WTO Finds U.S. Trade Damaged by EU Beef Import Ban

WTO arbitrators found today that the European Union's ban on U.S. beef and beef products has resulted in lost annual U.S. exports of beef to the EU in the amount of 116.8 million. The EU's ban, which covers beef and beef products from animals treated with growth hormones, was previously found to be unjustified under WTO rules. Decades of scientific research—by both U.S. food safety regulators and international bodies such as the World Health Organization—have proven the safety of the growth hormones used in U.S. beef production.

"The arbitrator's decision today confirms that under WTO rules, the EU must pay a price for failing to comply with its WTO obligations," said United States Trade Representative Charlene Barshefsky. "The EU's WTO-inconsistent ban on U.S. beef is harming U.S. farmers and processors, and is denying EU consumers access to the world's highest quality beef. The EU must understand that as a result of its failure to comply with its WTO obligations, the United States will act firmly and swiftly under its WTO rights to sharply raise tariffs on imports from the EU in an amount equivalent to the trade damage. Despite taking this action, the United States remains willing—as it always has been—to negotiate a resolution of the issue with the EU."

Ambassador Barshefsky further stated that ;This is the second time in the last few months that we have had to exercise our WTO rights to raise tariffs on EU goods. First in the bananas case, and now in the beef hormones case, the EU has refused to comply with its WTO obligations, even after WTO dispute settlement resulted in formal findings that EU actions were WTO-inconsistent. I would urge the EU to reconsider its damaging actions and to demonstrate a real commitment to the rules-based multilateral trading system."

Pursuant to the arbitrators' decision, the United States will exercise its WTO rights by imposing 100 percent tariffs on a list of EU products with an annual trade value of 116.8 million. The list of products and other details regarding the tariff increases will be announced in the near future.

Background This trade dispute over the EU's beef policies dates back to the 1980s. In December 1985, the EU adopted a directive on livestock production restricting the use of natural hormones to therapeutic purposes, banning the use of synthetic hormones, and prohibiting imports of animals, and meat from animals, to which hormones had been administered. The EU adopted this policy even though the safety of consuming beef from cattle treated with certain hormones has been thoroughly researched since the 1 950s. On all occasions of FDA testing, the six hormones subject to this trade dispute have always been found to be safe. The clear international scientific consensus is that these approved and licensed products are safe when used in accordance with good veterinary practices. Even the EU's own scientists have agreed with these findings. At present, U.S. beef is shipped to 138 countries.

That EU's 1985 directive was later declared invalid by the European Court of Justice on procedural grounds and had to be re-adopted by the Council, unchanged, in 1988 （"the Hormone Directive"）. These measures became effective January 1, 1989, notwithstanding U.S. attempts to resolve this issue bilaterally and multilaterally, including through dispute settlement under the General Agreement on Tariffs and Trade （GATT）.

On December 24, 1987, the President of the United States announced an increase in duties on selected European products in response to the Hormone Directive and related measures, but immediately suspended this action to promote a negotiated solution of the issue. The USTR enacted the increase in duties in January 1989 when the EU began implementing the hormone ban against imports from the United States. The USTR subsequently modified the application of increased duties on a number of occasions. During the early 1 990s, the United States continued to encourage resolution of this dispute and worked in the FAQ/WHO Codex Alimentarius to develop principles that reinforce the pre-eminent role of science in establishing high food safety standards.

Following entry into force of the WTO Agreement on the Application of Sanitary and Phytosanitary Measures （"SPS Agreement"） on January 1, 1995, the United States and, later, Canada, proceeded with formal WTO dispute settlement procedures against the hormone ban. On May 20, 1996, the WTO's Dispute Settlement Body （"DSB"） established a dispute settlement panel （"the WTO panel"） to examine the consistency of the EU's hormone ban with its WTO obligations. （Prior to the establishment of the WTO panel, the EU replaced the Hormone Directive with another directive that re-codified and expanded the hormone ban.）

On August 18, 1997, the WTO panel issued its report, finding that the hormone ban is not based on scientific evidence, a risk assessment, or relevant international standards in contravention of the EU's obligations under the SPS Agreement. The Appellate Body issued its report on January 16, 1998 affirming that the hormone ban is not consistent with the EU's obligations under the SPS Agreement. On February 13, 1998 meeting, the DSB adopted the Panel and Appellate Body reports on hormones.

The EU subsequently requested four years to implement the DSB recommendations and rulings. An Arbitrator determined that the reasonable period of time for implementation was fifteen months, and would expire on May 13, 1999.

The EU took no actions to implement the DSB recommendations and rulings by the May 13, 1999 deadline. Accordingly, on May 17, 1999, the United States exercised its WTO rights by requesting authorization to suspend tariff concessions on EU goods with an annual trade value equivalent to annual lost exports of U.S. beef, estimated by the United States as equal to $202 million. The EU requested arbitration over the amount of lost U.S. beef exports, arguing that the arbitrators should accept the EU's estimate of $53 million.

The arbitrators issued their report within the time provided under WTO rules, which is 60 days after the May 13, 1999 end of the implementation period.

