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EC Measures Concerning Meat and Meat Products (Hormones)
Complaint by the United States
Report of the Panel
The report of the Panel on EC Measures Concerning Meat and Meat Products (Hormones) - Complaint by the United States - is being circulated to all Members, pursuant to the DSU. The report is being circulated as an unrestricted document from 18 August 1997 pursuant to the Procedures for the Circulation and Derestriction of WTO Documents (WT/L/160/Rev.1). Members are reminded that in accordance with the DSU only parties to the dispute may appeal a panel report, an appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel, and that there shall be no ex parte communications with the panel or Appellate Body concerning matters under consideration by the panel or Appellate Body.
Note by the Secretariat: This Panel Report shall be adopted by the Dispute Settlement Body (DSB) within 60 days after the date of its circulation unless a party to the dispute decides to appeal or the DSB decides by consensus not to adopt the report. If the Panel Report is appealed to the Appellate Body, it shall not be considered for adoption by the DSB until after the completion of the appeal. Information on the current status of the Panel Report is available from the WTO Secretariat.
II. FACTUAL ASPECTS
2. The substances at issue (hormones)
3. The CodexAlimentarius standards
(b) Codex standards for five hormones at issue
5. History of events under the GATT
IV. ARGUMENTS OF THE PARTIES
2. The SPS Agreement
(b) Article 2.3 of the SPS Agreement
(c) Article 3.1 of the SPS Agreement
(d) Article 3.3 of the SPS Agreement
(e) Articles 5.1 and 5.2 of the SPS Agreement
(iii) Combinations of hormones and multiple exposure
(iv) Detection and control
(v) Administration and use of hormones
(vi) Risks arising from other parameters
(vii) The precautionary principle
(viii) Animal health protection
(g) Article 5.5 of the SPS Agreement
(h) Article 5.6 of the SPS Agreement
(i) Article 5.7 of the SPS Agreement
4. GATT 1994
(b) Article I:1 of GATT
4. New Zealand
Views of the scientific experts
B. ORGANIZATIONAL ISSUES
2. Parallel panel requested by Canada
2. Application of the SPS Agreement, the TBT Agreement and GATT
3. Relationship between the SPS Agreement and GATT
2. Burden of proof
3. Article 3.1: sanitary measures based on international standards
(b) Sanitary measures based on Codex standards
(ii) Comparison of levels of sanitary protection
(b) Burden of proof
(b) Articles 5.1 to 5.3: risk assessment
(ii) The existence of a risk assessment
(iii) Sanitary measures to be based on a risk assessment
(ii) Article 5.5: distinctions in levels of protection
(iii) Article 5.6: measures not more trade restrictive than required to achieve the appropriate level of protection
(b) Articles 5.1 to 5.3: risk assessment
(c) Article 5.5: distinctions in levels of protection
(ii) MGA for growth promotion compared to carbadox
F. CONCLUDING REMARKS
I.1 On 26 January 1996,
the United States requested consultations with the European Communities,
pursuant to Article 4 of the Understanding on Rules and Procedures
Governing the Settlement of Disputes ("DSU"), Article
11 of the Agreement on the Application of Sanitary and Phytosanitary
Measures ("SPS Agreement"), Article 14 of the Agreement
on Technical Barriers to Trade ("TBT Agreement"),
Article 19 of the Agreement on Agriculture and Article XXII of
the General Agreement on Tariffs and Trade 1994 ("GATT"),
regarding the Council Directive Prohibiting the Use in Livestock
Farming of Certain Substances Having a Hormonal Action and related
I.2 On 2 February 1997,
pursuant to Article 4.11 of the DSU, Australia (WT/DS26/3) and
New Zealand (WT/DS26/2), followed on 8 February by Canada
(WT/DS26/4), requested to be joined in these consultations. The
European Communities accepted these requests on 19 March
I.3 On 27 March 1996, the
United States, Australia, Canada and New Zealand held
joint consultations with the European Communities but failed to
reach a mutually satisfactory solution.
I.4 On 25 April 1996, pursuant
to Article 11 of the SPS Agreement, Article 14 of the
TBT Agreement, Article 19 of the Agreement on Agriculture,
Article XXIII:2 of the GATT, and Article 6 of the DSU,
the United States requested the Dispute Settlement Body ("DSB")
to establish a panel with standard terms of reference (WT/DS/26/6).
The United States claimed that the EC measures:
(2) Agreement on the Application of Sanitary and Phytosanitary Measures, Articles 2, 3 and 5;
(3) Agreement on Technical Barriers to Trade, Article 2; and
(4) Agreement on Agriculture,
These measures also appear to
nullify or impair the benefits accruing to the United States directly
or indirectly under the cited agreements".
I.5 On 20 May 1996, the
DSB established a Panel in accordance with the request made by
the United States. The agreed standard terms of reference
of the Panel were (WT/DS26/7):
I.6 Australia, Canada, New Zealand
and Norway reserved their rights to participate in the Panel proceedings
as third parties.
I.7 On 2 July 1996, the
Panel was constituted with the following composition:
I.8 The Panel met with the parties
on 10 October 1996 and 11 November 1996.
