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 i 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 ii 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 iii 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 (c) The Amended Tuna Measure .................................78 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