In addition to determining the level of annual lost U.S. exports of beef to the EU, the arbitrators addressed a procedural claim made by the EU. The EU had argued that the arbitration procedure should include an additional, second stage, in which the arbitrator would evaluate the U.S. list of products subject to higher tariffs. The United States pointed out that such a procedure would be inconsistent with WTO rules and would improperly delay the completion of the arbitration. The arbitrators rejected the EU's procedural argument.

Reading aids and expressions:

1. The EU must understand that as a result of its failure to comply with its WTO obligations, the United States will act firmly and swiftly under its WTO rights to sharply raise tariffs on imports from the EU in an amount equivalent to the trade damage.

在此句中

　　 1） “The EU must understand”是主句

　　 2） “that as a result of … trade damage”是个由“that”引出的宾语从句，其中
　　　　（1） 介词短语“as a result of its failure to comply with its WTO obligations”作状语，表示原因
　　　　（2） 介词短语“under its WTO rights”作状语，表示方式
　　　　（3） 动词不定式“to sharply raise tariffs on imports from the EU in an amount equivalent to the trade damage”作目的状语

2. First in the bananas case, and now in the beef hormones case, the EU has refused to comply with its WTO obligations, even after WTO dispute settlement resulted in formal findings that EU actions were WTO-inconsistent.

在此句中

　　1） “the EU has refused to comply with its WTO obligations”是主句

　　2） “First in the bananas case”和“now in the beef hormones case”是两个介词短语，作地点状语

　 3） “even after WTO … were WTO-inconsistent”是个时间状语从句，其中“that EU actions were WTO-inconsistent”是个同位语从句，说明“findings”的内容。

3. In December 1985, the EU adopted a directive on livestock production restricting the use of natural hormones to therapeutic purposes, banning the use of synthetic hormones, and prohibiting imports of animals, and meat from animals, to which hormones had been administered.

在此句中

　　1） “the EU adopted a directive”是主要部分

　　2） 介词短语“In December 1985”做时间状语

　　3） 介词短语“on livestock production”和现在分词短语“restricting the use of natural hormones to therapeutic purposes”都作定语，修饰名词“directive”

　　4） “banning the use of synthetic hormones”和“prohibiting imports …administered”是两个现在分词短语，作伴随状语，说明和谓语动词“adopted”同时发生的动作；其中“to which hormones had been administered”是个非限制性的定语从句，修饰名词“animals”

4. FAO/WHO Codex Alimentarius 世界粮农组织/世界卫生组织的食品规则：

The Codex Alimentarius is a collection of international food standards that have been adopted by the Codex Alimentarius Commission （CAC）.

Codex Standards cover all the main foods, whether processed, semi-processed or raw. In addition, materials used in the further processing of food products are included to the extent necessary for achieving the principal objectives of the code.

Codex provisions concern the hygienic and nutritional quality of food, including microbiological norms, food additives, pesticide and veterinary drug residues, contaminants, labeling and presentation, and methods of sampling and risk analysis.

The Codex Alimentarius Commission is an intergovernmental body created in 1963 by FAO and WHO to develop food standards, guidelines and related texts such as codes of practice under the Joint FAO/WHO Food Standards Program. Its principle objective is to protect the health of consumers, to facilitate the trade of food by setting international standards on foods （i.e. Codex Standards） and other texts which can be recommended to governments for acceptance, and to promote coordination of all food standards work undertaken by international governmental and non-governmental organizations.

The CAC is open to the governments of all member nations, or associate members of FAO and/or WHO. It currently has 174 Member States.

5. Accordingly, on May 17, 1999, the United States exercised its WTO rights by requesting authorization to suspend tariff concessions on EU goods with an annual trade value equivalent to annual lost exports of U.S. beef, estimated by the United States as equal to $202 million.

在此句中

　　1） “the United States exercised its WTO rights”是主要部分

　　2） “Accordingly”是方式状语

　　3） 介词短语“on May 17, 1999”作时间状语

　　4） 介词短语“by requesting authorization … to $202 million”作方式状语，其中介词短语“with an annual trade value equivalent to annual lost exports of U.S. beef”作定语，修饰名词“tariff concessions”，另外，过去分词短语“estimated by the United States as equal to $202 million”也作定语，修饰名词短语“annual lost exports”

Questions:

1. On what grounds did the European Union ban the imports of beef and beef products from the United States of America?

2. Who proved the safety of the growth hormones used in U.S. beef production?

3. What resulted from the EU ban on U.S. beef and beef products, according to the U.S. trade representative?

4. Why was the United States willing to resolve the trade dispute with the EU through negotiations, while at the same time it intended to sharply raise the tariffs on the imports from the EU?

5. When did the trade dispute start between the U.S. and the E.U. over the beef and beef products?

6. How many countries import beef and beef products from the United States?

7. Why did the United States decide to increase the tariffs on some imports from the E.U.?

8. What did the WTO panel find concerning the EU ban on the imports of U.S. beef and beef products?

9. How did the European Union respond to the WTO's Dispute Settlement Body's recommendations and rulings?

10. What was the United States' loss of beef exports due to the E.U. ban, according to the former's estimate?