeping and verification requirements and procedures are applied to tuna caught in the ETP, Mexico’s primary fishing area. These requirements and procedures take into account the circumstances surrounding the fishing, transporting, trading and processing of tuna from the ETP to ensure that the dolphin-safe status of the tuna is accurately tracked from the moment that it is captured in the ocean until it is delivered to the consumer. They include:  The tuna tracking form (TTF), a verification document that follows the tuna from ocean through production;  Separation of dolphin-safe and non-dolphin-safe tuna during fishing operations, recording the species, dolphin-safe status and quantity of tuna on the TTF, and assigning a TTF number to the tuna;  Unloading catch at port and confirming the species, dolphin-safe status and quantity of tuna on the TTF, and recording unloading so that the TTF number follows the tuna;

277 Appellate Body Report, US – Tuna II (Mexico), para. 285, referring to Panel Report, US – Tuna II (Mexico), para. 7.490. The Panel found that the distinctions were drawn in a way that created a genuine risk that consumers may be misled about whether the tuna was caught by using a technique that does not adversely affect dolphins. See Appellate Body Report, US – Tuna II (Mexico), footnote 592, referring to Panel Report, US – Tuna II (Mexico), para. 7.562. 278 Panel Report, US – Tuna II (Mexico), paras. 4.73, 4.110 and 4.146. 279 Ibid., paras. 7.412-7.413, 7.427, 7.479, 7.482, 7.490, 7.507, 7.515, 7.542, 7.555, 7.564, 7.592, 7.728.

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 Unloading catch at the processing facility and confirming the species, dolphin- safe status and quantity of tuna on the TTF, and recording the unloading so that the TTF number follows the tuna;  Processing tuna at the facility, using separate lines for dolphin-safe and non- dolphin-safe tuna, and confirming the species, dolphin-safe status and quantity of tuna on the TTF, and recording the movement of tuna so that the corresponding TTF number follows the tuna through every step of processing;  Storage, transportation and sale of tuna using tracking and verification procedures to ensure that the TTF number follows the tuna; and  Conducting periodic audits and spot checks to verify the accuracy of the foregoing information.280 270. Mexico has implemented these stringent requirements and procedures.281 They ensure that the information provided on the dolphin-safe status of Mexican tuna under the U.S. definition of dolphin-safe is accurate. The complexity and necessity of a tracking system for dolphin-safe tuna is evidenced in the many steps outlined in the above requirements and procedures. It is also illustrated in the description of tuna processing and tracking by the Mexican industry.282 Any break in this meticulous audit trail will mean that the information provided on the dolphin-safe status of the tuna cannot be certified as accurate. 271. In stark contrast, similar record-keeping and verification requirements and procedures are not applied to tuna that is caught in other geographic areas outside the ETP. Moreover, the limited requirements that do apply to such tuna do not take into account the circumstances surrounding the fishing, transporting, trading and processing of tuna from these other areas. Notwithstanding the fact that none of the tuna caught using “qualified” fishing methods can be accurately designated as dolphin-safe (discussed above in relation to disqualified/qualified fishing methods) and the fact that a captain’s certificate of dolphin-safe status is inherently unreliable with regards to observed adverse effects on dolphins (discussed in the next section), to the extent that legitimate dolphin-safe tuna is caught by, and landed on, a fishing vessel outside the ETP, there is no way to track the dolphin-safe status of that tuna from the moment of its capture in the ocean to its delivery to the U.S. consumer. Among other things:  As most major tuna products companies in other countries are not vertically integrated (as they are in the Mexican tuna industry), they purchase tuna from third party companies and, in many cases, the tuna has passed through at least two parties before it is processed;283

280 See Section II.B.4.b of this submission. 281 See Section II.B.4.b(1)(b) of this submission. 282 See Section III.B.1 of this submission. 283 See Section III.B.2.a of this submission.

87 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

 Many vessels do not know the ultimate destination for their catch when it is harvested;284  For longline and purse seine fishing, the catch of multiple fishing vessels is consolidated and commingled in refrigerated fish carriers, some of which are believed to be engaged in transshipment at sea;285  Transshipment can occur in ports, terminals and installations;286  With respect to purse seine vessels managed by the SPTC, “it was not possible to relate any particular fish sold for the trip to a particular individual set”;287  Vessels fishing outside of the ETP clearly set on dolphins,288 yet if the dolphin-set fishing method is used even a single time during a voyage, none of the tuna caught during the voyage may be designated as dolphin-safe;289 and  There is no requirement for dolphin-safe tuna tracking, no TTF forms, no tracking through processing, no requirements and procedures such as those outlined above for the ETP and Mexico, and, therefore, no means to verify the accuracy of the information about how the tuna was caught and whether or not dolphins were killed or seriously injured during the capture of the tuna.290 272. It is clear that the route taken by tuna from outside the ETP to U.S. consumers is more complex than the route taken by Mexican tuna, and that there are many actions that could occur during a fishing voyage and in the downstream processing and distribution chain that could eliminate the dolphin-safe status of such tuna. In light of this complexity, there are insufficient requirements and procedures under the Amended Tuna Measure to provide the necessary audit trail for tracking the tuna. As a consequence, accurate information is not being provided on the dolphin-safe status of tuna products that contain tuna caught outside the ETP. 273. The facts and circumstances related to the design and application of the record-keeping and verification requirements inside and outside the ETP clearly establish that the relevant regulatory distinction — i.e., the difference in labeling conditions and requirements — is not even-handed and, therefore, the detrimental impact on Mexican imports does not stem exclusively from a legitimate regulatory distinction. a) First Question to Determine the Legitimacy of the Regulatory Distinction

