The European Union has failed to justify its ban on imports of hormone-treated beef, the World Trade Organisation said in a ruling published yesterday, reports Reuters.

But in a mixed verdict the WTO panel also found the United States and Canada had broken trade rules when they extended sanctions on EU exports in response to the EU’s revised ban.

The European Union, Canada and the United States all claimed victory in the latest twist of the 12-year-old dispute. U.S. beef exports will not resume immediately and both sides are likely to appeal.

Brussels called on the United States and Canada to lift the trade sanctions, while Washington and Ottawa urged Brussels to let in hormone-treated beef. But trade experts said the United States and Canada had come out the real winners.

“There’s a little bit in this decision for both parties, but primarily it’s a U.S. victory,” said Brendan McGivern, a partner at the law firm White & Case. “If the EC has no scientific basis to maintain their ban then U.S. sanctions can remain in place,” he told Reuters.

In two reports of more than 1,100 pages each, the panel said Brussels had failed to remove the justification for trade retaliation, as its arguments that beef treated with growth hormones could cause cancer did not meet WTO standards. It was the first time that a WTO dispute panel had ruled on whether trade retaliation should be lifted or continued when a guilty party says it has complied with the initial ruling.

At issue in the case was whether Washington and Ottawa could continue imposing millions of dollars of trade sanctions on EU exports after Brussels revised its ban in 2003, citing stronger scientific evidence that hormone-treated beef endangered health. U.S. Trade Representative Susan Schwab called the EU ban “scientifically unjustified” and said: “It is high time for the EU to come into compliance with its obligations.”

Canadian International Trade Minister David Emerson welcomed the ruling which he said confirmed the EU ban violates global trade rules. “We hope that the EU will lift its ban,” he said. The EU’s executive commission, meanwhile, said the WTO had condemned the U.S. and Canadian sanctions.

“The EU therefore demands that the U.S. and Canada remove their retaliatory measures,” it said. Parties to the dispute have 60 days to appeal the ruling. The EU has banned the use of growth-promoting hormones and imports of meat treated with them since the mid-1980s.

Canada and the United States challenged the ban in 1997, and in 1998 the WTO found that it was not in line with trading rules because the scientific assessment was not specific enough. As the ban remained in place, the WTO authorised the United States and Canada to impose sanctions of $116.8 million and C$11.3 million ($11.1 million) a year respectively.

Since 1999 the two countries have imposed punitive 100 percent duties on European products such as Roquefort cheese, pork, cucumbers, tomatoes, truffles and mustard. In 2003 the EU issued a new directive drawing on new scientific research that it said found overwhelming evidence that one hormone, oestradiol 17-beta, caused cancer and harmed genes, and substantial but not conclusive evidence that five other hormones could harm human health.

Out of total beef and veal imports into the European Union in 2007 of 548,909 tonnes, the United States accounted for only 2,767 tonnes and Canada for 1,265 tonnes, with the bulk coming from Brazil, Argentina and Uruguay, EU Commission figures show. The United States exported $2.62 billion worth of beef and beef products worldwide in 2007.

About $49 million (or just under 2 percent of the total) was exported to the 27 European Union countries, a spokesman for the National Cattlemen’s Beef Association said. Thad Lively of the U.S. Meat Export Federation, said falling European production and Europe’s interest in diversifying supply meant U.S. exporters had good prospects of getting a big share of a market worth potentially $1 billion a year. “If the hormone ban wasn’t in place, we could be quite competitive there,” he said.

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