The WTO/Free Trade, Iceland and Whales
By Taffy Lee Williams
Alarms sounded recently when the WTO ruled against the US Dolphin Safe Tuna labeling process, saying it violated international free trade policy. Likewise, cetacean advocates were soundly defeated when Obama failed to impose economic sanctions against Iceland in accordance with the Pelly Amendment for its continued commercial whaling.
Established to promote free trade, the WTO creates the rules that govern international trade. Essentially, its mission is to lower trade barriers. Regular and fervent protests against the WTO call attention to policies which appear to serve big business and multi-national corporations ahead of consumer interests: member nations must modify environmental, public health and safety rules if these are found to impede trade. In the same week as the Dolphin Safe-Tuna label ruling, the WTO ruled that country of origin labeling on beef also violated WTO trade law. This was followed by a direct blow to health and consumer protection when the WTO used its Technical Barriers to Trade Agreement to find that US measures to reduce teenage smoking also violated Free Trade policy.
“Nothing new,” so says Public Citizen, who reports that the WTO rules against environmental, health and other national policies 90% of the time.
“This severe blow to consumer protection comes on the heels of two other WTO rulings against America's dolphin-safe tuna and beef country-of-origin labels, and are likely to put a significant damper on the Obama administration's efforts to pass trade deals with South Korea, Colombia and Panama that contain similar anti-consumer rules.” (Public CItizen. http://citizen.typepad.com/eyesontrade/2011/09/wto-opens-door-to-teen-tobacco-addiction.html)
Oddly, even as the WTO found that the reasons for the dolphin-tuna labeling reflected legitimate, dolphin- saving fishing methods, the panel still voted against it. What does this mean for wildlife protection in general? Friends of the Earth analysis finds the prospects troubling:
If this [dolphin-safe tuna labeling] decision is allowed to stand, the U.S. will be forced to roll back its labeling system or face retaliatory sanctions such as higher tariffs that worsen unemployment. The U.S. may choose to appeal the decision, but why did the United States agree in the first place to an international trade pact that allows corporate-dominated tribunals to decide U.S. environmental policy? (http://www.foe.org/wto-rules-‘dolphin-safe-tuna’-labels-are-illegal)
Now the question becomes, will the US implement the WTO decision, or will it appear “politically correct” and appeal as expected, full-well knowing the WTO anti-environment record. As a party to the WTO, if the US doesn’t implement the Dolphin-Safe Tuna labeling decision, will it face economic trade sanctions? Hefty fines? Actually, laws do not have to be changed but penalties can be assessed as long as a nation is in non-compliance.
The WTO agreement requires participating nations to conform their laws to comply with WTO rulings. This language clearly defines the ruling of the WTO to be superior to laws passed by Congress. How can this situation not be a loss of national sovereignty? ...Fines imposed by the WTO are not the slap-on-the-wrist variety. The U.S. said no to British Petroleum's wish to ship gasoline with the additive MTBE into the United States. The WTO said this is a violation of their rules and slapped the U.S. with a $360 million fine, according to Congressman Bart Stupak (D-MI). "When the WTO kicks in, sovereignty is kicked out," Stupak says. (http://www.sweetliberty.org/sovereigntywto.htm)
Does the US have a choice beyond tossing its Dolphin Safe Tuna labeling system? How will Congress react to these latest anti-consumer, anti-environment WTO rulings? Congressman Ron Paul (R-TX) believes our participation in the WTO results in an “erosion of national sovereignty” and has proposed that the US withdraw from the WTO. (ibid.) The International Forum on Globalizations (IFG) sheds light on the WTO’s appeal process:
Eighty years of World Trade Organization (WTO) decisions have demonstrated that the WTO views environmental, public health and human rights protections as obstacles to trade that should be eliminated. The WTO’s Dispute Settlement Body has the strongest enforcement procedures of any international agreement now in force. WTO panel rulings are automatically binding. Once a WTO tribunal has declared a country’s law WTO-illegal, the country must change the law or face trade sanctions. Dispute panels operate in secret, documents are restricted to the countries in the dispute, due process and citizen participation are absent and no outside appeal is available. The tribunals are composed of three to five trade experts chosen by the WTO secretariat without meaningful protections against conflicts of interest. Given that the WTO uses unelected and unaccountable trade experts to decide in secret if domestic laws are acceptable under WTO trade rules, the resulting tidal wave of rulings against public interest laws is not particularly surprising. http://www.ifg.org/pdf/cancun/issues-WTOvsEnv.pdf
The Colombia, Panama and Korean Free Trade Agreements each contain tariff schedules in which live cetaceans, their meat products and even whalebone are classified for trade. With respect to whales, trade measures (or restrictions) by MEAs (Multilateral Environmental Agreements) such as CITES and the IWC could be found in violation of WTO policy. However, parties involved in MEA/WTO disputes are urged to resolve problems within the MEA itself; i.e., whaling issues would be resolved at CITES or the IWC.
