In Brief

SWITZERLAND TO BAN HORMONE-TREATED BEEF, TO COMPLY WITH EC BILATERAL AGREEMENT

Switzerland is planning to implement an import ban on hormone-treated beef similar to that already enforced by the EC, according to government veterinary officials. The measure, which is set to enter into force no later than spring 2007, harmonizes Swiss legislation with the EC's sanitary and phytosanitary (SPS) rules as per a bilateral agreement.

Under current rules, beef is eligible for import into Switzerland so long as products are declared as stemming from hormone-treated animals and that hormone residues are no longer traceable. With the ban, hormone-treated beef will be denied access into the Swiss market. This will primarily affect US and Canadian exporters who, however, account for a relatively small share (three and four percent, respectively) of Swiss beef imports.

Although the ban has not been officially confirmed, US officials have expressed strong concerns with the prospects of an 'expansion' of the EC ban which was deemed incompatible with WTO law by the Appellate Body in 1998. The ban was never removed and the US and Canada have since applied sanctions amounting to $125 million every year.

The EC has continued to defend the legality of the ban, presenting additional scientific evidence arguing that hormone-treated beef does indeed pose a risk to human health. Based on this, it wants the US and Canada to remove the sanctions, something they so far have refused to do. The rebuff led the EC to file a complaint with the WTO in 2004. Hearings in that case started in September 2005; the second panel hearing is scheduled for 27-28 September (see Bridges Trade BioRes, 2 September 2005).

ICTSD Reporting; "Switzerland May Block US Beef Exports" Business Week Online, 27 August 2006

APPELLATE BODY SUPPORTS CANADA IN LUMBER DISPUTE - 'ZEROING' CONDEMNED AGAIN

In a report issued on 15 August, the WTO Appellate Body supported Canada's claim that the US has not implemented a 2004 ruling in the longstanding softwood lumber dispute.

The original case pertains to Canadian softwood lumber exports to the US. Washington argues that the Canadian lumber is being 'dumped' on the US market -- that is, sold below its market price in Canada -- and has placed additional import duties on it since 2002. WTO rules allow Members to impose anti-dumping duties on imports found to be 'dumped,' in order to offset the difference between the two prices.

In making these price comparison calculations, the US has employed a methodology that effectively ignores instances where the prices of the imported goods are actually higher in the home market -- 'zeroing' them out, in the jargon. Critics argue that taking only positive dumping margins into account distorts the calculation of the dumping margin.

In 2004, the Appellate Body deemed an earlier 'zeroing' methodology (the 'weighted average' method) incompatible with the Anti-dumping agreement, upon which the US switched to a 'transaction-to-transaction' calculation. Here, trade officials compare specific transaction prices as opposed to a monthly average (see Bridges Trade BioRes, 25 November 2005). This was the first time the Appellate Body ruled on the 'transaction-to-transaction' methodology.

Canada argued that the US had not complied with that ruling, since the 'transaction-to-transaction' methodology also failed to meet the Anti-dumping agreement's requirement for a 'fair comparison' between the export and home market prices. The Appellate Body confirmed this.

The ruling may have no direct impact: in July, the US and Canada signed an agreement 'in principle' to manage lumber trade through a series of varying export taxes. Under it, the US is to return approximately $4 billion of the almost $5.3 billion it has collected from Canadian companies since 2002. In spite of some industry opposition, the agreement now looks likely to receive parliamentary support in Canada this month. (See BRIDGES Trade BioRes 14 July, 2006).

The appellate body report is available at: http://www.wto.org/english/tratop_e/dispu_e/264abrw_e.doc

ICTSD Reporting: "Canada wins softwood case at WTO", CBC NEWS, 15 August 2006, "Canada wins WTO softwood ruling", the GLOBE AND MAIL, 16 August 2006 July 2006.

BUSH TO SIGN COLOMBIA FTA AFTER BOGOTA DROPS BAN ON US BEEF IMPORTS

Days after Colombia agreed to drop all mad cow disease-related restrictions on US beef imports, US President George W. Bush notified Congress on 24 August that he would formally sign a free trade agreement (FTA) with the Andean country. The FTA negotiations were largely wrapped up earlier in the year, save for some sticking points primarily related to agriculture trade. Bush is required to notify Congress 90 days before signing trade agreements.

Some 20-odd countries around the world have maintained bans on importing beef from the US since December 2003, when a cow there was found to have bovine spongiform encephalopathy (BSE). Many other governments impose various restrictions on US beef, only opening their markets to specific types of meat from cows under 30 months of age.

