News Release
Pascal Lamy
No. 159/04
November 8, 2004
EU REQUESTS WTO TO CONFIRM NO JUSTIFICATION FOR CONTINUED
US SANCTIONS OVER HORMONE CASE
Today, the EU has initiated dispute-settlement procedures against the United
States and Canada in the World Trade Organization (WTO). The EU is challenging
their continued imposition of sanctions on EU exports due to the way the EU banned
imports of hormone
beef. The EU believes these sanctions are no longer justified since the EU
has overhauled its original measures to bring them into line with WTO rules. Although,
the US and Canada have not challenged the WTO-conformity of the new EU legislation,
they continue to maintain their sanctions in place.
EU Trade Commissioner
Pascal Lamy
said: “There is no reason why European companies should continue to be targeted
by sanctions when they export to the US and Canada. The EU ban on certain growth-promoting
hormones is now in full respect of our international obligations. We have put
in place revised legislation based on a thorough and independent scientific risk
assessment. Our move to get the sanctions lifted shows our respect for the WTO
as the proper forum to resolve trade disputes instead of the unilateral maintenance
of sanctions. If they disagree with the EU measures, they should suspend their
sanctions and refer their apparent disagreement to the WTO as the EU has done
recently in the FSC case.”
The EU has launched today’s dispute by requesting formal consultations with Canada
and the United States within the dispute settlement system of the WTO. Sixty days
are foreseen for such consultations before the case can be taken to a panel for
obtaining a binding ruling on the contentious question.
The US and Canadian sanctions against the EU consist of an increase in tariffs
for a selected list of products in the amount of respectively US $116.8 million
USD and Canadian $11.3 million. Sanctions have been in place since July 1999.
Background
On 13 February 1998, the WTO Dispute Settlement Body (“DSB”) adopted the panel
and Appellate Body reports in EC – Hormones. The EU lost the hormones dispute
because, according to the WTO Appellate Body, the previous EU legislation was
not based on a proper scientific risk assessment and because the supporting scientific
evidence was insufficient.
The EU has eliminated those deficiencies by basing the new EU Hormones
Directive of 22 September 2003 on a full
scientific risk assessmentthat was conducted over the years 1999-2002. The
independent Scientific
Committee on Veterinary Measures relating to Public Health conducted this
risk assessment and specifically re-evaluated the potential risks to human health
from hormone residues in bovine meat. The results of this evaluation substantiated
the case for the prohibition on the use of the hormones in question for growth
promotion.
Accordingly, the new Directive maintains the permanent prohibition on oestradiol
17ß and imposes a provisional ban on the other five hormones (testosterone, progesterone,
trenbolone acetate, zeranol and melengestrol acetate). The provisional prohibition
will apply while the EU seeks more complete scientific information to clarify
the present state of knowledge of these substances. The Commission will regularly
review scientific information that may become available in the future. The new
Directive was published and entered into force on 14 October 2003. The EU Member
States were given one year for implementation, a time-period that has now
expired.
On 27 October 2003, the EU notified the WTO that it had implemented the WTO ruling
of 1998 and that, as a consequence, the United States’s and Canada’s sanctions
vis-à-vis the EU were no longer justified. The United States and Canada disagreed
and since then refused to lift their sanctions.
Canada and the United States also refused to initiate a compliance dispute in
the WTO, as it is foreseen for such situations in the WTO’s Dispute Settlement
Understanding. The EU has tried to convince Canada and the United States to bring
their case to the WTO and has offered to agree on a procedure to resolve the disagreement
over compliance. Regrettably, these efforts remained without success.
The WTO Agreement does not allow Canada and the United States simply to continue
to apply sanctions, since it amounts to a prohibited unilateral determination
of alleged non-compliance by the EU. The situation is equivalent to that now faced
in the dispute regarding Foreign
Sales Corporations, where the United States has recently adopted a law which
the EU does not consider to be fully WTO-compatible. In this case, however, the
EU has (unlike Canada and the United States) initiated compliance proceedings
in the WTO and has indicated its readiness to suspend sanctions while dispute
settlement proceedings are ongoing.
For more information:
IP/03/1393
http://europa.eu.int/comm/trade/issues/respectrules/dispute/index_en.htm
http://europa.eu.int/comm/food/index_en.htm