284 Joint comments of the three major tuna producers in the U.S. market – Starkist, Chicken of the Sea and Bumble Bee. See Section II.B.1 of this submission. 285 See Section III.B.2.a of this submission. 286 See Section III.B.2.a of this submission. 287 See Section III.B.2.b (1) of this submission. 288 See Section III.A.2 of this submission. 289 16 U.S.C. § 1385(d)(1)(B)(i) and (ii) (Exhibit MEX-8). 290 See Section III.B.2.b of this submission.

88 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

274. As noted above, the first question posed by the Panel in EC – Seal Products to determine the legitimacy of a regulatory distinction is whether the distinction is rationally connected to the objective of the measure. Applying this question to the labelling conditions and requirements relating to record-keeping and verification requirements for tuna caught inside and outside the ETP, it is clear that the distinction is not rationally connected to the objective of the measure. 275. A situation arises that is similar to that in EC – Seal Products and to the above analysis of this first question in the context of the disqualification/qualification of fishing methods. The objectives of the Amended Tuna Measure are: (i) “ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins”; and (ii) “contributing to the protection of dolphins, by ensuring that the U.S. market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins”.291 As explained above, the record-keeping and verification requirements for tuna caught inside the ETP are comprehensive and accurate. However, the requirements and procedures for tracking and verifying tuna caught outside the ETP are unreliable and do not provide accurate information on the dolphin-safe status of the tuna products comprising this tuna. Thus, U.S. consumers are not receiving accurate information on such tuna products and could be misled or deceived or could encourage fishing fleets to catch tuna in a manner that adversely affects dolphins. In this light, the difference in record-keeping and verification requirements for tuna caught inside and outside the ETP does not bear a rational connection to the objectives of the Amended Tuna Measure. b) Second Question to Determine the Legitimacy of the Regulatory Distinction 276. Given the absence of a rational connection, the approach taken by the Panel in EC – Seal Products requires that a second question must be answered. Is there any cause or rationale that can justify the distinction (i.e., “explain the existence of the distinction”) despite the absence of the connection to the objective of the measure, taking into account the particular circumstances of the current dispute? 277. Applying this question to the difference in record-keeping and verification requirements, it is clear that there is no cause or rationale that can justify the distinction. There are no reasons extraneous to the objective of dolphin protection that provide a cause or rationale for providing inaccurate information on the dolphin-safe status of tuna that is caught outside the ETP, while only providing accurate information for tuna that is caught within the ETP. All dolphin-safe tuna should be accurately labeled. 278. Accordingly, it is clear from the application of the first two questions articulated by the Panel in EC – Seal Products that, by reason of the differences in record-keeping and verification requirements, the Amended Tuna Measure’s detrimental impact on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction.

291 Appellate Body Report, US – Tuna II (Mexico), paras. 242 and 325, referring to Panel Report, US – Tuna II (Mexico), para. 7.401.

89 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

c) Third Question to Determine the Legitimacy of the Regulatory Distinction 279. Under the approach of the Panel in EC – Seal Products, if the Panel finds that there is a cause or rationale to justify the differences in record-keeping and verification requirements, the Panel must ask a third question. Is the distinction designed or applied in a manner that constitutes arbitrary or unjustifiable discrimination, such that it lacks even-handedness? This question also encompasses, at least in part, the approach to this issue articulated by the Appellate Body. It is clear that this question must be answered in the affirmative. Under the Amended Tuna Measure, differences in record-keeping and verification requirements are designed and applied in a manner that constitutes arbitrary or unjustifiable discrimination, such that it lacks even-handedness. 280. As discussed above, the “accuracy” of the information on the dolphin-safe nature of the tuna products is at the core of the Amended Tuna Measure. Accurate information is being provided on tuna caught in the ETP, but not on tuna caught in other fisheries. Competitive opportunities are being denied to Mexican tuna products vis-à-vis tuna products that are labeled dolphin-safe but are not dolphin-safe or cannot be verified as dolphin-safe within the U.S. definition. In such circumstances, the measure is clearly not even-handed. 281. Accordingly, the differences in record-keeping and verification requirements constitute arbitrary or unjustifiable discrimination, such that it lacks even-handedness. d) Conclusion 282. In conclusion, by reason of the differences in record-keeping and verification requirements, the Amended Tuna Measure’s detrimental impact on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. The Amended Tuna Measure is therefore inconsistent with Article 2.1 of the TBT Agreement. iii) Mandatory Independent Observer Requirements 283. Although related to the record-keeping and verification requirements, Mexico addresses the mandatory independent observer requirement separately because of its fundamental importance to the designation of tuna as dolphin-safe at the time of capture. Notwithstanding the fact that none of the tuna that is caught using “qualified” fishing methods can be accurately designated as dolphin-safe (as discussed above, in relation to disqualified/qualified fishing methods), to the extent that legitimate dolphin-safe tuna can be caught by, and landed on, a fishing vessel outside the ETP, it will not matter if a comprehensive and meticulous audit trail is implemented downstream to the U.S. consumer if the initial dolphin-safe designation is inaccurate. The entire audit trail will be tainted.

