"The Growth Hormones Dispute Between the U.S. and the EC"
"Introduction to American Law"
Professor Lawrence Watters
Université de Lausanne
Verfasser: Sebastian Pawlita
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The question whether our comestibles are actually safe to eat is probably one of the most delicate issues governments can be confronted with. The consumption of food being an indispensable component to life, there will be hardly any other area where consumers are as easily alerted by incidents making the safety of their daily habits doubtful. Extensive constitutional obligations usually bind governments to assure quality of foodstuffs.1 On the other hand, they are compelled under GATT to pursue the goal of liberalizing international trade.2 These two designs are not inherently ad odds, but it is evident that conflicts are sometimes bound to arise: Victuals containing an additive whose use is prohibited in a certain country, but which might be freely employed elsewhere, will not be allowed to be brought into the market of that country. A further intricacy is produced by the fact that measures in the field of consumer protection have the inherent peculiarity of particularly tempting governments to misuse them as a guise for protectionist actions.3 To what extent trade interests on the one hand and health concerns on the other might friction was demonstrated by the dispute pitting the U.S. and Canada against the EC over the residue of growth hormones in beef exported to Europe. The two North American nations held that the prohibition to introduce beef from animals fattened with the help of hormonal growth promoters into the European market violated the EC's responsibilities under the WTO Agreement on Sanitary and Phytosanitary Measures.4 Their complaint being the first case to be decided by WTO dispute settlement under this agreement,5 it lays the foundation for the resolution of future disputes in this sensitive domain.6 This paper will analyse this conflict. After having given an overview of the course of events and the legal background of the discord (II), it will treat - in the light of the case on hand - the restrictions the SPS Agreement imposes on the liberty of governments to ban food additives (III). It will first turn to the question what discretion GATT Members generally enjoy in this sphere (III.1). It will proceed with looking in detail at the principles of the SPS Agreement the hormones decision dealt with (III.2), in particular what scientific requirements are to be met to determine the risk of a substance (III.2 (c) and (d)), and what regime will apply when science reaches its bounds (III.2 (e)). After that, it will examine (with the help of literature already available on these topics) whether measures less onerous on trade than a ban are available (III.2 (f)), and, lastly, what consequences will have to be drawn for the remaining foodstuffs law (III.3). It will conclude with a few remarks on the experimental nature of the case (IV).
II. Background of the Hormones Conflict7
1. Keyword: Hormones
There are both natural and synthetic hormones with growth stimulating character: Estrogen (oestradiol 17-(), progesterone, and testosterone occur endogenously in both humans and bovines. Trenbolone, zeranol and melengestrol acetate (MGA) are produced by chemical synthesis and are foreign to humans and cattle.8 A further synthetic category called "stilbenes" exists which has been, however, taken off the market on both sides of the Atlantic due to the proven cancer-inducing character of its component diethylstilbestrol (DES).9 From the economic angle, the use of growth promoters is highly profitable, as hormone-treated animals reach market weight seventeen days faster than untreated animals and have a higher percentage of lean meat and a lower percentage of fat.10 From the literature accessible to jurists, it is difficult to tell to what degree residues from hormonal growth promoters in foodstuffs might present a risk to the health of consumers. The bulk of scientific experts seems to agree that, at least when it comes to natural hormones, their use in livestock farming will not be harmful. The same is supposed to be true for the three synthetic hormones on condition that "good animal husbandry practice" is observed when they are administered. However, there appears to be general scientific evidence (not focused on the application of hormones in the fattening process) that the consumption of hormones in general increases the risk of developing cancer.11
2. The EC's Ban on the Use of Hormonal Growth Promoters in Livestock Farming
Following a boycott of veal in Italy in the wake of a scandal involving residue of diethylstilbestrol (DES),12 the EC began harmonising previously disparate national legislation in this area in 1981.13 Directive 81/602 completely prohibited the use of stilbenes and MGA for fattening purposes.14 However, member states were empowered to continue allowing the use of the three natural hormones as well as of trenbolone and zeranol (together referred to as the "Five Hormones") until further action of the Council. In 1985, the Commission proposed to permit the application of the three natural hormones in cattle fattening, as its Scientific Working Group on this subject had concluded that the appropriate use of these substances would present no harmful effects to the health of the consumer.15 However, the European Parliament adopted a resolution demanding the ban of all the Five Hormones on the grounds that scientific data on their operation was incomplete.16 The Directive which finally saw the light of day heeded the resolution of the Parliament and prohibited the use of all hormones with the narrow exception of allowing the application of the three natural hormones for therapeutic and zootechnical purposes.17 This Directive - annulled for procedural reasons by the European Court of Justice -18 was preceded by a Directive of identical content in 198819 which this time passed the scrutiny of the Court20. Directive 96/602 finally combined the directives of 1981 and 1988.21 To sum it up: In the EC, no hormones may be used in the process of fattening cattle. For therapeutic and zootechnical purposes, the use of the three natural hormones is, though, permitted. The ban on meat from animals treated with hormones also applies to imports from third countries. The introduction of such meat has been prohibited - following a transition period - in all parts of the EC from 1 January 1989 at the latest.
