February 23, 2009

WTO consultations between the US and the EU have failed to make progress on resolving the long running bilateral dispute on sanitary requirements for poultry and beef sales, according to US and EU sources.

An EU source said officials on each side simply repeated their long-standing arguments on the EU ban of beef raised with artificial growth hormones.

The EU is now expected to seek a dispute settlement panel on whether the ban is consistent with the Agreement on the Application of Sanitary and Phytosanitary Measures, by April 11.

The Obama administration now will have to decide whether to proceed with a WTO charge on the EU ban on US poultry that is treated with antimicrobial washes.

Once a new US Trade Representative is appointed, the US poultry industry representatives are expected to meet with him/her to urge for a dispute settlement panel, according to US sources.

The EU said its ban as altered in 2003 complies with the SPS agreement, while the US officials continued to argue that the ban does not have scientific evidence that the treatment poses health risk to consumers.

If the EU won its case, the US and Canada would have to lift their punitive tariffs on EU exports imposed when the EU failed to implement a ruling against the ban within an agreed deadline.

EU efforts to get the sanctions lifted failed, as the WTO ruled in October 2008 that the US and Canada can keep their trade sanctions in place until a WTO compliance panel rules that the ban complies with the SPS Agreement.

The US is ready to rotate its retaliation list on March 23 under a decision announced by the Bush administration, hoping to force the EU to negotiate a settlement of the dispute with increased access for US beef not raised with artificial growth hormones.

But EU member states strongly oppose such an arrangement, and are pressuring the Commission to oppose the changes.