Bridges Weekly Trade News Digest • Volume 13 • Number 1 • 14th January 2009

Brussels Invites WTO Scrutiny of EU Beef Ban

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In the latest development in a trans-Atlantic controversy spanning nearly two decades, the European Union on 22 December requested formal consultations with Canada and the United States at the WTO. At issue is the legality of both the EU’s longstanding ban on imported hormone-treated beef as well as Canadian and American sanctions levied against EU goods in response.

The request from Brussels follows a mixed ruling from the Appellate Body in which the EU was granted the authority to continue the restrictions, while Canada and the US were allowed to continue to impose trade sanctions totalling over US$ 125 million annually.

At the centre of the controversy is whether the EU’s ban is in compliance with the WTO Agreement on Sanitary and Phytosanitary Measures, known as the SPS Agreement. That Agreement governs the use of health and safety-related trade barriers, and allows such restrictions to be justified based on scientific evidence or other pertinent information.

In its 16 October ruling, the Appellate Body held that it was unable to determine whether the EU’s assessment of human risk brought the European trading bloc into compliance with the SPS Agreement, faulting the lower WTO panel for numerous evidentiary and procedural errors. Concluding, the Appellate Body recommended that the parties re-initiate WTO dispute settlement proceedings, prompting the current request from Brussels.

By requesting formal consultations, the EU is inviting scrutiny of its own trade policies, an unusual move at the WTO. But Brussels says that it is confident that the import ban is legally justified.

“We are convinced that our legislation on hormones is fully in line with WTO law: the restrictions on hormone-treated beef are based on solid scientific evidence showing risks for human health,” EU spokesperson Peter Power said. “We are thus very confident and hope that the US and Canada will engage constructively in these consultations and that we can find a solution to this long-lasting dispute.”

The EU authorised the current sanctions in 2003, citing research claiming to have found overwhelming evidence that the hormone oestradiol 17-beta caused cancer and harmed genes, and substantial evidence that five other hormones were also harmful to humans. The EU had hoped that that change in policy would bring the bloc’s import ban into compliance with a 1999 WTO ruling that found earlier restrictions unjustified.

Having long taken a precautionary approach toward hormone-treated food, Brussels hopes this coming round of dispute settlement procedures will end the debate on the ban’s legitimacy, and end Canadian and American duties on EU imports as well.

In contrast, US Trade Representative Susan Schwab indicated continuing sanctions were justified following the 16 October Appellate Body ruling. “The Appellate Body’s report confirms that WTO Members that are subject to additional duties for failing to bring themselves into compliance with the WTO’s rulings and recommendations must do more than simply claim compliance in order to obtain relief from such duties. We very much welcome these conclusions by the Appellate Body” Schwab said.

Since the Appellate ruling, the USTR has solicited public comments on possible modifications to the EU products sanctioned. According to a 31 October notice in the Federal Register, while current sanctions cover mostly food products, possible changes could lead to duties on a range of products from chewing gum to motorcycles.

ICTSD reporting; “EU Wants Sanctions Justified in WTO Beef Hormone Case,” Bloomberg, 22 December 2008