Source: "Whaling in the North Atlantic - Economic and Political Perspectives," Ed. Gudrun Petursdottir, University of Iceland, 1997, ISBN 9979-54-213-6. Proceedings of a conference held in Reykjavik on March 1st, 1997, organized by the Fisheries Research Institute and the High North Alliance.
Author: Ted L. McDorman Associate Professor, Faculty of Law, University of Victoria, Victoria, B.C., Canada

Whales, the U.S. Pelly Amendment
and international trade law

Introduction

The principal debating points about whales are: Should they ever be harvested? - the moral question. Is there sufficient scientific certainty to condone controlled harvesting? - the scientific question. Is whale harvesting illegal? - the legal question. None of these fundamental questions about whaling concern international trade law. It is the U.S. Pelly Amendment which connects the whale world with the international trade law world of the General Agreement on Tariffs and Trade (GATT) administered by the World Trade Organization (WTO).

Pursuant to the U.S. Pelly Amendment, countries that engage in whaling or trade whale products, irrespective of whether the whaling is consistent with the International Convention for the Regulation of Whaling or whether the country is a party to that treaty, may face trade sanctions against any of their products that enter the United States. While the United States has yet to impose a trade embargo against a country because of its whaling practices, the authority to do so is a continuing threat to states that permit their nationals to whale. Norway has been subjected to the Pelly process because of its 1990s decision to resume harvesting of minke whales, Japan because of its taking of whales pursuant to the research provisions of the International Convention for the Regulation of Whaling, and Canada has received U.S. attention because of the capture of two bowhead whales by the Nunavut in the Canadian Arctic.

The specific points to be examined in this contribution are: the operation of the Pelly Amendment; whether a trade embargo imposed under the Pelly Amendment would be consistent with U.S. obligations under the GATT; and whether the existence of the Pelly Amendment and the ever-present threat of trade sanctions is consistent with U.S. obligations under the GATT.

The Pelly Amendment

The threshold step in the possible use of the Pelly Amendment to impose a trade embargo against a whaling country is certification. Only when the U.S. President receives a letter of certification may a trade embargo be imposed.

The Pelly Amendment establishes two avenues for certification. A third whaling-specific avenue for certification exists through the Packwood-Magnuson Amendment. However, a certification under the Packwood-Magnuson Amendment is deemed to be a certification under the Pelly Amendment and the trade embargo provisions of the Pelly Amendment are invoked, hence the Packwood-Magnuson Amendment is usually grouped with the Pelly Amendment process. The two amendments require a letter of certification to be sent to the U.S. President where:

i) the Secretary of Commerce determines that foreign fishing is diminishing the effectiveness of an international fishery conservation program;
ii) the Secretary of Commerce or Interior finds that foreign nationals are capturing or engaging in trade which diminishes the effectiveness of any international program for endangered or threatened species; or
iii) the Secretary of Commerce concludes that foreign fishing or trading diminishes the effectiveness of the International Convention for the Regulation of Whaling. (emphasis added)

The second of the three avenues creates the possibility of certification where a country is trading in endangered species and thus diminishing the effectiveness of the Convention on International Trade in Endangered Species (CITES). The first and third avenues create the possibility of certification where a country is harvesting or trading whale that is diminishing the effectiveness of the International Convention for the Regulation of Whaling. The first avenue captures this because an international fishery conservation program specifically includes the International Convention for the Regulation of Whaling.

The diminishing the effectiveness criterion at the heart of the Pelly Amendment certification decision is imprecise since it is not elaborated upon or defined in the legislation. In order to encourage stricter compliance with international fishery agreements, CITES and the International Convention for the Regulation of Whaling, it is argued by some that a broad view of what activities diminish the effectiveness of these arrangements is necessary. The international concern is whether the United States should have the role of enforcing international agreements, particularly where the United States establishes the standard that must be met by other states and unilaterally judges whether there has been a breach of that standard.

Upon receipt of a certification made under either the Pelly or Packwood-Magnuson Amendments, the U.S. President may impose a trade embargo against the certified country. Prior to 1992, a Pelly embargo was to be restricted to either fish or wildlife products from the certified country. Following 1992 amendments, a trade embargo can be placed against any products from the certified country. Thus, the trade threat from the Pelly Amendment has been increased.

