Jun 23, 1992

EC SEEKS FRESH PANEL ON TUNA DISPUTE.

GENEVA, JUNE 19 (TWN) -- The European Community Friday sought the establishment of a new GATT panel to go into the U.S. bans on import of tuna, both from primary and secondary sources, where in the U.S. view the tuna fishing in the Western pacific endangered dolphin.

The original complaint on this had been brought by Mexico, and the panel had ruled against the U.S., holding in effect that though purporting to act on environmental grounds, the U.S. action was in fact protective, did not deal in an equal way with domestic tuna fishers. The panel had also said that the U.S. could not use the GATT exceptions clause to undertake environment measures beyond its jurisdiction, and those actions in areas beyond national jurisdictions should be sought through multilateral processes and not unilaterally.

Having won the ruling, nevertheless Mexico has not pressed for adoption of the panel recommendation. Instead, it has joined the United States in telling the Council that bilateral negotiations to settle the problem were going on and hence it was not seeking adoption of the report.

A number of others, including the EC which has been hit by the secondary ban (imports from countries allowing tuna fish imports from Mexico, and re-exporting the processed products), had been pressing for adoption of the ruling by the Council. But the U.S.-Mexico position has prevented it.

The EC has thus brought a fresh complaint, and this was supported by a number of other countries.

The U.S. said legislation had been introduced in the Congress to provide for dolphin protection while removing restrictions on imports of tuna from primary countries. The U.S. was not agreeable to refer the EC complaint to a panel.

The EC request is to come before the next Council meeting (in mid-July) when panel reference will be automatic.

In other items before the Council, the U.S. agreed to the adoption by the GATT Council of two panel reports ruling against the U.S. - one on regulatory practices (Federal, State and by local authorities) in respect of alcoholic beverages, and the other on non-rubber footwear vis-à-vis imports from Brazil.

On the alcoholic beverages issue, a complaint brought by Canada, where the panel had found a host of practices discriminating against the imported products (in terms of pricing, labelling etc) to be GATT illegal.

Canada had said that in respect of beer alone, its loss because of the impugned regulations was an annual 200 million Canadian Dollars.

The U.S. said it had problems with the argumentation of the panel and its interpretation of the U.S. Constitution on the relationship between the Federal. and State governments and their powers and that the ruling would have implications for other Contracting Parties with federal and state governments.

However, it would not stop the adoption of the panel report. The U.S. said that it was talking to the individual states and local authorities on how to implement the recommendations of the panel.

In the non-rubber footwear case, the complaint had been brought by Brazil on the question that when the Tokyo Round subsidies code came into force, in doing away with the earlier countervailing duties imposed for subsidised exports (as required under the code), the U.S. had treated imports of footwear from Brazil differently from that accorded to other members of the and thus violated GATT's Article I calling for "most-favoured-nation" treatment.

The panel had ruled in Brazil's favour.

The U.S., which had held up adoption of the report, agreed Friday to the adoption of the panel rulings by consensus, but s -aid it was discussing the implementation question with Brazil.

The Brazilian delegate welcomed the U.S. action.

The ruling will have some implications in respect of on-going bilateral U.S.-Brazil negotiations on the issue.

In another dispute, (between the U.S. and Canada) over alcoholic beverages and practices of state alcohol boards, where a panel ruling against Canada had been adopted in February 1992 and where Canada had announced its intention to bring the practices in line with the panel recommendations, the U.S. expressed concern over some of the proposed elements of implementation.

The U.S. complained that the barriers to foreign alcoholic beverages would not be dismantled and new barriers might in fact be put up. Specifically, the U.S. complained about moves in Ontario province as well as in Quebec to maintain the discriminatory distribution system. The EC shared the U.S. concern.

Canada said it was trying to implement in good faith the recommendations of the panel.