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See also: One-page summary of key findings of this dispute
Complaint by Canada. (See also DS26 and DS321)
On 28 June 1996, Canada requested consultations with the European Communities regarding the importation of livestock and meat from livestock that have been treated with certain substances having a hormonal action under Article XXII of the GATT 1994 and the corresponding provisions in the SPS Agreement, TBT Agreement and the Agreement on Agriculture. Canada alleges violation of Articles 2, 3 and 5 of the SPS Agreement; Article III or XI of the GATT 1994 ; Article 2 of the TBT Agreement; and Article 4 of the Agreement on Agriculture.
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.
Panel and Appellate Body proceedings
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.
On 18 August 1997, the panel report was circulated to Members. The panel found that the European Communities' 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 DS26. 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.
At its meeting on 13 February 1998, the DSB adopted the Appellate Body report and the panel report, as modified by the Appellate Body.
Reasonable period of time
On 8 April 1998, Canada 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, Canada, 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 CAD 75 million. The European Communities, pursuant to Article 22.6 of the DSU, requested arbitration on the level of suspension of concessions requested by Canada. The DSB referred the issue of the level of suspension to the original panel for arbitration.
The Decision of the Arbitrators was circulated to Members on 12 July 1999. The Arbitrators determined the level of nullification suffered by Canada to be equal to CAD 11.3 million. At its meeting on 26 July 1999, the DSB authorized the suspension of concessions to the European Communities by Canada in the amount determined by the Arbitrators as being equivalent to the level of nullification suffered by Canada.
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 Canada ; 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 Canada in accordance with the provisions of Article 22.8 of the DSU. Canada said that while his country was prepared to discuss this matter further with the European Communitis, 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 European Communities. The European Communities responded that on the basis of the negative position expressed by 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 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; Canada 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 Canada. Canada stated that, although at the 7 November DSB meeting, Canada had put forward a suggestion for bilateral discussions concerning the justification for the European Communities’ position regarding its compliance with the WTO ruling, the European Communities had not responded to this suggestion; it was up to the European Communities to establish that it had complied with the WTO ruling; Canada continued to be open to discussions with the European Communities 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.
On 8 November 2004, the European Communities filed a separate request for consultations with Canada asserting that Canada should have removed its retaliatory measures insofar as the European Communities had removed the measures found to be inconsistent (see DS321).
On 22 December 2008, the European Communities requested consultations under Article 21.5 of the DSU. On 16 January 2009, Australia, New Zealand and the United States requested to join the consultations. Subsequently, Canada informed the DSB that it had accepted the requests of Australia, New Zealand and the United States to join the consultations.
Implementation of adopted reports
On 17 March 2011, the European Union and Canada 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 Canada to certain products of the European Union, agreed by the United States and the European Commission on 17 March 2011, in relation to this dispute.