Shrimp-Turtle

Case

A case for the developing

countries

Section B, Group 6: Alisha Sukhija (11PGDM066) Arnab Moitra (11PGDM076) Kamaldeep Singh (11PGDM086) Paritosh Saini (11PGDM097) Sanchit Gupta (11PGDM107) Sumit Kumar Jain (11PGDM117)

Shrimp-Turtle Case

Table of Contents

Introduction............................................................................................................................................. 2

The history ............................................................................................................................................... 3

The real problem ..................................................................................................................................... 3

TED - Turtle Excluder Device ................................................................................................................... 4

Setback for developing countries ............................................................................................................ 4

Conservation and management of sea turtles in the developing nations .............................................. 5

Is TED the only option? ........................................................................................................................... 9

The environmental “standards” of US .................................................................................................. 10

Ulterior motives of US ........................................................................................................................... 12

The WTO Case Timeline ........................................................................................................................ 13

Argument by Plaintiff Nations ............................................................................................................... 13

Argument by US .................................................................................................................................... 14

Panel Ruling: 6th April 1988 .................................................................................................................. 14

Aftermath of the ruling ......................................................................................................................... 15

Other Disputes at WTO ......................................................................................................................... 15

Disputes involving the US ...................................................................................................................... 16

Developed Nations: Devils in disguise? ................................................................................................. 17

Developing Nations in WTO .................................................................................................................. 18

Future of WTO - Challenges before developing nations ....................................................................... 18

Conclusion ............................................................................................................................................. 20

Annexure ............................................................................................................................................... 21

References ............................................................................................................................................. 23

Shrimp-Turtle Case

Introduction

Seven species of sea turtles have been identified till date. They are distributed around the world in

subtropical and tropical areas. They spend their lives at sea, where they migrate between their

foraging and nesting grounds.

Sea turtles have been adversely affected by human activity, either directly (their meat, shells and

eggs have been exploited), or indirectly (incidental capture in fisheries, destruction of their habitats,

pollution of the oceans).

In early 1997, India, Malaysia, Pakistan and Thailand brought a joint complaint against a ban

imposed by the US on the importation of certain shrimp and shrimp products. The protection of sea

turtles was at the heart of the ban.

The US Endangered Species Act of 1973 listed as endangered or threatened the five species of sea

turtles that occur in US waters, and prohibited their “take” (meaning harassment, hunting, capture,

killing or attempting to do any of these) within the US, in its territorial sea and the high seas.

Under the act, the US required that US shrimp trawlers use “turtle excluder devices” (TEDs) in their

nets when fishing in areas where there is a significant likelihood of encountering sea turtles.

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The history

• 1973: An Endangered Species Act was approved. It aimed to protect all endangered species

from further threats of extinction. Working primarily through and conservation and

protection, the ESA also affected harvesting techniques.

• 1987: Voluntary guidelines were issued for including turtle exclusionary devices during

fishing or shrimping.

• 1989 and 1991: Legislation is negotiated to protect all sea turtles in American waters,

including Central America and the Caribbean.

• 1992: Various NGOs pressurized the prohibition to cover international shrimp harvests.

• 1996: A full prohibition of all shrimps from any country that does not have sufficient

precautions and regulatory agencies to ensure that the catch of sea turtles is lesser than or

equal to that of United States.

The real problem

Figure 1: Clockwise from top (L): A shrimp trawler, the catch, net used for shrimping and the by-catch

US prohibited the importation of any shrimp harvested using commercial fishing technologies that

might harm sea turtles, unless the exporting country is certified by the US administration as having a

regulatory program to prevent incidental turtle deaths comparable to that of the United States or is

certified as having a fishing environment that does not pose risks to sea turtles from shrimping.

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While US adopted a program to require shrimpers to use TEDs on their boats, a country could take

up to three years to phase in the comprehensive program. Further guidelines, issued in 1993,

extended somewhat the final deadline by which a foreign country must implement its program in

order to be certified. In 1995, environmental NGOs challenged before the US Court of International

Trade (CIT) the decision of the State Department to limit the application of Section 609 to the

greater Caribbean area, as well as certain other interpretations that the State Department had made

of the law.

TED - Turtle Excluder Device

Figure 2: The working of TED explained

A "Turtle Excluder Device" is a grid of bars with an opening either at the top or the bottom of the

trawl net. The grid is fitted into the neck of a shrimp trawl. Small animals such as shrimp pass

through the bars and are caught in the bag end of the trawl. When larger animals, such as marine

turtles and sharks are captured in the trawl, they strike the grid bars and are ejected through the

opening.

