By Andrea Shalal and CAITLIN Webber
WASHINGTON (Reuters) -The United States is seeking the first-ever consultations with Mexico over its environmental obligations under the U.S.-Mexico-Canada trade agreement, including protection of the critically endangered vaquita porpoise, U.S. trade officials said Thursday.
The formal talks - which could ultimately result in trade sanctions - will also focus on Mexico's obligations to prevent illegal fishing and trafficking of the critically endangered totoaba fish, the Office of the U.S. Trade Representative (USTR) said in a statement.
Vaquita become entangled and die in fishing gear set to catch shrimp, totoaba - a large fish in demand in China for its swim bladder - and other finfish.
"There are serious concerns about Mexico's enforcement of its environmental laws in compliance with its USMCA obligations related to the protection of endangered species, the prevention of illegal fishing, and the trafficking of fish," Deputy U.S. Trade Representative Jayme White told reporters.
He said USTR hoped to reach a negotiated settlement with Mexico as a result of the formal consultations, but the trade deal also provided "additional tools" if the talks failed.
Senior USTR officials said the trade agreement called for the consultations to be scheduled within 30 days, and would involve technical experts, although an extension was possible.
If no agreement is reached, U.S. officials could request a dispute settlement panel after a minimum of 75 days had passed, which could ultimately result in tariffs or other trade sanctions, the USTR officials said.
"This is a big move that could save these little porpoises from extinction," said Sarah Uhlemann, international program director at the Center for Biological Diversity. "Illegal fishing is out of control in Mexican waters, and the vaquita is paying the highest possible price."
Mexico's Economy Ministry said in a statement it had received a request for consultations on the issue with the United States. The ministry said it would coordinate the work between authorities from the two countries "with the objective of timely presenting the efforts and measures adopted to protect marine species in the national waters."
"The Government of Mexico reaffirms its commitment to the correct implementation of the T-MEC and the responsibilities acquired within it," the statement said, using the Spanish acronym for the USMCA.
Environmental groups urged USTR in August to initiate proceedings against Mexico over its ongoing failure to crack down on rampant illegal fishing in the Gulf of California that has caused the vaquita's near-extinction.
USTR said the most recent data showed that at least six, but likely fewer than 19 vaquita remained on earth, but experts believe that the species remains biologically viable if given the space to recover.