90 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

a) Independent Observers Inside and Outside the ETP 284. Observers who are independent, specially trained, and approved by the AIDCP are mandated for tuna fishing in the ETP, and they ensure the accuracy of information concerning the dolphin-safe status of tuna caught in the ETP.292 285. Outside of the ETP, there is no requirement for independent observers. Instead, under the Amended Tuna Measure, the dolphin-safe status of tuna is based solely on self-certification by the captain in charge of the fishing vessel. Such self-certification is meaningless. Captains of vessels are not qualified to make dolphin-safe determinations and, even if they were qualified, their certifications are inherently unreliable, as is made clear in the following evidence:  The three major tuna products in the U.S. market – Starkist, Chicken of the Sea and Bumble Bee – jointly submitted comments on the new requirement for captains’ certifications from vessels not using purse seine nets, saying that such certificates will not be credible because, among other things: (i) it would require the education of thousands of longliners and jig boats in multiple languages on what constitutes serious injury and how “sets” are defined; (ii) many vessels do not know the ultimate destination for their catch and therefore would not know which fish were destined for the U.S. market; and (iii) due to the significantly lower observer coverage on longline fleets, the ability for the U.S. to audit and verify a captain’s statement of “no dolphin mortality or serious injury” will be challenging and could weaken the veracity and credibility of the U.S. Dolphin Safe program;293  Captains of fishing vessels cannot be expected to be able to accurately report on dolphin-safe status when even observers require special training to report such status, as evidenced in a statement by the American Tunaboat Association (ATA) regarding observers serving under the WCPFC who “undergo no special training in marine mammal behavior or interactions with fisheries, and clearly are not qualified (or authorized) to make such a certification”;294  In a similar statement regarding qualifications for the WCPFC observers, which would be even more applicable in the context of captains of fishing vessels, the legal counsel to U.S.-flag purse seiners noted that the observer training programs give “[v]ery little attention … to marine mammal protection”, and “[h]ow these observers, given their current level of training, could be used to make split-second decisions that categorize a particular fishing set as ‘dolphin-safe’ where schools of dolphins are not chased is hard to imagine”;295

292 See Section II.B.3 of this submission. 293 See Section II.B.1 of this submission. 294 See Section II.B.3.b of this submission. 295 See Section II.B.3.b of this submission.

91 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

 The 2013 Final Rule provides for the possibility of independent observers outside the ETP, but, among other things, it requires them to be “qualified”, confirming that independent observers, let alone captains of vessels, do not — without training and qualification — have the necessary qualifications to certify the dolphin-safe status of tuna;296  A report on global marine mammal bycatch prepared jointly by the Duke University Marine Laboratory and the University of St. Andrews stated that “[f]ew U.S. fishers report marine mammal bycatch voluntarily, although they are required to do so by the Marine Mammal Protection Act”, and that in “1990 fishers reported a bycatch of 74 harbor porpoises in the Gulf of Maine, whereas the total bycatch extrapolated from an observer program was 2900 (CV = 0.32) (Bisack & DiNardo 1992; Weber 2002:159)”, and that “[i]t is widely accepted that accurate estimation of bycatch rates in any fishery requires an independent observer scheme”;297  The Department of Commerce reached the same conclusion in a 2004 report on bycatch monitoring programs, in which it stated that “the Program has not succeeded in obtaining reliable marine mammal bycatch data”, and “[d]espite fairly good outreach and the distribution of reporting forms to all state and Federally-permitted fishermen each year, compliance with the reporting requirement is thought to be very low”;298 and  In the Freitas case, where two U.S.-flagged vessels that fish in the WCPO with FADs were penalized for illegally setting purse seine nets on marine mammals, including species of dolphins, the captain of one vessel testified that he had “nothing to do with setting the nets or saying about fish”, which was the fishing master’s responsibility.299 286. Finally, as found by both the Panel and the Appellate Body in the original proceedings, the dolphin-safe label has value in the U.S. market.300 This provides a financial incentive for captains of vessels to declare tuna “dolphin-safe” and a financial disincentive to declare tuna not dolphin-safe. An Administrative Report of the NOAA states that “groups related to commercial fishing interests will obviously hope to find little evidence of tuna-dolphin problems similar those occurring in the ETP”,301 confirming that the inherent conflict between commercial interests and dolphin-safe declarations will undermine the veracity of those declarations.

