Where's the Beef? Mad Cows and the Blight of the SPS Agreement

Article excerpt


The policies of a nation are seldom as susceptible to criticism from other nations as those policies that attempt to regulate international commerce. Indeed, even the internal regulations of one country can often have pervasive effects well beyond its own borders. In the wake of the "Mad Cow" scare, the European Union (EU) proposed a ban on any use of animal remains believed to have a specific risk of harboring Bovine Spongiform Encephalopathy (hereinafter BSE),(1) which will become effective January 1, 2000.(2) This ban is justified by the EU as prudent in response to public health needs.(3)

The ban is absolute and extends to foreign imports which contain any materials at high risk of carrying BSE.(4) One such use of the animal remains is the production of tallow, or animal fat, by boiling whole animal carcasses.(5) This is a common practice in U.S. slaughterhouses which claim the ban is unfair because it forces them to change their production methods,(6) particularly since there is no conclusive evidence that BSE exists in the domestic U.S. cattle market from which these producers draw their supplies.(7) Tallow derivatives are used in an estimated eighty percent of pharmaceuticals and in cosmetics and lubricants.(8) Additionally, the ban reaches cattle byproducts such as gelatin and gelatin-based cosmetics.(9) Collectively, this ban potentially affects up to $4.5 billion in U.S. pharmaceuticals exports which use tallow derivatives as key ingredients.(10)

The United States has threatened to submit a complaint to the World Trade Organization (WTO) if it is not exempted from the ban.(11) The ban is questionable under the GATT Sanitary and Phytosanitary Standards Agreement from the Uruguay Rounds (SPS Agreement).(12) The SPS Agreement allows a WTO member to choose the level of regulatory protectionism it wants to employ to preserve "public health" and to protect the environment from "risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs."(13) However, the Agreement established a framework within which the decision is to be made. This framework specifically outlines the need for "scientific" considerations to be made in the "risk assessment" phase of the regulatory process when a measure, such as the current EU proposal, is on the table.(14) These considerations are primarily to ensure that bona fide health regulations are passed, not "protectionist" devices under the pretext of "public health."(15) But the statute has been plagued by several interpretational difficulties by the Member States.(16)

The most glaring examples of these interpretational problems have arisen in the hormone dispute(17) over a ban by the EC (now the EU) of the administration of certain hormones (excepting those for medical purposes) to cattle, and also the marketing and slaughtering of cattle given the hormones, or selling or processing the meat or meat products derived from such cattle.(18) The United States argued the hormones were "scientifically" proven safe if used correctly and brought its complaint to the WTO for resolution.(19) Both sides were split (among other things) as to: (1) the meaning of "scientific justification," (2) what "based on" international standards means when choosing a level of protection, (3) the role of the Precautionary Principle, and (4) the precise contours of a "risk assessment" in the context of the SPS Agreement.(20)

For better or for worse, the recent resolution (and appellate decision) of the Beef Hormones Dispute by WTO dispute resolution panels shed some much needed light on a statutory text wrought with ambiguities. The decisions are likely to greatly influence the outcome of the SRM dispute should the United States formally go before the WTO. Since this is the first case interpreting the SPS Agreement, the decision is the first step in the development of what will inevitably become the "common law" of science in the realm of world trade disputes. …