Transcript US vs. EC Beef hormones DS26 - International Trade Relations

Jocelyn Mason
Kelly McFarlane
Anita Nyaga
Complainant
Respondent
Third Parties
United States
European
Communities
Australia, Canada,
New Zealand,
Norway
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“The EC under the Council Directive
Prohibiting the Use in Livestock Farming of
Certain Substances Having a Hormonal Action
restrict or prohibit imports of meat and meat
products from the US”
Inconsistent with:
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GATT Articles III and XI
SPS Agreement Articles 2, 3 and 5
TBT Agreement Article 2
Agreement on Agriculture Article 4.
Date
Action
January 26, 1996
Request for consultation
April 26, 1996
Panel requested by US
May 20, 1996
Panel Established
August 18, 1997
Panel Report
September 24, 1997
EC applies for appeal
January 16, 1998
Appellate Report
February 13, 1998
Adoption of report findings
May 29, 1998
Article 21.3 (c) Arbitration
report
July 12, 1999
Recourse to Article 22.6
Arbitration report
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Panel found that the EC was banning the
import of US beef from cattle treated with any
of six growth hormones.
Inconsistent with Articles 3.1, 5.1 and 5.5 of the
SPS Agreement
Panel conclusions were upheld despite EC’s
appeal
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April 8, 1998 - EC requests a reasonable
period of time for implementation of the
recommendations and rulings
The Arbitrator found the reasonable period of
time for implementation to be 15 months from
the date of adoption
Period of implementation was decided to expire
on 13 May 1999.
The EC agreed to comply with the
recommendations of the DSB within the
implementation period.
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April 28, 1999 - the EC informed the DSB that it would
consider offering compensation as it did not expect to
comply with the recommendations and rulings by the
deadline
June 3, 1999 – US and Canada requested
authorization from the DSB for the suspension of
concessions to the EC in the amount of $202 million
and $75 million, respectively.
The EC requested arbitration on the level of
suspension of concessions requested by the US and
Canada. The issue was referred to the original panel.
The level of nullification suffered by the US was
determined to be $116.8 million, the level of nullification
suffered by Canada was determined to be $11.3
million.
Date
Action
November 7, 2003
EC claims there is no legal
basis for the continuation of
retaliatory measures by
Canada and the US
December 1, 2003
EC requests that due to the
ongoing disagreement with
regard to the EC’s
compliance with the DSB’s
recommendations, the
matter should be referred to
the WTO for a multilateral
decision
December 22, 2008
Consultations requested
between EC, US and
Canada
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The Appellate Body, in its ruling against the EC, required the EC to
carry out a risk assessment on the use of hormones in beef.
When it failed to do so, the DSU commissioned such an
assessment to be undertaken on behalf of the EC, by an
independent scientific committee. The findings indicated that the
hormones in question posed a risk for consumers.
The EC felt it had fulfilled its WTO obligations and was entitled to
demand the immediate lifting of the sanctions imposed by the US
and Canada.
The EC creates a new Directive (2003/74/EC) regarding the
prohibition of the use of certain hormones, based on the finding of
the study.
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The US stated that a number of studies had found that there was
no increased health risk from the consumption of meat from
animals treated with growth-promoting hormones, and therefore
the US would not agree to the EC request.
Canada stated that it doubted whether the new studies presented
any new scientific basis for the ban of hormone-treated beef, and
would not agree to the request of the EC.
The EC responded that on the basis of the negative position
expressed by the US and Canada, it would reflect on the
appropriate actions that would be necessary in order to preserve
its rights under the WTO agreements.
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The EC stated that: in light of the disagreement between the
parties, the matter should be referred to the WTO for a
multilateral decision.
Canada claimed that they had requested discussions with
the EC , however the EC had not responded therefore it
was up to the EC to establish that it had complied with the
WTO ruling
Canada remains open to discussions with the EC regarding
its justification for its position. However, Canada did not see
any basis for removal of its retaliatory measures .
The US stated that they failed to see how the revised EC
measures could be considered implementation of the DSB’s
recommendations. However, they remain open to
discussion, though unwilling to consider removal of
retaliatory measures.
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The EC banned US beef & beef products
because they had been treated with specific
growth hormones.
EC was applying the precautionary principle
Protectionism
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The panel found that EC’s ban on US beef that had any of
the six growth hormones was inconsistent with:
Article 3.1, 5.1and 5.5 of SPS Agreement
•
Article 3.1: “To harmonize sanitary and phytosanitary measures
on as wide a basis as possible, Members shall base their sanitary
or phytosanitary measures on international standards, guidelines
or recommendations, where they exist, except as otherwise
provided for in this Agreement,…..”