It met with third parties on 10 October 1996. The Panel
consulted scientific and technical experts on 17-18 February 1997
in a meeting held jointly with the panel proceeding brought by
Canada on the same EC measures. 1
I.9 On 28 November 1996,
the Chairman of the Panel informed the DSB that the Panel would
not be able to issue its report within six months. The reasons
for that delay are stated in document WT/DS/26/8.
I.10 The Panel issued its interim
report to the parties on 7 May 1997. Following a request made
by the European Communities pursuant to Article 15.2 of the DSU,
the Panel held a further meeting with the parties on 4 June 1997.
The Panel issued its final report to the parties to the dispute
on 30 June 1997.
II. FACTUAL ASPECTS
1. The measures at issue
II.1 This dispute concerns EC
measures, in particular Council Directive 81/602/EEC ("Directive 81/602/EEC"),
Council Directive 88/146/EEC ("Directive 88/146/EEC")
and Council Directive 88/299/EEC ("Directive 88/299/EEC"). 2
II.2 Directive 81/602/EEC prohibits
the administering to farm animals of substances having a thyrostatic
action or substances having an oestrogenic, androgenic
or gestagenic action; the placing on the market or slaughtering
of farm animals to which these substances have been administered;
the placing on the market of meat from such animals; the processing
of meat from such animals and the placing on the market of meat
products prepared from or with such meat. The Directive provides
two exceptions to the prohibition: one exception is provided
for substances with an oestrogenic, androgenic or gestagenic action
when they are used for therapeutic or zootechnical purposes and
administered by a veterinarian or under a veterinarian's responsibility.
The other exception was for oestradiol-17b,
progesterone, testosterone, trenbolone acetate (or TBA) and zeranol
- when they were used for growth promotion purposes and their
use was governed according to the individual regulatory schemes
maintained by EC member States. This exception was made pending
an examination of the effects of these hormones on the health
of consumers and the adoption of an EC rule. EC member States
are obliged to apply their regulatory schemes to imports from
third countries in a manner not more favourable than that applied
to intra-EC trade.
II.3 Directive 88/146/EEC extends
the prohibition imposed by Directive 81/602/EEC to the administration
to farm animals of trenbolone acetate and zeranol for any purpose,
testosterone and progesterone for fattening purposes. However,
the Directive maintains the permission to administer these three
natural hormones to animals for therapeutic and zootechnical purposes
under prescribed conditions; in particular, therapeutic treatment
is defined to mean the administering to an individual animal of
any of the substances which are authorized to treat a fertility
problem diagnosed on examination by a veterinarian. The products
which are used for therapeutic treatment may be administered only
by a veterinarian, in the form of an injection (to the exclusion
of implantation) to farm animals which have been clearly identified.
Such treatment must be registered by the veterinarian and these
animals may not be slaughtered before expiry of the period fixed.
In the case of animals at the end of their reproductive career,
the treatments are prohibited from being administered during the
fattening period following the end of their breeding life. Article
4 of directive 88/146/EEC explicitly requires that undertakings
in the EC member States producing the prohibited hormones, those
companies authorized to market these hormones for whatever purposes
and undertakings producing pharmaceutical and veterinary products
based on those substances, must keep a detailed register recording
(in chronological order) the quantities produced or acquired and
those sold or used for the production of pharmaceutical and veterinary
products. The importation from third countries of animals and
meat from animals to which have been administered substances with
thyrostatic, oestrogenic, androgenic or gestagenic action is prohibited. 3
However, under certain conditions, Article 7 of Directive
88/146/EEC allows trade in those animals and meat from those animals
treated for therapeutic or zootechnical purposes, including imports
from third countries. 4
II.4 Directive 88/299/EEC lays
down the conditions for applying the derogations, provided for
in Article 7 of Directive 88/146/EEC, from the prohibition
on trade in certain categories of animals and their meat. The
first derogation of the Directive requires EC member States to
authorize trade in animals intended for reproduction and reproductive
animals at the end of their career (and of meat of such animals)
which, during their reproductive career, have undergone one of
two categories of treatments: The first category is therapeutic
treatment with one of the following substances: oestradiol-17b,
testosterone and progesterone; and those derivatives which readily
yield the parent compound on hydrolysis after absorption at the
site of application which appear in a list of approved products.
The second category is the administration of substances having
an oestrogenic, androgenic or gestagenic action for synchronization
of oestrus, termination of unwanted gestation, the improvement
of fertility and the preparation of donors and recipients for
the implantation of embryos, provided that the products in which
they are contained appear on a list of approved products and with
the respect of strict conditions of use concerning, in particular,
the respect of the withdrawal period, the monitoring of those
conditions of use and of the means of identification of the animals.
In addition, Articles 3 and 4 of this Directive provide that
trade between the EC member States of the European Communities
in animals intended for reproduction and reproductive animals
and meat from such animals is allowed only if all the conditions
laid down in the Directive are respected, in particular as regards
the waiting period and the requirement that animals have not received
any of the above treatments with any of the above substances during
the fattening period following the end of their breeding life.
The EC stamp may be affixed to the meat only if the waiting time
ended before the animals are slaughtered. The second derogation
in Directive 88/299/EEC allows imports from third countries
of treated animals and meat of such animals under guarantees equivalent
to those for domestic animals and meat.
