TCS Daily

Where's the Beef?

By Michael Standaert - October 3, 2002 12:00 AM

The longest-running trade dispute between the United States and the European Union - a battle over hormone-treated beef - has been overshadowed by other transatlantic issues recently. While agriculture subsidies and trade distortion are on the front-burner, the beef battle drags on almost unnoticed.

It is worth looking at the history of the fight. On January 1, 1989, the EU banned imports of meat treated with six growth hormones (three natural - estradiol, progesterone and testosterone; and three synthetic - trenbolone acetate, zeranol, melengestrol acetate or MGA) which had been tested by the U.S. Food and Drug Administration since the 1950s, and have since been shown to reveal no harm to humans assuming normal consumption levels.

In 1996 both Canada and the United States launched dispute settlement panels against the EU action at the World Trade Organization. After numerous decisions in favor of the US and Canada, the EU was given a four-year period to come into compliance - two years for risk assessment and two to complete legislative procedures. The WTO arbitrator cut that to 15 months and that deadline expired in May 1999.

In July of that year, the U.S. suspended concessions and decided to impose 100 percent duties on certain products to the amount of $116.8 million per year. Ever since, various proposals have died in the European Parliament about which hormones to ban, which to seek more scientific information on, and which to allow. Basically nothing has changed in the dispute since day one. The beef is still banned and the duties remain.

The chief agricultural negotiator in the U.S. Trade Representative's office, Allen Johnson, made a few passing remarks about the dispute in Brussels before heading to negotiations in Geneva recently, but nothing to show there had been much room to maneuver on the issue. "We need to have a good faith effort to bridge the gaps on these issues," Johnson said. "What is currently being done in Europe is illegal under the WTO ruling. We have a lot of work to do, and the [U.S./EU] relationship could use some good news."

The EU position on hormones dates back to 1981. when a directive (81/602) was passed effectively banning the use of growth hormones. Due to the divergent positions on risk and precaution between the U.S. and EU, there does not seem to be an easy way to "bridge the gaps" as Johnson would like to do. The philosophies are so different and fundamental, with the U.S. on the side of risk backed by what it sees at the appropriate scientific evidence, and the EU on the side of the precautionary principle. This divergence is also at the heart of other disputes such as GMOs and their use in food products and agriculture.

With such a vast difference in the basic philosophy toward the use of science to enhance food products, crops, and other agriculture, the outlook on whether hormone treated beef from the U.S. will ever be allowed in the EU is fairly dismal. Also, with other recent scares about growth hormones striking fear into European consumers, any move toward lifting the ban without a massive information campaign to dissuade those fears and total reversal of philosophy over the precautionary principle would be political suicide for most center-left and left-wing European politicians. If it has taken over a decade to get to the point we are at now, it could take a decade to get out of it.

The major hurdle ahead is whether the U.S. will take the EU to the WTO over the GMOs in food dispute. Perhaps if the EU is forced through the process and ruled against again in the WTO the philosophy of erring on the side of precaution will collapse. But that could take another 10 or 20 years to play out.



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