However, the U.S. President has a wide discretion regarding the imposition of an embargo. Thus far, the U.S. President has not imposed an embargo on a whaling state certified under either the Pelly Amendment or the Packwood-Magnuson Amendment. Advocates for employment of the Pelly and Packwood-Magnuson Amendments see them as a way to use the economic power of the United States to encourage or force renegade countries to adhere to the whale quotas and moratorium of the International Whaling Commission. Concerns that the United States is imposing its standards of behaviour on foreign actors operating outside the United States and the unilateral nature of the Pelly process are swept aside in the moral fervor over whales.

Trade Law Relevant to a Pelly Amendment Embargo
(This section draws from T.L. McDorman, “Protecting International Marine Living Resources with Trade Embargoes: GATT and International Reaction to U.S. Practices” in G. Blichfeldt, ed. Additional Essays on Whales and Man (Reine i Lofoten, Norway: High North Alliance, 1995), at pp. 21-28.)

The GATT Rule on Trade Embargoes
Regarding trade embargoes, the fundamental rule of the GATT is Article XI(1), which prohibits WTO-members from imposing quantitative restrictions (quotas) or quantitative prohibitions (embargoes) on imports or exports. Such restrictions are seen as inconsistent with the free flow of goods, the operation of comparative advantage, and an efficient allocation of world resources, all of which are objectives of the GATT rules.

The no-trade embargo rule of Article XI can be avoided where the GATT is superseded by other international obligations and therefore not applicable, or, even where the GATT is applicable, one of the numerous exceptions in the GATT applies.

The Non-Application of GATT Article XI
There are two situations where GATT Article XI would not be applicable to a trade embargo: (a) where the trade embargo was required by another multilateral international treaty, and (b) where the trade embargo was a countermeasure or reprisal for breach of a treaty.

Trade embargoes will be neither GATT illegal, nor perceived as unacceptable, where a multilateral international treaty explicitly permits the employment of such a trade measure. The prime example is CITES which explicitly requires its members to utilize embargoes against the import and export of endangered species. A CITES trade embargo is a prima facie inconsistency with the GATT. CITES would override GATT obligations where the states involved are members of both CITES and GATT. It is a delicate legal and political question whether CITES obligations would override GATT obligations if the states involved in a dispute were members of GATT but not CITES.

(See: T.L., McDorman “The 1991 U.S.-Mexico GATT Panel Report on Tuna and Dolphin: Implications For Trade and Environment Conflicts” (1992), 17 North Carolina Journal of International Law and Commerce 461, at pp. 484-485.) (See below regarding Iceland)

It is important to note that CITES does not permit trade embargoes to be employed because a country is not appropriately protecting endangered species.

Trade embargoes connected to protection of the marine living resources would not be subject to GATT scrutiny where a trade embargo was imposed as a countermeasure or reprisal for the breach of an international environmental treaty or marine living resource treaty. Such a trade embargo would be given priority over potentially conflicting GATT obligations since trade measures are a legitimate way to deal with treaty breaches, although reprisals generally are used sparingly and involve, amongst other conditions, proportionality. As a matter of international law, only those countries explicitly bound by an international environmental or ocean resource protection treaty can utilize or be subject to enforcement embargoes of this type.

The Exceptions to Article XI
The two exceptions in the GATT that are seen as having the potential to justify trade embargoes for marine living resources conservation purposes are Article XX(b) and (g). Article XX(b) allows governments to impose trade measures that are “necessary to protect human, animal or plant life or health”. Article XX(g) permits governments to utilize trade measures, such as import embargoes, where the embargoes are “relating to the conservation of exhaustible natural resources if such measures are made effective in conjunction with restrictions on domestic production or consumption”. Both Article XX(b) and (g) are qualified by the requirements that any trade measures taken must not constitute arbitrary or unjustified discrimination and must not be a disguised restriction on trade.

Relying on the GATT exceptions, there is no question that a state can utilize trade embargoes to protect marine living resources subject to or within their own jurisdiction. More generally, the GATT imposes few constraints on policies and practices designed to protect a state’s domestic environment. The only qualification is that a trade measure must have a bona fide environmental purpose and not be a disguised protectionist measure.

