Canada, US-EU Beef Hormone Dispute
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C Canada, US-EU Beef Hormone highlights the challenges of dealing with con- Dispute sumer suspicions of a technology to all intents and purposes deemed “safe,” the conflict between Jill E. Hobbs a precautionary principle approach to technology Bioresource Policy, Business and Economics, versus a science-based risk assessment approach, University of Saskatchewan, Saskatoon, and the challenges for the international trade SK, Canada architecture in distinguishing between policies motivated by nefarious protectionism and genu- ine consumer concerns. At the heart of the ethical Synonyms dilemma posed by the US-EU beef hormone dis- pute is the reality that the World Trade Organi- Consumer preferences; Growth-promoting hor- zation (WTO) was not set up to deal with mones; Labeling; Precautionary principle; Risk consumers’ demands for protection (who are usu- assessment; Sanitary and Phytosanitary Agree- ally expected to benefit from trade liberaliza- ment; WTO dispute panel tion) – its primary focus traditionally has been demands for protection from domestic producers. The beef hormone dispute proved to be Introduction a challenging first test of the WTO dispute settle- ment mechanism. Citing public anxieties about the use of hormones This essay outlines the origins of the US-EU in livestock production in the 1980s, the Euro- beef hormone dispute and traces the turbulent pean Union (EU) banned the nontherapeutic use history of the dispute through various WTO rul- of a number of synthetic and naturally occurring ings, responses, and outcomes. The chief argu- hormones in domestic beef production and sub- ments put forth by the EU in defense of its beef sequently banned imports of beef produced using import ban and by the USA and Canada in chal- these productivity-enhancing hormones. The US lenging the import ban are examined. The ethical and other beef-exporting nations such as Canada issues raised by the trade dispute and potential argued that the import ban was not justified on solutions are explored with reference to key lit- scientific grounds and was instead disguised pro- erature on the topic. The essay concludes by tectionism. Thus began a long-running and often discussing the implications for trade policy of acrimonious trade dispute between the EU and the clash between a scientific rationality and the USA along with Canada. The trade dispute a social rationality approach to new technologies. P.B. Thompson, D.M. Kaplan (eds.), Encyclopedia of Food and Agricultural Ethics, DOI 10.1007/978-94-007-0929-4, # Springer Science+Business Media Dordrecht 2014 C 274 Canada, US-EU Beef Hormone Dispute Origins of the Beef Hormone Dispute that an overwhelming scientific consensus existed on the safety of beef produced using Growth-promoting hormones are commonly used approved growth hormones. In addition to almost internationally to enhance the production effi- 50 years of scientific study, it was argued that the ciency of livestock. The beef hormone trade dis- long-term use of hormones in beef production pute revolved around six hormones that were had been widespread in a number of countries licensed for use in North America but banned for decades with no known food safety or health in the European Union: estradiol-17b (also consequences. In the view of the USA and called oestradiol-17), progesterone, testosterone, Canada, the absence of a scientific basis for the melengestrol acetate, trenbolone acetate, and import ban pointed toward disguised protection- zeranol. The first three are produced naturally in ism as the true underlying motivation. Beef pro- animals and humans, while the others are syn- ducers within the EU were placed at a significant thetic hormones (Kerr and Hobbs 2005). The competitive disadvantage vis-a`-vis producers in three naturally occurring hormones are permitted the USA and Canada since they no longer had for animal therapeutic purposes in the EU if used access to the productivity-enhancing hormones under veterinary supervision. as an input to beef production. Furthermore, The EU hormone ban arose from growing there were suspicions that the domestic ban on public anxieties over the use of hormones in hormone use in the EU may also have been moti- livestock production in the late 1970s and early vated by a desire to reduce the increasingly bur- 1980s (Roberts 1998). In the late 1970s, Italian densome costs of the European Common schoolchildren began exhibiting signs of prema- Agricultural Policy (CAP) by lowering produc- ture development which was believed to be tivity and thus reducing aggregate beef supply linked to the use of illegal growth hormones in (Roberts 1998). veal or poultry served in school lunches. A public For its part, the EU maintained that an appro- furore ensued, with further investigations discov- priate level of protection was a societal value ering residues of an illegal growth promotant in judgment and that it had the right to adopt samples of veal-based baby food