Setback for developing countries

The developing countries suffered the following setbacks due to the ban:

• Loss of Comparative Advantage: The requirement of installing the TED devices on every trawler

was quite expensive for the poor trawlers of the developing countries. Also as they used the

more expensive equipment the comparative advantage of producing at lower rates was lost by

the shrimpers and the trade was jeopardized.

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• Time difference in implementation and preferential treatment for some countries (ACP

countries the main beneficiary): In 1991, some countries like Mexico, Belize, Guatemala,

Honduras, Nicaragua, Costa Rica, Panama, Colombia, Venezuela, Trinidad and Tobago, Guyana,

Suriname, French Guyana, and Brazil were required to make a commitment to require all shrimp

trawl vessels to use TEDs at all times . These nations were given three years for the complete

phase-in of a comparable program. The other countries in comparison were given a period of

only four months to comply.

• No alternative to TED accepted: Apart from TED, the US did not accept alternative methods of

ensuring lower mortality for turtles. The embargo applied on the countries was to be removed

only on the condition if the countries agreed to use the TED in the trawlers. The other potential

methods of conservation of turtles were completely ignored by US.

Conservation and management of sea turtles in the

developing nations

Following the ban, the complainant nations argued that measures for conservation of sea turtles had

already been in place, much before the diktat of the US.

India

India argued that it had a well-established history of protecting endangered species, including sea

turtles. For many centuries, the essential harmony between the environment and man had been a

central precept in Indian society, based on the fact that the continued replenishment of

environmental resources was crucial for the very livelihood of a vast majority of Indians. The

objectives of environmental protection were therefore deeply ingrained in Indians.

• Five of the seven species of sea turtles found worldwide are reported to occur in Indian coastal

waters and the Bay Islands.

• Environmental resources had traditionally been safeguarded by their close association with the

teachings of India's major religions. For example, the turtle itself was considered by many

Indians to be an incarnation of the Divine. The turtle was an incarnation of Lord Vishnu.

• All the five species of sea turtles that occur in Indian coastal waters are legally protected under

Schedule I of the Indian Wildlife Protection Act (1972), as well as listed in Appendix I of

Convention of International Trade in Endangered Species of Wild Fauna and Flora (CITES),

which ensure that international trade in specimens of wild animals and plants does not threaten

the survival of the species in the wild by signatory countries. However, India could not find any

provision in CITES which called for an import restriction on shrimp and shrimp products in order

to protect and conserve sea turtles, nor could it find in CITES any reference to the TEDs as a

"multilateral environmental standard" to be used for the protection and conservation of sea

turtles. India did not accept the US assertion that the use of TEDs was the only way to keep sea

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turtles species found in India's territorial waters from becoming extinct; conservation programs

such as the ones undertaken by India were also essential for conserving sea turtles.

• The nesting population of olive ridley had increased over the past ten years in the Gahirmatha

region, off India's Orissa coast, and every year approximately 600,000 olive ridley sea turtles

nested in this area. The local government had banned fishing and shrimping within a radius of 20

kilometers around Gahirmatha to protect these turtles. In addition, 65,000 hectares in the

Bhitarkanika and Gahirmatha regions had been declared a sea turtle sanctuary. Fifteen other

state governments had issued public notices reminding fishermen and others that catching or

endangering sea turtles was illegal. Not only was the Government of India establishing programs

to ensure the preservation of sea turtles, but the Government had also established programs to

ensure that the laws were enforced.

• Central Marine Fisheries Research Institute in India monitored olive ridley turtles nesting in

some regions during 1978 and 1986, and conducted an exhaustive study on the nesting

population. The Institute also operated a hatchery for sea turtles in Madras (Now Chennai), from

which hatchlings were released at sea.

India considered that since it had adequate measures in place to protect and preserve endangered

species of sea turtles, there was no need for the United States to impose its own agenda on third

parties through the use of far-reaching, extraterritorial measures such as the one imposed by

Section 609. This action constituted an unacceptable interference in policies within India's sovereign

jurisdiction.

Malaysia

• Malaysia submitted that none of the Malaysian fishermen used TEDs. A significant amount of

wild harvested shrimps were caught using traditional mechanisms (such as hand retrieval nets)

which would not in any way cause incidental catches of turtles.

• Organizations actively involved in the conservation of turtles included the Fisheries Department,

local universities, NGOs (e.g. WWF and the Malaysian Society of Marine Sciences) and

corporate bodies (as sponsors of conservation projects) carried out the various measures.

