"GATT-Zilla vs. Flipper" Dolphin Case Demonstrates How Trade Agreements Undermine Domestic Environmental, Public Interest Policies

April 11, 2003

Proponents of sweeping trade agreements such as the North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) always have maintained that U.S. trade commitments do not affect or undermine domestic law.  But the Bush administration’s attack on a domestic environmental law is the latest proof – the “smoking dolphin,” if you will – that trade commitments do lead to the erosion of domestic public interest policies.

On April 10, a federal judge in San Francisco temporarily blocked the Bush administration from gutting rules that forbid the use of the popular “dolphin safe” label on tuna caught using encirclement nets that endanger dolphins. Earth Island Institute, along with Samuel LaBudde, Humane Society of the United States, American Society for the Prevention of Cruelty to Animals (ASPCA), Defenders of Wildlife, International Wildlife Coalition, Animal Welfare Institute, Society for Animal Protective Legislation, Animal Fund, and Oceanic Society had filed a federal lawsuit to block the Bush administration’s proposed weakened tuna label.

The Bush administration announced on Dec. 31, 2002, that it planned to weaken the rules protecting dolphins from encirclement nets used to catch tuna.

Since 1992, the United States has been under orders to weaken the dolphin law in question after it was ruled to be an illegal trade barrier by an international tribunal operating under the General Agreement on Tariffs and Trade, or GATT.  Recently, Mexico has stepped up threats of WTO action if the law is not changed. The Bush administration action underscores the concerns raised by public interest activists about domestic policies being attacked by foreign nations as illegal trade barriers in secret WTO tribunals.

The following provides a timeline of the challenge to the dolphin law and an explanation of the actions by the Clinton and Bush administration to comply with the resulting trade rulings and threats.

History of Dolphin Trade Case

For reasons that are poorly understood, yellowfin tuna in the Eastern Tropical Pacific often travel with dolphins.  In the 1950s, tuna fishermen developed a deadly new method for catching the tuna.  They would locate pods of dolphins swimming near the ocean surface and then herd the dolphins, along with the tuna swimming beneath, to the surface. Fishing vessels would then encircle the disoriented animals with giant purse seines, which could be drawn together at the bottom to trap the fish. The dolphins often drowned before they could be brought aboard the boat and released.

Outrage over the practice, which is estimated to have killed seven million dolphins in the region, helped spur Congress in 1972 to pass the Marine Mammal Protection Act.   While this act drastically reduced the number of dolphin deaths, fishermen still were permitted under the act’s provisions to kill tens of thousands of dolphins per year.

Public concern rose again in 1988, when an environmental activist secretly videotaped large numbers of dolphins being slaughtered on a Panamanian vessel. Congress that year banned tuna imports from countries that failed to meet U.S. dolphin conservation standards.  Then in 1990, Congress reacted to a growing grassroots movement by creating the highly popular “dolphin safe” labeling program, which outlawed the use of the label for tuna caught using encirclement nets.  In 1992, Congress banned the U.S. sale of all tuna that was not “dolphin safe.”

Mexico and several other countries challenged the ban as a violation of the GATT.   In 1991, a GATT tribunal ruled that U.S. law violated GATT rules because it treated physically identical “goods” – tuna – differently according to the manner in which they were caught, harvested or processed. Even though such “process and production” distinctions are vital to many environmental and other laws, the GATT tribunal ruled that the United States was allowed to protect dolphins only through “less trade restrictive measures.”  The panel also ruled that under trade rules, a country may not set regulations on its own markets that have implications reaching beyond its borders.

Initially, the United States did not change its dolphin law to conform with the GATT ruling. The fight over congressional approval of the NAFTA becoming heated and the Clinton administration thought that gutting a popular dolphin protection because of a trade ruling in a case brought by Mexico would threaten congressional approval of NAFTA. The 1991 GATT case had achieved a high profile because it was the first obvious attack on an environmental policy brought under the authority of a trade pact.  But GATT rules required a consensus, which the United States could block, before sanctions could be levied.

