A WTO Dispute from A to Z:. US – Shrimp. The Shrimp Turtle Case: Brief Background.
US – Shrimp
Australia, Colombia, Costa Rica, Ecuador, El Salvador, the EEC, Guatemala, Hong Kong, Japan, Mexico, Nigeria, the Philippines, Senegal, Singapore, Sri Lanka, Venezuela
Requested: 8 Oct 1996
Held: 19 Nov 1996
Requested by Malaysia and Thailand on: 9 Jan 1997
Requested by Pakistan on: 30 Jan 1997.
Requested by India on: 25 Feb 1997.
Established: 25 Feb 1997 for Malaysia, Thailand and Pakistan.
Established: 10 April 1997 for India.
Decision that Panel be consolidated: 25 Feb 1997.
Panel Notification that could not make report in 6 months: 22 Sept 1997.
Meeting with Experts and Parties: 21 & 22 Jan 1998.
Report Circulated: 6 April 1998.The Shrimp Turtle Case: Basic Elements
The US embargo constitutes a prohibition or restriction on the importation of shrimp or shrimp products in violation of Article XI:1. (Para 3.136).
Argues that the prohibition falls under Article XI as it bans import of shrimp from any country not meeting certain policy conditions. (Para 3.140)
USA did not dispute that with regard to uncertified countries, S. 609 amounted to a restriction on the importation of shrimp within the meaning of Article XI:1. (Para 3.143)
The complainants have the burden of establishing the alleged violation. (Para 3.143)
Under Article XX GATT, nothing is to be construed to prevent the adoption or enforcement of the measures at issue. As such, USA did not need not address Article XI.Parties’ Arguments on Whether S.609 Violates Article XI:1 GATT.
1. USA Was in Violation of Article XI:1
2. Burden of Proof. (Para 7.14)
Prohibition from non certified countries is inconsistent with MFN in Article 1:1 because physically identical shrimp from different Members are treated differently by US upon importation. (Para 3.135)
This differentiated treatment is solely based on the method of harvest and the conservation policies of the harvesting government. Harvested wild shrimp is forbidden entry if harvested by a national of a non certified country but not of a certified country. (Para 7.18)
Initially affected countries were given a phase in period of 3 years while newly affected nations were not given similar period of time. Malaysiaargues was given only 3 months to comply. (Para 3.142)
The US measure was applied equally to all harvesting nations. (Para 3.143)
Denies entry of shrimp based on method of harvest. (Para 7.20)
Difference in phase in periods was because the longer time period was needed for the undeveloped character of TED technology, while the shorter period was later made possible by the improvements in the technology.Parties’ Arguments on Article XIII:1 and 1:1.
Article XX (b) and (g) cannot be invoked to justify a measure which applies to animals outside the Member’s jurisdiction. (Para 3.157).
Article XX (g) is limited to the conservation of finite resources such as minerals rather than biological or renewable resources for which there was a limited supply, hence the possibility of depletion. (Para 3.237)
US measure was not “necessary” because the complainants already had adequate programs in place for the protection of turtles within their jurisdictions. (Para 3.217)
Measures found inconsistent with Articles XI:1 are justified under Articles XX (b) and (g). (Para 3.147).
Article XX (b) and (g) contain no jurisdictional limitations nor limitations on the location of the animals or natural resources to be protected and conserved. (Para 3.159)
The measures were necessary to reduce sea turtle mortality which were threatened with extinction. The use of TEDs was also necessary because other measures to protect sea turtles were not sufficient to allow sea turtles to recover from the brink of extinction. (Para 3.222)Parties’ Arguments on Articles XX (b) and (g).
2. Article XX (b) and (g).
The measure at issue represents a clear infringement of Articles I, XI and XIII GATT and it is well established that in cases where there is a clear infringement of provisions of GATT, the action would prima facie constitute a nullification or impairment within the meaning of Article XXIII GATT. (Para 3.297)
USA did not address this issue.Parties’ Arguments on Article XXIII:1 (a) GATT
An Error in the Interpretive Analysis of the Panel.
The Appellate Body found that the interpretive analysis adopted by the
Panel constituted an error in legal interpretation because:
1. The Panel did not inquire specifically into how the application of S.609 constituted a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevailed. (Para 115)
2. The Panel did not follow all the steps of applying the customary rules of interpretation of public international law, according to Article 3.2 DSU. It did not expressly examine the ordinary meaning of the words of Article XX. (Para 114).
3. The Panel did not look into the object and purpose of the chapeau of Article XX. Rather it looked into the object and purpose of the whole of GATT and the WTO Agreement. Maintaining rather than undermining the multilateral trading system is necessarily a fundamental premise underling the WTO Agreement, but it is not a right or an obligation, nor is it an interpretive rule which can be employed in the appraisal of a given measure under the chapeau of Article XX. (Para 116)
4. The general design of a measure, as distinguished from its application, is to be examined in the course of determining whether the measure falls within one of the paragraphs of Article XX chapeau. The Panel did not attempt to inquire into how the measure at stake was being applied in such a manner as to constitute abuse or misuse of a given kind of exception. (Para 116).
