The US Environmental Protection Agency sought to protect endangered species. Presently, the NMFS requires US shrimp fishermen to use the technology while fishing for shrimp.
The new technology allowed the capture and harvest of shrimp without ensnaring sea turtles in the indiscriminatory bottom-trawling process. The patented trap door was very effective and the US fishermen quickly adopted the technology; however, implementation and adoption of the shrimp turtle trap door was limited at best among international countries to comply. One of the hurdles in adopting the shrimp/turtle trap door was the prohibitive cost of the modified nets. The TEDS were estimated to cost –[citation needed]
Because the fishermen from outside the United States, some of them earning a yearly income equivalent to the trap door,[citation needed] could not afford the trap door, the farmers/fishermen refused to acknowledge the US's demands and later, their countries, Malaysia, India, and Pakistan jointly filed suit with the WTO. Environmentalists argue that these low income fishermen do not sell shrimp to the U.S.; they either work under a larger company who could pay for the TEDs or only sell locally. Many environmental groups within Western Countries, in an effort to protect five species of sea turtle, motivated the EPA and US government to subsidize the TED. Initially, the WTO ruled against the United States. According to the WTO, the United States could not discriminate between each country by providing the protesting countries with "financial and technical assistance," but not all countries. The US later amended the EPA. Unsatisfied, Malaysia continued to assert the United States banned the import of shrimp. After further review, a WTO compliance panel ruled in favor of the US in 2001. They stated the US was justified under GATT because the U.S. no longer discriminated in the application of their exception under Article XX(g).
This case is significant because the WTO permitted the U.S. to restrict an import based on its production process and not the product itself. A matter known as the process versus product issue.
The case is also widely misunderstood. The WTO didn't forbid the U.S. from restricting imports of shrimp from countries not using TEDs. The final ruling in 2001 actually permitted this practice. What was at stake was Article XX which says the exceptions listed below cannot be applied in a way that discriminates. After the U.S. corrected the discrimination they were in compliance with their WTO obligations.