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See also: One-page summary of key findings of this dispute
Complaint by the United States. (See also DS48 and DS320)
On 26 January 1996, the United States requested consultations with the European Communities claiming that measures taken by the EC under the Council Directive Prohibiting the Use in Livestock Farming of Certain Substances Having a Hormonal Action restrict or prohibit imports of meat and meat products from the United States, and are apparently inconsistent with Articles III or XI of the GATT 1994, Articles 2, 3 and 5 of the SPS Agreement, Article 2 of the TBT Agreement and Article 4 of the Agreement on Agriculture.
On 25 April 1996, the United States requested the establishment of a panel. At its meeting on 8 May 1996, the DSB deferred the establishment of a panel.
Panel and Appellate Body proceedings
Further to a second request to establish a panel by the United States, a panel was established at the DSB meeting on 20 May 1996. On 2 July 1996, the panel was composed. The panel report was circulated to Members on 18 August 1997. The panel found that the EC ban on imports of meat and meat products from cattle treated with any of six specific hormones for growth promotion purposes was inconsistent with Articles 3.1, 5.1 and 5.5 of the SPS Agreement.
On 24 September 1997, the European Communities notified its intention to appeal certain issues of law and legal interpretations developed by the panel. The Appellate Body examined this appeal with that of DS48. The Appellate Body report was circulated to Members on 16 January 1998. The Appellate Body upheld the panel’s finding that the EC import prohibition was inconsistent with Articles 3.3 and 5.1 of the SPS Agreement, but reversed the panel’s finding that the EC import prohibition was inconsistent with Articles 3.1 and 5.5 of the SPS Agreement. On the general and procedural issues, the Appellate Body upheld most of the findings and conclusions of the panel, except with respect to the burden of proof in proceedings under the SPS Agreement.
The Appellate Body report and the Panel report, as modified by the Appellate Body, were adopted by the DSB on 13 February 1998.
Reasonable period of time
On 8 April 1998, the European Communities requested that the “reasonable period of time” for implementation of the recommendations and rulings of the DSB be determined by binding arbitration, pursuant to Article 21.3(c) of the DSU. The Award of the Arbitrator was circulated to Members on 29 May 1998. The Arbitrator determined that the reasonable period of time for implementation to be 15 months from the date of adoption (i.e. 15 months from 13 February 1998), therefore the European Communities had to comply by 13 May 1999.
The European Communities undertook to comply with the recommendations of the DSB within the implementation period. At the DSB meeting on 28 April 1999, the European Communities informed the DSB that it would consider offering compensation in view of the likelihood that it may not be able to comply with the recommendations and rulings of the DSB by the deadline of 13 May 1999.
Proceedings under Article 22 of the DSU (remedies)
On 3 June 1999, the United States, pursuant to Article 22.2 of the DSU, requested authorization from the DSB for the suspension of concessions to the European Communities in the amount of USD 202 million. The European Communities, pursuant to Article 22.6 of the DSU, requested arbitration on the level of suspension of concessions requested by the United States. The DSB referred the issue of the level of suspension to the original panel for arbitration.
The Decision by the Arbitrators was circulated to Members on 12 July 1999. The Arbitrators determined the level of nullification suffered by the United States to be equal to USD 116.8 million. At its meeting on 26 July 1999, the DSB authorized the suspension of concessions to the European Communities by the United States in the amount determined by the Arbitrators as being equivalent to the level of nullification suffered by the United States.
At the DSB meeting on 7 November 2003, the European Communities stated that following the entering into force of its new Directive (2003/74/EC) regarding the prohibition on the use in stockfarming of certain hormones, there was no legal basis for the continued imposition of retaliatory measures by the United States; one of the reasons cited by the Appellate Body in its ruling against the European Communities was its failure to carry out a risk assessment within the meaning of Articles 5.1 and 5.2 of the SPS Agreement; and, having commissioned such an assessment to be undertaken on its behalf by an independent scientific committee whose findings indicated that the hormones in question posed a risk for consumers, the European Communities had fulfilled its WTO obligations and was entitled to demand the immediate lifting of the sanctions imposed by the United States in accordance with the provisions of Article 22.8 of the DSU. The United States stated that they had carefully reviewed the new EC Directive and did not share the view that it implemented the recommendations and rulings of the DSB. The new measure lacked any scientific basis and as such could not be justified under the SPS Agreement. Contrary to the European Communities’s claim, a number of studies had found that there was no increased health risk from the consumption of meat from animals treated with growth-promoting hormones. In the circumstances, the United States was not in a position to accede to the request by the European Communities. The European Communities responded that on the basis of the negative position expressed by the United States, it would reflect on the appropriate actions that would be necessary in order to preserve its rights under the WTO agreements.
At the DSB meeting on 1 December 2003, the European Communities stated that: in light of the disagreement between the parties to the dispute with regard to the European Communities’ compliance with the DSB’s recommendations, the matter should be referred to the WTO for a multilateral decision; this situation was similar to other cases, which had been resolved in the past through recourse to Article 21.5 of the DSU; the United States should initiate multilateral procedures to determine whether or not the European Communities was in compliance; the European Communities stood ready to discuss this matter with the United States. The United States stated that it failed to see how the revised EC measure could be considered to implement the DSB’s recommendations; with regard to the European Communities’ suggestion that multilateral proceedings be established to determine whether or not the European Communities was in compliance with the WTO rulings, the United States was ready to discuss this matter along with other outstanding issues in relation to the European Communities’ ban on US beef.
On 8 November 2004, the European Communities filed a separate request for consultations with the United States asserting that the United States should have removed its retaliatory measures insofar as the European Communities had removed the measures found to be inconsistent (see DS320).
On 22 December 2008, the European Communities requested consultations under Article 21.5 of the DSU. On 19 January 2009, Australia, Canada and New Zealand requested to join the consultations. Subsequently, the United States informed the DSB that it had accepted the requests of Australia, Canada and New Zealand to join the consultations.
Implementation of adopted reports
On 25 September 2009, the European Communities and the United States notified the DSB of a Memorandum of Understanding regarding the importation of beef from animals not treated with certain growth-promoting hormones and increased duties applied by the United States to certain products of the European Communities, agreed by the United States and the European Communities on 13 May 2009, in relation to this dispute.