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ITRN 603 Dr. S. Malawer By Khadija Alhussein Hanan Alkibsi Jay Anderson

Beef Hormone Case. ITRN 603 Dr. S. Malawer By Khadija Alhussein Hanan Alkibsi Jay Anderson. History. Use of Hormones started in 1970’s to help farmers increase the growth and quality of meat. Saves time and Money Produces healthier leaner meat

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ITRN 603 Dr. S. Malawer By Khadija Alhussein Hanan Alkibsi Jay Anderson

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  1. Beef Hormone Case. ITRN 603 Dr. S. Malawer By Khadija Alhussein Hanan Alkibsi Jay Anderson

  2. History • Use of Hormones started in 1970’s to help farmers increase the growth and quality of meat. • Saves time and Money • Produces healthier leaner meat • Since 1981 the EC/EU has prohibited the use of hormones domestically and the importation of beef from cattle given beef hormones

  3. Natural: Progesterone Testosterone Oestradiol Synthetic: Zeranol Melengestrol Trenbolone Hormones under dispute

  4. History… • Since 1981 the EU/EC has amended the laws regarding beef hormones several times. • Most significant • 1985- EC prohibits the use of synthetic hormones and natural hormones, except for therapeutic uses • 1988- EC bans all US meat

  5. History… • 1987- Reagan announces and suspends 100 million in EC imports • 1988- WHO concludes that natural hormones pose no health risks as long as “good animal husbandry” is used • 1989-EC and US retaliatory measures take effect

  6. History… • 1995- Uruguay Round • Refers to Codex for international food standards. • SPS & TBT agreement also included in Uruguay round • 1996- EC bans more specific hormones • Directly opposes new Codex standards passed in 1995. • Overruled earlier vote against US. • 1996-US and Canada request that a panel be Formed on violations of SPS and TBT violations

  7. Interests • US & Canada Interests: • Loss of market access to EU • Chemical industry: Monsanto, Eli Lilly, etc. • International: • US “won” incentive for other countries to use hormones too • EU Interests: • Health concerns (SPS) • Protect national EU market • Competition from US and other int’l producers Third Parties: New Zealand, Norway, Australia

  8. Agreements • GATT Article III • GATT Article V • SPS Agreement • TBT Agreement • Agreement on Agriculture Art. IV:

  9. GATT Article III 1. International standards, guidelines or recommendations • Exceptions regarding paragraph 3. 2. SPS measures should prove to protect human, animal, or plant life or health.

  10. Article III (cont’d) 3. In the event of raising standards: -agree with paragraph 1-8 of article 5 of SPS -cannot disagree with any other part of this agreement 4.Periodic reviews and guidelines: -Codex Alimentarius Commission -International Office of Epizotics -Interaction Plant protection Convention 5-Monitoring procedures for international harmonization

  11. GATT article V 3- Risk Assessment and SPS measures have to consider economic factors such as: -production and sales damage -spread of pests and diseases -cost of eradication in importing country -Cost effectiveness of alternative measures of limiting risks

  12. GATT article V 1-SPS measures are based to risk assessment to human, animal, or plant life or health. 2-Use of Risk assessment techniques of International Organizations. 3-Scientific evidence: • Inspection • Sampling • Testing

  13. GATT article V 4-Minimizing negative trade effects 5-No unjustifiable distinctions ”discrimination or disguised restriction on international trade” 6- Insufficient scientific evidence

  14. AGREEMENT ON THE APPLICATION OFSANITARY AND PHYTOSANITARY MEASURES("SPS Agreement") Article 2: Basic Rights and Obligations 1. Member's right of SPS measures consistent with the provisions of this Agreement. 2. Protection of human, animal or plant life or health -sufficient scientific evidence -exceptions found in paragraph 7 of Article 5. 3. Prohibition of “disguised restriction on international trade”.

  15. TBT Agreement • Technical regulations and product standards should not unnecessarily restrict international trade • International Standards • Enforcement & “Notification authorities” • Technical Regulations • Codex Standards

  16. Agriculture Agreement Article 4: Market Access • All agreements that have achieved opening markets by reduction of tariff should be followed & honored. • Members shall not use the kind of any measures that will result in higher tariffs & custom duties.

  17. Agriculture Agreement Article 4: Market Access 4.1 All agreements that have achieved opening markets by reduction of tariff should be followed & honored. 4.2 Members shall not use the kind of any measures that will result in higher tariffs & custom duties.

  18. Debated Issues • Health issues regarding Hormone use • Scientific evidence? • EU Public Opinion • Legitimate reason for Ban under WTO? • Discriminatory nature of ban • Illegal Protectionism?

  19. DSB under Process • USA • 8 May 1996: Panel request rejected by DSB. • 20 May 1996: 2nd panel request • 2 July 1996: US Panel was composed. • 18 August 1997: Panel report circulated to Members • CANADA • 16 September 1996: Panel Request • 27 September 1996: Panel deferred by DSB • 16 October 1996: 2nd panel request & meeting • 4 November 1996: Canadian Panel was composed. • 18 August 1997: Panel report circulated to members

  20. Panel Decision • EC ban of US and Canadian beef was not based on a risk assessment of sanitary measures • violates Article 5.1 of the SPS Agreement. • EC demonstrates inconsistent and discriminatory use of Article 5.5 of SPS Agreement • “disguised restriction on international trade”. • EC did not abide by existing international standards and sanitary measures • Violation of Article 3.3 and 3.1 of SPS Agreement.

