EU - US provisional agreement in beef dispute - briefing

07 May 2009
by eub2 -- last modified 07 May 2009

Today the European Commission and the United States agreed in principle on a way forward in the long-running dispute over hormone-treated beef.

EU Trade Commissioner Catherine Ashton and United States Trade Representative Ron Kirk issued the following statement after the call:

“Following a very good discussion today, we have reached an understanding that provides a pragmatic way forward in the long-running beef dispute. An agreement is in our mutual interest, and we will now discuss this with our respective stakeholders and constituencies in an effort to finalize it as soon as possible. Reaching an agreement on this issue will be a clear sign of our commitment to working through -- and, where possible, resolving -- the bilateral disputes in our trade relationship. We will continue our close cooperation on other outstanding issues in the future.”

Details of the agreement

Under the terms of the agreement, the U.S. would agree not to impose new so-called 'Carousel' sanctions which were due to come into force this week and would affect a range of EU products including Italian mineral water, Roquefort cheese and a number of other food products. The U.S. would maintain the currently reduced level of existing sanctions against EU products (68% or USD 79 million lower), and would eliminate all sanctions beginning in the fourth year of the agreement. In return, the agreement would provide additional duty-free access to the EU market for the type of high quality beef traditionally exported by the U.S. and produced from cattle that have not been treated with growth-promoting hormones. The agreement would provide additional duty-free access for 20,000 tons of beef in the first three years, increasing to 45,000 tons beginning in the fourth year. Before the end of the four-year period, the two sides will seek to agree on the conditions for the settlement applicable beyond that period.

Background – History of the dispute

The EU ban on hormone treated beef has been in place since the early 1980s.

The US and Canada challenged the EU's non-discriminatory ban at the WTO in 1996. The WTO Appellate Body found in 1998 that the rules were not consistent with one provision of the WTO Agreement on Sanitary and Phytosanitary Measures and in 1999 the US and Canada were given permission to impose sanctions in the form of tariffs to the value of EUR 116.8bn.

In October 2003 a new EC Hormones Directive was issued, based on thorough scientific grounding. One hormone (oestradiol 17) has been found to cause and promote cancer and harms genes and is subject to a permanent ban. The EU has invoked the precautionary principle in relation to five further hormones and these remain under review. In 2007 the European Food Safety Authority's (EFSA) said there were no grounds to call for a revision of earlier risk assessments which found risks to human health from residues in hormone treated meat.

The US and Canada rejected the evidence underpinning the 2003 Hormones directive and maintained their sanctions. In 2004 the EU challenged these sanctions. In November 2008, the Appellate Body ruled that it was unable to complete the analysis of the WTO-compatibility of the EU legislation due to mistakes made by the Panel in gathering factual information, and consequently did not give a definitive view on the legality of the US and Canadian sanctions. It did however clarify certain aspects of the SPS agreement. Furthermore, it recommended that the EU, US and Canada start compliance proceedings to see if the current EU legislation remedied the breaches of WTO had identified in 1998, and as a result the US and Canada should end their sanctions.

Following that recommendation, on 22 December 2008 the EU asked for consultations at the WTO in order to examine the legality of the EU restrictions on hormone-treated beef.

Source: European Commission