296 2103 Final Rule, 50 CFR § 216.91(a)(2)(iii)(B) (Exhibit MEX-7). See discussion in Section II.B.3.b. 297 See Section III.B.2.b(1) of this submission. 298 See Section III.B.2.b(1) of this submission. 299 See Section III.B.2.b(1) of this submission. 300 See Panel Report, US – Tuna II (Mexico), paras. 7.289 and 7.290; Appellate Body Report, US – Tuna II (Mexico), paras. 233 and 235. See also Section IV.B.3.a(2) of this submission. 301 National Marine Fisheries Service, “An Annotated Bibliography Of Available Literature Regarding Cetacean Interactions With Tuna Purse-Seine Fisheries Outside Of The Eastern Tropical Pacific Oceans” (November 1996), pp. 2 and 38 (Exhibit MEX-40). See discussion in Section III.A.2 of this submission.

92 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

Captains, therefore, have an obvious inherent conflict of interest when making declarations as to the dolphin-safe status of tuna. 287. For these reasons, the information concerning the dolphin-safe status of tuna caught outside the ETP when it is initially landed on a vessel is not reliable or accurate, in contrast to the accurate information that is provided by qualified, trained, and independent observers for tuna caught in the ETP. This, in turn, means that the dolphin-safe status of non-ETP tuna products sold to U.S. consumers will not be reliable or accurate. The requirement to have independent observers to verify dolphin-safe sets and gear deployments is a fundamental part of the record- keeping and verification requirements addressed above, and it is essential to ensure the “accuracy” of the dolphin-safe designation. 288. Clearly, this difference in the application of independent observer requirements in the Amended Tuna Measure is not even-handed. b) Treatment of Independent Observers in the Original Proceedings 289. Under the original measure, the law held out the possibility that the Department of Commerce could designate other ocean regions as requiring an independent observer to verify a certification that nets were not set on dolphins during the entire voyage in which the tuna was caught: For purse seine vessels, “in a fishery in which the Secretary has determined that a regular and significant association occurs between dolphins and tuna (similar to the association between dolphins and tuna in the eastern tropical Pacific Ocean)”; and For non-purse seine vessels, “in a fishery … identified by the Secretary as having a regular and significant mortality or serious injury of dolphins ….” 290. As Mexico argued in the original proceedings, the Department of Commerce has never defined the term “regular and significant”, nor has it ever conducted an evaluation of the effect of tuna fishing on dolphin populations outside the ETP. 291. Under the Amended Tuna Measure, as before, observers are required for large purse seine vessels fishing within the ETP. The Amended Tuna Measure introduces the possibility that the Department of Commerce could require independent observers for non-ETP fisheries, regardless of whether there is a determination of a “regular and significant” association with dolphins or a “regular and significant” mortality of dolphins, if the Department of Commerce: has determined that observers participating in a national or international observer program are qualified and authorized to certify that no purse seine net was intentionally deployed on or used to encircle dolphins during the fishing trip in which the tuna were caught, and that no dolphins were

93 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

killed or seriously injured in the sets in which the tuna were caught, and where such an observer is on board the vessel ….302 292. The Department of Commerce has made no such determination that observers are qualified and authorized in non-ETP fisheries. 293. The Appellate Body’s analysis referred to the requirement that there be a certification that no dolphins were killed or seriously injured when tuna were caught outside the ETP.303 With respect to the requirement for independent observers, the Appellate Body stated: [W]e note that nowhere in its reasoning did the Panel state that imposing a requirement that an independent observer certify that no dolphins were killed or seriously injured in the course of the fishing operations in which the tuna was caught would be the only way for the United States to calibrate its "dolphin-safe" labelling provisions to the risks that the Panel found were posed by fishing techniques other than setting on dolphins. We note, in this regard, that the measure at issue itself contemplates the possibility that only the captain provide such a certification under certain circumstances.304 294. However, the Appellate Body noted “that such a requirement [i.e., independent observer] may be appropriate in circumstances in which dolphins face higher risks of mortality or serious injury”.305 295. During the original proceeding, neither the Panel nor the Appellate Body had before it the facts regarding adverse effects on dolphins set out in section III of this submission or the facts regarding the unreliability of captain certifications, as discussed above. The facts clearly establish that dolphins face very high risks of mortality and serious injury from tuna fishing outside the ETP (much higher than fishing within the ETP) and captains’ certifications are inherently unreliable. Thus, a mandatory independent observer requirement for tuna fishing outside the ETP is both appropriate and necessary if this element of the Amended Tuna Measure is to be applied in an even-handed manner. First Question 296. As noted above, the first question posed by the Panel in EC – Seal Products to determine the legitimacy of a regulatory distinction is whether the distinction is rationally connected to the objective of the measure? Applying this question to the difference in the treatment of independent observers inside and outside the ETP, it is clear that the distinction is not rationally connected to the objective of the measure. 297. As is the case in respect of both the disqualification/qualification of fishing methods and the record-keeping and verification requirements, a situation arises that is similar to that in EC – Seal Products. The objectives of the Amended Tuna Measure are: (i) “ensuring that consumers are not misled or deceived about whether tuna products contain tuna that was caught in a manner that adversely affects dolphins”; and (ii) “contributing to the protection of dolphins, by ensuring

