Dispute Settlement - All Sides Appeal Beef Hormones Ruling

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Both substantive and procedural aspects of the latest WTO verdict in the long-running dispute over the EU’s import ban on hormone-treated beef have been challenged by the parties involved.
At issue is a somewhat confusing panel ruling released in March (Bridges Year 12 No.2 page 8).
On the one hand, the panel found that the EU still had not presented sufficient scientific evidence to justify the import prohibition in force since 1988, and this despite the EU’s 2003 notification to the WTO that new risk assessments showed grave enough potential threats to human health to uphold the ban. However, the panel also faulted the US and Canada for keeping in place trade sanctions imposed a decade ago. The two complainants should first have sought a formal WTO determination on whether the additional EU research did in fact fulfil the requirements for health-related import restrictions under the Agreement on Sanitary and Phytosanitary Measures, the panel ruled.
EU: Panel Erred on Substance
The EU’s appeal, filed on 29 May, asserted that the panel had erred in finding that the 2003 EU hormones directive– on which the ban is based – did not comply with the SPS Agreement. Specifically, the EU maintained that the panel had ignored the ‘the fundamental principle of due process’ when selecting and taking the advice of scientific experts, as well as the uncertainties that prevail over the safety of the growth hormones in question.
The appeal further noted the panel had incorrectly shifted the burden of proof so that it was up to the EU to demonstrate its ban was WTO-consistent rather than for the complainants to prove that it was not. The EU also said that the panel should have instructed Canada and the US to lift the sanctions.
Complainants Say Compliance Finding Unnecessary
On 9 June, the US and Canada called for the Appellate Body to overturn the panel’s finding that they had breached dispute settlement rules in not requesting a compliance panel to determine whether the 2003 modification of the EU’s hormone directive had made the import ban WTO-consistent. The complainants also argued that the continuation of the sanctions after that date did not violate trade rules, and rejected the panel’s recommendation that they seek a new WTO ruling on the matter ‘without delay.’
Procedural Gray Area?
According to Article 23.1(a) of the Dispute Settlement Understanding, retaliatory action must be consistent with the findings of adopted panel/Appellate Body reports and a WTO determination of the level of sanctions. It does not explicitly refer to Article 21.5, which requires any disagreement on the ‘existence or consistency’ of measures taken to comply with rulings to be determined through “recourse to these dispute settlement proceedings, including wherever possible resort to the original panel.”
In the Beef Hormones dispute, the US and Canada cannot be faulted under Article 21 as their punitive tariffs are indeed based on adopted reports and a WTO determination of the sanctions (US$116.5 million for the United States and US$11.6 million for Canada).
However, in would seem that the intention of the DSU drafters was that parties should seek a formal confirmation of non-compliance if they think that measures taken by a defendant to implement a ruling are not sufficient. Only once a continued violation has been formally established, would the complainant have the right to apply or, in this case, continue to apply trade retaliation.
Nevertheless, it could be argued that unless the Appellate Body modifies the substantive findings of the Beef Hormones panel, it would be redundant to request yet another ruling to confirm that the EU’s import ban is still inconsistent with the SPS Agreement.