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WTO case over hormones in beef drags on

Observers of the years-long trade dispute between Canada, the U.S. and the European Union, over the EU’s block on the two other countries’ beef, now wonder if the World Trade Organization can ever make it all stop.

The EU on Monday announced yet another request for “consultations” at the WTO with Canada and the U.S., which for years have put up retaliatory trade sanctions against EU products in the dispute.

The EU has banned the use of growth-promoting hormones and the import of meat treated with hormones since the 1980s. Canada and the U.S., claiming no valid scientific basis for the EU ban, first took it to the WTO in 1996.

“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,” said Peter Power, spokesperson for EU trade commissioner Peter Mandelson, in an EU release Monday.

“We are thus very confident and hope that the U.S. and Canada will engage constructively in these consultations and that we can find a solution to this long-lasting dispute,” Power said.

Canada’s departments of international trade and agriculture and the U.S. Trade Representative’s office had no immediate comment available Tuesday.

The U.S. has argued that the human body already generates the hormones that are subject to the EU’s ban, and that said hormones also occur naturally in foods such as eggs and butter, often at concentrations higher than those in beef from hormone-treated cattle.

The WTO, in 1999, allowed both Canada and the U.S. to slap retaliatory duties on imports of certain food products from Europe. In late 2003, the EU amended its ban — but the U.S. and Canada didn’t lift their duties, arguing that the EU’s changes made no difference to the non-WTO-compliant part of the ban.

“Precautionary principle”

The EU’s 2003 directive maintained that one hormone, oestradiol, carries a body of evidence showing it causes and promotes cancer and harms genes.

The 2003 directive further claimed that the risk from five other hormones — testosterone, progesterone, trenbolone acetate, zeranol and melengestrol acetate — could not be accurately determined, “but evidence suggests potential detrimental effects on human health.” Thus, the EU said, it invokes the “precautionary principle.”

The EU then went back to the WTO, claiming that Canada and the U.S. should have lifted their duties and filed a new non-compliance complaint at the WTO if they felt the EU’s amended ban was still in breach.

To that, a WTO panel then ruled in March this year that the EU’s amended ban still didn’t comply with international trade rules. The panel, however, also ruled the U.S. and Canada shouldn’t have kept their duties in place without first getting a WTO ruling on the EU ban.

The EU, Canada and the U.S. all appealed that decision, which wound up in October with a WTO appeal body reversing the WTO panel’s March ruling against Canada and the U.S.

But the appeal body in October also recommended the WTO’s dispute settlement body ask Canada and the EU to launch “Article 21.5” proceedings, to resolve their dispute over whether the EU has actually removed the WTO-inconsistent part of its ban — and thus whether Canada’s continued retaliatory duties are still legally valid.

The EU on Monday estimated Canada’s continued sanctions as being worth about C$11.3 million per year, while the U.S. sanctions are worth about US$116.8 million.

Stretch of jurisprudence

Jonathan Lynn, writing for the Reuters news service, on Monday described the EU’s move as “the latest twist in a complex case which has stretched WTO jurisprudence to the limits.”

The beef hormone case, Lynn wrote, “has also highlighted the difficulty for the WTO, which umpires world trade and rules on cases worth billions of dollars, to decide when retaliatory sanctions must be lifted and to review governments’ highly technical food safety standards.”

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