302 2103 Final Rule, 50 CFR § 216.91(a)(4)(ii) (Exhibit MEX-7). 303 Appellate Body Report, US – Tuna II (Mexico), paras. 293-294. 304 Ibid., para. 296. 305 Ibid., footnote 612 to para. 296.

94 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014 that the U.S. market is not used to encourage fishing fleets to catch tuna in a manner that adversely affects dolphins”.306 As explained above, captain self-certification for tuna caught outside the ETP does not provide reliable or accurate information on the dolphin-safe status of the tuna products comprising this tuna because captains are not trained, educated or qualified to identify whether tuna are caught in a dolphin-safe manner, captains may not be directly involved in the setting of nets and the capturing of fish, and captains will not reliability declare non- dolphin-safe sets or non-compliance with dolphin-safe requirements. 298. As a consequence, the initial designation of the dolphin-safe status of tuna caught outside the ETP is unreliable and inaccurate. This taints all subsequent stages in the audit trail up to the U.S. consumer. Thus, U.S. consumers are receiving unreliable and inaccurate information on such tuna products, and they could be misled or deceived, or could unknowingly be supporting or encouraging fishing fleets to catch tuna in a manner that adversely affects dolphins. In this light, the difference in independent observer requirements inside and outside of the ETP does not bear a rational connection to the objectives of the Amended Tuna Measure. Second Question 299. As noted above, the absence of a rational connection means that a second question must be answered. Is there any cause or rationale that can justify the distinction (i.e. “explain the existence of the distinction”) despite the absence of the connection to the objective of the measure, taking into account the particular circumstances of the current dispute? 300. Applying this question to the difference in the treatment of independent observers inside and outside the ETP, it is clear that there is no cause or rationale that can justify the distinction. There are no reasons extraneous to the objective of dolphin protection that provide a cause or rationale that can justify providing U.S. consumers with reliable and accurate information for tuna that is caught within the ETP, while providing them with unreliable and inaccurate information for tuna that is caught outside the ETP. 301. Accordingly, it is clear from the application of the first two questions articulated by the Panel in EC – Seal Products that, by reason of the differences in the treatment of independent observers inside and outside the ETP, the Amended Tuna Measure’s detrimental impact on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. Third Question 302. In the alternative, if the Panel finds that there is a cause or rationale to justify the differences in the treatment of independent observers inside and outside the ETP, then the Panel, as noted above, must ask a third question. Is the distinction designed or applied in a manner that constitutes arbitrary or unjustifiable discrimination, such that it lacks even-handedness? This question also encompasses, at least in part, the approach articulated by the Appellate Body. In the present case, it is clear that this question must be answered in the affirmative. The facts discussed above clearly demonstrate that differences in the treatment of independent observers

306 Appellate Body Report, US – Tuna II (Mexico), paras. 242 and 325, referring to Panel Report, US – Tuna II (Mexico), para. 7.401.

95 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014 inside and outside the ETP are designed and applied in a manner that constitutes arbitrary or unjustifiable discrimination, such that it lacks even-handedness. 303. Accordingly, the differences in the treatment of independent observers inside and outside the ETP constitute arbitrary or unjustifiable discrimination, such that it lacks even-handedness. c) Conclusion 304. In conclusion, by reason of the differences in the treatment of independent observers inside and outside the ETP, the Amended Tuna Measure’s detrimental impact on imports of Mexican tuna products does not stem exclusively from a legitimate regulatory distinction. The Amended Tuna Measure is therefore inconsistent with Article 2.1 of the TBT Agreement. 4. Conclusions on Mexico’s Article 2.1 Claim 305. The forgoing establishes that the detrimental impact of the Amended Tuna Measure does not stem exclusively from a legitimate regulatory distinction and, instead, reflects discrimination against a group of imported products. 306. The facts and circumstances related to the design and application of the relevant regulatory distinction – i.e., the differences in labeling conditions and requirements – demonstrate a lack of even-handedness because: (i) Mexico's AIDCP-compliant fishing method is disqualified as a method for catching dolphin-safe tuna, while other fishing methods are qualified for catching dolphin-safe tuna even though they have adverse effects on dolphins that are equal to or greater than Mexico's method; (ii) the disqualification of AIDCP-compliant fishing methods is permanent and cannot be reviewed on the basis of the evidence of positive changes in dolphin stocks in the ETP; (iii) the record-keeping and verification requirements for tuna caught inside the ETP are comprehensive, reliable and accurate, whereas there are no comparable requirements for tuna caught outside the ETP, which makes information on the dolphin-safe status of the latter unreliable and inaccurate; and (iv) within the ETP, the initial designation of the dolphin-safe status of tuna at the time of capture is reliable and accurate because it is done by independent, qualified, specially-trained, AIDCP-approved observers, whereas the initial designation of tuna caught outside of the ETP is unreliable and inaccurate because it is done by the captain of the vessel, who is not qualified to make the designation, may not be directly involved in the setting of nets and the capturing of fish, and has financial and other incentives to not declare non-dolphin-safe sets. C. The Amended Tuna Measure is Inconsistent with Article I:1 of the GATT 1994 307. The relevant part of Article I:1 of the GATT 1994 provides: … with respect to all matters referred to in paragraphs 2 and 4 of Article III any advantage, favour, privilege or immunity granted by any [Member] to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other [Members].