3. Reactions of the U.S.
In contrast to EC practice, the use of the Five Hormones and MGA for growth promotion is authorized in the U.S. and widespread.22 American farmers therefore were in the face of ever mounting difficulties when they tried to compete on the European market, as access for meat from hormone-treated animals was more and more restricted until it was completely banned in 1989. Their annual loss is estimated at $116.8 million.23 This disagreement with the EU is at the bottom of much of the United States' motivation to push for the establishment of the SPS Agreement, which finally entered into force in 1994 and is designed to prevent the abuse of sanitary and phytosanitary measures as non-tariff barriers to trade.24 In the meantime, the U.S. invoked dispute settlement proceedings under the Tokyo Round Agreement on Technical Barriers to Trade in 1987, but did not succeed as the Agreement applied only to final product requirements and not to production and processing methods.25 In due course, retaliatory measures worth about $100 million entered into force on January 1, 1989, which prompted an interim solution permitting U.S. exporters to ship certified "hormone-free" meat to the EC.26 This concession was, however, temporarily suspended in 1999 due to deficiencies of the control system.27
4. WTO Dispute Settlement
Under the WTO dispute settlement process, Members must agree to enter into consultations in case other Contracting Parties consider them to be in violation of their GATT obligations.28 If these consultations yield no mutually acceptable solution, a Panel is convoked to decide on the dispute.29 Thus, after consultations had failed, the U.S. requested in 1996 the establishment of a Panel,30 reproaching the EC principally with breach of the SPS Agreement on the grounds that the ban was not supported by a risk assessment and inconsistent with levels of protection adopted in different situations.31 The EC countered, with reference to the precautionary principle, that despite insufficient scientific evidence to prove that remnants of growth hormones in food are dangerous, the ban was permissible as general scientific information indicated negative effects of the consumption of hormones.32 The Panel came to the conclusion that the EC import ban of hormone-treated meat violated its obligations under the SPS Agreement, as it was neither based on a risk assessment nor on international standards, and as the EC had adopted arbitrary distinctions in the appropriate levels of sanitary protections which resulted in discrimination or a disguised restriction on international trade.33 Both sides appealed the decision. The Appellate Body then upheld the Panel's findings only to the extent that the EC import ban failed to comply with the requirement of being based on a risk assessment, but reversed the rest.34 It obliged the EC to bring its measure "in conformity with the SPS Agreement".35 At the moment, both parties are at variance over what this exactly means. Whereas the EC argues that it simply needs to carry out a risk assessment in order to be able to uphold its import restrictions, the U.S. and Canada are of the opinion the EC actually has to lift the ban.36 A further point of controversy as to the length of the "reasonable period of time" the EC may claim to bring its legislation in conformity with the hormones decision was settled through WTO arbitration37 to the effect that the EC would have had to adapt its measures until May 13, 1999.38 The EC, not being able to comply with this time-limit as scientific studies would not be completed by the deadline, offered commercial compensation.39 Although negotiations are ongoing in this area, The U.S., obtained after the deadline had elapsed authorization to suspend tariff concessions to the EC in the amount of $116.8 million per year.40
III. The Hormones Decision in Detail: Limits on National Discretion to Regulate the Use of Food Additives
This section analyses the decision of the Appellate Body. Starting out from a general sketch of the provisions framing the liberty of governments to ban undesirable additives in foodstuffs (i.e., an overview of the SPS Agreement) (1), it examines how these provisions work in detail (2): It will look at the question to what extent Members are to heed international safety standards (2 (a)) and which party is charged with the burden of proof (2 (b)). It will then turn to the core of the SPS Agreement by examining to what degree a measure must be supported by scientific evidence, that is, what requirements are to be fulfilled for a measure to be based on a risk assessment (2 (c)). This section deals then with the question what happens if science is unable to determine a risk (2 (d)) and continues by taking a look at the requirement to have consistent standards of protection (2 (e)). It will then continue with considering the eventual merits of labelling schemes as less trade-restricting alternative (2 (f)) and conclude with assessing the impact of the Appellate Body Report on the remaining EC foodstuffs legislation (3).
1. General Scope in Which Governments May Ban Food Additives: The SPS Agreement
First, it is interesting to generally examine to what extent governments may prohibit the use of additives in victuals at all without violating GATT obligations.41 Such bans are now governed by the SPS Agreement.42 A Member will be allowed to uphold its interdiction if it is aimed at protecting human or animal life or health within the territory of the GATT Member and if the relevant provisions of the Agreement are met.43 This link-up to health matters precludes governments from adopting permanent measures on the sole grounds of, say, animal welfare, or unfounded consumer anxieties. Consumer preferences which might consist in shrinking from meat containing residues of pharmaceutical products will not excuse an import ban either. Consistency with the Agreement is presumed if the ban is conform to international standards, guidelines or recommendations.44 If it is not, it may still be maintained if scientifically justified, or if it is the result of the Member choosing to establish a higher level of sanitary and phytosanitary protection than could be achieved through mere adherence to the international standard.45 However, Members must remain within the boundaries set in article 5, i.e. mainly refrain from arbitrarily fixing different levels of protection in comparable situations46 and avoid measures that are more trade-restrictive than required47. Apart from these limits, Members must be guided by scientific expertise when deciding to adopt a superior level of protection in comparison to international standards.48 As a general rule, it can be said that scientific tests must be at the bottom of all measures taken in virtue of the SPS agreement.49
2. The SPS Agreement in Detail
After having outlined the fundamental principles of the SPS Agreement, it is now appropriate to focus on those that were scrutinized by the Panel and Appellate Body Reports.
