From a USTR press release:
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.
For more background on this conflict, see prior posts here and here. In the latter post, Tomer commented: "It would be better for the US if it could find a way to get a NAFTA panel to order Mexico to stay WTO procedures." It appears they have taken up his suggestion.
