US – Tuna AB Report

The WTO’s AB report on the US – Tuna case (DS381) was issued last May 16, 2012. On it, the AB ruled that the US “dolphin-safe” label is inconsistent with WTO law. It is worth noting the landmark finding that a non-binding label can be a prohibited technical regulation; a point that could have important ramifications for all kinds of consumer labels.

The three-member AB, sided with the original WTO panel in their overall conclusion: that the US label is inconsistent with the WTO’s Agreement on Technical Barriers to Trade (TBT); however, they overruled the panel report on some important points. As an example of these, the AB found that the differential treatment affects Mexico’s export competitiveness, and further denied US’ claim that the differential treatment was exclusively due to a legitimate regulatory requirement. Mexico, on the other hand, failed to convince the AB that the AIDCP qualified as an international standard and thus appropriate benchmark.

This decision concludes the first of two label-related disputes between Mexico and the US. A decision by the AB in the COOL dispute (DS384) is expected later this year.