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These are two parallel cases brought by the EC against the US and Canada in November 2004. The dispute concerns the US and Canada’s ongoing suspension of concessions (retaliation) against the EC following the EC’s loss in the earlier Beef Hormones case. The EC claimed that it has brought its beef hormones measures into compliance with the WTO ruling. New Zealand is interested from a systemic viewpoint in the “post retaliation” aspects of the case - ie what procedures apply where there is DSB authorisation to retaliate is in place and the Member concerned claims it has brought itself into compliance. There are also SPS aspects (do the new EC measures comply with the SPS Agreement?) that New Zealand did not address directly in its submission, made in August 2005. The first panel hearing took place on 12-15 September 2005. Due to the complexity of the dispute, the panel report was not circulated to Members until 31 March 2008. The Panel held both sides to be in breach of certain obligations under the DSU. On 29 May 2008, the EC notified its decision to request the Appellate Body to review certain issues of law.
The Appellate Body decision was released in late 2008. It sets out the Appellate Body’s view of the procedures that apply in a situation where: WTO-authorised retaliation has been taken; the Member being retaliated against claims subsequently to have brought itself into compliance but the Member/s taking the retaliatory action do not consider this to be the case. The Appellate Body’s findings make clear that, in such a situation, the duty to cease retaliatory action is not triggered until substantive compliance is determined through multilateral dispute settlement proceedings. On the substantive question of the EC's compliance with the SPS Agreement, the Appellate Body recommended that the Parties jointly initiate compliance proceedings to address that issue.
On 8 January 2009, in response to the Appellate Body decision, the EC requested consultations with the US and Canada to determine its substantive compliance with the SPS Agreement. New Zealand has joined as a Third Party to this latest phase of the dispute. Consultations took place in February 2009 but failed to resolve the dispute. On 30 September 2009, the EC and US circulated a Memorandum of Understanding, which set out a pathway towards a mutually agreed solution in relation to the dispute. Under this agreement, neither Party will request the establishment of a compliance panel under Article 21.5 of the DSU for at least 18 months.
