By Daniel Pruzin
GENEVA -- The United States and Malaysia have concluded a deal aimed at heading off another dispute over a U.S. ban on wild shrimp imported from countries without adequate conservation policies for the protection of sea turtles.
In an agreement made public Jan. 12, the two countries notified the World Trade Organization that Malaysia has agreed "at this stage" not to challenge U.S. assertions that it has complied with a 1998 WTO ruling, which found that the U.S. ban was not applied in a manner consistent with global trading rules.
In return, the United States has agreed not to oppose any Malaysian efforts to seek a WTO ruling on the question of U.S. compliance should Malaysia wish to initiate such proceedings at a future date.
The agreement avoids a potentially embarrassing scenario for the Clinton administration whereby the WTO could rule that the United States has failed to implement the ruling, thus opening the way for Malaysia to impose trade sanctions on U.S. goods, at the same time Congress debates continued U.S. membership in the WTO.
Under the U.S. legislation implementing the Uruguay Round agreements creating the WTO, President Clinton is obliged to present a report to Congress by March 1 analyzing the impact of the WTO's first five years of activity on U.S. interests as well as the "value of continued participation" in the WTO.
Members of the House or Senate will have the right to introduce a resolution calling for U.S. withdrawal from the WTO once the report is submitted. Congress would then have 90 days from the report's submission to act on the resolution, although any vote in favor of U.S. withdrawal almost certainly would be subject to a presidential veto.
For the Clinton administration, the shrimp/turtle ruling is one of the most politically sensitive rulings issued by the WTO. In October 1998, the WTO's Appellate Body ruled that the United States had the right in principle to impose the ban for conservation purposes but violated global trading rules by failing to first seek less trade-restrictive alternative measures and then failing to ensure that the ban did not discriminate among WTO members (15 ITR 1698, 10/14/98).
Echoes of Turtle-Teamsters in Seattle
The ruling provoked outrage among U.S. environmental groups, which joined labor unions in a "turtles and Teamsters" alliance that headed the sometimes violent street demonstrations against the WTO at the organization's failed Seattle ministerial late last year.
The United States was given a Dec. 6, 1999, deadline to implement the ruling. The Clinton administration revised State Department guidelines on administering the ban that it claims brings it in line with WTO requirements. But India and Malaysia -- two of the four Asian countries that successfully challenged the U.S. measure before the WTO -- have insisted that the United States must lift the ban in order to be in full compliance, something Washington has so far refused to do.
In addition to postponing any immediate challenge to the U.S. compliance claims, the U.S.-Malaysia agreement asserts that Malaysia must first seek a ruling under Article 21.5 of the WTO's Dispute Settlement Understanding affirming that the United States has not implemented the shrimp/turtle decision before proceeding with any request under Article 22 for WTO authorization to impose trade sanctions on the United States for non-compliance. Article 21.5 compliance rulings must be issued by the WTO within 90 days.
In return the United States will not challenge Malaysia's right to seek Article 22 authorization to retaliate even though Article 22 requests must normally be made within 30 days of the expiration of the implementation deadline.
Indian officials also affirmed that they are in talks with the United States aimed at bringing a close to the shrimp/turtle dispute but warned that New Delhi will seek a WTO ruling on U.S. compliance if the talks fail to result in an agreement.
Copyright c 2000 by The Bureau of National Affairs, Inc., Washington D.C.:
