The Great Beef Debate

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Given the sizes of the European and American economies and the amount of trade between them, it is inevitable that disputes will arise. I will focus on the continuing clash over the European ban on hormone-treated beef and the recent dispute over American steel safeguard measures. These two trade disputes represent different types and different issues within the trade relationship, although both expose weaknesses in the WTO system.

The beef hormone dispute represents a new type of ideologically-based trade dispute that is becoming more and more common . Hormone treated beef was first banned in 1989 by the European Community, and in 1995, the beef hormone case was one of the first cases brought to the newly formed World Trade Organisation (WTO). The US claimed that the ban on hormone treated beef was inconsistent with the new Agreement on the Application of Sanitary and Phytosanitary Measures (the SPS agreement), negotiated as part of the Uruguay Trade Round. This agreement established rules governing food safety regulations, stating that such regulations must be supported by scientific risk assessment . A WTO dispute panel ruled in favour of the United States, saying that the EU’s use of the precautionary principle (which justified the ban on the ground of scientific uncertainty about the health effects of hormones ) could not override the terms of the SPS agreement. The EU did not alter its regulations, prompting the United States to instigate tariffs against $116.8 million of European goods, mostly luxury items from France, Germany and Italy, countries that the US saw as the strongest supporters of the ban . These tariffs remained in place for years as attempts to resolve the dispute through bilateral negotiation repeatedly...

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