(a) Extent to Which Members Must Comply With International Standards Art. 3.2 SPS Agreement states that "[t]o harmonise sanitary and sanitary and phytosanitary measures on as wide a basis as possible, Members shall base their ... measures on international standards, guidelines or recommendations, where they exist, except as otherwise provided for in this agreement, and in particular in paragraph 3". As for growth hormones, international standards governing their remnants in meat exist in the shape of the Codex Alimentarius50. It establishes acceptable daily intake levels (ADIs) and maximum residue limits (MRLs) for the two synthetic hormones zeranol and trenbolone.51 For the three natural hormones, the setting of limits was deemed unnecessary if these substances were administered in accordance "with good animal husbandry practice".52 No standard exists for MGA.53 As the EC only allows the marketing of meat without any residue from growth promoters at all, thus exacting a "zero residue level", it provides for a level of protection significantly different from that of the Codex Alimentarius. The question thus arose to what extent Members were to heed the recommendations of the Codex. The Panel argued that art. 3.1 would oblige Members to keep their measures in conformity with international standards, unless they qualified for the narrow exceptions of scientific justification or science based choice of a higher level of protection. The Appellate Body reversed this finding as contrary to the wording and the meaning of art. 3.1, as it would only provide that SPS measures shall be "based on" (in the sense of "supported by") international standards.54 Any other interpretation would have had the effect of vesting these standards (which are meant to be mere recommendations) with obligatory force.55 The wish to lose such a massive portion of sovereignty would have been expressed much more clearly in the SPS Agreement if the Parties had really been so disposed.56 The essence of this is that Members are not constraint to harmonize their SPS measures in accordance with international standards. The Appellate Body confirmed the sovereign right of a nation to set its own level of protection:57 If governments opt for hundred per cent safety, they may, undisturbed by eventually differing international standards, establish a "no residue level". It is worth noting, however, that they will not benefit from the presumption of legality of their measure (art. 3.2) if they do not adopt the international standard completely ("conform to" it).58
(b) Allocating the Burden of Proof Related to the issue of coherence with international standards is the question of who is charged with the onus of proof. Having construed the right to deviate from international standards as an exception from the general obligation to conform to them, the Panel shifted the burden of proof to the Party availing itself of the exception to the effect that this Party would have to show the conformity of its behaviour with its GATT obligations. In the hormones case, it would thus have been due to the EC to prove that its measures were consistent with the SPS Agreement. The Appellate Body reversed this finding as the right to adopt different levels of protection than those reflected in international standards was the sovereign right of a nation and not a mere exception of some other provision.59 Therefore, the general rule governing the allocation of the burden of proof applies under which it is up to the complaining party to prove violation of the Agreement. However, in the particular case on hand the U.S. and Canada had established prima facie evidence to that effect which it was up to the EC to disprove.60
(c) Extent to Which SPS Measures Must Be Supported by Scientific Evidence While confirming the sovereign right of a nation to determine its own level of protection, the Appellate Body also made it clear that this right is not absolute.61 If Members wish to exercise it (by departing from international standards), they must comply with the requirements established in art. 5.1 SPS Agreement, i.e. they must base their measures on a risk assessment.62 The obligation to assess the risk applies equally to the situation where no international standard exists.63 As the EC interdiction of the use of the Five Hormones deviates from Codex criteria, and no norm exists for the remaining hormone MGA, assessing the risk posed by these substances is the prerequisite for the EC to maintain its ban. The case therefore revolves around the question of what requirements are to be met for an SPS measure to be based on a risk assessment.
(aa) Composition of a Risk Assessment First, it has to be established what elements a risk assessment consists of. In compliance with common practice,64 the Panel had distinguished between setting the scientific basis for an SPS measure ("risk assessment") and the process of choosing the most appropriate reaction to the danger thus exposed ("risk management").65 By thus tying the mechanism of assessing a risk to strictly scientific examination of data and factual studies, excluding from its scope social, political and economical considerations, the Panel had set a very exacting level for a risk assessment to be sufficient.66 The Appellate Body lowered this threshold considerably. Finding that the text did not yield a distinction between the two phases and holding that the list of admissible techniques provided by the SPS Agreement itself67 was not exclusive,68 it extended the reach of risk assessments - in addition to strictly scientific procedures -69 to all methods capable of determining "the actual potential for adverse effects ... in a real world where people live and work and die".70 To put it differently: Assessing risks also includes - in the view of the Appellate Body - issues of risk management.71 In order to get their risk assessment successfully through the scrutiny by WTO Panels, governments will therefore not need to restrain themselves to "quantitative analysis by the empirical or experimental laboratory methods commonly associated with physical sciences"72, but may also keep in mind questions which escape a purely scientific assessment, such as the danger of abuse and the difficulty to suppress the establishment of a black market.73 This is particularly important for the case on hand as the available scientific studies claim the safety of hormones only on the basis that they are administered in accordance with good veterinary practice.74 The Appellate Body made it also clear that a risk assessment is not required to establish a threshold level of risk, in other words to quantify the potential for adverse effects on human health.75 With regards to the application of these principles on the case on hand, the Appellate Body held that in the domain of purely scientific risk assessment, several reports submitted by the EC fulfilled the minimum requirements.76 However, relating to the socio-political elements, that is to dangers arising from misuse of hormonal growth promoters combined with control problems, no adequate risk assessment had been submitted.77 Although a study drawing a theoretical framework for the systematic analysis of such problems had been presented, it was deemed insufficient as it had remained in the realm of theory and failed to examine the cases of abuse and lack of control that had already occurred in reality.78 This finding indicates that, although the scope of admissible risk assessment methods was broadened by including issues of risk management, this does not amount to a blank cheque for governments to justify SPS measures with no matter what choices of public policy, as the presence of an actual risk still has to be proven.