� Protection of turtle eggs by incubation programs, involving in situ methods or protected

beach hatcheries, and banning the commercial harvest and sale of eggs in certain areas (e.g.

leatherbacks eggs in Terengganu). In other areas where the nesting beaches were extensive,

turtle egg collection was licensed to the local inhabitants from whom the eggs were

purchased for incubation in protected beach hatcheries. Efforts were continuously made to

increase the proportion of eggs bought from licensed egg collectors for incubation.

� Establishment of turtle sanctuaries/state parks in recognized turtle nesting areas to protect

the nesting sites. This ensured that commercial development did not encroach upon the

nesting beaches.

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� In marine parks where key nesting sites of green turtles occurred, fishing activities within a

radius of two nautical miles surrounding the island or island groups was prohibited.

� Research programs were undertaken by local universities and the Fisheries Department to

provide scientific information for further development and enhancement of conservation

programs.

• Sabah and Sarawak had turtle protection laws, and fishing trawlers were not allowed to operate

within designated areas where turtles mated and nested. Therefore, in the case of the Sarawak

population of green turtles, even in the absence of TEDs, the population had remained constant

over a long period and had been sustained. The Turtle Island of Sabah was constituted as a State

Park in 1984, after the Sabah State Government had compulsorily acquired the islands from

private ownership.

Figure 3: The Sabah and Sarawak islands of Malaysia

• The active enforcement of fishery laws by the Department of Fisheries had successfully kept the

trawlers away from the coastal and turtle island waters and the existing trawling operations had

been successfully kept away from the migration routes of the turtles.

• Malaysia had a comprehensive legal framework on the conservation and management of marine

turtles which were under the jurisdiction of 13 individual states. The states' legislation on turtle

protection had been enacted in 1932 and prohibited, inter alia, the capture, killing, injuring,

possession or sale of turtles, collection of eggs, disturbing turtles during laying eggs, and

provided for the establishment of turtle sanctuaries. Subsidiary legislation had also been

enacted, such as the Customs (Prohibition of Export/Import) Orders of 1988, enforced

specifically to ban the exports and imports of turtle eggs to and from all countries.

• Malaysia had cooperated with the Philippines in the launching of the Turtle Island Heritage

Protected Area in 1996, to develop uniform conservation measures for the turtles on the

islands.

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• While recognizing that the use of TEDs was a step in contributing to the conservation of turtles,

Malaysia considered that it was just one of the many accepted methods for the conservation of

turtles. The use of TED alone could not absolutely ensure the survival of turtles.

Malaysia considered that its commitment was evident by the actions taken both domestically and

internationally in order to protect these endangered species from extinction. Conservation efforts

were better achieved through bilateral or multilateral agreements rather than resorting to trade

sanctions under the WTO.

Pakistan

Pakistan submitted that it shared the United States' concerns over the plight of sea turtles. However,

the US requirement that TEDs be installed on Pakistan's commercial fishing vessels not only violated

US obligations under the GATT, but was completely unnecessary given Pakistan's long history of

protecting endangered species, including sea turtles.

• Pakistan stated that its culture embraced a traditional belief that it was sinful to kill sea turtles.

• In 1950, Pakistan had passed legislation to protect sea turtles by enacting the Imports and

Exports (Control) Act (amended on 13 August 1996), which made it illegal to export protected

species, including sea turtles and sea turtle by-products from Pakistan.

• In addition to laws protecting sea turtles, various public and private organizations in Pakistan

were engaged in sea turtle protection programs. Since 1979, Pakistan's Sindh Wildlife

Department was engaged in sea turtle conservation programs in conjunction with WWF and

IUCN (International Union for Conservation of Nature). The main objective of this program was

to protect sea turtles from extinction. In this regard, this program had established enclosures on

beaches to protect sea turtles and their eggs from predators and poachers.

• The Sindh Wildlife Department had also engaged in turtle conservation training programs

designed to teach the public about the importance of protecting sea turtles. This program had

proven to be extremely effective in preserving and protecting sea turtles. It was estimated that

between October 1979 and December 1995 more than 1.5 million sea turtle eggs had been

protected and thousands of hatchlings had been released safely to the sea.

Pakistan did not accept the US assertion that the use of TEDs was the only way to prevent the

extinction of sea turtles and considered the US action to be an unacceptable interference in policies

within Pakistan's sovereign jurisdiction. Pakistan argued that, since it had adequate measures in

place to protect and preserve endangered species of sea turtles, there was no need for the United

States to meddle with the internal affairs of the country.

