For a while, the Mexico-U.S. WTO dispute over U.S. measures related to dolphin-safe labels on tuna was pretty conventional. Mexico brought a complaint; the U.S. lost. The U.S. revised its regulations, and Mexico challenged the new regulations in an Article 21.5 proceeding. The U.S. lost again. Mexico then requested authorization to suspend concessions. The U.S. objected to the level of suspension proposed, and, just recently, the matter was referred to an arbitrator under Article 22.6 to determine the appropriate level. We've seen all this before.
But now we are in uncharted territory. After having its revised regulations found not to be in compliance in the Article 21.5 proceeding, the U.S. then revised its regulations again. And it has now requested that another Article 21.5 panel be set up, to get itself declared to be in compliance on the basis of the second revision to the regulations. For its part, Mexico will apparently request its own Article 21.5 panel, to argue that the second revision to the regulations is not, in fact, in compliance. (Presumably, Mexico did not want to be constrained by the terms of reference that might have existed based on the U.S. panel request).
So if you are keeping score at home, that will be up to three panels/arbitrators -- presumably made up of the same people -- weighing in on these issues in the coming months. How should they sort all this out?
If I had to sort it out myself, I would say the Article 22.6 arbitrator should focus on the issue of the level of nullification or impairment, and should do so based solely on the impact of the first revision to the regulations. And then, separately, the two Article 21.5 panels requested by the U.S. and Mexico should be merged into one panel, to jointly consider all of the issues related to the consistency of the second revision to the regulations with WTO obligations.
It might be useful to have DSU rules to deal with this kind of situation. On the other hand, I can see how a practice would develop to handle these issues when they arise.
ADDED: In response to a reader question, so what happens when these new cases are decided? Well, obviously, as soon as the Article 22.6 decision comes out, Mexico can get authorization to suspend concessions. Given the later start, I'm guessing the Article 21.5 report(s) will come out after the Article 22.6 decision. If the 21.5 report(s) find no violation, then the U.S. could demand that Mexico stop whatever trade retaliation it is imposing. On the other hand, if the current U.S. regulation is found to be in violation, it gets more complicated, as the level of nullification or impairment might have changed in relation to the Arbitrator's assessment of the previous regulation. Would the U.S. then file a new objection to Mexico's suspension level, to have the arbitrator reevaluate the appropriate level? We are now getting further into uncharted territory, and I don't really know.
