Animal & Veterinary
Beef Hormone Trade Dispute
by Merton Smith, Ph.D., J.D., Special Assistant for International Activities, Center for Veterinary Medicine
FDA Veterinarian Newsletter November/December 2005 Volume XX, No VI
In 1985, the European Union (EU) enacted a ban on production and importation of meat derived from animals treated with growth-promoting hormones. The EU justified the ban as needed to protect the health and safety of consumers from the illegal and unregulated use of hormones in livestock production in several EU Member States.
On January 1, 1989, the EU banned the import of U.S. beef produced with growth-promoting hormones. This action dramatically reduced beef exports to EU Member States. The value of the lost exports was about $100 million. The United States retaliated by imposing 100 percent duties on $100 million in EU products exported to the United States. This retaliation continued with some adjustments during the period of 1989-1996.
In April 1996, the United States requested that the World Trade Organization (WTO) Dispute Settlement Body (DSB) establish a panel to consider the U.S. claim that “European Community measures against certain growth hormones (the six hormones involved in this dispute were estradiol-17, progesterone, testosterone, trenbolone, zeranol, and melengestrol acetate [MGA]; the first three are natural hormones and the second three are synthetic hormones) adversely affect imports of meat and meat products and appear[ed] to be inconsistent with the obligations of the European Communities under…the Sanitary and Phytosanitary (SPS) Agreement….”
In May 1996, a panel (the Hormones Panel, officially called “Panel on EC Measures Concerning Meat and Meat Products [Hormones])” was formed “to examine…the matter…and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the SPS (and other WTO) agreements.” In February 1997, the Hormones Panel consulted with scientific and technical experts and issued its final report in June 1997, in which it found that EC measures were inconsistent with the SPS Agreement.
(By way of background, the WTO’s dispute resolution procedures permit a WTO Member government to request that a dispute resolution panel be established to determine whether measures maintained by another WTO Member government violate its obligations under the WTO agreements. Such a panel, normally consisting of three individuals selected in consultation with the parties to the dispute, considers written submissions and oral arguments by the parties. According to the applicable WTO procedures, a panel may seek advice from experts selected in consultation with the parties to the dispute, particularly in a dispute involving scientific or technical issues.)
Following an EU appeal of the initial findings of the Hormones Panel, in February 1998 the WTO Appellate Body upheld the Panel’s findings that the EU was inconsistent with Articles 3.3 and 5.1 of the SPS Agreement.
Article 5.1 states that “Members shall ensure that their sanitary or phytosanitary measures are based on an assessment, as appropriate to the circumstances, of the risks to humans, animal or plant life or health, taking into account risk assessment techniques developed by the relevant international organizations.” The EU was inconsistent with that article because it “maintained measures which were not based on a risk assessment,” the panel said.
The panel also found that the EU was inconsistent with Article 3.3 of the SPS Agreement. That article says that “Members may introduce or maintain sanitary of phytosanitary measures which result in a higher level of sanitary or phytosanitary protection than would be achieved by measures based on the relevant international standards, guidelines, or recommendations, if there is a scientific justification, or as a consequence of the level of sanitary or phytosanitary protection a Member determines to be appropriate in accordance with the relevant provisions of paragraphs 1 through 8 of Article 5.” The panel said that, “by maintaining sanitary measures which are not based on existing international standards without justification under Article 3.3 of the SPS agreement, it had acted inconsistently with the requirements…of that agreement.”
Finally, after arbitration proceedings and other delays, in July 1999 the DSB authorized the United States to begin collecting tariffs, by suspending its concessions on $116.8 million worth of imports from the EU, the amount that it lost each year due to the hormone ban.
Following the findings of the Hormone Panel, the EU announced it would conduct additional studies and risk assessments on hormones that would satisfy its Article 5.1 obligations.