  21. Panel Decision (cont’d) • EC needs to conform areas of dispute to SPS Agreement. • EC ban on imports of hormone treated meat products was inconsistent with Articles 3.1, 5.1 and 5.5 of the SPS Agreement.

  22. A/B Process • 24 September 1997: • EC requests appeal • The Appellate Body referred back to WT/DS48. • 16 January 1998: • Circulation of Appellate Body report. • The Appellate Body upheld the Panel’s findings regarding Articles 3.3 and 5.1 of the SPS Agreement • Reversed the Panel’s finding that the EC import prohibition was inconsistent with Articles 3.1 and 5.5 of the SPS Agreement. • 13 February 1998: DSB adoption of panel and A/B reports

  23. Outcome • US and EU both claim victories after the A/B rulings

  24. Implementation • How? • A/B gives EU space to maneuver and the ruling is very different than the Panels • EU may keep ban if it can provide “an adequate assessment of risk” • EU may also maintain a higher standard than the Codex if it can prove that the standards are scientifically based. • AB rules that the ban is not purely protectionary, contrary to the previous Panels ruling and TBT agreement

  25. Implementation • 1998- EU given 15 months to implement ruling • EU refuses to implement ruling and accept US and Canadian hormone treated beef • US seeks $202 million in concessions and Canada seeks $75 million in concessions from arbitrator

  26. Implementation • Awards • US awarded entitlement to impose $116.8 million per year and Canada $11.3 million in regulatory tariffs • US imposes tariffs on items such as French mustard, truffles, Roquefort cheeses, and fruit juices • Strong retaliatory reaction from French farmers

  27. Implementation • Awards • US awarded entitlement to impose $116.8 million per year and Canada $11.3 million in regulatory tariffs • US imposes tariffs on items such as French mustard, truffles, Roquefort cheeses, and fruit juices • Strong reaction from French farmers

  28. Implementation • US cattle ranchers— • See the outcome of the case as good and bad • US won, but still do not have market access

  29. Dispute to Date • November 2003 • EC state that it is now in compliance with the ruling by the AB • Why? • AB had cited a lack of a risk assessment study • EC claims that study “posed a risk to consumers.” • US disagrees with EC’S interpretations and maintains sanctions

  30. Dispute to Date… • November 2004--- EC files request for consultations with US • Asserts that US should have removed retaliatory measures • Canada requests to join consultations • January 2005– EC request the establishment of a panel

  31. Dispute to Date… • January 2006 Chairman of Panel postpones the DSB • Final report is due October 2006

  32. Sources • FAS Online (2005, November 18). THE U.S. - EU HORMONE DISPUTE.     Retrieved September 30, 2006 from , Web site:     http://www.fas.usda.gov/itp/policy/hormone.html • FoEI (2001, January 24). Trade Case Study: Beef-Hormone Dispute. Retrieved September 29, 2006 from , Web site:     http://www.foei.org/trade/activistguide/hormone.htm • Jackson,J. H., Davey, W. J., Sykes A. O., Jr. (2004). Legal Problems    of International Economic Relations (4th.ed.). St. Paul, MN:    West Group. • Kuruvila, E. (2006, August 2). INTERNATIONAL FOOD STANDARDS .    Retrieved October 6, 2006 from Canadian Library of Parliament, Law    and Government Division Web site:http://www.parl.gc.ca/information/library/PRBpubs/prb0599-e.htm#applicationtrade • Malawer, S. (2006, August 2). EC MEASURES CONCERNING MEAT AND MEAT    PRODUCTS (Hormones) . Retrieved October 2, 2006 from GMU,    International Trade Web site:http://www.internationaltraderelations.com/WTO.beef-hormone%20(1998).htm • Paulson, M. (1999, November 22). WTO Case File: the Beef Hormone     Case. Retrieved September 26, 2006 from , Web site:     seattlepi.nwsource.com/national/case22.shtml

  33. Sources… • USTR (2005, November 15). Dispute Settlement Update. Retrieved     September 26, 2006 from , Web site:     www.ustr.gov/enforcement/update.pdf • Weir R. Hormone Ban in EU Meat (EUMEAT). Retrieved September     29, 2006 from American University, Web site:     http://www.american.edu/projects/mandala/TED/eumeat.htm • WTO (2006, June 2). European Communities — Measures Concerning Meat     and Meat Products (Hormones). Retrieved September 28, 2006 from     , Web site:     http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds26_e.htm • WTO (2006, June 2). United States — Continued Suspension of     Obligations in the EC — Hormones Dispute. Retrieved September     28, 2006 from , Web site:     http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds320_e.htmHarvard University (2004, April,). Sanitary and Phytosanitary    Measures and Technical Barriers to Trade . Retrieved October 6,    2006 from Center for international development Web site:http://www.cid.harvard.edu/cidtrade/issues/spstbt.html • WTO Website (2006, June 2). European Communites- Measures Concerning    Meat and Meat Products (Hormones). Retrieved September 29, 2006    from , Web site:www.wto.org/english/tratop_e/dispu_e/cases_e/ds26_e.htm

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