Wto Dispute - Beef Hormone Case

The main problem in the dispute between the United States and the European Union in the beef hormone dispute is to determine the extent that a country can use health or other concerns to prohibit trade. The major aspect of this dilemma is that the United States and Europe have different regulations concerning beef. Although the beef meets American and International standards it doesn’t meet some European regulations.

Even though the case went to the WTO and there were recommendations made, the have problem between the United States and the European Union has not been solved. In the case study it informs us that after the ruling in the favor of removing the barrier due to a lack of scientific evidence that hormone treated beef is bad, that the European Union persisted in the ban of all hormone treated beef (Moss 2002). In retaliation the United States placed tariffs on a mixture European Union goods; however, though the both the tariffs and beef restrictions remain, the parties are in negotiations (Moss 2002). Thus, there are a few different outcomes that may eventually take place, the ban on beef remains in place, the ban on beef is taken away in response to punitive tariffs, or the two parties come to an understanding and make compromises.

Because the United States has performed decades of research, they feel that the hormone-treated beef is perfectly safe to the end consumers. Research has shown that the amount of hormones in the treated beef isn’t significantly above the hormone levels found in naturally raised beef (Moss 2002). Thus, by taking the case to the WTO has tried to ensure that the European Union is not creating a non-tariff barrier to trade. Even though there are other tariffs placed on the European Union, they don’t seem to mind the higher costs. One measure the United States could take next is to increase the punitive tariffs higher until Europe drops its ban, thus, trying to force Europe into accepting its imports. While America could certainly push this prerogative, it is not likely to create an effective solution to the problem.

It is clear that the United States and Europe have different tolerances when it comes to modified food and what they are willing to tolerate. Jean Buzby, an agricultural economist, states, “European consumers are generally less trusting of food safety regulatory systems than are U.S. consumers because of recent incidents where European agencies initially failed to detect the extent of food safety problems” (Buzby 64). Thus, it is clear to see why the European consumers are skeptical to allow the hormone-grown beef. This fear was magnified after the press sensationalized the possible effects of long-term the beef consumption (Moss 2002).

However, insisting the ban remain in place or go away is short sided and not likely to alleviate the tension of the relationship between the United States farmers and the European Union consumers. Thus, both sides need to examine what an equitable remedy would be for the regulation and trade of the hormone grown beef. The two aspects that the case mentions have been discussed in negotiations is that the United States agreed to label the hormone-treated beef, and Europe has offered to expand the market for naturally grown American beef (Moss 2002). Both of these options are good first steps to be taken. By labeling the hormone-treated beef, the European consumer can make an informed decision, and allow the individual consumers to decide whether or not to buy meat that has been raised with hormones. However, this will add considerable cost to the marketing of the meat, and may not solve the real problem (Buzby 2001). In order to ensure that labels can be trusted and accurately reflect the true product, there need to be more means of controls and agents to inspect and certify the meat. As a result the price for the beef will increase to pay for the process and it may lead to problems in Europe as consumers shun the meat from the United States. The European agreement to create more access to the market for untreated meat is important because it is a step forward in allowing the import of American beef.

If the United States had understood and taken into consideration the needs of all people affected by the problem, I think they would have come up with better solutions to the problem rather than going to the WTO. America would have seen that the context of the problem doesn’t end in the science of the problem, but it stems from prior food safety issues.

References:

Buzby, J.C., Effects of food-safety perceptions on food demand and global trade, In: Regmi, A. 2001. Ed.. Changing Structure of Global Food Consumption and Trade, Washington, DC: United States Department of Agriculture (USDA) Economic Research Service. 55–66.

Moss, David, and Rick Bartlett, Note on WTO disputes: five major cases, 2002. Boston: Harvard College. 5-7.

References: Buzby, J.C., Effects of food-safety perceptions on food demand and global trade, In: Regmi, A. 2001. Ed.. Changing Structure of Global Food Consumption and Trade, Washington, DC: United States Department of Agriculture (USDA) Economic Research Service. 55–66. Moss, David, and Rick Bartlett, Note on WTO disputes: five major cases, 2002. Boston: Harvard College. 5-7.