WTO Authorizes Mexico to Suspend Trade Benefits to U.S. in Tuna Dispute

by Holland & Knight LLP

Holland & Knight LLP

Mexico is one of the few countries that has been authorized to adopt retaliatory measures against noncompliance of its trading partners' obligations, and it has made use of this authorization.

After nearly nine years of litigation between Mexico and the United States before the World Trade Organization (WTO)1against the discrimination on Mexican tuna for denying it the dolphin-safe label – while allowing its use on imports from other countries without effectively monitoring whether damage to dolphins is taking place – an arbitral decision was published on April 25, 2017, authorizing Mexico to suspend equivalent commercial benefits to the U.S. in the amount of $163 million.

Under WTO rules, Mexico may suspend benefits (i.e., increase tariffs on products of the same sector, in another sector of the same agreement or under a different agreement), as long as the U.S. does not withdraw or modify its labeling to comply with the WTO rules eliminating any discriminatory aspect. However, there is no public list of products on which Mexico could increase tariffs (the most common way of suspending benefits). On previous occasions, the products subject to retaliation have included high fructose, wines, brandy, whiskey, notebooks and wooden furniture, among others (Broom-Corn Brooms dispute, 1996); wines and dairy products (Byrd Amendment dispute, 2005)2; and several agricultural products, including wine and juices, onions, potatoes and more in 2009; and apples, juices, household appliances, among others in 2010 ("carousel" retaliations in the cross-border trucking dispute).

The adoption or not of any retaliation undoubtedly will be affected by the context of a North American Free Trade Agreement (NAFTA) renegotiation. On the other hand, the duration of the measure could be affected by the results of the arbitration procedure initiated by the U.S., pursuant to Article 21.5 of the Understanding on WTO Dispute Settlement, under which the latest modifications to the dolphin-safe labeling system made by the U.S. in March 2016 are being reviewed to confirm if they comply with the WTO rules. This proceedings could conclude in early 2018, confirming if the U.S. has complied or if the retaliatory measures authorized to Mexico could be maintained.

There is no pre-established criteria for the selection of goods that will be subject to retaliation. However, the Mexican government will be sensitive to increasing tariffs on products that would increase prices in Mexico (e.g., input raw materials), but products that are extremely competitive and have displaced Mexican production (e.g., apples) will be likely candidates. Additionally, there appears to be a pattern that goods selected for retaliation have included products from U.S. states whose congressional delegation supported the dolphin-safe labeling requirements and products from sectors that have sufficient U.S. lobbying power to press for compliance with the WTO ruling in order to have the increased tariffs removed. If goods fall into one of these "likely to be retaliated" categories, it is suggested to take early action before the Mexican government to try and avoid retaliatory duties.

Holland & Knight's International Trade Group  will continue to follow possible retaliatory measures that may be taken by the Mexican government, as well as U.S. compliance with WTO rules, in order to provide advice to the productive sectors interested in this issue or in bringing disputes before the WTO. 


1 Consultations in this dispute were requested on Oct. 24, 2008, without taking into consideration the tuna dispute held under General Agreement on Tariffs and Trade (GATT) times.

2 Modified in 2006

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Knight LLP | Attorney Advertising

Written by:

Holland & Knight LLP

Holland & Knight LLP on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.