II.5 Directive 96/22/EC will
replace Directives 81/602/EEC, 88/146/EEC and 88/299/EEC as from
1 July 1997. It will maintain the prohibition on the use
of these hormones for growth promotion purposes; extend the prohibition
on the use of beta-agonists; restrict the use of the hormones
at issue for therapeutic or zootechnical purposes, reinforcing
in particular the role of the veterinarian; and reinforce the
provisions on control and testing. Penalties and sanctions in
case of violations are to be increased where checks detect the
presence of prohibited substances or products or residues of substances
administered illegally. Such substances or products will be confiscated
and any treated animals or meat placed under official supervision
until penalties have been applied.
2. The substances at issue
II.6 Hormones (chemicals) produced
by the bodies of humans and animals are called endogenous or natural
hormones. (Phyto-hormones are produced by some plants.) Compounds
chemically synthesized to mimic the effect of natural hormones
are called synthetic or xenobiotic hormones. Natural hormones
are secreted into the blood stream by specialized cells and travel
throughout the body. Hormones act by binding protein receptors
present in hormone-responsive tissues. The receptor undergoes
a conformational change, binds to specific DNA sequences and regulates
specific genes within a cell. Synthetic hormones may differ from
endogenous (natural) hormones in their rate of metabolism and
II.7 Hormones function in four
broad areas: reproduction; growth and development; maintenance
of the internal environment; and production, utilization and
storage of energy. One hormone can have multiple actions. For
example, the male hormone testosterone controls many processes
from the development of the fetus to libido in the adult. One
function may be controlled by multiple hormones: the menstrual
cycle involves oestradiol, progesterone, follicle-stimulating
hormone and luteinizing hormone.
II.8 Of the six hormones involved
in this dispute, three are naturally occurring hormones produced
by humans and animals: oestradiol-17b,
progesterone and testosterone (hereafter also referred to as natural
is a sex steroidal hormone with oestrogenic action (i.e., responsible
for female characteristics); testosterone is a sex steroidal
hormone with androgenic action (i.e., responsible for male characteristics);
progesterone is a sex steroidal hormone with gestagenic action
(i.e., responsible for maintaining pregnancy). These three hormones
are produced throughout the lifetime of each individual and are
required for normal physiological functioning and maturation.
Hormone levels vary with the tissue, with the species of animal
and with the sex and individual. Hormone levels vary most dramatically
with puberty, pregnancy and castration.
II.9 The other three hormones
involved in this dispute are artificially produced hormones:
trenbolone, zeranol and melengestrol acetate (MGA) (hereafter
also referred to as synthetic hormones). These hormones mimic
the biological activity of the natural hormones. Trenbolone mimics
the action of testosterone; zeranol mimics the action of oestradiol-17b;
and MGA mimics progesterone.
II.10 In the United States,
the three natural hormones may be used for medical treatment (therapeutic).
is also permitted for zootechnical purposes. In the United States
the six hormones are also approved for growth promotion purposes.
Three of the hormones used for growth promotion purposes, trenbolone,
zeranol, and MGA, have no zootechnical or therapeutic uses. For
growth promotion purposes, five of these hormones (except MGA)
are formulated as pellets (with approved and fixed amounts of
compound) designed to be implanted in the ear of the animal.
The ear is discarded at slaughter. MGA is administered as a feed
3. The Codex Alimentarius
II.11 The SPS Agreement makes
reference, in a number of provisions, to "the relevant international
standards, guidelines and recommendations". Annex A:3(a)
of the SPS Agreement states that the international standards,
guidelines and recommendations relevant for food safety are those
established by the Codex Alimentarius Commission relating to food
additives, veterinary drug and pesticide residues, contaminants,
methods of analysis and sampling, and codes and guidelines of
II.12 The Codex Alimentarius
Commission (hereafter the "Codex Commission") is a joint
FAO/WHO advisory body established to implement the Joint FAO/WHO
Food Standards Programme. The purpose of this programme is to
protect the health of consumers and to ensure fair practices in
food trade through the elaboration of food standards. These standards,
together with notifications received from governments with respect
to their acceptance or otherwise of the standards, constitute
the Codex Alimentarius. The Codex Alimentarius (hereafter "the
Codex") is thus a collection of internationally adopted food
standards presented in a uniform manner.
II.13 Membership of the Codex
Commission is open to all member Nations and Associate members
of FAO and/or WHO and is composed of government representatives
of these members. Most of its members, including the United States
and the EC member States, are WTO Members. The European Communities
has an observer status in the Codex Commission. The Codex Commission
has established a number of subsidiary bodies, including the Codex
Committee on Residues of Veterinary Drugs in Food ("CCRVDF").
II.14 The technical and scientific
analysis of veterinary drugs, food additives and some other substances
in foods and beverages is not undertaken by the Codex Commission
itself but independently by the Joint FAO/WHO Expert Committee
on Food Additives ("JECFA"). The JECFA is composed
of independent scientists who serve in their individual capacities
as experts, not as representatives of their governments or organizations.