sold in Italy. a precautionary approach seeking a “zero risk” These widely publicized “hormone scandals” level if it so chose. It claimed that scientific prompted veal boycotts across a number of Euro- questions still remained regarding the long-term pean countries and led to official proposals to ban effects of hormone use, as well as possible syn- the use of growth-promoting hormones in cattle ergistic effects with hormones taken for medical production. The first European Commission purposes. Apparent widespread consumer oppo- Directive partially banning the use of growth sition to the use of the technology also factored hormones was passed in 1981, with a stronger into the EU’s position, creating a political chal- ban on their use both domestically and in lenge for decision makers. The tendency for pol- imported beef adopted in 1985 – subsequently iticians to exercise “political precaution” when annulled following a European Court of Justice faced with public pressure to act even when the challenge – and then readopted in 1988 (Roberts scientific evidence suggests little evidence of 1998). a problem has been recognized in other contexts Following the trade ban, exports of beef prod- (see Kerr 2009). ucts from the USA and Canada to Europe fell precipitously, with US beef exports falling from 76,000 t in 1982 to just 4,500 t by 1990 (Kastner The WTO Dispute Settlement and Pawsey 2002). The value of lost exports from Mechanism the USA and Canada has been estimated at over 100 million dollars (Roberts 1998). The USA, Protracted bilateral negotiations between the Canada, and other beef-exporting nations parties failed to resolve the dispute, and in the objected to the ban on imports of beef, arguing late 1980s, the USA and the EU entered a period Canada, US-EU Beef Hormone Dispute 275 C of retaliatory and counter-retaliatory trade mea- with the ruling, a protracted period of negotiation sures. The existing mechanisms within the Gen- ensued between the EU and the USA and Canada eral Agreement on Tariffs and Trade (GATT) regarding the time frame for implementation, architecture proved unable to resolve this dispute. with the matter eventually being referred to In 1995, however, the new World Trade Organi- a WTO arbitrator. Ultimately the period of time zation (WTO) came into existence, bringing with required for the EU to come into compliance it strengthened trade rules around the use of expired in May 1999 at which point the EU indi- C trade restrictions for sanitary and phytosanitary cated that it would not comply with the WTO reasons, as well as a new dispute settlement ruling. This fraught first test of the newly mechanism. established WTO dispute panel settlement mech- The WTO Sanitary and Phytosanitary (SPS) anism threatened to undermine the credibility of Agreement allows the imposition of trade barriers the entire WTO dispute settlement architecture in instances where a country determines that with repercussions that reverberated far beyond imports may pose a threat to plant, animal, or the economic significance of the loss in trade human health. An SPS trade measure, however, represented by the beef hormone dispute itself. must have a sound scientific rationale. In the Refusal to comply with a dispute panel ruling, cases of suspected SPS hazards, where a country while expected to be rare, had nevertheless been claims there is insufficient information for a full allowed for by the framers of the WTO. A coun- risk assessment, the SPS Agreement explicitly try that chooses not to comply can either offer states that precautionary trade measures should compensation to the affected party (or parties) or be temporary and any country invoking SPS mea- accept retaliation against alternative products up sures should actively seek to fill in the gap in to the value of the trade affected by the “illegal” scientific information (Kerr and Hobbs 2005). trade measure. As Kerr and Hobbs (2005) indi- The SPS Agreement defers to various interna- cate, countries rarely choose the compensation tional scientific bodies for a scientific consensus option because it is set to the gross value of the on acceptable levels of risk, including the Codex trade loss, while retaliation only results in a net Alimentarius Commission in the case of food. In value of trade loss since the goods retaliated 1995 a Codex Committee voted narrowly in favor against can find alternative markets. The EU of standards governing the continued use of five opted for retaliation. Consequently the USA and of the six hormones (Kastner and Pawsey 2002). Canada imposed 100 % ad valorem tariffs on The USA and Canada argued that the EU beef a range of agricultural commodities concentrated hormone ban was in violation of the SPS Agree- on politically influential countries in the EU: ment given the lack of scientific evidence of primarily against exports from France, Germany, a threat to health, and in 1996 both the USA and Italy, and Denmark (the latter being a large live- Canada applied for WTO dispute panels to adju- stock exporter).