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DISPUTE SETTLEMENT: DISPUTE DS48

European Communities — Measures Concerning Meat and Meat Products (Hormones)

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

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Appellate Body and Panel Reports Adopted

Complaint by Canada.

On 28 June 1996, Canada requested consultations with the EC regarding the importation of livestock and meat from livestock that have been treated with certain substances having a hormonal action under GATT Article XXII and the corresponding provisions in the SPS, TBT and Agriculture Agreements. Violations SPS Articles 2, 3 and 5; GATT Article III or XI; TBT Article 2; and Agriculture Article 4 are alleged. The Canadian claim was essentially the same as the US claim (WT/DS26), for which a panel was established earlier.

On 16 September 1996, Canada requested the establishment of a panel. At its meeting on 27 September 1996, the DSB deferred the establishment of a panel. Further to a second request to establish a panel by Canada, the DSB established a panel at its meeting on 16 October 1996. On 4 November 1996, the Panel was composed. The report of the Panel 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 EC 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 WT/DS26. The report of the Appellate Body 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.

Implementation Status of Adopted Reports

Complaints by the United States and Canada.

On 8 April 1998, the respondent 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 Arbitrator found the reasonable period of time for implementation to be 15 months from the date of adoption (i.e. 15 months from 13 February 1998). The report of the Arbitrator was circulated to Members on 29 May 1998.

The period for implementation was set by arbitration at 15 months from the date of the adoption of the reports i.e. it expired on 13 May 1999. The EC undertook to comply with the recommendations of the DSB within the implementation period. At the DSB meeting on 28 April 1999, the EC 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.

On 3 June 1999, the United States and Canada, pursuant to Article 22.2 of the DSU, requested authorization from the DSB for the suspension of concessions to the EC in the amount of US$202 million and Can.$75 million, respectively. The EC, pursuant to Article 22.6 of the DSU, requested arbitration on the level of suspension of concessions requested by the United States and Canada. The DSB referred the issue of the level of suspension to the original panel for arbitration.

The arbitrators determined the level of nullification suffered by the United States to be equal to US$116.8 million, and the level of nullification suffered by Canada to be equal to CDN$11.3 million. The report of the arbitrators was circulated to Members on 12 July 1999. At its meeting on 26 July 1999, the DSB authorized the suspension of concessions to the EC by the United States and Canada in the respective amounts determined by the arbitrators as being equivalent to the level of nullification suffered by them.

At the DSB meeting on 7 November 2003, the EC 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 Canada and the US; one of the reasons cited by the Appellate Body in its ruling against the EC 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 EC had fulfilled its WTO obligations and was entitled to demand the immediate lifting of the sanctions imposed by Canada and the US in accordance with the provisions of Article 22.8 of the DSU. The US 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 EC’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 US was not in a position to accede to the request by the EC. Canada said that while his country was prepared to discuss this matter further with the EC, it doubted whether the new studies presented any new scientific basis for the ban of hormone-treated beef, and was also not in a position to accede to the request of the EC. The EC responded that on the basis of the negative position expressed by the US and Canada, 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 EC stated that: in light of the disagreement between the parties to the dispute with regard to the EC’s 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; Canada and the US should initiate multilateral procedures to determine whether or not the EC was in compliance; the EC stood ready to discuss this matter with Canada and the United States. Canada stated that, although at the 7 November DSB meeting, Canada had put forward a suggestion for bilateral discussions concerning the justification for the EC’s position regarding its compliance with the WTO ruling, the EC had not responded to this suggestion; it was up to the EC to establish that it had complied with the WTO ruling; Canada continued to be open to discussions with the EC regarding its justification for its position; at this stage, Canada did not see any basis for removal of its retaliatory measures nor wished to take any other action. The US stated that: the US failed to see how the revised EC measure could be considered to implement the DSB’s recommendations; with regard to the EC’s suggestion that multilateral proceedings be established to determine whether or not the EC was in compliance with the WTO rulings, the US was ready to discuss this matter along with other outstanding issues in relation to the EC’s ban on US beef.

On 22 December 2008, the European Communities requested consultations under Article 21.5 of the DSU with the United States and Canada. On 16 January 2009, the United States requested to join the consultations requested by Canada. On 19 January 2009, Canada requested to join the consultations requested by the United States.

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