The goal of the JECFA evaluation of veterinary drugs is:
(a) The elaboration of Codex
II.15 The elaboration of Codex
standards involves an 8-step process:
The Codex Commission secretariat arranges for the preparation
of a "proposed draft standard". In the case of veterinary
drugs, JECFA is in charge of preparing recommendations for maximum
The secretariat distributes the "proposed draft standard"
to the members of the Commission for comments.
The comments received are sent by the secretariat to the CCRVDF
which considers the comments and prepares, if appropriate, a proposed
Step 5: The proposed draft standard is submitted through the secretariat to the Codex Commission or to the Executive Committee with a view to its adoption as a "draft standard".
The "draft standard" is sent by the secretariat to
all members and interested international organizations for comments
on all aspects, including possible implications of the "draft
standard" for their economic interests.
The comments received are sent by the secretariat to the CCVDRF,
which considers such comments and may amend the "draft standard".
The "draft standard" is submitted through the secretariat
to the Codex Commission together with any written proposals received
from members and interested international organizations for amendments
at Step 8 with a view to its adoption as a "Codex standard".
Adoption of standards is normally done on the basis of a consensus
decision, however, if requested, a vote may be taken. In this
case, a decision by the majority of Codex members is required.
An accelerated elaboration procedure may be used when there is
an urgent need for a standard.
II.16 The Codex Commission keeps
under review and may revise Codex standards, generally following
procedures similar to those used for the elaboration of standards.
Codex standards are published and sent to governments for acceptance
and to international organizations to which competence in the
matter has been transferred by their EC member States. Acceptance
of the standards is voluntary and Codex members are not required
to indicate formal acceptance of Codex standards, guidelines or
recommendations. The implementation of Codex standards at the
national level is the responsibility of members.
(b) Codex standards for five
hormones at issue
II.17 Codex standards for veterinary
drugs are normally stated in terms of an Acceptable Daily Intake
("ADI") and a Maximum Residue Limit ("MRL").
An ADI is "an estimate by JECFA of the amount of a veterinary
drug, expressed on a body weight basis, that can be ingested daily
over a lifetime without appreciable health risk (standard man
= 60 kg)". 6 An ADI is derived from the experimental No Observable
Effect Level ("NOEL") in the most appropriate animal
species, by applying an appropriate safety factor. To account
for sensitivity variabilities between humans and animals, and
dietary variabilities among humans, a safety factor is typically
applied. When data from long-term animal toxicity studies are
available, a safety factor of 100 is generally applied. Larger
safety factors, up to 1000, may be used in certain cases.
II.18 A Codex MRL is one of the
tools for ensuring that intake does not exceed the ADI and that
"Good Practice in the use of Veterinary Drugs" ("GPVD")
is observed. It is the maximum concentration of residue resulting
from the use of a veterinary drug (expressed in mg/kg
on a fresh weight basis) that is recommended by the Codex Commission
to be legally permitted or recognized as acceptable in or on a
food. Test animals are first treated with the drug in accordance
with proposed GPVD and, on the basis of this usage, tentative
MRLs are set for various tissues. These MRLs are then compared
with the ADI, considering dietary food intake. If the MRL established
on the basis of proposed GPVD would cause the ADI to be exceeded,
the MRL will be lowered to a level which ensures that the ADI
is not exceeded, and the proposed GPVD will also be made stricter.
If, on the other hand, the proposed MRL would not cause the ADI
to be exceeded (as is most frequently the case), the MRL will
be proposed for adoption. Thus, MRLs are frequently set at levels
below (even far below) the theoretical safe levels determined
from an ADI. An MRL may also be reduced to be consistent with
the GPVD as approved by national authorities or increased (to
a level still below the safe level) to be detectable using practical
II.19 "Good Practice in
the Use of Veterinary Drugs" (GPVD), is defined as:
According to the Codex expert
advising the Panel, the terms "good veterinary practice"
and "good veterinary and husbandry practice", when used
in JECFA reports, are synonyms for GPVD.
II.20 For the hormones at issue,
JECFA considered five of the six substances (all except MGA) and
made recommendations on four of them (excluding trenbolone) during
its 32nd Session in 1987. For trenbolone, further data was sought
and a JECFA recommendation made in 1989. The CCRVDF considered
the JECFA recommendations at its meetings in 1987 and recommended
draft standards for the three endogenous hormones and zeranol.
These draft standards were approved by the Codex Commission at
Step 5 in 1989. Standards for these four hormones were considered
at Step 8 by the Codex Commission in June 1991, but, following
a vote on the matter, were not adopted. A draft standard for
trenbolone at Step 5 was adopted on 1991. In June 1995,
the Codex Commission adopted standards, at Step 8, for the
five hormones, on the basis of a vote. These standards apply
exclusively with respect to cattle, and meat and meat products
of bovine origin, when these hormones are used for growth promotion
II.21 With respect to the three
natural hormones in dispute, oestradiol-17b,
progesterone and testosterone, similar Codex standards apply.