(bb) When is a Measure Based on a Risk Assessment? After having determined the elements composing a risk assessment, the next step is to examine to what extent the risk assessment must be reflected in the SPS measure. Here, the Appellate Body first of all held the view that there are no procedural requirements (in the sense of the Member having to prove it actually took into account a risk assessment when imposing a certain SPS measure).79 A Member secondly need not carry out its own risk assessment if this task has already been performed elsewhere.80 As to the substantive requirement, the Appellate Body held that for an SPS measure to be based on a risk assessment, there must be a rational relationship between the two, i.e., the results of the risk assessment must sufficiently support the measure in question.81 In more explicit terms, this means the following: First of all, the measure need not reflect the majority opinion in science.82 Thus, it was not initially harmful to the EC's case that the bulk of their own scientific studies came to the conclusion that the use of hormones for growth promotion was "safe" when good veterinary practice was observed.83 A measure may as well follow a minority opinion, if it stems from "qualified and respected sources".84 However, minority scientific opinion will only suffice if it is purported to be the result of scientific studies the expert has actually carried out himself, and if the studies focus specifically on the problems at issue.85 Not meeting these requirements, a comment of a single scientist advanced by the EC which might have been interpreted as supporting the notion of the cancer-inducing propensities of hormone-treated beef was deemed irrelevant.86 Moreover, it will not suffice if the SPS measure reflects only the result of studies that merely cover the area at issue in general. For this reason, studies that showed the carcinogenic potentials of the hormones in question in general were not taken into account as they had not evaluated the cancer-causing capacity of these hormones when used specifically for growth promotion purposes. Likewise, a study was set aside for lack of specificity that had proved the risk to human health of substances related to MGA.87 From the fact that most scientific studies seem to confirm the safety of hormones when used in accordance with good veterinary practice, together with the absence of a risk assessment concerning the failure of observance of such good veterinary practice, the Appellate Body concluded that the EC's import ban was not sufficiently warranted by a risk assessment, and therefore inconsistent with art 5.1 of the SPS Agreement.88 This result shows that the requirements for a measure to be based on a risk assessment are - although lower than in the Panel's opinion - still quite exacting. The fact that general studies indicating the risk of a substance are not deemed sufficient a base for an SPS measure is particularly remarkable. This might put a damper on the discretion of nations to determine their own level of protection. This is even more so as Panels are not obliged to pay "reasonable deference" to the regulative authority's determination of the adequacy of scientific support, but are apparently in a position to review facts to a degree that almost amounts to a de novo review.89 However, it is not quite clear yet just how far the Panel's reviewing competence goes.90 The extent to which adjudicatory competence of the WTO will limit regulatory competence of nations can therefore not be exactly determined at this point.
(d) What Happens if Science Reaches its Bounds? A pivotal problem when trying to assess a hazard with the help of scientific methods consists of the fact that science will often be unable to determine the risk of a given substance simply due to lack of knowledge.91 Just because no study has shown a risk, safety cannot be assumed.92 Indeed, there are numerous examples where negative effects only revealed themselves years later, showing in retrospect that a more cautious approach should have been adopted.93 To counter such conceivable, albeit unproven, risks, numerous international treaties embody the "precautionary principle", which advises regulative authorities to remain on the "safe side" when formulating public policy in the face of scientific uncertainty, rather than adopt a "wait and see" approach.94 The EC tried to justify the absence of a risk assessment on these grounds. However, the Appellate Body agreed with the panel that - prescinding from the question whether the precautionary principle was "a general principle of law" - it was incorporated in the SPS Agreement, mainly in the shape of art. 5.7 (which provides for the situation where relevant scientific information is insufficient by permitting Members to adopt provisional measures).95 The precautionary principle would therefore not override the general obligation for Members to base their measures on a risk assessment.96 Thus, it follows that in the face of scientific uncertainty, the measures adopted without a risk assessment must be - in accordance with art. 5.7 - provisional. The EC did not resort to the defense of invoking art 5.7 as a means of justifying its import ban, as it did not intend the ban to be of provisional, but rather definitive nature. It has to be noted in this context, though, that the Appellate Body did not say that the absence of scientific knowledge might not in itself be a risk. If lack of scientific knowledge proves to be perpetual, it should therefore be possible to base a permanent measure on a risk assessment that addresses precisely the danger of insufficient scientific data.
(e) Whether the EC Ban is Discriminatory in Relation to Comparable Situations It is obvious that strict SPS measures applied to only a select range of products strongly indicate that their real objective is to serve as a cloak for disguised trade restrictions. Art. 5.5 of the SPS Agreement prohibits therefore arbitrary or unjustifiable differences in the levels of protection a Member deems appropriate in different situations, if such distinctions result in discrimination or a disguised restriction on international trade. To put it differently: The EC's further foodstuffs legislation needs to take a similarly strict approach in situations that are comparable to the administration of growth promoting substances in livestock farming. In this context, it was noted that the EC allowed the selling of foods in which hormones are endogenously present. The Appellate Body reversed the Panel's finding that this would amount to an "arbitrary or unjustifiable distinction" in comparison to the ban of added hormones in beef, as there would be a fundamental difference between naturally-occurring hormones and hormones added through human tempering. Requesting the EC to take action against hormones naturally occurring in food would be an "absurdity".97 Likewise, the Appellate Body came to the conclusion that the permission to use hormones for therapeutic and zootechnical ends was not at variance with the ban of the same substances for fattening purposes.98 However, the Appellate Body upheld the Panel's ruling that the authorization to use carbadox and olaquindox as feed additive constitutes an unjustifiable difference in the level of protection with respect to the hormones at dispute.99 Contrary to the Panel, the Appellate Body held, though, that this distinction would not amount to discrimination or a disguised restriction on trade, as the ban on hormone-treated beef was not designed to keep the U.S. and Canada out of the European market, but genuinely intended to protect the health of the consumer.100 Therefore, the EC's ban did not violate art. 5.5 of the SPS Agreement. This finding clarifies that neither the largeness of the difference between two levels of protection nor the pursuance of different goals101 besides the aim to protect human health justify in themselves the qualification of a measure as discriminatory.102