5. The above flaws flowed from the fact that the Panel disregarded the sequence of steps essential for making a finding under Article XX. (Para 117). As stated in the US Gasoline case, the analysis is two tiered: First; provisional justification of the measure by reason of characterization under XX (g); second, further appraisal of the same measure under the introductory clauses of Article XX. This reflects the fundamental structure and logic of Article XX. Reversing the above sequence makes a whole world of difference. (Para 118)
6. The Panel formulated a broad standard and a test that finds no basis either in the text of the chapeau or in that of either of the two specific exceptions claimed by USA. The Panel in effect construed a priori test that purports to define a category of measures which ratione materiae fall outside the justifying of the chapeau. (Para 121).
Whether S. 609 was Justified Under Article XX (g).
1. Exhaustible natural resources. ArticleXX (g) is not limited to the conservation of mineral or non living natural resources. Living resources are just as finite as non living resources. (Para 128). It should be noted that also modern international conventions and declarations make reference to natural resources as embracing both living and non living resources. (Para 130).
2. Relating to conservation of exhaustible natural resources. “Relates to” implies the looking at the relationship between the measure at stake and the legitimate policy of conserving exhaustible natural resources. (Para 135). It involves examination of the general structure of S. 609 and the policy goal it purports to serve, the conservation of sea turtles.
3.Measure is made effective in conjunction with restrictions on domestic production and consumption - whether the restrictions imposed by S. 609 with respect to imported shrimp are also imposed in respect of shrimp caught by USA shrimp trawl vessels. The Appellate Body found that USA had the ability to seize shrimp catch from trawl vessels fishing in US waters and had done so in cases of egregious violations. As such, S. 609 was an even handed measure, which was made effective in conjunction with restrictions on domestic harvesting of shrimp. (Para 144).
4. Conclusion on XX (g) or XX (b)?
Since S. 609 falls within the ambit of Article XX (g), there is no need to investigate it under XX (b), considering the US had prayed for XX (b) only if the measure did not fall under XX (g). (Para 146).
Characterizing S. 609 Under the Chapeau’s standards.
There are 3 standards contained in the chapeau. (Para 150)
i) Arbitrary discrimination between countries where the same conditions prevail.
ii) Unjustifiable discrimination between countries where the same conditions prevail.
iii) A disguised restriction on international trade.
Arbitrary or Unjustified Discrimination
For a measure to be an arbitrary or unjustified discrimination, 3 elements must
exist: (Para 150).
a) The application of a measure must result in discrimination.
b) The discrimination must be arbitrary or unjustifiable in character.
c) The discrimination must occur between countries where the same conditions
Key Issues Before the Panel
The implementing measure as currently applied violates Article XI:1 GATT. (Para 3.28).
By continuing to apply a unilateral measure after the end of the reasonable period of time pending the conclusion of an international agreement, US failed to comply with its obligations under GATT.
USA revised Guidelines are still not in compliance with the DSB recommendations and rulings. US imposes its own conservation policy and standards on other Members which practice is contrary to the sovereign right of Malaysia to define its own environmental policies and standards. (Para 3.122)
Section 609 has been found to be provisionally justified under Article XX (g) GATT. (Para 3.38)
As far as the other recommendations and rulings are concerned, the US has made serious good faith efforts to negotiate a sea turtle conservation agreement and has modified the guidelines implementing S. 609 in order to comply with those recommendations and rulings. (Para 3.67).Recourse to Article 21.5: Arguments of the Parties.
1. Article XI:1
2. Article XX (g).
3. Arbitrary or Unjustifiable discrimination.
4. Disguised restriction on International Trade?
Key Issues Before the Appellate Body.
The panel improperly limited its analysis to the recommendations and rulings of the DSB and thus failed to fulfill its mandate under Article 21.5 because it did not examine the consistency of the US implementing measure with the relevant GATT provisions. (Para 13 and 14).
Avoiding arbitrary or unjustifiable discrimination under the chapeau requires the conclusion of an international agreement which has not been done by USA. (Para 16).
Malaysia’s argument is based solely on the use of the phrase “recommendations and rulings of the DSB.” The Panel’s use of the said phrasing is entirely appropriate and indicates no limitation in its scope of review. (Para 29).
The revised guidelines remedy all inconsistencies identified by the Appellate Body under the chapeau of Article XX. (Para 30)Recourse to Article 21.5: Arguments of the Parties.
1. Panel Mandate Under Article 21.5
2. The Chapeau - Arbitrary and Unjustifiable Discrimination.