For these three hormones it was considered "unnecessary"
to establish an ADI or MRL. 8 Specifically, the Codex states that:
II.22 The 32nd JECFA Report of
1988 ("1988 JECFA Report"), on which the Codex standards
are based, concluded that residues arising from the use of testosterone
as a growth promoter in accordance with good animal husbandry
practice are unlikely to pose a hazard to human health and that
the amount of exogenous progesterone ingested in meat from treated
animals would not be capable of exerting an hormonal effect, and
therefore, any toxic effect, in human beings. Since, according
to JECFA, the potential toxic effect of residues of these hormones
is directly related to their hormonal effect, the report concluded
that the additional residue levels in treated animals are not
capable of exerting any toxic effect. On the basis of this safety
assessment and in view of the difficulty of determining the levels
of residues attributable to the use of these hormones for growth
promoting purposes in cattle (residues of endogenous natural hormones
in meat cannot be practically distinguished from those exogenously
administered), JECFA concluded that it was "unnecessary"
to establish an ADI or MRL for these hormones.
II.23 With respect to two of
the synthetic hormones at issue, zeranol and trenbolone, the Codex
standards are the following: an ADI of 0-0.5 and 0-0.02 mg/kg
body weight, respectively, and for both hormones an MRL of 2 mg/kg
in bovine muscle and 10 mg/kg
in bovine liver.
II.24 The 1988 JECFA Report,
on which the Codex standard for zeranol is based, noted that zeranol
was a weak oestrogen which mimicked the action of oestradiol-17b.
The Report concluded that the toxic (in casu tumorigenic)
effect of zeranol is associated with its hormonal (i.e. oestrogenic)
properties and that an ADI could thus be established on the basis
of a no-hormonal-effect level. Adopting what it considered to
be a conservative approach by using as a basis studies on ovariectomized
female cynomolgus monkeys (highly sensitive to oestrogenic substances)
and using a safety factor of 100, JECFA set an ADI for human beings
of 0-0.5 mg/kg
of body weight. For a 70 kg person consuming 500 g of meat daily
over an entire lifetime, the maximum permissible or safe level
of zeranol residues in meat would then, according to JECFA, be
of edible tissue. However, the Report noted that when zeranol
is administered to cattle according to good animal husbandry practice,
the maximum mean residue levels did not exceed 0.2 mg/kg
in muscle, 10 mg/kg
in liver, 2 mg/kg
in kidney, and 0.3 mg/kg
in fat at any time after implantation. These residue levels obtained
on the basis of good animal husbandry practice are thus below
the maximum permissible level of 70 mg/kg.
However, in order to set a level which is detectable by routine
residue analysis methods, the Codex MRL was increased to 2 mg/kg
in muscle and set at 10 mg/kg
II.25 Trenbolone acetate is the
chemical form or ester used for the administration of trenbolone.
Trenbolone, or trenbolone acetate ("TBA"), an androgen
which mimics the action of testosterone, is rapidly hydrolysed
after administration to cattle. The major metabolite (i.e. compound
into which TBA breaks down by chemical activity after entering
the body) is a-trenbolone,
occurring inter alia in liver, and b-trenbolone
present in muscle. With respect to TBA, the 1988 JECFA Report
concluded that its potential toxic effects only arise as a consequence
of its hormonal activity. The report further concluded that,
therefore, an ADI could be established on the basis of a no-hormonal-effect
level. Adopting what it considered to be a conservative approach
by using as a basis studies on castrated male rhesus macaque monkeys
(which are highly sensitive to compounds with antigonadotropic
activity) and pigs (which are a sensitive model for assessing
hormonal effects of TBA) and using a safety factor of 100, JECFA
later set an ADI for human beings of 0-0.02 mg/kg
of body weight (34th JECFA Report of 1989). The maximum ADI for
a 60 kg person would thus be 1.2 mg
of TBA residues. JECFA then set MRL's for b-trenbolone
in muscle and a-trenbolone
in liver of 2 mg/kg
and 10 mg/kg,
respectively, based on average residue levels in heifers at 15-30
days after implantation of 300 mg TBA, noting that concentrations
would be even lower at proposed GPVD. According to JECFA, the
MRL's thus obtained on the basis of conservative estimates should
not exceed the Codex ADI or safe level at any time after implantation
of the drug, that is, irrespective of the withdrawal period used.
4. History of events
II.26 European consumers' concern
over the use of hormones for growth promotion purposes in livestock
grew steadily throughout the 1970s as the result of the illegal
use of dethylstilboestrol, commonly known as DES (see paragraph 4.123),
in veal production in France and incidents, particularly in Italy,
where adolescents had been reported to be suffering from hormonal
irregularities and veal had come under suspicion as a possible
cause. European consumer organizations called for a boycott of
veal, and the market for veal was severely affected. On 20 September
1980, the EC Council of (Agriculture) Ministers adopted a declaration
in favour of a ban on the use of oestrogen and endorsed the principle
of greater harmonisation of legislation on veterinary medicines
and of greater control on animal rearing, both at the production
and slaughtering stages.
II.27 On 31 October 1980, the
EC Commission proposed legislation aimed at banning the use of
all hormone products (COM (80) 614), except for therapeutic purposes.