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Thailand

• Thailand submitted that it had a long history of taking action to protect the four species of sea

turtles (leatherback, green, hawksbill and olive ridley) within its jurisdiction. The Thai culture

embraced a traditional belief that it was sinful to kill sea turtles.

• As early as 1947, the Fisheries Act had been passed, prohibiting the catching, harvesting or

harming of any sea turtle. This Act also specified that any accidentally caught turtles had to be

released into the sea immediately.

• Three branches of the Government of Thailand were responsible for sea turtle restoration

programs: the Department of Fisheries, the Department of Forestry, and the Royal Thai Navy.

Sea turtle egg collection programs were run by 5 Marine Fisheries Development Centers and 13

Coastal Aquaculture Development Centers within the Department of Fisheries. The goal of the

restoration programs administered by these institutions was to cultivate and release 5,000 baby

sea turtles a year.

• From 1967 to 1996, there had been no observed incidental sea turtle kills in connection with

shrimping. The reason for this was that sea turtles inhabited coral reefs and sea grass beds

within three kilometers of the shoreline where shrimp trawling was prohibited.

• During the fifth meeting of the ASEAN Sectoral Working Group on Fisheries, held on 13-14

March 1997, Thailand had suggested that an agreement be negotiated within ASEAN with

respect to sea turtles. The meeting had agreed to authorize Thailand to draft a Memorandum of

Understanding setting forth the steps that could be taken jointly for the protection and

conservation of sea turtles. The MOU also established a Technical Expert Working Group to

prepare an ASEAN program for Sea Turtle Conservation and Protection, coordinated by

Malaysia. It also established mutual recognition of each nation's laws and regulations on this

subject and called for harmonization of such laws and for the sympathetic consideration of such

new laws that might be proposed by the working group.

Is TED the only option?

• The complainants argued that the use of TED was not the only and most effective device to

protect the sea turtles and that TED is not a “multilateral environmental standard” and that

“extending the same program outside the United States was disguised restriction on

international trade, because scientific evidence did not demonstrate that shrimp trawling was

the principal threat or even an immediate threat to sea turtles elsewhere in the world.

• In 1996, the Indian government proposed legislation for the requirement of modified

"indigenous" TEDs, which they called TSDs (Turtle Saving Devices) to be used by local fishermen.

This was a response to the declining olive ridley population that was nesting in beaches such as

in Orissa. The modified TSDs were similar to standard TEDs except for having fewer bars. This

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resulted in the increase of the distance between each pair of bars to ensure that bigger

specimens of shrimp and fish were able to pass through the TSD and into the net.

• It has been acknowledged that the larger sea turtles, primarily large loggerheads and

leatherbacks are too large to fit through the escape hatches installed in most TEDs. These turtles

remain trapped within the net and perish.

• TED use becomes impractical due to debris in the water. When a TED is clogged with debris, it

can no longer catch fish effectively or exclude turtles. For example, in September 2008 following

Hurricanes Gustav and Ike, the National Marine Fisheries Service (NMFS) allowed temporary use

of "Tow Times" in lieu of TEDs. Vessels were required to limit their tows to 55 minutes from the

time the trawl doors entered the water until they were retrieved from the water. In June 2010

the limit was further reduced to 30 minutes. Unfortunately vessels were not equipped with tow

time data loggers, so there was no practical method to enforce these time limits.

• Use of TED results in about 9-10% loss in catch of fishes and shrimps, thereby increasing the

transaction costs.

The environmental “standards” of US

• Each year US factories spew 3 million tons of toxic chemicals into the air, land, and water. That

compounds the over one-half billion tons of solid hazardous wastes.

• US is the 2nd highest producer of Carbon emission.

Figure 4: Environment Performance Index scores of US

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• Among 132 countries, USA has a ranking of 100 in ecosystem vitality in Environment

Performance Index.

• A survey conducted by Gallup depicts that there has been a decrease in concern for

environment in the US is shown below.

