Beef Hormone Case US/EU

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Beef Hormone Case US/EU

• Samrawit Aragie
• Marcia Banda
• Tanya Bathiche
• ITRN 603 International Trade Relations
• Professor Malawer

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(No Transcript)
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U.S. Beef ExportsSource Trademap 2004
Exporters Total exported (US thousands) Share in the world exports,
World Estimation 11,421,088 100
Netherlands 1,563,945 13
Australia 1,524,821 13
Canada 1,361,858 11
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

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Destination of Netherlands Beef ExportsSource
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 4
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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.
• 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 CommunitiesThird 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
• 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

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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 50s and
  has found hormones safe
• EUs 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 Panels
  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

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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 Canadas 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

• 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

• Paulson, Michael. WTO Case File The Beef
  Hormone Case. Seattle Post-Intelligencer. Nov
  22, 1999. http//seattlepi.nwsource.com/national/c
  ase22.shtml
• The U.S. EU hormone dispute. www.fas.usda.gov/it
  p/policy/hormone1.html
• A Primer on Beef Hormone. www.fas.usda.gov/itp/pol
  icy/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?id56009-eu-re-ign
  ites
• www.useu.be/issues/hormonelist0720.html
• www.wto.org/english/tratop_e/dispu_e/cases_e/ds48_
  e.htm
• www.trademap.org