96 United States – Measures Concerning the Importation, First Written Submission of Mexico Marketing and Sale of Tuna and Tuna Products (WT/DS381) 8 April 2014

308. The object and purpose of Article I:1 is to prohibit discrimination among like products originating in or destined for different countries.307 It protects competitive opportunities of imported products, not trade flows.308 It imposes upon WTO Members the obligation to treat like foreign products equally, irrespective of their origin.309 309. In the circumstances of this dispute, to determine whether there is a violation of Article I:1, three questions must be answered: (i) are the imported products concerned “like” products; (ii) does the measure at issue confer an advantage, favour or privilege on products originating in any other country; and (iii) was the advantage, favour or privilege granted “immediately and unconditionally” to the like product originating in the territories of all other Members? 1. Like Products 310. For the same reasons set out above for Mexico’s claim under Article 2.1 of the TBT Agreement, the imported products at issue — i.e., tuna products from Mexico — are “like” domestic tuna products within the meaning of Article I:1 of the GATT 1994.310 2. Advantage, Favour or Privilege on a Product Originating in Other WTO Members 311. The Amended Tuna Measure confers an advantage, within the meaning of Article I:1 of the GATT 1994, to tuna products of U.S. origin and tuna products originating in countries other than Mexico. 312. The term “advantage” in Article I:1 is broad and applies to all matters referred to in paragraphs 2 and 4 of Article III of the GATT 1994.311 In turn, Article III:4 applies to all “laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use” of a product. The Appellate Body noted in the original proceedings that the original Tuna Measure “is composed of legislative and regulatory acts of the U.S. federal authorities and includes administrative provisions”.312 As the elements of the original Tuna Measure are the same as the elements comprising the Amended Tuna Measure presently at issue (i.e., the DPCIA, the implementation regulations in the 2013 Final Rule and the Hogarth ruling), each of the latter is a “law or regulation” within the meaning of Article III:4 of

307 Appellate Body Report, Canada – Autos, para. 84. 308 Panel Report, Argentina – Hides and Leather, para. 11.20. 309 Appellate Body Report,EC – Tariff Preferences, para. 89, citing Appellate Body Report, EC – Bananas III, para.190. 310 See Panel Report, EU – Seal Products, paras. 7.140, 7.594 and 7.607. The Panel considered, in chronological order, claims under Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994. In the context of the Article 2.1 analysis, the Panel determined that the imported seal products at issue were “like” seal products originating in other countries (see paras. 7.139-7.140). The Panel then relied upon its finding that the seal products are “like” within the meaning of Article 2.1 of the TBT Agreement for the purposes of satisfying the corresponding elements of the legal test under Article I:1 and the legal test under Article III:4 of the GATT 1994 (see paras. 7.594 and 7.607, respectively). 311 Panel Report, EU – Seal Products, para. 7.595. 312 Appellate Body Report, US – Tuna II (Mexico), para. 199.

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the GATT 1994. As a consequence, the Amended Tuna Measure falls within the scope of Article I:1 of the GATT 1994. 313. The advantage granted by the Amended Tuna Measure is the authorization to use “dolphin-safe” labelling in the United States on tuna products.313 This advantage is granted only to tuna products containing tuna that meets the applicable conditions and requirements set out under the implementing regulations of the Amended Tuna Measure. The Amended Tuna Measure therefore affects “the internal sale, offering for sale, [and] purchase” of tuna products in the United States. 314. This advantage is made available to tuna products originating in other countries, including Thailand and the Philippines, who are the largest sources of imported tuna products into the United States.314 3. Accorded Immediately and Unconditionally To the Like Product Originating in the Territories of All Other Members 315. The “advantage” of access to the dolphin-safe label is not accorded immediately and unconditionally to the like tuna products originating in the territories of all other WTO Members, namely Mexico. In the original proceedings, the Panel and Appellate Body found that most tuna caught by Mexican vessels, being caught in the ETP by setting on dolphins, would not be eligible for inclusion in a dolphin-safe product under the US dolphin-safe labelling provisions.315 This continues to be the case. As discussed above, virtually all of Mexico’s purse seine tuna fleet continues to fish in the ETP by setting on dolphins and is therefore fishing for tuna that would not be eligible to be contained in a dolphin-safe tuna product under the Amended Tuna Measure.316 4. Conclusions 316. Accordingly, with respect to matters referred to in paragraphs 2 and 4 of Article III, an advantage (i.e., access to the dolphin-safe label) granted by any Member (i.e., the United States) to any product (i.e., tuna products) originating in any other country (e.g., Thailand) is not being accorded immediately and unconditionally to the like product originating in or destined for the territories of all other Members (i.e., Mexico). The Amended Tuna Measure is therefore inconsistent with Article I:1 of the GATT 1994.