This proposal was expanded later by documents COM(80)920 and
COM(80)922, presented on 6 January 1981. These allowed for the
controlled use for therapeutic and zootechnical purposes of three
natural hormone products, and introduced a number of control measures
on the production and handling of such products, together with
proposals on the testing of animals. On 13 February 1981, the
European Parliament adopted the "Nielsen Report" approving
the Commission proposals. The EC Economic and Social Committee
endorsed the proposals in February 1981. However, three EC member
States (Belgium, Ireland and the United Kingdom) sought to have
the three natural hormones remain available both as therapeutic
drugs and as growth promotion agents, and Ireland and the United Kingdom
also argued for the retention of the synthetic hormones, trenbolone
and zeranol. Moreover, third countries, including Argentina,
Australia, Canada, New Zealand, South Africa and the United States,
also raised questions concerning the impact of any ban on their
exports to the European Communities.
II.28 The EC Council of Ministers
adopted its first Directive on the issue (81/602/EEC) on 31 July 1981.
In that Directive, and in regard to five of the hormones at issue
(all but MGA), the Council directed the Commission to provide,
not later than 1 July 1984, a report on the experience acquired
and scientific developments, accompanied, if necessary, by proposals
taking into account these developments. Accordingly, the Commission
set up a Scientific Group on Anabolic Agents in Animal Production,
chaired by Professor G.E. Lamming (the "Lamming Group").
The question addressed to the Lamming Group was:
The Lamming Group issued an interim
report on 22 September 1982 (the "Lamming Report").
The Lamming Report concluded as follows:
"Evaluation of data on
"trenbolone" and "zeranol" revealed that some
data on the hormonal non-effect-level and the toxicology of these
compounds and their metabolites are still missing.
"The Scientific Working
Group considers it necessary that additional information be provided
before a final conclusion can be given on trenbolone and zeranol.
"Proper programmes to control
and monitor the use of anabolic agents are essential.
"It is necessary to continue
scientific investigations on the relevance of the present use
of the "no-hormone-effect" level related to the harmful
effects of anabolic agents".
II.29 The EC Scientific Veterinary
Committee gave its reaction to the Lamming Report on 9 November 1982,
followed by the EC Scientific Committee for Animal Nutrition on
17 November 1982 and by the EC Scientific Committee
for Food on 4 February 1983. These Committees supported
the conclusions and recommendations of the Lamming Report, but
stressed the need to lay down provisions regarding the establishment
of proper programmes to control and monitor the use of anabolic
agents with regard, in particular, to instructions for use, surveillance
programmes and analysis methods. In January 1984, the Commission
asked a group of experts within the EC Scientific Committee on
Anabolic Agents to review the information on trenbolone and zeranol.
On 12 June 1984, the Commission published a proposal
(COM(84)295 final) for a Council Directive amending Directive 81/602/EEC,
which envisaged the controlled use of the three natural hormones
for growth promotion purposes and proposed re-examining the ban
on the two synthetic hormones after their scientific evaluation
had been completed. However, the European Parliament, the EC
Economic and Social Committee and the EC Council of Ministers
rejected the Commission's proposal.
II.30 The EC Commission amended
its proposal accordingly and on 31 December 1985 the EC Council
adopted Directive 85/649/EEC. This Directive banned the use of
all the substances concerned for growth promotion purposes and
established more detailed provisions concerning authorized therapeutic
uses. The Directive was challenged in the European Court of Justice,
which annulled it on procedural grounds. The proposals were re-introduced
by the EC Commission and re-adopted by the EC Council as Council
Directive 88/146/EEC on 16 March 1988.
II.31 Following reports of significant
use of illegal growth-promoting hormonal substances in a number
of EC member States, on 26 September 1988 the European Parliament
established a "Committee of Enquiry into the Problem of Quality
in the Meat Sector". The Report of this Committee (the "Pimenta
Report") endorsed the ban on the use of hormones and was
adopted by the European Parliament on 29 March 1989 (see paragraphs
4.36-4.39). The essential findings of the Pimenta Report were
that the prohibition of hormonal substances for non-therapeutic
(i.e. growth-promoting) purposes must be maintained and expanded
(ii) 10 out of 12 national veterinary
experts indicated that a total ban would facilitate implementation
(iii) The scientific conclusions
regarding the use of natural hormones rested upon strict conditions
of use which it believed could not in reality be attained. The
Committee was of the opinion that use of the natural/nature-identical
hormones carries the risk of inexperienced application, incorrect
dosage and unsupervised injection which could pose a risk to the
animal and the consumer, and also noted doubts with regard to
long-term cumulative and interactive potential carcinogenicity.
In addition, the Committee believed that proven necessity and
socio-economic desirability should be criteria of acceptability
for the use of (bio)chemical growth promoters in animal-rearing;
(iv) The Committee did not accept
the argument that prohibiting the use for growth promotion of
some natural or nature-identical hormones would result in an increase
in the use of other, more dangerous growth-promoting substances
to the detriment of the consumer;
(v) The Committee believed that
the Commission should promote the concept of animal welfare
in agricultural production.
II.32 The European
Parliament adopted another report on the issue of use of hormones
for animal growth promotion, the "Collins Report" of
7 February 1989. 11 This report argued that:
II.33 The EC
Commission organized a scientific conference on this subject in
Brussels from 29 November to 1 December 1996.
With regard to the natural hormones, the 1995 EC Scientific Conference
on Growth Promotion in Meat Production (the "1995 EC Scientific
Conference") concluded that:
The daily production of sex
hormones by humans is much higher than the amounts possibly consumed
from meat, even in the most sensitive humans (prepubertal children
and menopausal women).
