November
1999
The
World Trade Organization: Current Disputes and Determinations
By Terri Lujan
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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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