ECONOMIC EFFECTS OF THE BAN IMPOSED BY THE EUROPEAN UNION ON BEEF FROM THE UNITED STATES TREATED WITH GROWTH HORMONES
The European Union adopted and implemented a policy that prohibits the introduction into members states of the European Union beef, beef products, or dairy products wherein the cattle have been treated with bovine growth hormone (bGH). This policy was not directed specifically at the United States. Rather, the policy applies to all countries desiring to export beef, beef products, or dairy products to the European Union (Mueller, 1996).
Brazil, a country whose farmers use bGH in raising beef cattle and in producing dairy products, agreed to export to the European Union only beef, beef products, and dairy products wherein the cattle had not been treated with bGH. Further, Brazil agreed to certify that such products exported to the European Union were bGH-free. By contrast, the United States and Canada protested the right of the European Union to prohibit the export of bGH-treated beef, beef products, and dairy products to the European Union (Mueller, 1996).
When the European Union and the United States were unable to come to an agreement on the issue, the United States lodged an official complain with the World Trade Organization (WTO) on the grounds that the action by the European Union in relation to bGH-treated beef, beef products, and dairy products was an unfair trade practice that contravened the Uruguay Round of the General Agreement on Tariffs and Trade (GATT). Eventually, the World Trade Organization ruled in favor of the United States, allowing the United States to impose penalizing tariffs on a variety of goods exported by the European Union to the United States should the European Union refuse to abide by the World Trade Organization ruling on the issue. The World Trade Organization also gave the European Union 12 months to conduct additional scientific tests to support their position on the is...