In August, Colombia and the US signed side letters to the FTA addressing the issue. A US agriculture spokesperson said that Colombia agreed to accept all beef products from the US, regardless of the age of the animal, so long as they receive formal approval from US food and safety authorities.

Removing barriers to US beef has emerged as a major priority in the US' trade strategy. Nevertheless, US beef exports remain at little over half their 2003 levels, according to the National Cattlemen's Beef Association.

Washington has urged countries to open their markets to all US-approved beef that meets World Animal Health Organisation (OIE) standards. US officials expect the OIE to okay their beef products for export. In an April side letter to its own FTA with the US, Peru agreed to import US beef products in accordance with OIE rules.

In bilateral FTA negotiations with Korea, Washington has pushed heavily for a removal of their import ban. Japan, which along with Korea used to be a major market for US beef, has only opened its markets to some kinds of beef from cattle younger than 21 months old. The US has also been urging China to relax its beef import ban, although trade is yet to resume.

The US' unilateral trade preferences for Andean countries will expire at the end of the year. Exporters from Colombia and Peru risk seeing their access to the US market reduced unless the FTAs enter into force at that time.

ICTSD reporting; "Bush tells Congress will sign Colombia trade pact," REUTERS, 24 August 2006.

OZONE LAYER RECOVERY LIKELY TO BE DELAYED

A major new report predicts that recovery of the depleted atmospheric ozone layer will probably take longer than previously expected.

The document, produced by a panel of 250 experts on ozone depletion, states that the ozone layer over Antarctica will not be fully restored until between 2060 and 2075 - as much as 10 to 25 years later than earlier research had suggested.

Ozone recovery in other global regions will also be slower than previously believed. In 2049, chlorofluorocarbon (CFC) concentrations could return to pre-1980 levels over Europe, North America, Asia, Australia, Latin America and Africa - five years later than a 2002 report had predicted.

The findings have been produced by the Scientific Assessment Panel to the Montreal Protocol on Substances that Deplete the Ozone Layer - the treaty intended to phase out production of ozone-depleting substances.

The report, entitled "Scientific Assessment of Ozone Depletion: 2006," suggests that two major factors are behind the delayed recovery. Firstly, there are signs that some kinds of CFCs not previously banned by the Protocol are still being used. Secondly, scientists now predict increased production of HFCF-22, a CFC substitute that still causes some ozone depletion.

"The delayed recovery is a warning that we cannot take the ozone layer for granted and must maintain and accelerate our efforts to phase out harmful chemicals," said Achim Steiner, executive director of UNEP.

The Protocol does however appear to be having some effect in decreasing the concentration of ozone-depleting substances - such as CFCs and methyl bromide. Compared to peak levels in 1992-1994, there are now lower concentrations of these substances in the troposphere (the lowermost portion of the Earth's atmosphere), and compared to 1990 levels, also lower concentrations in the stratosphere (which sits directly above the troposphere and contains the ozone layer) .

The full report will be released next year.

To access the executive summary of the "Scientific Assessment of Ozone Depletion: 2006," visit: http://ozone.unep.org/Publications/Assessment_Reports/2006/Scientific_Assessment_2006_Exec_Summary.pdf

ICTSD Reporting

WORLD WATER MANAGEMENT- COMING UP SHORT

One-third of the world population is already living with a water shortage, a level of scarcity previously predicted to occur two decades from now, according to a report released at the World Water Week on 20-26 August in Stockholm. Unlike previous research based on country-by-country analysis, the report analyses individual river basins and argues that changing agricultural practices now would slow the growth of demand for water by 50 percent by 2050.

The report, the Comprehensive Assessment of Water Management in Agriculture, calls for more rain-watered agriculture as opposed to irrigated farms. It also calls for improving access to water for poor people and increasing water's productivity. This would involve investing in areas where poverty is high and water productivity is low, such as sub-Saharan Africa and certain regions of South Asia and Latin America.

"We must grow more crop per drop, more meat and milk per drop and more fish per drop," said David Molden who led the assessment.

The report underscores the need "to change business as usual in order to deal with growing scarcity water crises we see in some countries like India, China and the Colorado River basin of USA and Mexico," said Director General of the International Water Management Institute, Frank Risjberman.

The report also addresses the relationship between global food trade and water, noting that "one way to alleviate water scarcity is to grow food where water is abundant and trade it with water short areas." It also recognises that many countries are reluctant to rely on imports to meet basic food needs.

More than 1,500 experts from 140 countries and over 100 organisations attended the World Water Week.

ICTSD Reporting; "Water, water not quite everywhere," TORONTO STAR (24 August 2006); "Fixing leaks can avert world water woes- expert," Alister Doyle, REUTERS (22 August 2006)

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