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Article 3.3: “Members may introduce or maintain sanitary or
phytosanitary measures which result in a higher level of sanitary or
phytosanitary protection than would be achieved by measures
based on the relevant international standards, guidelines or
recommendations, if there is a scientific justification, or as a
consequence of the level of sanitary or phytosanitary protection a
Member determines to be appropriate in accordance with the
relevant provisions……”
Source:http://www.wto.org/english/res_e/booksp_e/analytic_index_e/sps_01_e.htm#article3
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Article 5.1: “Members shall ensure that their sanitary or phytosanitary
measures are based on an assessment, as appropriate to the
circumstances, of the risks to human, animal or plant life or health, taking
into account risk assessment techniques developed by the relevant
international organizations.”
Article 5.5 “With the objective of achieving consistency in the application
of the concept of appropriate level of sanitary or phytosanitary protection
against risks to human life or health, or to animal and plant life or health,
each Member shall avoid arbitrary or unjustifiable distinctions in the
levels it considers to be appropriate in different situations, if such
distinctions result in discrimination or a disguised restriction on
international trade. ……”
Source:http://www.wto.org/english/res_e/booksp_e/analytic_index_e/sps_02_e.htm#article5
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The EC appealed and the Appellate Body
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Upheld the panel’s decision in regard to articles 3.3
and 5.1 of the SPS Agreement
BUT…….
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It reversed the panel’s decision in relation to articles
3.1 and 5.5 of the SPS agreement
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US believes that EC’s ban on US beef and beef products was
inconsistent with:
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GATT Articles III or XI
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SPS Agreement Articles 2,3 and 5
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TBT Agreement Article 2
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Agreement on Agriculture Article 4
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US argued that:
EC’s standards on the ban on growth hormones
was inconsistent with international standards
EC’s ban on US beef was not actually
scientifically based
EC’s ban was inconsistent with the Uruguay
Round SPS Agreement.
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EC was protecting the health of consumers
EC was applying the precautionary principle
EC had funded several scientific researches
which concluded that the hormones had some
effect on consumers
EC did not have enough funding to continue
with the research
Sanctions are still in place
 Beef ban is still in effect
 Requests for consultations have
been made
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Protectionism vs. Precautionary
Principal
Issues in International Food Safety
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Consumer safety can be used as a legitimate
escape clause in trade agreements
Consumer safety can also be taken advantage
of to engage in protectionism
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The EC has a long documented history of
applying the precautionary principle to
consumer food safety issues
Cultural differences are part of the difficulties
that the WTO must deal with when negotiating
trade disputes
The sovereignty issue: this was a consumer
driven push for import restrictions
International Harmonization of Food
Safety and Labeling Standards
Codex Alimentarius Commission (CAC)
 An intergovernmental body
 Over 170 members
 Established 1963
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Effects on developing countries
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Food exports are the primary driver of economic
growth in most developing countries
Conforming to strict food safety standards can be
prohibitively expensive
The FAO Pro-Poor Livestock Policy Initiative
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PPLPI aims to facilitate and support the formulation
and implementation of livestock-related policies and
institutional changes that have a positive impact on
the world’s poor
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Alderson, Elizabeth. “The economic importance of demonstrable local
and national systems for food safety hazard analysis, control and
monitoring.”
http://www.cabicompendium.org/ahpc/Library/HTML/Production/fsq_haccp_importance.ht
m#FoodSafety
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Halderman, Michael and Michael Nelson. “EU Policy-Making: Reform of
the CAP and EU Trade in Beef & Dairy with Developing Countries.” ProPoor Livestock Policy Initiative. Food and Agriculture Organization of
the United Nations.
http://www.fao.org/ag/againfo/programmes/en/pplpi/docarc/wp18.pdf
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Johnson, Renee and Charles E. Hanrahan. “The U.S.-E.U Beef Hormone
Dispute.” CRS Report for Congress. Congressional Research Service
R40449. 5 May 2009. http://www.nationalaglawcenter.org/assets/crs/R40449.pdf
The World Trade Organization. “European Communities – Measures
Concerning Meat and Meat Product (Hormones).”
http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds26_e.htm
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U.S. Food and Drug Administration. International Harmonization.
http://www.fda.gov/Food/InternationalActivities/ucm103013.htm