EU – US Beef Hormone Dispute

W H A T ’ S T H E B E E F ?

D a n i e l R i v e r a G r e e n w o o d D a n i e l S e w b e r a t h M i s s e r A l e x a n d r a M . S h a h a d y

History/Context

     1981 EU adopted restrictions on the use of hormones in beef  1989 EU fully implemented ban on imports of meats treated with hormones Loss of $100 million annually for the US Ban on imported beef arose from (EU) consumer pressure, not from the producers Stems from possible health risks from use of hormones (mad cow disease) US says use of hormones is safe, and scientifically backed up with over 40 years of research

Beef Industry

According to the USDA, US beef industry is  $73 Billion Industry (2009)   U.S. exports totaling $2.8 Billion Largest markets  Mexico ($690 million)   Canada ($621 million Japan ($496 million)  South Korea ($215 million)

Background

European Communities — Measures Concerning Meat and Meat Products (Hormones)

Complainant Respondent United States of America European Communities Third Parties Agreements cited Request for Consultations Panel body set up EC Appealed Appellate Body Report Australia; Canada; New Zealand; Norway Sanitary and Phytosanitary Measures (SPS): Art. 3, 5, 2 Agriculture: Art. 4 Technical Barriers to Trade (TBT): Art. 2 GATT 1994: Art. III, XI January 26, 1996 May 20, 1996 September 24, 1997 January 16, 1998

WTO Agreements & Provisions Involved

 Sanitary and Phytosanitary Measures (SPS):  Article 2: Basic Rights and Obligations  “Members have the right to take sanitary and phytosanitary measures necessary for the protection of human, animal or plant life or health, provided that such measures are not inconsistent with the provisions of this Agreement.”   Article 3: Harmonization Article 5: Assessment of Risk and Determination of the Appropriate Level of Sanitary or Phytosanitary Protection

WTO Agreements & Provisions Involved

   Agreement on Agriculture Part III  Article 4 Market Access Agreement on Technical Barriers to Trade  Article 2: Preparation, Adoption and Application of Technical Regulations by Central Government Bodies GATT 1947   Article III: National Treatment on Internal Taxation and Regulation Article XI: General Elimination of Quantitative Restrictions

What’s the Beef?

E.C Respondent

  EC bans US imports of beef treated with enhancing hormones Prohibition on the placing on the market and the implementation of meat and meat products treated with certain hormones

U.S Complainant

  Retaliates against ban of U.S beef and bans miscellaneous EC goods Argued that ban was inconsistent with GATT Articles III or XI, SPS Agreement Articles 2, 3 and 5, TBT Agreement Article 2 and the Agreement on Agriculture Article 4 ( 26 January 1996)

Timeline of Dispute

The Panel found that the EC ban on imports of meat and meat products from cattle treated with any of six specific hormones for growth promotion purposes was inconsistent with Articles 3.1, 5.1 and 5.5 of the SPS Agreement. (18 August 1997 ) Establishment of a Panel May 20, 1996 (US) October 10, 1996 (Canada Circulation of Panel Report Adoption August 18, 1997 Circulation of AB Report January 16,1998 February 1998

Appellate Body Decisions

 On 24 September 1997, the EC notified its intention to appeal certain issues of law and legal interpretations developed by the Panel.

 The Appellate Body upheld the Panel’s finding that the EC import prohibition was inconsistent with Articles 3.3 and 5.1 of the SPS Agreement, but reversed the Panel’s finding that the EC import prohibition was inconsistent with Articles 3.1 and 5.5 of the SPS Agreement.

Dates Filed

3 June 1999

Suspension of Concessions

Issues

U.S and Canada requested US$202 Million and Can.$75 Million respectivly 12 July 1999 U.S level of nullification amount was US$116.8 million and to CDN$11.3 million 7 November 2003 EC claims that they have fullfilled obligations, U.S disagrees 1 December 2003 30 September 2009 Request for Multilateral Decision Compliance proceedings completed with findings of non compliance

Implementation

  After AB’s decision, EU given 15 months, set to expire May 1999. In February 1999, EU gives 3 options to resolve  Eliminate Ban, with labeling (preferred by US).   Compensation Conversion to temporary measure

   EU conducts additional research (1 SCVPH concludes a hormone (estradiol 17-Β) is harmful to humans. st review),  Criticized by US and UK scientific research. After time given by AB for compliance, US looks for trade sanctions. WTO sets value of tariff at US$116.8 million  Ad Valorem rate of duty, on France, Denmark, Italy and Germany. UK excluded.

 Beef, pork, cheese, sausage casings, onions, soups, goose livers.

    In 2003, EU bans additional hormones, under Article 5.7 of SPS Agreement.

In 2008, new panel finds fault with EU and US positions  EU: Ban not backed by enough science  US: Trade sanctions not compliant Appellate Body:  Sanctions ok.  Ban not incompatible under WTO: Article 5.7

2009: MOU: Non-hormone treated beef

Observations

 WTO’s decision is correct one  Science is not conclusive.  Sanctions ultimately affect consumers of both markets.

Works Cited

 U.S. Agriculture Department Official on EU Beef Hormone Banhttp://useu.usmission.gov/092600_beef_hormones.html

 USDA Research Service http://www.ers.usda.gov/news/BSECoverage.htm

 Reuters. "U.S. Will Restrict Imports From EC to Avenge Meat Ban." Editorial. The Financial Post [Toronto, Canada] 28 Dec. 1988, Daily ed., News sec.: 5. Lexis Nexis. Web. 18 Oct. 2010.

 "WTO | Dispute Settlement - the Disputes - DS26." World Trade Organization - Home Page. Web. 18 Oct. 2010.

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 The US EU Beef Hormone Dispute, Congressional Research Service