The difficulty in application of the GATT exceptions arises where the marine living resource being protected is not within the jurisdiction of the state imposing the embargo and the actors are foreign nationals operating pursuant to foreign law. The wording of Article XX(b) or (g) is not restricted by geographic location or nationality, thus could be interpreted to accommodate an embargo designed to protect transnational marine living resources being harvested by foreign nationals.

The 1994 U.S. - E.U. Tuna-Dolphin GATT dispute settlement panel examined this issue respecting a trade embargo imposed under the U.S. Marine Mammal Protection Act triggered by foreigners harvesting tuna in waters beyond U.S. jurisdiction in a manner inconsistent with U.S.- created standards for dolphin protection.

(United States - Restrictions on Imports of Tuna, Report of the GATT Panel, May 20, 1994, reprinted in (1994), 33 International Legal Materials 842.)

The panel concluded that the U.S. tuna embargo was inconsistent with Article XI and that neither Article XX(b) or (g) exceptions were applicable. The Panel concluded that Article XX(b) or (g) were not applicable since the embargo was unrelated to conservation of domestic resources and, more importantly, was designed to force other countries to adopt laws and practices compatible with the unilaterally-determined U.S. standard.

Applying International Trade Law to the Pelly Amendment

The Threat of an Embargo
The certification process of the Pelly and Packwood-Magnuson Amendments and the requirement of the U.S. President to consider the imposition of an embargo creates an economic threat against states. Does the GATT prohibit economic threats such that the Pelly and Packwood-Magnuson Amendments can be challenged under the GATT, found inconsistent with GATT rules and the United States be required to remove the offending legislation?

The 1991 U.S. - Mexico Tuna-Dolphin GATT dispute settlement panel looked directly at this issue and found that “because the Pelly Amendment did not require trade measures to be taken, ...(it)... was not inconsistent with the General Agreement”.( United States - Restrictions on Imports of Tuna, Report of the GATT Panel, August 16, 1991, at. para. 5.21, reprinted in (1991), 30 International Legal Materials 1594.) The panel determined that legislation merely creating the possibility of imposing a trade embargo was not inconsistent with the GATT. This finding, consistent with previous determinations, ensures a broad scope for domestic law free from the interference of the GATT. Thus, the Pelly and Packwood-Magnuson Amendments themselves are immune from GATT attack, although any embargo imposed could be subject to GATT questioning.

The Case of Norway
As discussed in section three, not every trade embargo runs afoul of the GATT rules and, therefore, not every embargo that might be imposed pursuant to the Pelly Amendment would be inconsistent with the GATT. The specific circumstances of an embargo would need to be assessed - no blanket statement can be made. However, it is possible to determine that a Pelly Amendment embargo arising from recent Norwegian whaling would not be GATT consistent.

First, if a Pelly Amendment embargo was imposed against a country, a party to the IWC, that was in breach of the Whaling Commission rules, then the trade embargo might be considered a reprisal or countermeasure. Such a reprisal or countermeasure would override the rules of the GATT. Only states that are parties to the IWC, however, can be in breach of the treaty and thus be subjected to a reprisal. Norway, unhappy with the continuation of the whaling moratorium, but consistent with its law-abiding manner, elected to utilize the provisions of the Whaling Treaty to “opt out”of the moratorium resolution. Norway’s decision to renew commercial whaling, therefore, is unquestionably legal under the International Convention for the Regulation of Whaling.
Norway is using the whale products internally and is not engaged in trade of whale products. Moreover, the status of the whales being captured by Norway as endangered species is open to debate. The result is that Norway is not attracting attention under CITES. Thus, there is no question of whether CITES overrides the GATT.

Prima facie a U.S. Pelly Amendment embargo would be inconsistent with GATT Article XI(1) and thus would need to fit within Article XX(b) or (g). Following the 1994 U.S.-E.U. Tuna-Dolphin Panel decision, the critical consideration is whether the embargo is related to the protection of whales in U.S. waters or whether the embargo is designed to force the other state to follow the quota or moratorium of the IWC, determined by the United States to be the applicable standards. If the former, Article XX(b) and (g) may be successfully utilized and the trade embargo determined to be GATT consistent. If the latter, the trade embargo would be inconsistent with the GATT. In the case of Norwegian whaling, it is clear that any U.S. embargo would be designed to deal with production questions in Norway, and, unquestionably, the situation would be one of the United States imposing or forcing its whale standards on another state.