But in 1995, the dispute resolution rules changed drastically with the formation of the WTO, which had been created by the Uruguay Round of the GATT and approved by Congress the previous year.  The WTO featured an automatically binding dispute resolution system, meaning the United States lost its ability to keep the dolphin policy without suffering sanctions.

In 1995, with NAFTA already implemented and the WTO in effect, Mexico threatened to bring a challenge to the WTO over the United States’ continuing failure to implement the 1991 GATT dolphin ruling. To avoid the embarrassing spectacle of being ordered by the WTO to “kill Flipper,” the Clinton administration sought to weaken the Marine Mammal Protection Act.  Shortly after the 1996 election, President Clinton wrote a personal letter to then-Mexican President Ernesto Zedillo declaring that within 30 days of his new term, he would bring the U.S. marine mammal law into compliance with the 1991 GATT ruling.

Through 1996, a coalition of consumer, environmental and wildlife groups fought to uphold the law in Congress. In 1997, after an even bigger push by the Clinton administration, this time directly led by Vice President Al Gore and then-Undersecretary of State Timothy Wirth, Congress amended the Marine Mammal Protection Act. After skirmishes in court, the embargo against tuna caught with purse seines was lifted.   However, tuna caught in ways that killed dolphins could not use the coveted “dolphin safe” label – making it considerably less marketable. The law stipulated that tuna caught with encirclement nets could be labeled “dolphin safe” only if a special dolphin safety observer (on boats as long as a football field) witnessed no dolphins deaths. The change to the definition “dolphin safe” was to go into effect only if a National Marine Fisheries Service (NMFS) study mandated by the new legislation concluded that there were no detrimental impacts on dolphin populations by encirclement tuna fishing if certain techniques, such as divers, were used to free trapped animals.

In April 1999, then-Commerce Secretary William Daley announced that based on the results of NMFS’ preliminary report, it would implement the 1997 amendment effective February 2, 2000. This would mean that the labeling standard for “dolphin safe” tuna would be weakened from a standard of “no encirclement fishing” to “no observed dolphin deaths.”  The Mexican government welcomed the tardy implementation of the GATT order.

However, in August 1999, environmentalists led by Earth Island Institute filed suit against the Commerce Department, arguing that Daley had acted arbitrarily and ignored scientific evidence when he promulgated the new regulation. The change in dolphin labeling was temporarily stayed. In April 2000, a U.S. district court ruled against the Commerce Department. In July 2001, the 9th U.S. Circuit Court of Appeals upheld the ruling. The Mexican government revived its threats of a new WTO case.

Mexican tuna could still be imported under the law the Clinton administration had persuaded Congress to pass.   It just could not be labeled “dolphin safe.”  Mexico argued that this situation did not satisfy the GATT ruling of 1991 and continued to hold the threat of a WTO case over the United States’ head.

Watching two different administrations scramble to kill a popular domestic law at the mere threat of WTO action puts into perspective why so many countries no longer wait for a formal WTO challenge before weakening laws under attack.

In 2002, Commerce Secretary Donald Evans attempted to introduce identical regulations as the Daley rules to change the definition of “dolphin safe” to comply with Mexico’s GATT-WTO demands.  Last September, NMFS released the final report on dolphin populations required by the 1997 statute. The report found that dolphin stocks are depleted, that purse seine nets exert stress on dolphins and that dolphins are not recovering. However, another study required by the 1997 statute found that “purse-seine fishery is not having a significant adverse impact on any depleted dolphin stock.”

On the basis of this latter report, on Dec. 31, 2002, Secretary Evans announced the Commerce Department would allow “dolphin safe” labels on tuna caught using the dolphin encirclement technique. Environmental groups filed suit and a temporary stay was granted in early January 2003. A hearing in the case is now scheduled on April 7 in San Francisco.

It is easy to lose track of why three presidents, four U.S. trade representatives, five U.S. Congresses, and three Mexican presidents have been working diligently to undermine a remarkably successful U.S. environmental law.  But in the end, these most recent and perhaps dolphin-deadly developments illustrate how indeed so-called trade agreements do undermine vital domestic environmental and other public interest policies.