WTO law does not adequately address the role of other relevant rules of international law in adjudicating dispute on trade and environment. In addition the WTO dispute settlement mechanism is not structured appropriately to address environmental disputes. (http://ecologic.eu/download/projekte/1800-1849/1800/4_1800_cate_wto_dispute_settlement.pdf)
It remains to be seen how the WTO with its broad power over member nations will respond to the Dolphin Tuna Labeling appeal, if there is one, or what the US faces if not compliant. One could easily suppose the WTO will uphold its ruling. The WTO’s Committee on Trade and Environment (CTE) has been examining the relationship between MEAs and the WTO since 1995, yet has failed to reach any real conclusion. (http://www.worldtradelaw.net/articles/graymeawto.pdf) Needless to say, the complexity of the issue does not readily encourage analysis, a problem which deters public scrutiny.
The Federal Fisheries Protective Act, aka, the Pelly Amendment, authorizes economic sanctions (i.e., import embargoes) against any country whose fishing practices reduce the effectiveness of international marine or endangered (or threatened) species conservation programs. Both Norway and Iceland have openly defied the IWC’s moratorium on commercial whaling. (Japan uses the “scientific research” loophole under the IWC regulations.) In March, 2011, a coalition of anti-whaling nations issued a public statement opposing Iceland’s whale harvest of over 200 whales last season. Their catch included 148 endangered fin whales in 2010 and 125 in 2009. A 2006 Gallup poll found that only 1.1% of Icelanders consume whale meat more than once a week, while 82% of 16-24-year-olds never eat whale meat. (http://www.idw.org/html/conservation.html) Without a national market for cetacean meat, Iceland has pursued Japan to sell its product. Yet, we remember that in January, 2011, Japan’s stockpile of frozen, unsold whale meat hit record levels of over 6000 tons! The Japanese market has dried up for Icelandic whale meat, yet Iceland increased its catch-quota for whales! Meanwhile, fin whale populations have dropped over 70% since 1927, according to the World Conservation Union Red Book.
In 2009, Iceland dramatically increased its fin whale quota to 150 animals a year – more than three times the catch limit that would be recommended by the IWC’s approved quota calculation method if the commercial whaling moratorium was not in place. In December 2010, as Iceland’s self-allocated whaling quotas and exports reached record levels, 19 U.S. NGOs, representing tens of millions of U.S. citizens, filed a “Pelly petition” urging the Secretaries of Commerce and Interior to certify Iceland pursuant to the Pelly Amendment and encouraging the President to impose trade sanctions against Iceland and specifically against fisheries-related businesses linked to its whaling industry. (http://www.nrdc.org/media/2011/110720a.asp)
While Iceland was certified under Pelly, and Obama agreed that Iceland’s hunts were thwarting whale conservation efforts, in the end he refused to impose sanctions. Sound familiar? Like the WTO panel which agreed that dolphin-safe tuna standards were protecting dolphins and reducing bycatch death, but ruled against the labels anyway, the Obama decision not to impose sanctions against Iceland is another disappointing blow to environmentalists who grieve the ongoing losses in the struggle to maintain whale populations.
"Iceland's actions threaten the conservation status of an endangered species and undermine multilateral efforts to ensure greater worldwide protection for whales," said Obama in a message to Congress. "Iceland's increased commercial whaling and recent trade in whale products diminish the effectiveness of the (International Whaling Commission) conservation program."...But Obama said in the message that "I am not directing the Secretary of the Treasury to impose trade measures on Icelandic products for the whaling activities that led to the certification by the Secretary of Commerce." Instead, Obama directed US government officials to consider the appropriateness of traveling to Iceland, to raise the whaling issue with officials when they are there and to keep the situation under review. (http://news.yahoo.com/obama-waives-sanctions-iceland-whaling-210322293.html)
Is it likely Obama’s remedy will be enough to stop Icelandic whaling? Or is his sorry lack of action again exposing a not-so-new precedent? After all, the US has threatened sanctions under Pelly several times for whaling activities on both Norway and Japan, but as the whalers know, sanctions have never been imposed. Could it be the risk of retaliations inhibit US imposition of sanctions? For example, a sanctioned nation could impose tariffs on US products, or even halt US imports, possibly leading to job loss. Iceland has been incensed over the threatened sanctions, stating that their fin whale harvest is “no less sustainable than the US bowhead whaling”, which is approved by 3/4 of IWC members. (http://www.qffintl.com/news/readnews_test.cfm?article=2721) Yet what is the value of Pelly if it will never be implemented? Whales need more than agreements that look good on paper.