(f) Availability of Less Trade-restricting Alternatives Art. 2.2 allows only those SPS measures that are necessary to protect human, animal or plant life or health. Art. 5.6 puts this more precisely by obliging Members to ensure that their SPS measures are not more trade-restricting than required to achieve their appropriate level of protection. To put it differently, Members must act in a way to minimize negative impact on trade to the greatest extent possible. Neither Panel nor Appellate Body addressed this issue as they had already found violation of art. 5.1.103 However, it is still interesting to examine whether alternatives less trade-restricting than a ban exist, as their adoption might help resolve the hormones dispute.104 Such an alternative might be a labelling scheme.105 As a matter of fact, such a scheme has already been introduced in the wake of the negotiations of interim measures following U.S. retaliatory actions.106 Under this regime, farmers from third countries like the U.S. are allowed to introduce their meat into the European market if they can certify that it does not contain residues from hormonal growth promoters.107 This system could be transformed into a scheme under which hormone-treated meat would be compulsorily labelled,108 or, alternatively, meat originating from the EC would carry a "hormone-free" label.109 However, such a solution would entail the lifting of the ban on hormone-treated meat, although such meat has so far been considered a hazard to human health. The question therefore is whether a labelling regime would adequately address the anxieties existing within the EC as to the safety of growth promoting substances. The major obstacle consists of the difficulty of guaranteeing the effectiveness of controls. This problem seems insurmountable, as can be seen from the temporary suspension in 1999 of the concession to U.S. farmers to import certified "hormone-free" beef to the EC due to the discovery of growth-promoting substances in a part of this meat.110 Furthermore, EC institutions, Member States, producers and consumers oppose any lifting of the embargo.111 Apart from that, the U.S. made it clear that it will disapprove of any labelling scheme that vouches for anything else than the origin of the beef. This seems unacceptable as in this way European consumers would not be informed if the meat derives from hormone-fed cattle or not.112 Last but not least, a compulsory labelling requirement will constitute an SPS measure and as such fall in the scope of the SPS agreement. It is therefore difficult to imagine a regime that will not be attacked by the U.S. for failure to be based on a risk assessment. A labelling system seems therefore not to be a viable option to resolve the hormones dispute.
3. Coherence of Further EC Legislation
Having examined how the Appellate Body construed the provisions of the SPS Agreement, it is now appropriate to assess what attitude the EC legislator should adopt now when deciding on measures in the field of foodstuffs law. This issue needs to be addressed as the European Court of Justice has granted wide discretionary power to the EC legislator when it comes to SPS measures.113 This discretionary power may have been narrowed by the SPS Agreement. Although the EC is like its member states bound by the provisions of art. 28 (ex 30) EC to avoid quantitative restrictions on imports and all measures having equivalent effect, the Court holds the view that there is in principle no danger of disparities and, if the SPS measures are non-discriminatory, examines only if they breach the general principles of law.114 Therefore, the prohibition of growth hormones for the purpose of fattening cattle was deemed to be covered by the discretionary powers of the council, despite poor scientific evidence as to their danger to consumers.115 Only a measure manifestly inappropriate to achieve the pursued aim would be considered illegal. The EC legislator is therefore allowed to take measures simply to relieve anxieties of consumers.116 In contrast to this broad realm of discretionary power, the SPS Agreement - as interpreted by the Appellate Body - obliges Members to either conform their measures to international standards or to base them on a risk assessment. Furthermore, measures need to be linked to the protection of health. As Slotboom points out, this will probably mean that the case law of the Court is inconsistent with the SPS Agreement, especially in the light of the fact that Panels are most likely authorized to review the facts to a substantial degree.117 The same is most likely true for Directive 89/107118 which allows the authorization of food additives only if their need can be demonstrated. As this does not involve the assessment of the risk posed by each individual substance, this Directive probably violates art. 5.1 of the SPS Agreement.
The hormones dispute was a test case for both the SPS Agreement and the new WTO dispute settlement process. Opinions are divided as to whether the two institutions came up to the expectations that had been placed in them. Environmentalists lament the failure to adequately reconcile trade and environmental concerns due to a complete lack of reference to the individual right to health and the concomitant right of a nation to set standards that maintain this individual right.119 Furthermore, they feel that the case proved that trade experts are ill equipped for deciding environmental issues, as both Panel and Appellate Body had allegedly misconceived the notion of scientific evidence by falsely equating the absence of scientific studies showing a risk with the absence of the risk itself.120 They fear that the Appellate Body's elaboration of the requirement for scientific evidence sets a precedent that may completely undermine the ability of national regulatory bodies to set their own health policies.121 Diametrically opposed voices claim, however, that on the contrary, the Appellate Body gave a disproportionate weight to minority scientific opinions in the face of overwhelming evidence proving the safety of hormone-treated beef.122 The failure to recognize Codex standards as mandatory WTO obligations, combined with an alleged incapacity to identify a supposedly evident case of a disguised barrier to trade would undeservedly grant protection to Members who try to camouflage their protectionist actions as SPS measures.123 Last not least, a third opinion exists according to which the Appellate Body is to be praised for having begun to meaningfully balance free trade with the right to precaution by making it clear that nations may still establish a high level of health protection if they comply with certain minimum requirements as to the scientific character of their risk assessment.124 In quaint contrast to this variety of perception in literature, both parties seem to be remarkably happy with the result: They both claimed victory.125 This curious fact is due to a variance in interpretation of the Appellate Body's finding that the EC is to bring its legislation in conformity with the SPS Agreement. If the EC insists on its view that this merely obliges it to carry out a risk assessment, the U.S. might very well resort once again to WTO dispute settlement in order to carry its point: that the EC be forced to actually lift the import ban on hormone-treated meat.126 In any case, it is clear that the hormones dispute is not settled once and for all.
