U.S. and Canada win EU beef hormone appeal at WTO

Thu Oct 16, 2008 12:14pm EDT
 

By Jonathan Lynn

GENEVA (Reuters) - The World Trade Organization's (WTO) top court largely backed the United States and Canada on Thursday in a mixed ruling in an appeal over the European Union's long-standing ban on beef treated with growth hormones. The dispute, dating back to the 1980s, has led to U.S. and Canadian sanctions of $125 million a year on European products from Roquefort cheese to mustard, and has highlighted the power of food safety issues to disrupt trade.

The appeal was over a challenge by Brussels to the right of the United States and Canada to continue applying sanctions against the EU.

U.S. Trade Representative Susan Schwab welcomed the WTO appeal court ruling in a statement, and said it meant there was no need for Washington to remove the sanctions.

"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," she said.

RISK ASSESSMENT

The EU banned beef treated with growth hormones in the 1980s for fear it could cause cancer, and the United States and Canada have applied sanctions since 1999.

In March a WTO dispute panel found that a new risk assessment by the EU in 2003 had failed to justify the ban, which therefore still violated international trade rules.

But the panel also faulted the United States and Canada for deciding to retain sanctions against EU exports without initiating proper legal proceedings at the WTO to establish whether the continuing EU ban did in fact break WTO rules.

Brussels then appealed, arguing that its ban on hormone-treated beef was scientifically sound and therefore legal and that the WTO should have explicitly ordered the United States and Canada to lift their sanctions.

In their appeal, Washington and Ottawa said it was not enough for the EU to argue that its new scientific study had justified the ban for the sanctions to be removed.

The appeal court reversed the original panel's ruling that the United States and Canada had been wrong to act unilaterally by retaining the sanctions.

However, it also faulted the original panel for some of its conclusions on the EU's 2003 risk assessment -- but said it was not able itself to undertake the analysis.

After the initial case, launched nearly 13 years ago, the WTO authorized the United States and Canada to impose sanctions of $116.8 million and C$11.3 million ($9.5 million) a year respectively.

Since 1999 the two countries have imposed punitive 100 percent duties on European products including Roquefort cheese, pork, cucumbers, tomatoes, truffles and mustard.

In 2003 the EU issued a directive drawing on new research that it said found overwhelming evidence the hormone oestradiol 17-beta caused cancer and harmed genes, and substantial evidence that five other hormones could harm human health.

(For the full WTO Appellate Body reports, click on: here )

(Editing by Andrew Roche)