(Adds U.S. comment, NAFTA context)
By Tom Miles
GENEVA, April 25 Mexico can impose annual trade
sanctions worth $163.23 million against the United States after
winning a dispute over trade in tuna fish, a World Trade
Organization arbitrator ruled on Tuesday.
Mexico's economy ministry said it planned immediate action
to initiate the trade sanctions.
However, the ruling could be overturned later this year if a
subsequent WTO decision finds the United States has stopped
discriminating against tuna caught by its southern neighbour.
The sanctions award was only a third of the $472.3 million
Mexico had asked for. It has previously said it planned to
impose the sanctions on imports of U.S. high-fructose corn
Mexico's complaint, which dates back to 2008, focused on
U.S. rules on "dolphin friendly" labelling, which Mexico said
unfairly penalised its fishing industry.
Mexico said it had cut dolphin deaths to minimal levels but
that it was being discriminated against by U.S. demands for
paperwork and sometimes government observers. Tuna catches from
other regions did not face the same stringent tests, it said.
After losing the case, the United States changed its rules
in 2013. The WTO said the rule change was not enough and Mexico
was still being unfairly treated, giving rise to the award of
However, the United States changed its rules again in 2016
by expanding the tougher rules to all countries. If the WTO
decides that has stopped the discrimination, Mexico would have
to stop its retaliation. The WTO is expected to decide in July.
A spokeswoman for the U.S. Trade Representative's office
said the United States was disappointed by the ruling.
"Regrettably, the WTO Arbitrator's decision does not take
into account the United States' most recent dolphin-safe
labeling updates and dramatically overstates the actual level of
trade effects on sales of Mexican tuna caught by intentionally
chasing and capturing dolphins in nets," she said.
"We will continue to monitor the situation and closely
consult with Congress and stakeholders about next steps."
U.S.-Mexican trade relations are already under strain, as
U.S. President Donald Trump seeks to renegotiate the NAFTA trade
pact that has defined North-American commerce for a generation
and threatens a border wall.
NAFTA tensions were raised further on Monday when the United
States put anti-subsidy tariffs on Canadian lumber.
Mexico has long complained that U.S. fructose imports are
too cheap. In 2007, the WTO ruled against a tax Mexico imposed
on soft drinks made with imported sweeteners, after the United
States said it discriminated against U.S. corn growers and
The Mexican sugar industry says the cost of U.S. fructose
exports to Mexico are about 35 percent less than domestic
The retaliatory measures coincide with a new U.S.-Mexico
dispute over quotas for Mexican sugar that prompted Mexico’s
sugar industry association last month to threaten "to block"
(Reporting by Tom Miles, Frank Jack Daniel and David Lawder;
editing by Stephanie Nebehay and Richard Lough)