The dispute in this case was an issue with the beef hormone trade which involved
six hormones that were legally allowed to be used in America but were banned in
the European Communities (EC). This was due to the public anxiety that was
caused by these growth promoting hormones, of which three were naturally
produced while the other three were synthetic hormones1, which were suspected to
be affecting peoples health in European consumers leading it to release
Directives for the same, prohibiting the use of beef that was produced with the
administration of growth hormones, including import of the same from other
These hormones were only allowed in instances of therapeutic reasons or if
certified by a doctor2. This started with hormonal issues and negative health
effects being seen in children suspected to be coming from poultry with these
growth promotions seen in veal productions in France and even Italy, leading to
the EC Agriculture Ministers adopting a declaration in favour of this ban which
then led to an European Commission Directive being passed in 1981 banning both
the production and the import of the meat that has been treated with these
growth altering hormones which was ultimately implemented in 1989.
In response to this ban which caused the exports from USA and Canada of these
beef products to drop drastically, US invoked its GATT dispute settlement
(General Agreement on Tariffs and Trade) in 1987 under the TBT Agreement i.e.
Tokyo Round's Technical Barriers to Trade Agreement where the consultation
between both the countries didn't succeed in resolving this dispute 3.
This included America supporting its claim by stating that there was lack of
supporting scientific information for the ban for which a technical Experts
Group (TEG) should be formed under Art 14.5 of the TBT Agreement and even
included threats to implement more tariff on EU imports to which the EC
responded that they had the right to exercise a zero risk approach
which is precautionary which was supported with the consumer opposition
throughout the country. After the ban in 1989, United States implemented
retaliatory tariffs (100% ad valorem) on selected imports from EU which remained
in effect until 1996.
1995 led to a new WTO being set up which involved stricter rules for trade
restrictions for sanitary and phytosanitary (SPS) reasons along with a new
mechanism to solve these disputes. This WTO SPS Agreement allowed trade barriers
when it came to a country supposing a threat with the imports supported with
scientific reasons but also that these trade measures should be temporary.
This was followed by both USA and Canada applying for WTO dispute panels in
19964 to settle the EU hormone dispute after which US even stopped its
retaliatory measures. In 1997 the WTO panel ruled in concurrence with USA
stating that this ban was not taking in regards its obligations under the SPS
Agreement. After which the EU applied for an appeal against the same dealing
with certain legal interpretations that were found earlier and the same was
under Art 16 of the DSU which led to it being submitted for review with the
Appellate Body in November 1997 followed by its decision in February 19985.
The main question in the case was whether the steps that were taken by the EC of
banning the import of meat from animals with hormones affecting a trade loss
with other countries, were against the trade rules set under GATT and the SPS
The contested points I have brought up are:
Burden of Proof under SPS Agreement
- Whether multiple individual experts can be referred to instead of panel
of experts under DSU
- Whether defense under Article XX(b) of GATT can be used by EC along with
specific obligations under Article III of GATT
- Whether the defense of precautionary principle can be used here under
- Whether compliance of International standards under SPS has been
followed by EC here.
- Where does the relationship between SPS and GATT come to play here
- DSU i.e. Understanding on Rules and Procedures Governing the Settlement
of Disputes - Articles 7, 13.2, 15, 21.3.
- GATT – Articles III and XX(b) and I(1). 3) SPS Agreement – Articles 3
- Dispute Settlement Understanding (DSU):
Dispute Settlement Understanding deals with issues by resorting to solutions
that are acceptable and better for both the parties by trying to resolve it
mutually6 first rather than relying on the decision taken by a panel. The
same was done in this case initially when both EC and USA consulted each
other to reach to an understanding under Art 4 but failed to do so and
consequently went to the panel. The question was as to decided the
reasonable amount of time 7 for the implementation of what the DSB
suggested and for the same, under Art 21.3, the parties even resorted to
Arbitration which concluded that the time for its implementation should be
15 months from when the panel or appellate body report has been adopted 8.
In this case, after hearing both the parties, in accordance with Article 15
of DSU, the panel has presented an interim report. Following the report,
both the parties can submit a written report focusing on the specific parts
of the report they have issues with after which they shall sit again with
both the parties to discuss that identified issues that were pointed out in
the written reply following which a final report shall be made and given to
the parties. This process was followed in this case but there was an issue
raised with respect to Article 15 itself. The EC said that the due process
as given under the same limits them to discuss and change only the issues
that were raised from the interim review while panel didn't agree to the
An aspect of the DSU that has been raised in the Appellate body report is
Art 13.2 of the DSU which allows the panel to consult an expert for the
dispute. Considering the question here was scientific i.e. are hormone given
meat bad for health, with respect to the rules laid under Appendix 4, the
panel resorted to the same. But an issue arose as to under Article 15 is
this only limited to a panel of experts as given under the scheme or can
individual experts be appointed to do the same.
The panel decided on the fact that the Articles didn't stop them from
consulting multiple individual experts10, with the consent and knowledge of
both the parties and the same was done here without there being any
inconsistency with any other provisions.