Figure 5: The environmental awareness survey of US citizens

• Apart from fishing/shrimping, there are the various other reasons for turtle mortality but rather

than creating an international stir, is enough being done to curb these turtle mortality due to the

following causes:

� Artificial lighting: When a sea turtle hatches, its evolutionary instincts push it to move

towards the brightest light in view, which naturally would be the sun or the moon, leading

them toward the ocean horizon and into their new ecosystem. However, due to the

continual expansion of cities, construction of condos and hotels on coasts everywhere has

grown exponentially. With the invention of the light bulb and therefore artificial light, the

sea turtle’s natural source of guiding light has been replaced and is no longer the only or the

brightest source of light. With virtually every coast now constantly lit with buildings, the

hatchlings become easily confused and turned around, few of them making successful treks

to the ocean. Studies support artificial light as the leading cause for hatchling disorientation,

showing that in 1999, 51% of the nests studied showed signs of confusion with one-fourth of

all the hatchlings headed in the wrong direction.

� Magnetic interference: Ferrous metal wire mesh screens are commonly used to protect sea

turtle nests from predators' excavating and devouring the eggs and hatchlings. A new

concern is that nestlings' delicate magnetic sense may not develop normally in the presence

of the magnetic field interference from these steel mesh cages.

� Oil spills and marine pollution: Marine pollution is both directly harmful to sea turtles as

well as indirectly, through the deterioration of their natural habitats. Some of the most

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dangerous ocean pollutants include toxic metals, PCBs, fertilizers, untreated waste,

chemicals and a variety of petroleum products. Oil spills are particularly dangerous to sea

turtles. A 1994 study off of Florida’s Atlantic coast, 63% of hatchlings surveyed had been

found to have ingested tar. Loggerheads in particular have been shown to have the most

problems with tar-ball ingestion, leading to oesophageal swelling that can dislocate the

intestines and liver leading to serious buoyancy issues as well as excessive swelling. Many

regions heavily associated with oil, either exploration, transportation, or processing, are also

significant sea turtle environments, including the Gulf of Mexico and the Caribbean, and

particularly the coasts of Texas and Florida.

� Other minor reasons include poaching, global warming and diseases.

But for all these reasons US is not taking any crucial step. US is apparently concerned and interested

in restricting imports of shrimps from developing nations because of its ulterior motives.

Ulterior motives of US

• The tropical shrimps had much more demand than the temperate shrimps in the US market as

they were much more delectable. These shrimps, due to their tropical origins, were much more

liked and preferred over the temperate shrimps by the customers. This created a huge demand

for these shrimps and affected the local shrimp industry inversely. Thus US wanted to stop

these imports in order to increase their domestic demand again.

• The Asian countries had the comparative advantage of providing shrimps at lower costs than

were available domestically. Due to various cheap inputs like labor, the shrimps imported from

developing countries were very cheap in comparison to those of developed nation.

• The US was adhering to richer lobbyists representing environmental and angling interests. The

major companies involved in fishing and shrimping had invested a lot into TEDs and this was

affecting their profitability and increasing their costs. Thus these companies used the

government to force the use of TEDs in other nations also from where shrimps were imported.

• While importation of shrimps from the mentioned countries was banned, US did not undertake

any steps to stop import of shrimps from China. Such act of double standards was nothing but

realpolitik on the part of the US because it was aware that such acts of intimidation would not

work for China. The US could not flex its muscles when it came to matters concerning China.

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The WTO Case Timeline

Figure 6: The Shrimp-Turtle case timeline

Argument by Plaintiff Nations

Following were the arguments put forth by the plaintiff nations:

• India, Pakistan, Malaysia and Thailand argued that the embargo on shrimp and shrimp products

was inconsistent with the Most-Favoured-Nation (MFN) principle embodied in Article I:I of

GATT. This argument was raised because:

� Pursuant to the embargo, wild shrimp harvested by use of TEDs were forbidden entry into

the United States if harvested by a national of a non-certified country, while shrimp

harvested by the same method by a national of a certified country would be permitted entry

into the United States.

� The embargo, as applied, was also inconsistent with Article I:I of the GATT 1994 because

initially affected nations had been granted a phase-in period of three years, while newly

affected nations had not been given a similar phase-in period. Thus, initially affected nations

had been given the opportunity to implement the required use of TEDs without substantially

interrupting shrimp trade to the United States. Products from these countries had therefore

been given an "advantage, favour, privilege or immunity" over like products originating in

the territories of other Members.

Oct 8th, 19964 nations (India, Malaysia, Pakistan & Thailand) jointly have consultations with the U.S.

