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WTO vindicates sanctions in the EU-hormone dispute

00:00AM Oct 17, 2008

The World Trade Organization (WTO) Appellate Body has concluded that the United States did not violate its WTO obligations by maintaining additional duties on certain EU products after the EU claimed it had come into compliance by amending its ban on beef from animals treated with growth-promoting hormones.

The Appellate Body report is significant for the WTO dispute settlement system as a whole, according to U.S. Trade Representative Susan C. Schwab. "The Appellate Body's report confirms that WTO Members that are subject to additional duties for failing to bring themselves into compliance with the WTO's rulings and recommendations must do more than simply claim compliance in order to obtain relief from such duties. We very much welcome these conclusions by the Appellate Body.”

The dispute over the EU ban on beef from animals administered certain growth promoting hormones dates back to 1996 and is one of the longest-standing disputes in the history of the WTO. In 1999, after the United States had successfully challenged the ban in front of a WTO panel and the Appellate Body, the United States obtained authorization from the WTO to suspend concessions and impose additional duties on certain EU products. Those duties are intended to restore the balance of trade concessions under the WTO and to induce compliance by the EU with the WTO's rulings and recommendations in the original EC – Hormones dispute. The EU amended its ban in 2003, claiming that the ban now complied with WTO requirements, and challenged the continued application of additional duties by the United States. In light of today's report, there is no need to remove those duties.

"This report validates the additional duties the United States imposes on certain EU products in order to balance the trade disparity caused by the EU ban on hormone-treated beef.  The ban, which has been in place for more than 20 years, is scientifically unjustified and fails to satisfy the requirements of the WTO agreement on Sanitary and Phytosanitary Measures," Andy Groseta, rancher from Cottonwood, Arizona, and president of the National Cattlemen's Beef Association said in a statement.

"The EU claims that amendments made to the ban in 2003 bring them into compliance with WTO trade requirements.  However, the ban continues to prohibit beef treated with hormones, pending the availability of further scientific evidence," he said. "The EU is an important market for U.S. beef products, having rapidly emerged as one of the world's largest net beef importing countries in recent years after being a net exporter earlier this decade. Despite this unscientific trade restriction, the EU will be a key market for in 2008 with U.S. beef exports projected to exceed $100 million."