- The General Agreement on Tariffs and Trade (GATT):
Article III: 4
Claims of US- US brought up Article III:4 of GATT stating that the EC
measures were not in accordance with the same as it didn't allow for them to
sell and import meat unlike the same domestic products11. This meant that
they discriminated from the domestic production of the like product and
the same didn't consist of any reasonable purpose to do the same.
Claims of EC- EC responded to the alleged violation of the above Article by
stating that the prohibited meat was checked for growth promoting hormones,
and thus in the presence of the same they cannot be found to
be like the other meat found domestically. In case of a violation it
resorted to Article XX(b) which allowed for them to take up measures to
protect their health.
- Article XX(b)
Claims of EC- The EC didn't indulge a lot in GATT except for invoking
Article XX(b) as a defence thus when it came to Article I and III of GATT,
the panel found that finding inconsistencies in those wont be justifiable as
also they had already found inconsistencies with respect to SPS Agreement.
Claims of US- Regarding Article XX(b), United States said that EC cannot
resort to the same as a defense as it had not shown any proof of its issues
on health grounds and that it was an arbitrary discrimination or a
disguised restriction on international trade12.
- Article III:I
Claims of US- One of the important claims of USA against EC was that of
disguised protectionism that was being used through these measures. The
same was claimed for with respect to Article III:I of GATT which stated that
to protect a domestic production, internal measures cannot be applied 13.
Claims of EC- To the above argument, EC claimed that a very narrow approach
was taken in all these aspects and that the measures taken by them werent
for protection of their products but to protect human health in life in
general and thus isn't in violation of the above.
- Article I:1
The discrimination that is covered under this was brought up US which held
that they weren't given the same opportunity as other countries with regards
to the like product as produced by others to which EC stated this
discrimination didn't differentiate with the countries producing these
products but with goods of the same category, which also applied to every
member the same.
- Relation between GATT and SPS Agreement:
The main contention here was with regard to the primacy of the GATT over the
SPS agreement and the EC argued that SPS was a mere clarificatory agreement
to the GATT on matters of sanitary measures which was evident from the last
recital of the preamble to the SPS agreement which clearly states that:
desiring therefore to elaborate rules for the application of the provisions
of GATT 1994 which relate to the use of sanitary measures, in particular the
provisions of Article XX(b), and that to establish a violation under SPS
agreement, there needs to be established a violation of articles of GATT
The US on the other hand argued that the SPS agreement enacted
primarily to deal with issues relating to sanitary measures which directly
or indirectly affects international trade14, thus it is the SPS agreement
that is applied when a violation pertaining to a sanitary measure is brought
before the Panel and not GATT since it's a general agreement.
The Panel in
this case sided with the interpretation of the United States and also
concluded on the point that the SPS agreement contains no explicit
requirement of a prior violation of GATT to make the SPS agreement
- SPS Agreement:
Burden of Proof- The first issue that arose out of this agreement was the
question of Burden of Proof. While the US stated that EC had to bear the burden
of proof of its contention that the meat being imported with hormones would
affect health of its consumers with scientific evidence. This wasn't agreed with
initially by the panel which asked the party challenging the measures i.e. US to
take the burden of proof as generally the complainant party that has called for
the panel bears the burden15 to prove the violation of WTO rules or other
agreements but later changed it to EC since they were evidently violating the
Article 3.1- Article 3.1 of the SPS Agreement deals with International Standards
that the measures should be based on. These were to take inference from the
standards mentioned by the Codex Alimentarius
Commission 16 with no other such conditions. Going through the same its found
that there were international standards for five out of six hormones that were
in question that were set and thus the measures need to be based on them in
accordance with Article 3.1.
When it came to the measure without a set standard, it has to comply with other
provisions of this agreement. Thus it was found that the measures resulted in a
different level of sanitary protection and thus are not based on these
international standards. This was later rejected by the Appellate Body which
stated that based on didn't necessarily mean must conform to such standards
- Article 5- Articles 5.1 and 5.2 came into question in this case as they
required for the measures that were implemented by the members to be based
on assessment of risk with the help of scientific evidence. Violation of the
same would also lead to violating Article 3.3 of SPS which allows for
measures to be of a higher level of protection than the set international
standards but only with proper scientific evidence.
Similarly the necessity of scientific evidence to support measures taken to
protect human, plant or animal life is also brought up in Article 2.2.
Even though Article 5 allows for sanitary protection measures to be taken by the
members with proper evidence, it has to avoid the issue of discrimination and
restriction on internation trade that is disguised as a measure.
Thus when implementing Art 5.2, its read with Articles 5.4, 5.5 and 5.6 that
deal with the risk management decision to minimize trade restricitons and issues
while also putting necessary amount of protection.