Nov 19th, 1996

Consultations held without resolution

Jan 9th – Feb 25th , 1997

India, Malaysia, Pakistan & Thailand request DSB to establish a panel to look into the US embargo on import of shrimp & shrimp products

April 15th, 1997

DSB establishes 3 member panel

April 6th, 1998

Panel issues final report and ruling (in favor of the plaintiff nations)

July 13th, 1998

US appeals against the panel’s ruling

Oct 1998 Appellate Body gives its final report (in favor of US)

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• Article XI of GATT 1994 provided for the general elimination of quantitative restrictions on

imports and exports. The scope of Article XI was comprehensive, applying to all measures

instituted or maintained by a Member prohibiting or restricting the import, export or sale for

export of products other than measures that took the form of duties, taxes or other charges.

• The ban imposed by the US was in contravention of Article XIII.I as it restricted importation of

like products. Physically identical shrimp and shrimp products from different nations were

treated differently by the United States upon imports based solely on the method of harvest and

the policies of the foreign government under whose jurisdiction the shrimps were harvested.

Import of shrimp and shrimp products from some shrimp harvesting nations were denied entry

into the United States while imports of similar shrimp and shrimp products from other nations

were permitted entry into the United States.

Argument by US

• The US argued that it had taken measures to protect and conserve sea turtles, and endangered

“natural resource” that all parties to this dispute had agreed needed to be protected and

conserved. United States required its shrimp fishermen to harvest shrimp in manner that was

safe for sea turtles. In this case, the United States only asked that shrimp imported into the

United States to be harvested in a comparable manner.

• Article XX lays down specific instances in which a WTO member may be exempted from GATT

rules. A member can exercise Article XX to “protect human, animal, plant life or health”. Article

XX could also be exercised for “conservation of exhaustible natural resources” if such measures

are made effective in conjunction with restrictions on domestic production or consumption.

• US complained that in spite of repeated reminders on the usage of TEDs, the complainants did

not pay heed to their claims and there were no effective shrimp/turtle policies undertaken by

these countries.

• US also claimed to be in compliance with the “WTO Agreement”. This agreement was the first

multilateral trade agreement concluded after the UN Conference on Environment and

Development which provided that the rules of trade must not only promote expansion of trade

and production, but must do so in a manner that respects the principle of sustainable

development and protects and preserves the environment.

Panel Ruling: 6th April 1988

• Ban inconsistent with GATT Article XI: The import ban applied by the US on the basis of Section

609 of Public Law 101-162 is not consistent with Article XI - Section I of GATT 1994 imposed by

the US.

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• US could not justify its measure under GATT Article XX (dealing with general exceptions to Art

XX): The US measure constituted unjustifiable and arbitrary discrimination between countries

where the same conditions prevail.

• The Panel made the following recommendation: United States bring this measure into

conformity with its obligations under the WTO Agreement.

Aftermath of the ruling

• US and parties to the dispute reached agreement on a 13 month compliance period which

ended in December 1999.

• The US Department of State guidelines for implementing Section 609 was revised and issued

after providing notice and an opportunity for public comment.

• US to provide financial and technical assistance (training in the design, construction, installation

and operation of TEDs to any government requesting it).

However, in October 2000, Malaysia requested the re-establishment of the original panel to

examine whether the United States had in fact complied with the Appellate Body findings. The

implementation panel ruled in favor of the United States citing the following:

� Appellate Body ruling was an obligation to negotiate.

� United States had indeed made serious “good faith” efforts to negotiate.

Other Disputes at WTO

US-Mexico - Tuna Dolphin Case

In this dispute, Mexico was the exporting

country concerned. Its exports of tuna to the

US were banned. Mexico complained in 1991

under the GATT dispute settlement

procedure. The embargo also applies to

“intermediary” countries handling the tuna

en route from Mexico to the United States.

Often the tuna is processed and canned in

one of these countries. In this dispute, the

“intermediary” countries facing the embargo

were Costa Rica, Italy, Japan, and Spain etc.

The panel reported to GATT members in September 1991 and concluded that:

• US could not embargo imports of tuna products from Mexico simply because Mexican

regulations on the way tuna was produced did not satisfy US regulations. (But the US could apply

Figure 8: A Dolphin Safe can of Tuna

Figure 7: A Dolphin-Safe can of Tuna

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its regulations on the quality or content of the tuna imported.) This has become known as a

product versus process issue.

• GATT rules did not allow one country to take trade action for the purpose of attempting to

enforce its own domestic laws in another country - even to protect animal health or exhaustible

natural resources. The term used here is "extra-territoriality".

US-EU - Meat without hormones case

The Beef Hormone Dispute is one of the

two most intractable transatlantic

controversies since the establishment of

the WTO.