- Fussnoten -
1 See Meinhard Hilf and Barbara Eggers, Der WTO-Panelbericht im EG/USA-Hormonstreit, Europäische Zeitung für Wirtschaftsrecht, number 18 (1997), 559, at 564 left column.
2 The General Agreement on Tariffs and Trade (GATT), signed on the 30th October 1947 in Geneva, embraces the core of the stillborn Charter of Havana, which had provided for the establishment of an International Trade Organization to regulate worldwide trade. It was meant to be an interim solution until time was ripe for setting up such a regulative body. When an international trade organization finally came into being in 1994 in the shape of the World Trade Organization (WTO), GATT was fused into this wider framework: GATT 1994 incarnates the original GATT and the agreements ("Understandings") reached by the parties in the Uruguay Round. GATT aims at encouraging trade by curbing tariff restrictions (e.g. customs duties), quantitative restrictions (e.g. quotas) and non-tariff barriers (other measures intended to protect the national market), and by enacting standards supportive to international commerce, such as the non-discrimination principle or the most favoured nation treatment. However, in the field of health policy, an exception from the general obligation to liberalize trade is made in Art. XX paragraph (b) which allows Members to adopt measures necessary to protect human, animal or plant life or health, and, more specifically, by the SPS Agreement (see footnote 4). See Hans van Houtte, The Law of International Trade (London, Sweet & Maxwell, 1995), 51-54; Dominique Carreau and Patrick Juillard, Droit international économique (4th edition, Paris, L.G.D.J., 1998) 47-50; David A. Wirth, The Role of Science in the Uruguay Round and NAFTA Trade Disciplines, Cornell International Law Journal, Vol. 27 (1994), 817 at 820-822.
3 See Dale A. McNiel, The First Case Under the WTO's Sanitary and Phytosanitary Agreement: The European Union's Hormone Ban, Virginia Journal of International Law, vol. 39, issue 41, 89, at 90 and 95 (1998).
4 Agreement on Sanitary and Phytosanitary Measures ("SPS Agreement"), April 15, 1994, printed in The Results of the Uruguay Round of Multilateral Trade Negotiations - The Legal Texts, GATT Secretariat, Geneva (1994), 69. The articles relevant on the Hormones case are reprinted as annex in Sara Pardo Quintillán, Free Trade, Public Health Protection and Consumer Information in the European and WTO Context, Journal of World Trade, Vol. 33, Issue 6 (1999), 147, at 194-197.
5 See Report of the Panel, EC Measures Concerning Meat and Meat Products (Hormones) - Complaint by the United States, Aug. 18, 1997, WT/DS26/R/USA (hereinafter Panel Report U.S.); Report of the Panel, EC Measures Concerning Meat and Meat Products (Hormones) - Complaint by Canada, Aug. 18, 1997, WT/DS48/R/CAN; Report of the Appellate Body, EC Measures Concerning Meat and Meat Products (Hormones), Jan. 16, 1998, adopted Feb. 13, 1998, WT/DS26/AB/R & WT/DS48/AB/R (hereinafter Appellate Body Report). All these documents are available on the WTO's homepage (http://www.wto.org, chapter "Dispute Settlement"). The Appellate Body's decision is also substantially reprinted in Europäische Zeitschrift für Wirtschaftsrecht, number 5-6 (1998), 157.
6 The present focus of concern to which the SPS Agreement applies is the safety of genetically modified organisms (GMOs). See C. Ford Runge, A Conceptual Framework for Agricultural Trade and The Environment: Beyond the "Green Box", Journal of World Trade, Vol. 33, Issue 6 (1999), 47, at 54. However, it must be noted that neither WTO Panel Reports nor, in all probability, Appellate Body Reports are binding on later cases. See M. M. Slotboom, The Hormones Case: An Increased Risk of Illegality of Sanitary and Phytosanitary Measures, Common Market Law Review, Vol. 36, 471 (1999), at footnote 38 on p. 483.
7 For a comprehensive overview of the course of events see Dale E. McNiel, supra note 3, at 99-107.
8 See Sara Pardo Quintillán, supra note 4, at 156; Dale E. McNiel, supra note 3, at 97.
9 See id.
10 See study conducted in 1987 by the U.S. Department of Agriculture, cited by Dale E. McNiel, supra note 3, at 100. The same study estimates the economic benefit of hormone implants at $44.21 per animal.
11 See Layla Hughes, Limiting the Jurisdiction of Dispute Settlement Panels: The WTO Appellate Body Beef Hormone Decision, The Georgetown International Environmental Law Review, Vol. 10 (1998), 915, at 916, quoting an unpublished submission to the WTO Panel by the Sierra Club Legal Defense Fund (Comments on Behalf of Cancer Prevention Coalition, Public Citizen, and Institute for Trade and Agricultural Policy, Oct 4, 1996). See as example id., at footnote 88 on p. 927 (expert's affidavit is supposed to have stated that "an internal industry report documented the induction of a statistically significant incidence of mammary tumors in female mice as a result of exposure to MGA".)
12 Children had shown signs of premature development which were later linked to DES residues in school lunches, see Sara Pardo Quintillán, supra note 4, at footnote 43 on page 155.
13 See Dale E. McNiel, supra note 3, at 100-101.
14 Council Directive 81/602/EEC (art. 3), 1981 O.J. L 222, 32.
15 See Proposal for a Council Directive Amending Directive 81/602/EEC Concerning the Prohibition of Certain Substances Having a Hormonal Action and of Any Substances Having a Thyrostatic Action, O.J. C 170, 4 (1984), and the amended to this proposal, O.J. C 106, 7 (1985).
