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United States Initiates NAFTA Dispute with Mexico over Mexico's Failure to Move Its Tuna-Dolphin Dispute from the WTO to the NAFTA

Washington, D.C. -- The Office of the United States Trade Representative announced today that the United States has requested North American Free Trade Agreement (NAFTA) dispute settlement consultations with Mexico regarding Mexico's failure to move its "dolphin safe" labeling dispute from the World Trade Organization (WTO) to the NAFTA, as requested by the United States and as required by Article 2005 of the NAFTA. Specifically, the NAFTA requires that in a dispute of this nature, if the responding party so requests, the NAFTA, rather than any other forum, should be the sole venue of any dispute. In this case, that would mean that the NAFTA - rather than the WTO - should be the forum to hear Mexico's challenge to U.S. law concerning dolphin safe labeling of tuna and tuna products.

The U.S. request came in response to Mexico's resumption of its dispute settlement proceedings in the WTO by requesting the WTO to begin the process of selecting panelists.

"We regret that Mexico is continuing its WTO case despite the fact that the United States has invoked its right under NAFTA provisions to have the dispute moved from the WTO to the NAFTA," said Debbie Mesloh, a USTR spokesperson. "In resuming its current proceedings in the WTO, Mexico continues to disregard its obligation to the United States to have recourse solely under the NAFTA for this dispute."

"In requesting NAFTA consultations, we are enforcing the right that the United States, Canada and Mexico negotiated in the NAFTA," said Mesloh. "This is an important right that has not previously been invoked by a NAFTA party, and defending our right under this clause preserves and strengthens the NAFTA dispute settlement regime."

The U.S. dolphin safe labeling provisions at issue in the WTO dispute prohibit tuna sellers from labeling their products as "dolphin safe" if the tuna is caught by intentionally encircling ("setting on") dolphins with purse seine nets. Mexican fishing vessels use this technique to fish for tuna.

Mexico's challenge to the U.S. dolphin safe labeling provisions meets the criteria in NAFTA Article 2005(4) choice of forum provision. This provision states that certain disputes which pertain to matters arising under both the WTO Agreement and the standards-related provisions of the NAFTA, and which concern human, animal or plant life or health or the environment and raise factual issues concerning the environment or conservation, shall be heard - at the responding party's option - solely under the NAFTA's dispute settlement procedures.

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

BACKGROUND

On March 9, 2009 Mexico requested that a WTO panel be established to review Mexico's claims that U.S. law limiting the use of the "dolphin safe" label on tuna and tuna products is inconsistent with U.S. obligations under the WTO Agreement. In response, the United States invoked the NAFTA choice of forum provision (Article 2005(4) of the NAFTA) on March 24, 2009.

However, Mexico pursued its request for a WTO panel and on April 20, 2009, the WTO Dispute Settlement Body established a WTO panel to review Mexico's claims that U.S. dolphin safe labeling provisions are inconsistent with U.S. obligations under the WTO Agreement. Although Mexico agreed to postpone selecting panelists as it explored other settlement options with the United States, those efforts have not yet led to a resolution of the dispute and Mexico has resumed the WTO proceedings.

Consultations are the first step in a NAFTA dispute. Under NAFTA rules, if the parties do not resolve an issue through consultations, either party may request a meeting of the NAFTA Free Trade Commission to address the matter.