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Beef Hormone Case US/EU

Beef Hormone Case US/EU. Samrawit Aragie Marcia Banda Tanya Bathiche ITRN 603 – International Trade Relations Professor Malawer. U.S. Beef Exports Source: Trademap 2004. Destination of Netherlands Beef Exports Source: Trademap 2004. Hormones in Meat.

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Beef Hormone Case US/EU

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  1. Beef Hormone Case US/EU Samrawit Aragie Marcia Banda Tanya Bathiche ITRN 603 – International Trade Relations Professor Malawer

  2. U.S. Beef ExportsSource: Trademap 2004

  3. Destination of Netherlands Beef ExportsSource: Trademap 2004

  4. 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.

  5. 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.

  6. 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.

  7. 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.

  8. 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

  9. Naturally Occurring Oestradiol Progesterone Testosterone Artificially Produced Zeranol Melengestrol Trenbolone Hormones in Question

  10. 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

  11. 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

  12. US Position • FDA has been conducting tests since the 50’s and has found hormones safe • EU’s own scientists agree with these findings • The same hormones are found in several foods consumed daily • Provides higher quality meat at lower price

  13. 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

  14. US Position Continued • European argument is vague • Has no scientific backing • Based on cultural concerns

  15. Decisions of the Panel and AB • August 18th,1997 panel ruled in favor of US • January 1998 Appellate body upheld Panel’s 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

  16. 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

  17. 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

  18. 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 Canada’s losses as a result of no access to E.C. market) Sanctions (Retaliatory Measures)

  19. 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

  20. 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 Interests at Stake

  21. 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

  22. References • Paulson, Michael. WTO Case File: “The Beef Hormone Case”. Seattle Post-Intelligencer. Nov 22, 1999. http://seattlepi.nwsource.com/national/case22.shtml • The U.S. – EU hormone dispute. www.fas.usda.gov/itp/policy/hormone1.html • A Primer on Beef Hormone. www.fas.usda.gov/itp/policy/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?id=56009-eu-re-ignites • www.useu.be/issues/hormonelist0720.html • www.wto.org/english/tratop_e/dispu_e/cases_e/ds48_e.htm • www.trademap.org

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