UNITED STATES - CONTINUED SUSPENSION OF OBLIGATIONS IN THE EC - HORMONES DISPUTE
Document: Request for Consultations by the European Communities
Date: 10 November 2004
Document codes: WT/DS320/1; G/L/713
Complainant: EU
Respondent: U.S.
Third parties: Australia, Brazil, Canada, China, Taiwan, India, Mexico, New Zealand, Norway
Dispute stage: Appellate Body
Agreements cited: Art. I, II  GATT 1994Art. 3.7, 22, 23.1, 23.2, 21.5  Dispute Settlement Understanding (DSU)

UNITED STATES - CONTINUED SUSPENSION OF OBLIGATIONS IN THE
EC - HORMONES DISPUTE

Request for Consultations by the European Communities

 The following communication, dated 8 November 2004, from the delegation of the European
Communities to the delegation of the United States a nd to the Chairperson of the Dispute Settlement
Body, is circulated in accordance with Article 4.4 of the DSU.

 The European Communities hereby requests c onsultations with the Government of the
United States pursuant to Article XXII:1 of the General Agreement on Tariffs and Trade 1994
("GATT 1994") and Article 4 of the Understa nding on Rules and Procedures Governing the
Settlement of Disputes ("DSU") regarding the Unite d States' continued suspension of concessions and
other obligations under the covere d agreements, after the European Communities has removed the
measures found to be WTO-inconsistent in European Communities – Measures concerning meat and
meat products (Hormones) ("EC – Hormones").

 On 13 February 1998, the Dispute Settlement Body ("DSB") adopted th e panel and Appellate
Body reports in EC – Hormones. In doing so, the DSB recommended that the European Communities
bring the measures at issue into conformity with WTO rules. The Arbitrator appointed pursuant to
Article 21.3(c) of the DSU determined that th e European Communities shall have a "reasonable
period of time" until 13 May 1999 to comply with the recommendations. On 26 July 1999, the
United States obtained from the DSB the authorization to suspend obligations up to the level of 116.8
million US Dollars per year. The arbitrators ac ting pursuant to Article 22.6 of the DSU had
previously determined this level to be equivalent to the level of nullification or impairment suffered
by the United States in the matter EC – Hormones (Article 22.4 of the DSU). Pursuant to the DSB's
authorization and since 29 July 1999, the United States applies import duties in excess of bound rates
to imports from the European Communities by imposing a 100 % ad valorem rate of duty on a list of
articles that are the products of certain EC Member States.

 The European Communities subsequently removed the measure found to be inconsistent with
a covered agreement. It adopted Directive 2003/74/EC of the European Parliament and of the Council
of 22 September 2003 amending Council Directive 96/ 22/EC concerning the prohibition on the use in
stockfarming of certain substances having a hormonal or thyrostatic action and of beta-agonists. The
Directive was published and entered into force on 14 October 2003.

 In conformity with the recommendations and ru lings of the DSB, the new EC legislation is
based on a comprehensive risk assessment, in particul ar on the opinions of the independent Scientific

Committee on Veterinary Measure s relating to Public Health.
1 The European Communities initiated
and funded a number of specific scientific studies a nd research projects. It addressed specific requests
to the United States, Canada and third countries to provide any recent scientific data and information
in their possession. It took account of the findings of various independent expert bodies.

 On 27 October 2003, the European Communities notified to the DSB the adoption,
publication and entry into force of this Directive as well as the preceding scientific risk assessment.
In the same communication, the European Communities explained that it considers itself to have fully
implemented the recommendations and rulings of the DSB in the EC – Hormones dispute and that, as
a consequence, it considers the United States' and Canada's suspension of concessions vis-à-vis the
European Communities to be no longer justified.2

 The United States and Canada disagreed and denied that the new Directive was based on
science and that it implements the DSB's recommenda tions and rulings. As announced in the DSB,
3
the United States and Canada maintained the suspen sion of their concessions in relation to imports
from the European Communities. Fu rther, the United States and Canada refused to initiate dispute
settlement proceedings under Article 21.5 of the DSU in order to obtain a review of the new
Directive's consistency with the recommendations and rulings of the DSB. They have also rejected all
proposals by the European Communities over the l ast year which sought to establish an agreed
procedure for resolving this dispute.

