Transcript Beef Hormone Case - International Trade Relations

Beef Hormone Case US/EU
Samrawit Aragie
Marcia Banda
Tanya Bathiche
ITRN 603 – International Trade Relations
Professor Malawer
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U.S. Beef Exports
Source: Trademap 2004
Total exported
(US thousands)
Share in the world
exports, %
World Estimation
11,421,088
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Netherlands
1,563,945
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Australia
1,524,821
13
Canada
1,361,858
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Germany
1,322,426
11
Ireland
1,115,932
9
France
839,918
7
Brazil
592,139
5
Belgium
451,397
3
USA
444,786
3
Exporters
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Destination of Netherlands Beef Exports
Source: Trademap 2004
Country
%
Italy
28
Germany
20
France
20
Spain
8
Denmark
5
United Kingdom
4
Portugal
4
Belgium
3
Greece
3
Sweden
1
Others
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Hormones in Meat

Speed up growth rates and production is more in line
with consumer preferences.

Growth-promoting hormones are used widely in the U.S.,
and in other beef exporting countries.

In the U.S. hormones are used in about 90% of
commercial cattle feedlots.
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The U.S. Food and Drug Administration (FDA) and the
U.S. Department of Agriculture (USDA) maintain that
hormones in beef have no physiological significance for
humans.
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The EU Hormone Ban

The EU banned production and importation of meat
treated with hormones in 1985 (did not take effect until
January 1, 1989).

Justification: protect the health and safety of consumers
from the illegal and unregulated use of hormones.

During the 1980s, there were press reports of black
market sales of hormones by a "hormone mafia" as well
as several reports of serious health effects from
consuming meat from animals treated with hormones.
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The EU Hormone Ban (Cont.)

European livestock producers support the hormone ban
because they are concerned about competition.

Concerns about maintaining EU beef demand not only
because preferences of consumers for diets low in fat
and cholesterol but also for the "mad cow disease.“

In addition, EU agricultural policy makers are resistant to
policies that might accelerate the contraction of the
agricultural sector and the move of agricultural
producers and workers to urban areas where rates of
unemployment are high.
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The Case

US request consultations with EU about
restrictions on imported US beef (January 1996)

Inconsistence with GATT articles III, XI, SPS
Agreement Articles 2, 3, 5. TBT Agreement
Article 2, and Agreement on Agriculture Article
4.

The Panel was established in July 1996 and
Report circulated in August 1997.
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The Issue
Dispute:
The EC ban on imports of beef from cows treated with
hormones for growth-promotion purposes, allegedly for
human health reasons. The US and Canada claimed that
there was no evidence of adverse effects on human
health.
Parties:
Complainants: United States and Canada.
Respondent: European Communities
Third Parties: Australia, Norway, New Zealand
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Hormones in Question
Naturally Occurring
 Oestradiol
 Progesterone
 Testosterone
Artificially Produced
 Zeranol
 Melengestrol
 Trenbolone
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WTO Agreements Involved

Agreement on the Application of Sanitary
and Phytosanitary Measures
1.
Article 2: Basic Rights and Obligations
Article 3: Harmonization
Article 5: Assessment of Risk and
Determination of the Appropriate Level
of Sanitary or Phytosanitary Protection
2.
3.
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WTO Agreements Involved

General Agreement on Tariffs and Trade
1994, Article III or Article XI

Agreement on Technical Barriers to Trade,
Article 2

Agreement on Agriculture, Article 4
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US Position
FDA has been conducting tests since the
50’s and has found hormones safe
 EU’s own scientists agree with these
findings
 The same hormones are found in several
foods consumed daily
 Provides higher quality meat at lower price

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EU Position
Consumer protection
 Risk assessments were not in accordance
with Article 5
 EU should not have to adopt a scientific
opinion as truth
 The scientific evidence did not support
unqualified and free use of hormones

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US Position Continued
European argument is vague
 Has no scientific backing
 Based on cultural concerns

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Decisions of the Panel and AB
August 18th,1997 panel ruled in favor of US
 January 1998 Appellate body upheld Panel’s
findings
 Arbitrator gave the EU 15 months May 13th
for compliance
 DSB authorized the suspension of concessions to
the EU by the United States and Canada in the
amount of $116.8 and $11.3 million respectively
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Implementation

Deadline for
Implementation: 13 May
1999
– 15 months after the
adoption of the Appellate
Body and Panel reports


E.C. did not meet the
1999 deadline
November 2003 - EC
issues new Directive
(2003/74/EC)
– Thorough and independent
scientific risk assessment
3. Agreement between
all 3 parties = Resolve to Case
This has not occurred & may
restart the cycle
1. Adoption of
Appellate Body
Panel Reports
February 13, 1998
2. Implementation
of Reports by E.C
November 2003
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New E.C. Directive
(2003/74/EC)

Independent Scientific Committee on Veterinary Measures relating
to Public Health
– Conducts risk assessment and re-evaluates the potential risks to human
health

The new directive puts into effect the prohibition of one of the six
hormones found in beef: oestradiol 17B and imposes a
provisional ban on the other five hormones until further scientific
information is gathered.
–
–
–
–
–

testosterone,
progesterone,
trenbolone acetate,
zeranol, and,
melengestrol acetate
The EU feels like it is in compliance with its WTO obligations since it
provided new scientific evidence, but Canada and the US disagree
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Sanctions (Retaliatory Measures)
WTO authorizes
sanctions in 1999
 U.S. Sanctions

– Increased duties on
E.C. goods for a total
of USD $116.8 million
(amount equals U.S.
losses as a result of no
access to the E.C.
market)

Canada Sanctions
– Increased duties on
E.C. goods for a total
of CDN $11.3 million
(amount equals
Canada’s losses as a
result of no access to
E.C. market)
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Sanctions on European Products


USTR announced the product
list on July 19, 1999 (imposed
100% ad valorem duties)
Duties imposed on European
products select list includes:
– French Roquefort cheese,
– Chocolate, cocoa preparations,
truffles,
– Lingonberry and Raspberry
Jams
– Tomatoes (Products of France,
Germany or Italy)
– Yarn (Products of Germany
and France)
– Prepared Mustard, and
– Other delicacies
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Interests at Stake

National Interests
– Protectionism (EU
protecting its beef
industry)
– Public Health and
potential risks to
consumers
– Other motives based
on other trade
disputes? (Bananas,
GMOs – biotech
products)

International Interests
– Access to Markets (loss
in trade revenue)
– Non-compliance with
WTO regulation
– Other motives based on
other trade disputes?

Third parties to case
include:
– Australia; Canada;
New Zealand; and
Norway
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Recommendations
1.
2.
3.
U.S. and Canada should
halt using hormones in
production of Beef
E.U. should perform
required risk assessment
Consumers should be
given the opportunity to
choose
– Beef should be clearly
labeled
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References
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Paulson, Michael. WTO Case File: “The Beef Hormone Case”. Seattle PostIntelligencer. Nov 22, 1999.
http://seattlepi.nwsource.com/national/case22.shtml
The U.S. – EU hormone dispute.
www.fas.usda.gov/itp/policy/hormone1.html
A Primer on Beef Hormone. www.fas.usda.gov/itp/policy/hormone2.html
DSU Update: GMOs, Beef Hormones.
www.ictsd.org/weekly/o4-11-10/story3.htm
www.wto.org
www.meatprocess.com/news/ng.asp?id=56009-eu-re-ignites
www.useu.be/issues/hormonelist0720.html
www.wto.org/english/tratop_e/dispu_e/cases_e/ds48_e.htm
www.trademap.org
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