This is mainly to avoid the unnecessary and arbitrary distinctions in trade
restrictions or any kind of discrimination. As a result EC did put out its
scientific reports to tests it had conducted to prove its necessity for these
restrictions but there wasn't any set procedure to base of its risk assessment
however the party had to submit evidence for the same. What was an essential
requirement in the same was that the conclusion that is reached to with the
scientific evidence are reflected in these measures taken up by the member and
is in concurrence with the assessments and evidences for these measures17.
Another method of adopting these measures is to adopt the precautionary
principle under Article 5.7 of SPS which is a necessary part of international
law but it doesn't allow for it to override Articles 5.1 and 5.2 which
necessitates for their to be an assessment of risk and evidence to support these
Finally it was held that EC violates these Articles stating that the measures
taken werent based on risk assessment and also resulted in a disguised
restriction on international trade and since it violated these specific
conditions, it need not look at other obligations and provisions. This was
however later reversed by the Appellate Body stating that 5.1 only required
there to be a rational relation
between these measures and risk
Findings By The Appellate Body (Reversed)
As mentioned previously, there were instances when the Appellate body reversed
the findings in the panel body report. It found that the case should have only
brought the buren on EC to bring through evidence for their measures after US
first should have made a prima facie case with the evidence of provisions of SPS
Agreement being violated.
It also reversed the interpretation of based on
in Article 3 and stated
that it doesn't mean conform to
and thus the measure that is to be
based on international standards need not conform to the same under Article 3.2.
It also reversed the part where the panel held that there needs to be a specific
level of risk that is to be shown with proper evidence when taking risk
assessment into account, stating otherwise that such an imposition of a certain
standard of requirement for the assessment is not given under the SPS Agreement
and thus cannot be made for them to compulsively follow 19.
Over many years, this dispute went unresolved with EU maintaining its ban on
beef with hormones from US and Canada while the latter continued with their
retaliatory measures. Alongside, EU also went along with its research and
studies to prove the ban and in 2003 with a study proving its contentions right
in line with its obligations, asked WTO to proceed with US and Canada stopping
In 2005, they started with new proceedings and in 2009 it was
held that all parties were at wrong here and with new hearings and proceedings,
in 2008 decided to allow for EU to continue with its ban and USA to continue its
measures which led to an even bigger mess.
This dispute persisted for more than two decades and even though it was evident
that the WTO rulings didn't help with the dispute being resolved despite of
there being the SPS Agreement and the Dispute Settlement Mechanism but the
general principles of these rules were complied with when it came to both the
The only issues that came up in my eyes were with respect to different approaches
being taken to these rules. For example, the question of whether multiple
individual experts can be used in place of panel of experts if it deems to be a
better option and even though it was uncontested from both the parties, it was
still brought up as it might have been a very wide approach to the rule.
But the fact is that these issues will always persist as interpretation of these
rules can be subjective to an extent, we just have to make sure no other
obligation is violated and no party has a conflict of interest with the same.
When it came to the SPS Agreement, its main objective was to allow member
countries to set its safety standards, and they can be stricter than the
international standards but they have to be justified with reports of evidence
And even though EU could show its consumers completely banning beef with
hormones, lack of studies always questioned it to be an act of protectionism.
This seems justified as lack of evidence can lead for people to think this is
just another negative impact on trade and this is only because the existence of
GATT and it leading to a panel adjudicating the matter only seems fair and is
only done after consultations with both the parties.
Even though I agree with most of the provisions and its application by the
Appellate body like the part with international standards not having to
and that there should be a rational relation
the risk assessment and the measures and that there was no discrimination
between countries and only of the products of the same catrgory which wasn't
prohibited, this wide approach might cause some issues as well which in my eyes
was the part of burden of proof.
Even though the appellate body overturned the ruling that US had the burden of
proof and found that EC had violated and thus had the burden of proof.
Considering previous cases and other instances of the application of this common
law, to me the burden should fall on US considering that is the member which
brought up action against EC and thus should make a case as to why WTO should go
ahead with its proceedings 20.
Thus even though EC started the dispute with its ban, the retaliatory measures
taken up by USA didn't really help and in turn introduced further trade issues
and restrictions. Thus it isnt only a model case for when it came to economic
losses and trade distortions but also how all the dispute resolving mechanisms
failed, in my view, despite of all the Agreements.
- See Panel Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/R/USA, August 1997, pg. 4.
- Ibid, pg. 8-9
- Ibid, pg .11
- Ibid pg. 12
- See Appellate Body Report, EC Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/AB/R, January 1998, pg. 3-4
- Article 3.7 DSU
- EC Measures Concerning Meat and Meat Products (Hormones)- Arbitration
under Article 21.3(c) of DSU, WT/DS26/15,WT/DS48/13
- Ibid, pg. 17-20
- Ibid, Para 7.6
- Ibid, Para 8.7
- Ibid, Para 3.3
- Ibid, Para 3.3
- Ibid, Para 4.242
- Ibid, Para 4.5
- Ibid, Para 8.55
- Ibid, Para 8.69.
- Ibid, Para 8.111
- Ibid, Para 8.157
- Ibid, Para 177