Due to an extensive first-pass
metabolism, the bioavailability of ingested hormones is low, thus
providing a further safety margin." 12
With regard to the synthetic
hormones, zeranol and trenbolone, the 1995 EC Scientific Conference
5. History of events under
II.34 In March 1987, the United States
raised the issue of the EC ban under the Tokyo Round Agreement
on Technical Barriers to Trade ("TBT Agreement").
Bilateral consultations between the United States and the
European Communities failed to resolve the dispute. Arguing that
the EC Directive was not supported by scientific information,
the United States requested the establishment of a technical experts
group ("TEG") under Article 14.5 of the TBT Agreement
to examine the question. This request was denied following the
EC response that the use of growth promotants was a process and
production method (PPM), and that parties to the TBT Agreement
only had an obligation not to use PPMs to circumvent the Agreement.
The European Communities favoured the establishment of a panel
"to evaluate the rights and obligations of Parties deriving
from Article 14.25 (of the TBT Agreement)". 14 The dispute
2.35 On 1 January 1989,
the United States introduced retaliatory measures in the form
of 100 per cent ad valorem duties on a list of products
imported from the European Communities. The European Communities
consequently asked for the establishment of a panel. This request
was denied by the United States. In 1989, a joint US/EC Task
Force agreed on certain measures which allowed imports into the
European Communities of US meat certified to have not been produced
with hormones. This resulted in the United States withdrawing
some products from the retaliation list. The other EC products
figuring in the list remained subject to the retaliatory action.
On 19 June 1996, the European Communities requested the
establishment of a panel to examine this matter. On 15 July 1996,
after this Panel was composed, the United States terminated its
retaliatory action in its entirety.
III. CLAIMS OF THE PARTIES
III.1 The United States
claimed that the EC ban on the importation and sale of animals,
and meat derived from animals, that had been administered any
of the six hormones at issue for growth promotion purposes (oestradiol-17b,
progesterone, testosterone, trenbolone, zeranol and melengestrol
acetate (MGA)) was inconsistent with the SPS Agreement and the
III.2 Arguing that the EC measures
were sanitary measures, the United States claimed, with regard
to the SPS Agreement, that these measures: directly and
indirectly affected international trade; were not based on an
assessment of risk and were consequently inconsistent with Article 5.1
of the Agreement; were maintained without sufficient scientific
evidence in contravention of Article 2.2; were not justified
as a "provisional" measure under Article 5.7;
breached Articles 2.2 and 5.6 in that they were not based on scientific
principles; were not applied only to the extent necessary to
protect human life or health and were more trade-restrictive than
required to achieve the appropriate level of sanitary protection;
arbitrarily or unjustifiably discriminated between Members where
identical or similar conditions prevailed, in contravention of
Article 2.3; constituted a disguised restriction on international
trade, in breach of Article 2.3; contravened Article 3.1
because they were not based on the relevant international standards,
guidelines or recommendations and that this departure from international
standards was not justified by Article 3.3; and were based
on arbitrary or unjustifiable distinctions in the levels of protection
in different situations, resulting in discrimination or a disguised
restriction on international trade in contravention of Article 5.
III.3 The United States
claimed that the EC measures discriminated against imports and
were inconsistent with Article III of GATT. Arguing that US meat
and animals were "like" EC meat and animals, the United States
claimed that the EC measures were inconsistent with Article III:4
of GATT because they prohibited the importation and sale of certain
imported meat and animals, while permitting the sale of like domestic
products. The EC measures therefore treated US imports less favourably
than domestic production. The United States further claimed
that the European Communities had no legitimate policy purpose
for discriminating against US meat and animals. The United States
also claimed that the EC measures were inconsistent with Article
I:1 of GATT because they failed to accord to imports from the
United States the advantages, favours, privileges or immunities
granted to like animals and meat originating in the territories
of other countries. Finally, the United States argued that
the EC measures could not be justified by resort to Article XX
of GATT, in particular Article XX(b), because the European Communities
had put forward no evidence to support its measures on health
grounds, and the measures were "applied in a manner which
would constitute a means of arbitrary or unjustifiable discrimination
between countries where the same conditions prevail, or a disguised
restriction on international trade". The United States claimed
that if the EC measures were not sanitary measures, they would
be inconsistent with the TBT Agreement; in particular they were
technical regulations within the meaning of the TBT Agreement,
and would be inconsistent with Articles 2.1, 2.2, and 5.1.1 and
III.4 The European Communities
submitted that the analysis of the SPS and/or TBT Agreements should
take place only if alleged violations of GATT Articles were found.
Therefore, in their defense, the European Communities first invoked
GATT. With regard to the alleged violation of Article III:4
of GATT, the European Communities argued that the animals to which
the hormones at issue had been administered for growth promotion,
and meat from those animals, were not "like" other animals
and meat from those animals, respectively. Furthermore, the European
Communities argued that even if they were found to be "like",
imported products were not given "less favourable treatment"
than domestic products. Therefore, the European Communities claimed
that its measures did not infringe Article III:4 of GATT. The
European Communities claimed that in case its measures were found
to be contrary to Article III:4, they were justified by Article XX(b),
which did not affect the power of a Member to adopt a policy in
order to protect human and animal health.