In the 1990s, in the midst of the mad cow

disease crisis, the EU banned the import of

meat that contained artificial beef

hormones. WTO rules permit such bans,

but only where a signatory presents valid

scientific evidence that the ban is a health

and safety measure. Canada and the US

opposed this ban, taking the EU to the WTO

DSB in 1997 where the WTO ruled against

the EU.

Disputes involving the US

Figure 10: Disputes involving US in WTO

Figure 9: Hormone-free Pork

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Since inception of the World Trade Organization, US have been involved in numerous disputes with

large number of other WTO members as well as non-members, either as a complainant or as a

respondent. The red color represents the US as a complainant while the blue color represents US as

a respondent.

Developed Nations: Devils in disguise?

With the coming up of the so called “Globalization” , the rich countries have got a kind of licensing

rights to exploit poorer nations in the name of development and investment. The developed

economies are getting involved in a proxy reign of power and influence.

The governments of developed nations promote and support their multinational companies to

exploit poorer nations in the name of global trade. The fact of the matter is this that the rich are

getting richer and the poor are getting poorer. This massive exploitation, with the help of trade and

other political influences, have led to mass starvation, political instability in the host country and

power hungry clans fighting amongst each other. This has further deteriorated the overall conditions

of these countries leading to genocide and abject poverty, case in point being countries like Nigeria,

Libya, Sudan, etc.

Poor countries hold 40 per cent of the world's population, but receive only 3 per cent of the world's

income from trade. Rich countries make up 14 per cent of world population and yet get 75 per cent

of the profit from trade. These rich countries enforce stricter bans and regulations from the imports

of developing nations, whenever their domestic industries get slightest of the interference from the

exports of the developing nations.

Developing nations are poorer countries; their inputs of the production are cheap. They can produce

same goods as rich developed nations at cheaper price. The developed nations want to level the

fields by enforcing higher taxes on the imports from developing countries. This is a major loss of

comparative advantage and against the principles of free trade.

Developed countries give financial aid to the poorer countries for development purposes; but,

through the complex web of taxes, tariffs and quotas that govern trade, they take far more from the

poor than what they give them. Unfair trade costs the world's poor $100bn a year. There are terrible

inequities that need to be addressed if the 2.7 billion people in the world who live on less than $2 a

day are to be enabled to stand on their own feet.

Few examples of unfair trade practices across the world include:

• Discrimination in case of Cocoa by US and EU. Higher the addition of value by a poor, higher the

tariffs imposition (Germany, Britain against Ivory Coast, Ghana). For importing raw cocoa beans

from Ghana and Ivory Coast, US and EU impose no tariffs. However, if these countries export

processed cocoa beans in the form of cocoa butter; the tariffs will be raised to 10 per cent in EU.

It will go further to 15% and 20 per cent if they will process it in the form of cocoa powder and

chocolate respectively.

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• Clothing, India's second largest export to the US, is taxed by Washington at 19 per cent whereas

the imports from countries such as France, Japan, and Germany are charged at between 0-1 per

cent.

Developing Nations in WTO

Figure 11: Developing nations and the WTO

Future of WTO - Challenges before developing nations

• Directly participating in the dispute settlement process (explained in Annexure) either as a

complainant or as a defendant has become very complex, because of the intricacies of the legal

interpretation which has routinely become a part of the panel or appeal process in the disputes

these days.

• The developed countries have started taking up these negotiations with a new determination to

expand the access of their economic entities in developing countries. Their attitude and

approach appear to have changed in recent years. The old concept of enlightened self-interest in

seeing the harmony of their own long-term prospects with the development of developing

countries has been replaced by expectations of immediate gains from expansion of current

opportunities in the developing countries, irrespective of its effect on the economies of these

countries.

• The developed countries, particularly the major ones, are more coordinated in their objectives

and methods in the WTO, whereas the developing countries have been losing whatever

solidarity they had in the past. The developed countries are also now moving with a great deal of

confidence in themselves. They feel that they can solve their economic problems by proper

Attractive opportunities due to free trade among nations prometed developing countries to join WTO

Growth of industries in developing nations due to availability of new markets for sale of their products

Domestic industry of developed nations faced competition from those of the developing countries

Restrictions imposed on the produce of developing nations in the form of Trade Sanctions and Anti-dumping investigations

WTO's role is that of an enforcer imposing restrictions on the developing countries

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coordination of policies among themselves; and they do not see the need for support from

developing countries in this regard. This has naturally reduced their sensitivity to the problems

of developing countries.