The Case of Canada
Like Norway, Canada is not a renowned environmental delinquent. The decision to permit limited harvesting of bowhead whales was based on the social and cultural significance of the whales to the Nunavut. Moreover, Canada is no longer a party to the IWC and thus cannot be in breach of the IWC. The GATT exceptions would not support a Pelly Amendment embargo since the embargo is unrelated to protection of whales in the United States and is designed to force Canadian compliance with the whaling standard the United States deems appropriate.

The Case of Iceland
Like Canada, Iceland is no longer a party to the International Convention for the Regulation of Whaling. A resumption of whaling by Iceland, therefore, cannot be a breach of the IWC and a U.S. trade embargo could not be justified as a reprisal.

A trade embargo against Iceland premised solely upon a resumption of whale harvesting would be inconsistent with GATT for the same reasons such an embargo against Norway or Canada would be GATT-illegal. The exceptions to the GATT “no embargo”rule do not apply where the embargo is designed to deal with production issues (i.e. whaling) in Iceland, which do not affect the United States, and where the principal purpose of the trade embargo is to force compliance with U.S. - determined standards.
Unlike the Norwegian and Canadian situations, however, Iceland is contemplating trade in whale products which may lead to trade embargoes premised on CITES concerns. Iceland, however, is not a member of CITES. If the whale sought to be exported by Iceland was not subject to CITES (not listed in Appendix I), then a trade embargo against either whale products or other Icelandic products would be GATT-illegal. If, however, the exported whale was subject to CITES (listed in Appendix I), then an import embargo against the whale products or other Icelandic products may be GATT legal.

As a technical, formal legal issue, since Iceland is not a party to CITES, the GATT rules would apply between Iceland and the United States rather than CITES and any embargo against Iceland based upon CITES, or a “breach”of CITES, would be GATT-illegal. However, if a U.S. embargo were restricted to whale products from Iceland, in other words, the United States was adhering to its CITES obligation, it is highly unlikely that a WTO dispute settlement panel would decide that the U.S. embargo was GATT-inconsistent. If the U.S. embargo was against non-whale Icelandic products and imposed because of Icelandic whale exports to a third country, a WTO dispute settlement panel would be confronted with the difficult issue of the United States attempting to use its economic prowess to enforce CITES, a widely-accepted regime, against a non-member of CITES. While this scenario is similar to the tuna-dolphin cases, a key difference is the broad international acceptance of CITES. The sensitivity of the WTO to attack as being anti-environmentalist also plays a role. The technical law suggests a favourable response to Iceland, the U.S. embargo being illegal, however, a WTO dispute settlement panel would be very hesitant to undermine the principles of CITES and impose the GATT rules.

Conclusion

The Pelly and Packwood-Magnuson Amendments permits the United States to impose a trade embargo against any products from a state certified as harvesting or trading whales in a manner which diminishes the effectiveness of either the International Convention for the Regulation of Whaling or the Convention on International Trade in Endangered Species (CITES). The “diminishing the effectiveness”criterion is flexible enough to allow U.S. embargoes irrespective of whether the impugned state is a party to either treaty or has operated illegally under either treaty. Thus far, however, the U.S. President, relying upon the discretion in the legislation, has not imposed an embargo against a whaling state certified under the legislation.

The issues addressed in this contribution concern the legality under the rules of the GATT of Pelly Amendment action. First, the threat of an embargo is not GATT illegal. Second, no blanket answer can be given whether a Pelly embargo would be inconsistent with the GATT. Each circumstance needs to be examined. In the recent cases of whaling by Norway and Canada, if an embargo had been employed by the United States such an embargo would have been illegal under the GATT. A similar result would be the case if Iceland were to resume whaling, provided Iceland did not trade in whale products. Despite not being a member of CITES, a U.S. embargo imposed because of Icelandic trade in whale products would create a direct confrontation between the law and politics of CITES and the GATT. It would be a legally-challenging and politically-charged confrontation which makes prediction difficult.