III.5 With regard to the alleged
violation of Article I of GATT, the European Communities claimed
that such violation was not mentioned in the Panel's terms of
reference, was not mentioned in the documents by which the United States
requested consultations and was not discussed during the consultations
that were held subsequently. The European Communities claimed
that even if animals and meat from animals to which the hormones
at issue had been administered for growth promotion were found
to be "like" (quod non), the measures at issue applied
without distinction to all imports of meat irrespective of their
country of origin and not only to imports originating in the United
States. Accordingly, the European Communities argued that its
measures did not violate Article I:1 of GATT.
III.6 The European Communities claimed that the measures at issue, in any event, did not violate any provision of the SPS Agreement because they satisfied all the conditions imposed by it. The measures were based on scientific principles as required by Article 2.2 of the SPS Agreement, and a risk assessment had been performed which established the scientific basis for regulatory action. The European Communities observed that the SPS Agreement recognized a Member's right to establish the level of protection which the Member determined to be appropriate. The European Communities claimed that the measures at issue aimed at achieving a level of protection which was higher than could be achieved if the recommendations of Codex Alimentarius for these hormones were followed. It also claimed that WTO dispute settlement panels were not competent to judge its level of sanitary protection nor the scientific evidence upon which it was based, but only whether its measures were in conformity with the provisions of the SPS Agreement. It further claimed that the US arguments in fact attacked the EC chosen level of protection, not its measures, because they suggested that residues of these hormones, above naturally present levels, did not pose any risk to health and, therefore, did not warrant the application of any measures to control them. The European Communities also claimed that its measures were based on the precautionary principle. Moreover, it claimed that the United States had failed to discharge its burden of proof because it had failed to show that the measures at issue were no more trade restrictive than required to achieve the EC appropriate level of sanitary protection. The European Communities claimed that its measures were applied in exactly the same way to all animals treated with these hormones and meat from such animals intended for consumption in the EC market, whatever its origin; there was consequently no discrimination nor disguised restriction on international trade. The European Communities did not submit arguments on TBT because it considered that the measures at issue fell with the SPS Agreement. The European Communities claimed that because the measures at issue did not violate any of the provisions of the SPS Agreement, they should be found also to be in conformity with the rules of GATT, in particular Article XX:b, in case a violation of one of its provisions were to be found.
TO CONTINUE WITH EC MEASURES ON MEAT - COMPLAINT BY THE U.S.
2 Other measures relevant to the dispute are contained in Directives 72/462/EEC, 81/602/EEC, 81/851/EEC, 81/852/EEC, 85/358/EEC, referenced in Directive 88/146/EEC; the decisions, control programme and derogations referred to in Article 6(2), Article 6(7) and Article 7, respectively, of Directive 88/146/EEC; and any amendments or modifications, including Directives 96/22/EC and 96/23/EC.
3 Article 6(7) of Directive 88/146/EEC requires the establishment of a control programme as regards imports from third countries to ensure that imports do not receive more favourable treatment than EC products. This control programme also provides for rules on the frequency of controls on imports from each third country and on guarantees offered by the inspection regulation of third countries. Such checks on imports are now carried out in accordance with Directives 91/496/EEC and 90/675/EEC.
4 Article 7 of Directive 88/146/EEC allows derogations in respect to trade in animals intended for reproduction and reproductive animals at the end of their career (and in respect of meat from these various animals, taking into account the guarantees given), which in the course of their existence have been treated under the provisions of Article 4 of Directive 81/602/EEC. This article authorizes the administration to farm animals of substances with oestrogenic, androgenic or gestagenic action approved in accordance with the Directives on veterinary medical products (other than substances referred to in Article 3 of Directive 81/602/EEC) for therapeutic use, synchronization of oestrus, termination of unwanted gestation, the improvement of fertility and the preparation of donors and recipients for the implantation of embryos. The administering of these substances shall be effected by a veterinarian, however, EC member States may allow the synchronization of oestrus and the preparation of donors and recipients for the implantation of embryos to be done not by a veterinarian but under his direct responsibility.
5 Codex Alimentarius, Vol.3, Residues of Veterinary Drugs in Foods, p.vi.
6 Ibid., p.65.
8 Codex Alimentarius, Vol. 3 - 1995, Section 1, pp.7, 12 and 14.
9 Ibid., Section 1, footnote, pp.7, 12 and 14.
10 Report of the (EC) Scientific Veterinary Committee, Scientific Committee for Animal Nutrition and the Scientific Committee for Food on the Basis of the Report of the Scientific Group on Anabolic Agents in Animal Production, pp.1 and 12.
11 European Parliament, Committee on the Environment, Public Health and Consumer Protection, Report on "The USA's Refusal to comply with Community legislation on slaughterhouses and hormones and the consequences of this refusal", EP 128 381/B, 7 February 1989, named after its reporter Mr. Collins, MEP.
12 "Assessment of Health Risk - Working Group II", in 1995 EC Scientific Conference Proceedings, pp. 20-21.
14 GATT document TBT/M/Spec/7, p.9, para. 34.