The barb in trade agreements’ tail is the Investor State Dispute Settlement (ISDS) system, which lets companies sue governments to repeal rules that interfere with their profitability. It’s let tobacco giants fight anti-smoking campaigns, and now it’s letting fisheries attack rules aimed at preventing the wholesale slaughter of dolphins.
Since the 1990s, non-US fisheries have attacked America’s Marine Mammal Protection Act, which bans the importation of tuna that is caught with dolphin-killing dragnets. Today, thanks to trade court actions under the WTO, the MMPA has been watered down to little more than a requirement to mark tuna with labels indicating how it was caught. Mexico has fought even this minimal requirement since 2008, and now the WTO has handed down a final ruling in Mexico’s favor that cannot be appealed, ruling that America’s labelling rules are a barrier to trade, meaning that the US has to repeal the rules or face billions in sanctions.
This is the second labelling law that’s been struck down by a WTO trade tribunal this year: both the US and Canada are set to end their requirement for country-of-origin labelling on meat, after the WTO threatened both countries with billions in sanctions if they continued the practice.
A very practical example of why ISDS is wrong.