313 In the original proceedings, the Panel agreed with Mexico that access to the “dolphin-safe” label constitutes an “advantage” on the US market. This finding was not appealed. The Appellate Body found that the factual findings by the Panel clearly establish that the lack of access to the “dolphin-safe” label of tuna products containing tuna caught by setting on dolphins has a detrimental impact on the competitive opportunities of Mexican tuna products in the US market. See Appellate Body Report, US – Tuna II (Mexico), paras. 233-235. 314 NMFS import statistics (Exhibit MEX-85). 315 Appellate Body Report, US – Tuna II (Mexico), paras. 234-235. 316 See Section IV.B.3.a (2) of this submission.

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D. The Amended Tuna Measure is Inconsistent with Article III:4 of the GATT 1994 317. The Amended Tuna Measure accords Mexican tuna products treatment less favourable than that accorded to U.S. tuna products in a manner that is inconsistent with Article III:4 of the GATT 1994. As discussed above, the Appellate Body has made clear that the scope and content of the provisions of Article III:4 and Article 2.1 of the TBT Agreement are different.317 Accordingly, the Panel’s decision on Mexico’s claim under Article 2.1 will not necessarily resolve Mexico’s Article III:4 claim, and it is therefore crucial that the Panel make findings on the Article III:4 claim. 318. Article III:4 of the GATT provides that: The products of the territory of any [Member] imported into the territory of any other [Member] shall be accorded treatment no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. 319. In Korea – Various Measures on Beef, the Appellate Body explained that a Member’s measure is inconsistent with Article III:4 if three elements are met:  the imported and domestic products at issue are “like products”;  the measure at issue is a law, regulation or requirement affecting their internal sale, offering for sale, purchase, transportation, distribution, or use; and  the imported products are accorded “less favourable” treatment than that accorded to like domestic products.318 320. Mexico will address each element in turn. 1. Like Products 321. For the same reasons set out above for Mexico’s claim under Article 2.1 of the TBT Agreement, the imported products at issue – i.e., tuna products from Mexico – are “like” domestic tuna products within the meaning of Article III:4 of the GATT 1994.319

317 Appellate Body Report, US – Tuna II (Mexico), para. 405. 318 Appellate Body Report, Korea – Various Measures on Beef, para. 133. 319 See Panel Report, EU – Seal Products, paras. 7.140, 7.594 and 7.607. The Panel considered, in chronological order, claims under Article 2.1 of the TBT Agreement and Articles I:1 and III:4 of the GATT 1994. In the context of the Article 2.1 analysis, the Panel determined that the imported seal products at issue were “like” seal products originating in other countries (see paras. 7.139-7.140). The Panel then relied upon its finding that the seal products are “like” within the meaning of Article 2.1 of the TBT Agreement for the purposes of satisfying the corresponding elements of the legal test under Article I:1 and the legal test under Article III:4 of the GATT 1994 (see paras. 7.594 and 7.607, respectively).

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2. Laws, Regulations and Requirements Affecting Their Internal Sale, Offering for Sale, Purchase, Transportation, Distribution or Use 322. Article III:4 applies to those “laws, regulations and requirements” that affect “the internal sale, offering for sale, purchase, transportation, distribution or use” of the products at issue. 323. The Amended Tuna Measure, which comprises a group of laws and regulations that set out the dolphin-safe labeling requirements, pertains to the category of “laws, regulations and requirements”. These instruments include the DPCIA, the implementation regulations in the 2013 Final Rule and the Hogarth ruling. These laws, regulations and requirements “affect the internal sale, offering for sale, purchase, transportation, distribution or use” of feeder cattle. 324. With regard to the term “affecting” used in Article III:4, the Appellate Body has explained: [T]he word “affecting” operates as a link between identified types of government action (“laws, regulations and requirements”) and specific transactions, activities and uses relating to products in the marketplace (“internal sale, offering for sale, purchase, transportation, distribution or use”). It is, therefore, not any “laws, regulations and requirements” which are covered by Article III:4, but only those which “affect” the specific transactions, activities and uses mentioned in that provision. Thus, the word “affecting” assists in defining the types of measure that must conform to the obligation not to accord “less favourable treatment” to like imported products, which is set out in Article III:4. 320 325. The term “affecting” contained in Article III:4 has been interpreted as having a broad scope of application.321 The GATT Panel in Italy – Agricultural Machinery observed that the word “affecting”, as employed in Article III:4, covers “not only the laws and regulations which directly govern … the conditions of sale or purchase, but also any laws or regulations which might adversely modify the conditions of competition between domestic and imported products on the internal market”322 In EC - Bananas III, the Appellate Body noted that “[t]he ordinary meaning of the word ‘affecting’ implies a measure that has ‘an effect on’, which indicates a broad scope of application”.323 Prior WTO panels have concluded that Article III:4 encompasses measures that: (i) provide an incentive to purchase local products;324 (ii) provide a disincentive to accept and distribute the imported product to end-users;325 and (iii) that influence a manufacture’s choice between domestic and imported products.326