• A developed country, on the other hand, can start the process with much greater ease. Similarly

the developing countries also face a serious handicap in defending themselves in a case in the

WTO because of the cost involved. Thus, the developing countries are very poorly placed in the

WTO in respect of enforcing their rights and ensuring observance of the obligations of the other

countries.

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Conclusion

The hitch still remains and some of the major questions regarding world trade are yet to be

answered:

Figure 12: A question mark on Globalization

Environmentalists also insist that WTO rules need to be changed to accommodate Multilateral

Environmental Agreements (MEAs). They want trade sanctions imposed to enforce MEAs, such as

the Kyoto Protocol on reducing carbon-dioxide emissions, which are beyond challenge at the WTO.

This is tricky. Clearly, some accommodation is needed, but exemptions from trade rules all too easily

become protectionist loopholes. Rich-country parties to an MEA could, for instance, gang up on poor

countries on environmental grounds.

In such cases the right response is to tackle the root cause of the environmental damage - and not to

stop trade. The right way to deal with people’s desire for consumption (eating turtle-friendly

shrimps, hormone-free beef or whatever) is not to impose one country’s values on another. The

onus should lie on consumers, rather than governments, to choose what they want – let the

MARKET prevail over the STATE!

Is globalization a debt-trap for the developing and poor nations?

Should free trade be restricted in the name of environmental protection and to what extent?

WTO Members unilaterally adopting their own conditional market access measures - Does it not undermine the multilateral trading system?

Why can’t the consumer make the purchasing decision instead of the governments?

GLOBALIZATION

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Annexure

Dispute Settlement Process

Dispute settlement is the central pillar of the multilateral trading system, and the WTO’s unique

contribution to the stability of the global economy. Settling disputes is the responsibility of the

Dispute Settlement Body (the General Council in another guise), which consists of all WTO

members. The Dispute Settlement Body has the sole authority to establish “panels” of experts to

consider the case, and to accept or reject the panels’ findings or the results of an appeal. It monitors

the implementation of the rulings and recommendations, and has the power to authorize retaliation

when a country does not comply with a ruling.

Figure 13: The Dispute Settlement Process

• First stage: Consultation (up to 60 days). Before taking any other actions, the countries in

dispute have to talk to each other to see if they can settle their differences by themselves. If

that fails, they can also ask the WTO director-general to mediate or try to help in any other

way.

• Second stage: The panel (up to 45 days for a panel to be appointed, plus 6 months for the

panel to conclude). If consultations fail, the complaining country can ask for a panel to be

appointed. The country “in the dock” can block the creation of a panel once, but when the

Dispute Settlement Body meets for a second time, the appointment can no longer be

blocked (unless there is a consensus against appointing the panel).

Officially, the panel is helping the Dispute Settlement Body make rulings or

recommendations, but since the panel’s report can only be rejected by consensus in the

Dispute Settlement Body, its conclusions are difficult to overturn. The panel’s findings have

to be based on the agreements cited. The panel’s final report should normally be given to

the parties to the dispute within six months. In cases of urgency, including those concerning

perishable goods, the deadline is shortened to three months.

STAGE 3 – Provision of Appeal - Appellate Body Setup (60 days – 90 days)

DSB adopts Appeal Report (30days)

STAGE 2 – Panels

Panel Appointment ( up to 45 Days)

Final Panel Report to Parties (6 months)

Final Panel Report to WTO (3 weeks)

STAGE 1 – Consultations (up to 60 days)

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• Third stage: Provision of Appeal - Appellate Body Setup (60 - 90 days). Either side can

appeal a panel’s ruling. Sometimes both sides do so. Appeals have to be based on points of

law such as legal interpretation - they cannot re-examine existing evidence or examine new

issues.

Each appeal is heard by three members of a permanent seven-member Appellate Body set up by

the Dispute Settlement Body and broadly representing the range of WTO membership.

Members of the Appellate Body have four-year terms. They have to be individuals with

recognized standing in the field of law and international trade, not affiliated with any

government. The appeal can uphold, modify or reverse the panel’s legal findings and

conclusions. Normally appeals should not last more than 60 days, with an absolute maximum of

90 days. The Dispute Settlement Body has to accept or reject the appeals report within 30 days -

and rejection is only possible by consensus.

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References

• www.wto.org

• www.economist.com

• www.theinsider.org

• news.independent.co.uk

• www.iucnredlist.org

• www.nmfs.noaa.gov/pr/species/turtles/

• www.conserveturtles.org

• www.downtoearth.org.in

• ictsd.org