16 Resolution Closing the Procedure for Consultation of the European Parliament on the Proposal from the Commission of the European Communities to the Council for a Directive Amending Directive 81/602/EEC Concerning the Prohibition of Certain Substances Having a Thyrostatic Action, O.J. C 288, 158 (1985).
17 Council Directive of 31 December 1985 Prohibiting the Use in Livestock Farming of Certain Substances Having a Hormonal Action, O.J. L 382, 228 (1985).
18 Case 68/86, United Kingdom v. Council, 1988 E.C.R. 855.
19 Council Directive of 7 March 1988 Prohibiting the Use in Livestock Farming of Certain Substances Having a Hormonal Action, O.J. L 70, 16 (1988).
20 Case C-331/88 ("Fedesa"), 1990 E.C.R. I-4023.
21 Council Directive 96/22/EC of 29 April 1996 concerning the prohibition on the use in stockfarming of certain substances having a hormonal or thyrostatic action and of ß-agonists, and repealing Directives 81/602/EEC, 88/146/EEC and 88/299/EEC, O.J. L 125, 3 (1996).
22 See Dale E. McNiel, supra note 3, at 99-100.
23 See para 83 of European Communities - Measures Concerning Meat and Meat Products (Hormones), Original Complaint by the United States, Recourse to Arbitration by the European Communities under Art. 22.6 of the DSU, Decision by the Arbitrators, WT/DS26/ARB, 12 July 1999, available on the WTO's homepage, supra note 5.
24 See David A. Wirth, supra note 2, 822.
25 See Sara Pardo Quintillán, supra note 4, at footnote 55 on p. 159.
26 See Dale E. McNiel, supra note 3, at footnote 136 on p. 110.
27 See para 27 of the Decision by the Arbitrators, WT/DS 26/ARB, 12 July 1999, supra note 26.
28 See art. 4.3 of the Uruguay Round Understanding on Rules and Procedures Governing the Settlement of Disputes ("DSU"), available on the WTO's homepage (http://www.wto.org) under the chapter "Dispute Settlement".
29 See id., art. 4.7.
30 So did Canada, see supra note 5. The two Panel reports are, however, so similar that when they were subsequently appealed, they were both treated in a single appeals decision.
31 See Appellate Body Report, supra note 5, at para 49, 52, 122.
32 See id. at para 121.
33 See Panel Report U.S., para
34 See Appellate Body Report, supra note 5, at para 253.
35 See id., para 255.
36 See M. M. Slotboom, supra note 6, at 472.
37 See art. 21.3 (c) DSU, supra note 28.
38 WT/DS26/15 and WT/DS48/13, available on the WTO's homepage, see supra, note 5.
39 See "Recent Developments" under the "Dispute Settlement" chapter on the WTO's homepage, supra note 5.
40 See Decision by the Arbitrators, WT/DS 26/ARB, 12 July 1999, supra note 26.
41 See supra note 2.
42 SPS Agreement, supra note 4.
43 id., art. 2.1, 2.4; Definitions, para 1.
44 id., art. 3.2.
45 id., art. 3.3.
46 id., art, 5.5.
47 id., art. 5.6.
48 Measures must be based on scientific principles and cannot, except as provided for in art. 5.7, be maintained without sufficient scientific evidence, art. 2.2 SPS Agreement.
49 See David A. Wirth, supra note 2, at 818, 832-837. It is argued that this focus on science is a major flaw of the SPS Agreement. See Layla Hughes, supra note 11, at 926-929; who points out the temporary nature of scientific doctrines, the fact that science can be bought and the lack of scientific knowledge of Panel and Appellate Body members.
50 See SPS Agreement, supra note 4, Definitions para 3 (a). The Codex Alimentarius is a compilation of recommendations pronounced by a joint committee of the FAO and WHO, the Codex Alimentarius Commission. It contains standards for food additives, chemicals, pesticides and other hazardous substances, and contaminants. See M.M. Slotboom, supra note 6, footnote 14 on p. 475.
51 id., at footnote 16 on p. 476.
52 See id.
53 See Meinhard Hilf and Barbara Eggers, supra note 1, at 563 (left column).
54 See Appellate Body Report, supra note 4, para 163.
55 See id., para 165.
56 See id.
57 See id., para 172.
58 See id.
59 See Appellate Body Report, supra note 5, at para 104.
60 See id., footnote 180.
61 See Appellate Body Report, supra note 5, at para 173.
62 This follows from art. 3.3 which states that "Members may introduce or maintain ... measures which result in a higher level of ... protection than would be achieved by measures based on the relevant international standards, ..., if there is scientific justification, or as a consequence of the level of ... protection a Member determines to be appropriate in accordance with the relevant provisions of paragraphs 1 through 8 of Article 5 [which mainly provide for the necessity to base a measure on a risk assessment]. ..." The Appellate Body does not distinguish between the two requirements as the differentiation is "more apparent than real", see Appellate Body Report, supra note 5, at para 176.
63 Here, art. 5.1 applies directly.
64 See David A. Wirth, supra note 2, at 833.
65 See Appellate Body Report, supra note 5, at para 181.
66 See Meinhard Hilf and Barbara Eggers, supra note 1, at 562 (left column).
67 See SPS Agreement, supra note 4, art. 5.2
68 See Appellate Body Report, supra note 5, at para 181, 187.
69 For an overview of the possibilities to scientifically ascertain the hazards a substance may pose to health, see the sketch of the U.S. Environmental Protection Agency's risk assessment for carcinogens in Vern R. Walker, Keeping the WTO from Becoming the "World Trans-science Organization": Scientific Uncertainty, Science Policy, and Factfinding in the Growth Hormones Dispute, Cornell International Law Journal, Vol. 31 (1998), 251, at 263-267. To determine whether a substance is carcinogenic, usually data obtained through animal experiments are extrapolated.