EU requests further hormone consultations
On November 8, 2004, the EU filed a request for consultations with the United States asserting that the United States should have removed its retaliatory measures because the EU believed it had now removed the measures found to be SPS-inconsistent by the Hormones Panel. Specifically, on October 14, 2003, the EU amended its 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 and asserted that it was now in conformity with the Hormones Panel. The EU further asserted that the amendment of Directive 96/22/EC was based on comprehensive risk assessments, in particular on the opinions of its Scientific Committee on Veterinary Measures relating to Public Health. Underpinning these risk assessments were a number of EU-funded and initiated studies and projects. The EU concluded that “the avoidance of intake of oestradiol 17ß is of absolute importance to human health and that, consequently, the placing on the market of meat containing this substance should be prohibited.” With regard to the other hormones in dispute, the EU provisionally prohibited the placing on the market of meat containing these substances because the EU asserted that relevant scientific evidence was insufficient.
The United States disagreed and denied both that the new Council Directive 96/22/EC was based on science and that the Directive implemented the DSB’s recommendations and rulings. The United States formally stated that it considered the new Directive to be inconsistent with the EU obligations under the SPS Agreement 5.1 and that it would continue to impose retaliatory duties on certain products from the EU. In January 2005, the EU requested the WTO to convene another dispute resolution panel.
The United States believes that, contrary to the EU’s claim, there are no studies that demonstrate there is increased health risk from the consumption of meat from animals treated with growth-promoting hormones.
The first meeting of this new panel and the disputing parties took place in September 2005. To highlight the broad interest that this case continues to have, it is interesting to note that this has been the first time a WTO dispute panel meeting has been conducted and broadcast in full transparency. Initially the panel was expected to complete its work within six months, but several months ago determined that, “due to the complexity of the dispute and the administrative and procedural matters involved,” it is not expected to issue a final report until October 2006.
This trade dispute has been ongoing for a number of years and has been rather bitter especially considering that it has involved a relatively small amount of trade. (For example, in 1999 the trade lost from hormone-treated beef amounted to less than 0.1 percent of all U.S. exports to the EU.)
Relying on JECFA, CCRVDF, and CAC
In this continuing hormone trade dispute with the EU, the United States has relied significantly on the safety decisions made by the Codex Alimentarius Commission (CAC), its Codex Committee on Residues of Veterinary Drugs in Foods (CCRVDF), and the Joint Expert Committee on Food Additives (JECFA), especially in pressing its case before the 1996 Hormones Panel.
For the six hormones at issue in this dispute, JECFA considered five of the substances (all except MGA) and made recommendations on four of them (excluding trenbolone) during its 32nd Session in 1987. For trenbolone, further data were sought, and a JECFA recommendation was made in 1989. The CCRVDF considered the JECFA recommendations at its meeting in 1987 and recommended draft standards for the three endogenous hormones and one of the synthetic hormones, zeranol. These draft standards were approved by the CAC at Step 5 in 1989. Standards for these four hormones were considered at Step 8 by the CAC 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 CAC adopted standards, at Step 8, for the five hormones (all except MGA), 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 purposes.
For the three natural hormones in dispute, estradiol-17, progesterone, and testosterone, CAC considered it “unnecessary” to establish an Average Daily Intake (ADI) or Maximum Residue Level (MRL). Specifically, the CAC standard states:
“Establishing an ADI and an (MRL) for a hormone that is produced endogenously at variable levels in human beings was considered unnecessary by the Committee (CCRVDF). Residues resulting from the use of this substance as a growth promoter in accordance with good animal husbandry practice are unlikely to pose a hazard to human health.”
Earlier, in the 32nd Report of the JECFA (1988 JECFA Report) on which the Codex hormone standards are based, JECFA concluded that residues arising from the use of testosterone and estradiol-17 as growth promoters 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 a hormonal effect, and therefore, any toxic effect, in human beings. (The term “good animal husbandry practices” is recognized to mean “the official recommended or authorized usage including withdrawal periods, approved by national authorities, of veterinary drugs under practical conditions.” This is an important condition given that some of the EU concerns were raised with reference to the improper use of hormones.)
With respect to two of the synthetic hormones at issue, zeranol and trenbolone, the JECFA recommendations concluded that any toxic effects of these hormones are associated with their hormonal properties and that an ADI could thus be established on the basis of a no-hormonal-effect level. JECFA adopted what it considered to be a conservative approach by using animals highly sensitive to these hormonal substances and using a safety factor of 100.