320 Appellate Body Report, US – FSC (Article 21.5 – EC), para. 208. 321 Ibid., para. 210. 322 GATT Panel Report, Italy – Agricultural Machinery, para. 12. 323 Appellate Body Report, EC – Bananas III, para. 220. 324 Panel Report, India – Autos, para. 7.197. 325 Panel Reports, Canada – Wheat Exports and Grain Imports, para. 6.267. 326 Panel Reports, China – Auto Parts, para. 7.256.

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326. The Amended Tuna Measure clearly “affects” the internal sale, offering for sale, purchase and distribution of tuna products. As found by the Panel and the Appellate Body: access to the “dolphin-safe” label constitutes an “advantage” on the US market; lack of access to the “dolphin-safe” label has a detrimental impact on the competitive opportunities in the U.S. market; and government intervention, in the form of adoption and application of the U.S. “dolphin-safe” labelling provisions, affects the conditions under which like goods, both domestic and imported, compete in the market within a Member’s territory.327 327. The Amended Tuna Measure, like its predecessor, therefore pertains to the category of laws, regulations and requirements that affect the internal sale, offering for sale, purchase, transportation, distribution or use of Mexican tuna products within the meaning of Article III:4. The national treatment obligation under Article III:4 therefore applies. 3. Less Favourable Treatment 328. Article III:4 stipulates that WTO Members shall accord imported products “treatment no less favourable” than the treatment accorded to like products of national origin. In Korea – Various Measures on Beef, the Appellate Body articulated that “[w]hether or not imported products are treated ‘less favourably’ than like domestic products should be assessed … by examining whether a measure modifies the conditions of competition in the relevant market to the detriment of imported products.”328 In Dominican Republic – Cigarettes, the Appellate Body confirmed that this was the question that a panel must answer, and it clarified that “a measure accords less favourable treatment to imported products if it gives domestic like products a competitive advantage in the market over imported like products”.329 329. As noted above in the context of the term “affecting”, in the original proceedings, the Appellate Body found that access to the “dolphin-safe” label constitutes an “advantage” on the US market, lack of access to the “dolphin-safe” label has a detrimental impact on the competitive opportunities in the US market, and government intervention, in the form of adoption and application of the US “dolphin-safe” labelling provisions, affects the conditions under which like goods, domestic and imported, compete in the market within a Member's territory. Moreover, the Panel and Appellate Body found that most tuna caught by Mexican vessels, being caught in the ETP by setting on dolphins, would not be eligible for inclusion in a dolphin-safe product under the US dolphin-safe labelling provisions, while most tuna caught by US vessels is potentially eligible for the label.330 This continues to be the case. Virtually all of Mexico’s purse seine tuna fleet continues to fish in the ETP by setting on dolphins and is therefore fishing for tuna that would not be eligible to be contained in a dolphin-safe tuna product under the Amended Tuna Measure.331 In contrast, U.S. canneries do not use tuna caught in the ETP and, therefore, virtually all of their tuna products are eligible for the dolphin-safe label.332

327 Appellate Body Report, US – Tuna II (Mexico), paras. 234-235. 328 Appellate Body Report, Korea – Various Measures on Beef, para. 137 (emphasis in original). 329 Appellate Body Report, Dominican Republic – Import and Sale of Cigarettes, para. 93. 330 Appellate Body Report, US – Tuna II (Mexico), paras. 234-235. 331 See Section IV.B.3.a(2) of this submission. 332 See Section IV.B.3.a(2) of this submission.

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4. Conclusions 330. Accordingly, the products (i.e., tuna products) of the territory of any Member (i.e., Mexico) imported into the territory of any other Member (i.e., the United States) are not being accorded treatment that is no less favourable than that accorded to like products of national origin in respect of all laws, regulations and requirements affecting their internal sale, offering for sale, purchase, transportation, distribution or use. The Amended Tuna Measure is therefore inconsistent with Article III:4 of the GATT 1994.

V. CONCLUSION 331. On the basis of the foregoing, Mexico respectfully requests that the Panel find that the United States has failed to comply with the recommendations and rulings adopted by the DSB on the basis that the Amended Tuna Measure remains inconsistent with Articles 2.1 of the TBT Agreement, Article I:1 and Article III:4 of the GATT 1994.

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