The EC has asked both Canada and the US to initiate a compliance procedure to assess WTO consistency of the EC's new measure in the hormone-treated beef case, but both countries indicate that they would rather hold further discussions.
The move comes after months and months of heated debate on this complex and rather convoluted issue. It all began back in January 1998, when the WTO Appellate Body issued a report stating that EU legislation banning the use of certain growth-promoting hormones was not based on a risk assessment as required by the WTO agreement on Sanitary and Phytosanitary measures.
In particular, the Appellate Body found that the scientific material used by the EU was too general in nature, as it did not specifically evaluate the risks arising from hormone residues in meat products.
Following the EC's failure to comply within the prescribed timeframe with the recommendations and rulings of the DSB in this case, the United States and Canada requested and obtained from the DSB the authorisation to suspend concessions to the EC. And in response to that ruling, the EU reviewed the available scientific information and sought new evidence on the risk to human health of hormone residues in meat products.
In 1999, the EU's Scientific Committee on Veterinary Measures relating to Public Health (SCVMPH) concluded that one of the hormones, oestradiol 17a, should be considered a carcinogen. For the other five hormones (testosterone, progesterone, trenbolone acetate, zeranol and melengestrol acetate), the SCVMPH assessment was that the current state of knowledge did not make it possible to give a quantitative estimate of the risk to consumers. On this basis, the Commission made a proposal in 2000 to amend Directive 96/22/EC concerning the prohibition on the use in stockfarming of certain substances having a hormonal or thyrostatic action and of beta-agonists.
The new legislation amends Directive 96/22/EC and confirms the prohibition of substances that have a hormonal action for growth promotion in farm animals. Moreover, it drastically reduces the circumstances under which oestradiol 17a may be administered to food producing animals for purposes other growth promotion.
"The EU has delivered a thorough risk assessment based on current scientific knowledge, fully respecting its international obligations," said health and consumer protection commissioner David Byrne back in October. "Public health and consumer protection are the core of our approach to food safety guided by independent scientific advice."
The EU directive was published in the Official Journal of the European Community on 14 October 2003 and entered into force on the same day. With the publication and entry into force of this Directive, the EC considers that it has now fully implemented the recommendations and rulings of the DSB in the aforementioned dispute. As a consequence, the EC considers that the suspension of concessions to the EC by the United States and Canada in this dispute is no longer justified.
"Today's move shows that we are fully committed to abiding by our WTO obligations," said EU trade commissioner Pascal Lamy in October. "We have worked hard to get this new legislation in place and I now call on the United States and Canada to lift their trade sanctions against the EU."
Which brings us to December's DSB, where a number of issues still clearly need to be hammered out. The EC noted that, at the end of this month, two years will have passed since the expiry of the implementation period. The EC added that persisting inaction of the US had left it no other option than retaliation.
The EC also noted that at the DSB of 7 November 2003, the US and Canada had declared that the EC measures taken to comply with the hormones ruling were still WTO inconsistent. The EC recalled also that the US and Canada had officially stated their intention to maintain their suspension of concessions. As a result, Europe said that Canada and the US should initiate multilateral procedures to determine whether the EC was now in compliance. The EC added that it was ready to discuss more in detail with them how to address this matter appropriately.
Canada said that it was ready to have bilateral discussions with the EC but that it was up to the EC to be in compliance. Canada added that it saw no reason at the moment to remove its sanctions or to move in any other way. The US said that it had always been ready to discuss with the EC any matters regarding its compliance and that it would be pleased to discuss with EC officials any outstanding issues.
It remains to be seen whether this month's DSB successfully draws a line under this trade dispute.