For these two synthetic hormones the JECFA recommendations included the following: an ADI of 0-0.5 µg/kg body weight for zeranol and 0-0.0225 µg/kg body weight for trenbolone, and for both hormones an MRL of 2.25 µg/kg in bovine muscle and 10.25 µg/kg in bovine liver. According to JECFA, the MRLs thus obtained should not exceed the Codex ADI or safe level at any time after implantation of the drug, regardless of the withdrawal period used.
The CAC vote in 1995 adopting these JECFA recommendations about hormones was not unanimous. The CAC usually adopts its standards by consensus, but in this case consensus was not possible. The CAC adopted the hormone standards by a majority vote: 33 to 29, with seven countries abstaining.
The approval of these five hormones by the CAC provided important support for the United States in its subsequent case in the WTO against the EU.
Public health protection and the hormone trade dispute
It is clear from this dispute over the safety of hormones that Codex decisions can be used to either support or to lend non-support to national food safety control measures in trade disputes. But the primary interest of both the Food and Drug Administration (FDA) and the Center for Veterinary Medicine (CVM) in participating in the standard-setting activities of Codex and JECFA is to ensure that Codex decisions are based on sound science with the goal of protecting the public health.
FDA is not a trade facilitation or trade promotion arm of the U.S. Government, but many of FDA’s decisions and actions clearly may result in effects on international trade for food and other products. Even though it is not a trade promotion agency, FDA does have a responsibility to explain the scientific and regulatory basis for its decisions and to provide evidence that the decisions are applied consistently to comparable risks. This kind of information is regularly given to U.S. trade protection or promotion agencies such as the U.S. Department of Commerce or the Office of the U.S. Trade Representative, as well as to foreign government and industry officials who ask for such information.
Furthermore, FDA has some responsibilities articulated in law to support U.S. trade agencies and some of their activities when they do not contravene FDA’s public health purposes. Specifically, the Federal Food, Drug and Cosmetic Act’s (FFDCA) section 803(c)(1) requires that “the Secretary shall support the Office of the United States Trade Representative, in consultation with the Secretary of Commerce, in meetings with representatives of other countries to discuss methods and approaches to reduce the burden of regulation and harmonize regulatory requirements if the Secretary determines that such harmonization continues consumer protections consistent with the purposes of this Act. (2) The Secretary shall support the Office of the United States Trade Representative, in consultation with the Secretary of Commerce, in efforts to move toward the acceptance of mutual recognition agreements relating to the regulation of drugs, biological products, devices, foods, food additives, and color additives, and the regulation of good manufacturing practices, between the European Union and the United States. (3) The Secretary shall regularly participate in meetings with representatives of other foreign governments to discuss and reach agreement on methods and approaches to harmonize regulatory requirements;” and section 903(b)(3) of the FDCA concerning FDA’s mission: “The Administration shall… participate through appropriate processes with representatives of other countries to reduce the burden of regulation, harmonize regulatory requirements, and achieve appropriate reciprocal arrangements.”
Need for credible science-based rules
In the end, if the scientific basis of health and safety standards is perceived to be invalid, whether they are viewed as overly protective or not protective enough, there will be distrust by the public of the regulatory actions that are based on those standards. Failing credibility may also result in increased problems related to a growing lack of compliance by product manufacturers and users. For example, reports of illegal products being available on black markets in some countries may indicate, in addition to inadequate enforcement capabilities, that government regulatory requirements are viewed as arbitrary or scientifically unjustifiable. The availability and use of such illegal products clearly can greatly exacerbate potential public health problems.
(In 2001 Dr. Rainer Stephany of the National Institute of Public Health and the Environment in Bilthoven, the Netherlands, reported that in some EU Member States extended black markets exist, facilitating the use of between 35 and 55 illegal hormonally active growth promoters in farm animals.)
Strong science-based national requirements and international standards are, and will continue to be, the focus of CVM’s work both in its domestic regulatory capacity and in its participation in the work of Codex and JECFA.