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November 1999
The World Trade Organization: Current Disputes and Determinations

By Terri Lujan


The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible. Decisions in the WTO are taken by consensus among all member countries and are ratified by members’ parliaments. Trade friction is channeled into the WTO’s dispute settlement process (described below) where the focus is on interpreting agreements and commitments, and ensuring that countries’ trade policies conform with them.

A dispute arises when one country adopts a trade measure or takes some action that one or more fellow WTO members considers to be a breach of WTO agreements. Settling disputes is the responsibility of the Dispute Settlement Body, which has sole authority to establish panels of experts and accept or reject the panel findings or the results of an appeal. It also has the power to authorize retaliation when a country does not comply with a ruling.

Disputes usually take a year to resolve. Before the first hearing, each side in the dispute presents its case in writing to the panel, which is then heard by the panel. The panel can consult experts or appoint an expert group if one side raises scientific or technical matters. After the panel has submitted an interim report, a two week review of the findings takes place, after which a final report is submitted to the two sides. Three weeks later, the report is circulated to all WTO members. If the panel decides that the disputed trade measure does break a WTO agreement, it recommends that the measure be made to conform with WTO rules. The report becomes a ruling within 60 days, unless there is a consensus to reject it. Both sides can appeal the report.

Recently, the WTO has been involved in some touchstone cases that reveal a great deal about how governments and industries view the interests of nation states, the environment, and food.

Banana Wars
In what has become known as the Banana War, the U.S. accused the EU of breaking world trade rules by favoring banana imports from their former colonies in the Caribbean and Africa. The U.S. then imposed penalties on the EU—unfairly the Europeans charged—because the U.S. did not wait for a ruling on the dispute by the WTO. However, in its ruling, the WTO upheld the U.S.’ right to impose punitive tariffs on $180 million worth of European goods ranging from Scottish cashmere to German coffee. The Banana War may look like a battle between two groups of poor banana farmers in Latin America and the EU-supported countries of the Caribbean. But it is really between large, multinational companies in Central America (which have devastated land with their plantations and increased their power through large donations to the U.S. government), and poor, powerless family farmers in the Caribbean. The EU is appealing the WTO’s decision.

Beef Row
As the Banana War raged, a new battle erupted between the EU and the U.S. as Brussels accused Washington of endangering European children’s health by trying to open European markets to American beef treated with growth-promoting hormones. The European Commission of the EU threatened to ban all U.S. beef imports because traces had been found in meat that was supposed to be hormone-free. The EU claims scientific evidence shows that one of the hormones, 17 Beta-oestradiol, is potentially carcinogenic. The hormones have been illegal in Europe for the past 10 years but are allowed to be used in the U.S. and other countries such as Australia.

The U.S. took the issue to the WTO, which in September authorized the U.S. to impose $116 million of sanctions on EU imports (mostly “gourmet” foods like foie gras). The WTO ruled that the EU’s ban was not backed by valid scientific evidence. Within the European Union itself, the EU’s ban is somewhat controversial. British companies have kept out of the beef dispute with the U.S., and the UK’s Department of Trade and Industry has told the U.S. that it does not support the EU’s stance. Britain has only recently been allowed to sell its beef in Europe after nearly two years of European governments refusing to buy it, fearing it could be tainted with bovine spongiform encephalopathy (BSE), commonly known as “mad cow disease.” Even now, the French and German governments are imposing restrictions on the sale of British beef.

Sea Turtles
All sea turtles in U.S. waters are listed as endangered or threatened species. In 1987, the U.S. issued regulations under the Endangered Species Act (ESA) that require shrimp fishers to use turtle excluder devices (TEDs). As shrimp nets drag through the water, they capture sea turtles and tons of unwanted fish along with the shrimp. If the turtles cannot escape, they drown. TEDs, designed to reduce sea turtle mortality, are metal grids sewn into the net that allow turtles to escape the shrimp nets. The TED guides turtles to a hole in the net while shrimp pass through the grid and into the back of the net. Failure to use TEDs kills as many as 150,000 sea turtles every year.

On April 6 of this year, the WTO ruled that the U.S. law protecting sea turtles is a violation of international trade rules. The ruling will require the U.S. to weaken its law protecting sea turtles or face trade sanctions. The U.S. is still deciding what action to take. Shrimping without the use of TEDs causes more sea turtle deaths than all other human causes combined. The international community has recognized that TEDs are the most effective means of sea turtle protection.

Critics of the WTO ruling, such as the National Wildlife Federation (NWF), have suggested that it threatens more than just sea turtles. They say the ruling represents a failure by those interpreting trade rules to balance trade and environmental priorities; as such, it overrides efforts to protect the environment in the interests of free trade.

Tuna-Dolphin Agreement
In the 1980s and 1990s, the U.S. public, the largest consumers of tuna in the world, began to demand that the killing of hundreds of thousands to dolphins each year in tuna nets (dolphins tend to swim with the tuna most desired by fishers) be stopped. Through citizen action, boycotts and other political activities, laws were passed in the U.S. to help put a stop to this unnecessary killing and “dolphin safe” tuna was born.

In 1998, the U.S. negotiated with other countries an international tuna-dolphin agreement that included a mandate for all countries to reduce the catch of “non-target species” such as dolphins, sharks, sea turtles, billfish and juvenile tuna. It is the first international program to reduce this “bycatch.” For the first time, there is a common, binding set of rules to which all countries must adhere. The agreement aims to ensure that the dolphin mortality remains below 5,000 a year.

However, in May 1997, the Republican-controlled House of Representatives passed HR 408, the inaptly named International Dolphin Conservation Act, by a vote of 262 to 166. Supporters of this bill include Mexico, Colombia, Venezuela and other countries, which have threatened to stop protecting dolphins unless all tuna embargoes are lifted and the dolphin-safe label is refined.

HR 408 would permit fishing practices that employ speedboats to chase dolphins to exhaustion and herd them into nets with exploding seal bombs. These practices could still be called “dolphin-safe,” and canned tuna still labeled “dolphin safe” as long as no one observes dolphins actually dying in the nets. The bill ignores the fact that many injured and traumatized dolphins die shortly after the chase and capture. A Senate version of the bill, S. 39, was introduced by Senators Stevens (R-AK) and Breaux (D-LA), but has not yet been passed.

Mexico has vowed to file a suit against the U.S. with the WTO, demanding that Congress pass what critics call “the dolphin death act.” To up the ante, it is currently withholding data on its tuna fleets’ violations of dolphin protection rules and has suspended efforts to protect dolphins under the international treaty.

Terri Lujan is an animal activist devoting her free time to the rights and welfare of all animals.


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