Problem I:

     The bananas dispute continues to simmer. In 2005, the EU set a tariff at 230 euros per ton. Latin American exporters successfully challenged this rate as failing to provide them the same level of access to the European market previously agreed to. Thereafter, the EU lowered its tariff to 176 euros/ton, but maintained duty-free access for 775,000 tons of ACP bananas. Ecuador and the U.S. successfully challenged this quota in WTO dispute proceedings and, in a November 2008 report, the AB upheld this finding.

     In the meantime, the Latin exporters and the EU engaged in extended efforts to reach an agreement on an acceptable tariff rate, with WTO Director-General Pascal Lamy personally serving as mediator. In July 2008, the EU and Latin American exporters Colombia, Costa Rica, Ecuador, Guatemala and Panama reached an agreement. The EU agreed to eventually drop its tariff on banana imports from 176 euros per metric ton to 114 euros per ton over an eight year period; in exchange, the Latin American states agreed to allow the EU to continue providing duty-free access to ACP bananas. The exporters also agreed to drop all WTO claims against the EU regarding bananas. However, by April 2009, the deal had not yet been finalized, because, the EU claimed, the bananas agreement was contingent on a larger Doha Round agreement on agriculture.

     As a general matter, WTO dispute settlement continues to be quite active. As of January 29, 2009, some 390 complaints had been notified to the WTO, and 116 AB and panel reports had been adopted. Prevailing parties had been authorized to suspend concessions to noncomplying parties in 15 disputes. A WTO Secretariat report summarizing all of the matters considered in dispute resolution proceedings can be found here.

Problem II:

     WTO panels continue to grapple with trade and environment disputes. One high-profile case involved a challenge by Argentina, Canada and the United States to the EC’s de facto moratorium on approvals to market genetically modified organisms (GMOs) in Europe. Excerpts from the lengthy panel report are available here. Neither side appealed the report and, in July 2009, Canada and the EC reached a mutually agreed solution in this matter.

     A more recent dispute involved an EC complaint against a Brazilian ban on the imports of retreaded tires. Brazil claimed that its measure was necessary to protect public health and environmental interests. The panel found that the measure was GATT-inconsistent, and did not fall within the scope of the article XX exception because it was not applied consistent with the article XX chapeau. On appeal, the AB upheld the panel’s conclusion that the Brazilian measure did not fall within the scope of article XX, although for different reasons. An edited version of the AB report is available here.

     Other disputes are working their way through the system. For example, in July 2009, the EC, prompted by animal welfare concerns, imposed a ban on seal products. An exception permits trade in seal products originating from indigenous peoples. Canada complained that the measure did not provide an exemption for humanely harvested seal products. In July 2009, Canada sought consultations with the EC at the WTO on this matter.

     Finally, the tuna-dolphin dispute has resurfaced at the WTO. The 1997 legislation discussed in the text – the International Dolphin Conservation Program Act – required the Secretary of Commerce to determine whether the tuna fishery is adversely affecting the dolphin population. In 1999, the Secretary made a finding that there was not an adverse impact. This finding would permit the importation of tuna caught with purse-seine nets with ‘dolphin-safe’ labels. Environmental groups challenged this finding, and the Ninth Circuit determined that the Secretary’s finding was “arbitrary and capricious.” Brower v. Evans, 257 F.3d 1058 (9 th Cir. 2001). The agency undertook new studies, and again found that the tuna fishery was not adversely affecting dolphin populations. Again, the courts rejected this finding. Earth Island Institute v. Hogarth, 484 F.3d 1123 (9 th Cir. 2007). As a result, the United States continued to bar Mexican tuna.

     Mexico claims that its fishing practices result in a dolphin mortality rate of “practically zero” and that they conform to standards established by the Inter-American Tropical Tuna Commission. It also claims that the United States is in violation of the WTO’s non-discrimination rules and requested that a WTO dispute panel rule on the matter. In April 2009, a panel was established.