70 See Appellate Body Report, supra note 5, para 187.
71 See Barbara Eggers, Die Entscheidung des WTO Appellate Body im Hormonfall, Europäische Zeitschrift für Wirtschaftsrecht, number 5-6 (1998), 147, at 149 (left column).
72 See Appellate Body Report, supra note 5, para 187.
73 See id., para 206. That abuse and black marketing of hormones are a real problem in the EC is documented in a resolution of the European Parliament on the fight against the "hormone mafia", O.J. C89, 10 April 1995.
74 See Appellate Body Report, supra note 5, para 206.
75 See id., para 185, 186. An example of a quantified risk would be "the odds that the consumption of hormone-treated beef causes cancer are one to a million". Members are not required to demonstrate the existence of such a threshold.
76 See Appellate Body Report, supra note 5, para 196.
77 See id., para 208.
78 See id., para 207.
79 See Appellate Body Report, supra note 5, para 188.
80 See id., para 190.
81 See id., para 193.
82 See id., para 194.
83 See id., para 196.
84 See id.
85 See id., para 198.
86 See id.
87 See id., para 200, 201.
88 See id., para 208.
89 See Barbara Eggers, supra note 70, 148, 150.
90 See M. M. Slotboom, supra note 6, 491.
91 Lack of scientific knowledge can be attributable to various reasons: Data might be incomplete, ambiguous or simply lacking, see David A. Wirth, supra note 2, at 837. Testing procedures might yet have to be developed. Available data might be held back on legal grounds, as was the case with MGA: The U.S. and Canada had declined to submit any assessment of this substance upon the ground that the material they were aware of was proprietary and confidential in nature. See Appellate Body Report, supra note 5, para 201.
92 See Layla Hughes, supra note 11, at 927.
93 The best known example in this area is the thalidomide case. Other examples include the hormone DES whose genotoxic character was only discovered after it had been on the market for years, see Sara Pardo Quintillán, supra note 4, at footnote 42 on page 156. A more recent case is the link between Mad Cow Disease and Creutzfeld Jakob Disease: It was not until strong scientific evidence supported the existence of such a link that a ban on the export of British beef was enacted, despite warnings since the late 80s, see id., at footnote 125 on p. 173.
94 See David A. Wirth, supra note 2, at 838-840; M. M. Slotboom, supra note 6, at footnote 19 on p. 477.
95 See Appellate Body Report, supra note 5, para 124.
96 See id., para 125.
97 See id., para 221.
98 See id., 225. The reason is that animals treated in this framework are usually kept for breeding purposes only and therefore unlikely to be processed to food, see prbl. Directive 96/602, supra note 21.
99 Carbadox and olaquindox are anti-microbial agents mixed with the feed given to piglets. Their genotoxic, (cancer-inducing) character is known. See Appellate Body Report, supra note 5, para 226. In no relation to the dispute settlement proceedings, the EC has now taken steps to ban these substances, see Commission Regulation 2788/98 amending Council Directive 70/524/EEC concerning additives in feedingstuffs as regards the withdrawal of authorisation for certain growth promoters, O.J. L 347(1998), p. 31.
100 See Appellate Body Report, supra note 5, para 245.
101 The ban on the use of hormonal growth promoters was also meant to harmonize national legislation and to raise the consumption of beef by instilling confidence in consumers. The first goal was a legal obligation of the EC, the second also benefited American exporters of "hormone-free" beef, see Barbara Eggers, supra note 70, at footnote 43 on page 149.
102 See Appellate Body Report, supra note 5, para 245.
103 See id., para 253 (n).
104 See Sara Pardo Quintillán, supra note 4, 170. On the question whether the concept of scientific justification should not be altogether dropped in favour of a "necessary" test, see Layla Hughes, supra note 11, 935-936.
105 See Sara Pardo Quintillán, supra note 4, 170-172.
106 See Dale E. McNiel, supra note 3, at footnote 136 on p. 110.
107 See id., 170.
108 Such a solution was actually proposed by the Commission to defuse the conflict, see id.
109 See id.
110 See Decision by the Arbitrators, WT/DS 26/ARB, 12 July 1999, supra note 26.
111 See Sara Pardo Quintillán, supra note 4, 170.
112 See id., 171.
113 See the "Fedesa" Case, 331/88 (1990) ECR I-4023.
114 See M. M. Slotboom, supra note 6, 487.
115 See "Fedesa" Case, supra note 113.
116 See M. M. Slotboom, supra note 6, 490.
117 See id., 490.
118 See Directive 89/107/EEC on the approximation of the laws concerning food additives authorized for use in foodstuffs intended for human consumption, O.J. L 40/27 (1989). This Directive authorizes the approval of food additives amongst others only if "there can be demonstrated a reasonable technological need and the purpose cannot be achieved by other means which are economically and technologically practicable", Annex II para 1.
119 See Layla Hughes, supra note 11, at 922.
120 See id., 922-929 and 927 in particular.
121 See id., 923.
122 See Dale E. McNiel, supra note 3, 134.
123 See id., 133-134.
124 See Barbara Eggers, supra note 70, 150-151.
125 See M. M. Slotboom, supra note 6, at footnote 5 on p. 472.
126 See Dale McNiel, supra note 3, 133.
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