 The issues which the European Communities would like to raise in the course of the
consultations include, but are not limited to, the following measures:

- the United States' suspension of obligations and continued imposition of import duties in
excess of bound rates on imports from the Europ ean Communities despite the EC's removal
of the measures found to be inconsistent with the covered agreements and notification thereof
to the DSB;
- the United States' unilateral determination that the new EC legislation is in violation of
obligations under the covered agreements; and
- the United States' failure to have recourse to dispute settlement proceedings pursuant to
Article 21.5 of the DSU in order to resolv e the disagreement over whether the new EC
legislation is consistent with a covered agreement.
 These measures are inconsistent with the United States' obligations under Articles I and II of
GATT 1994 and Articles 23.1; 23.2(a) and (c); 22.8 and 21.5 of the DSU.

- The United States has acted inconsistently with Article 22.8 of the DSU by failing to apply
the suspension of obligations only until such ti me as the measure found to be inconsistent

1 Opinion of the Scientific Committee on Veterinary Measures Relating to Public Health: Assessment
of potential risks to human health from hormone residues in bovine meat and meat products (30 April 1999);
Opinion on review of previous SCVPH opinions of 30 April 1999 and 3 May 2000 on the potential risks to
human health from hormone residues in bovine meat and meat products (adopted on 10 April 2002) and Review
of specific documents relating to the SCVPH opinion of 30 April 99 on the potential risks to human health from
hormone residues in bovine meat and meat products (adopted on 3 May 2000).

2 WTO, European Communities – Measures concerning meat and meat products (Hormones) ,
Communication from the European Communities, WT/DS26/22, WT/DS48/20, 28 October 2003.

3 DSB, Minutes of Meeting held on 7 November 2003 , WT/DSB/M/157, 18 December 2003, paras 29-
33.

with a covered agreement has been removed, or the implementing Member has provided a
solution to the nullification or impairment of benefits previously caused to the United States.
- The United States has acted inconsistently w ith Articles I and II of GATT 1994 by imposing
import duties in excess of bound rates on imports from the European Communities. Thereby,
the United States has failed to accord an advantage granted, with respect to customs duties, to
products originating in other countries immediat ely and unconditionally to the like products
originating in the territory of the Europ ean Communities. By the same measure, the
United States has failed to accord to the commerce of another Member treatment no less
favourable than that provided for in the appr opriate part of the Schedule annexed to the
GATT 1994. The United States has also failed to exempt products, which are the products of
territories of another Member, on their importation into the United States' territory, from
ordinary customs duties in excess of those set forth and provided in the United States'
Schedule.
- The United States has acted inconsistently with Article 23.1 of the DSU by failing to have
recourse to, and abide by, the rules and proce dures of the DSU, in a situation where it seeks
redress of an alleged violation of obligations under a covered agreement.
- In the particular instance, the United States failed to have recourse to dispute settlement
pursuant to Article 21.5 DSU, in a situation wh ere there is a disagreement as to the existence
or consistency with a cove red agreement of measures taken to comply with DSB
recommendations and rulings.
- The United States has acted inconsistently with Article 23.2(a) of the DSU by unilaterally
making a determination to the effect that a viol ation is still occurring, despite the removal of
the measures. The United States has made such determination without recourse to dispute
settlement in accordance w ith the rules and procedures of the DSU and, as a consequence, in
the absence of findings contained in an adopted panel or Appellate Body report or arbitration
award rendered under the DSU.
- By applying the suspension of obligations to the new EC legislation, the United States has
acted inconsistently with Article 23.2(c) of the DSU. The United States has failed to follow
the procedures set forth in Article 22 of the DSU and to obtain DSB authorization in
accordance with those procedures before suspending obligatio ns under a covered agreement
in response to the alleged failure of anot her Member to implement DSB recommendations
and rulings.
 The European Communities reserves the right to address additional measures and claims
under other provisions of the WTO Agreement regard ing the above matter during the course of the
consultations. The European Communities looks fo rward to receiving in due course a reply from the
United States to this request. The European Commun ities is ready to consider with the United States
mutually convenient dates to hold consultations in Geneva.