Geneva - The European Union and the United States headed into a major row over which had emerged victorious from a World Trade Organization ruling on the EU's ban on imports of hormone-treated beef.
But neutral analysts said a WTO appeals board had in essence backed an earlier panel finding that the EU was in the wrong by maintaining the nine- year-old veto without the backing of a credible study of the health risks from eating the meat.
However, the analysts said the complicated nature of the multi-million dollar case and the wording of the finding -- to be formally issued by the WTO on Friday -- left no doubt a long legal wrangle between the two top trading powers lay ahead.
Both sides claimed victory on the basis of advance texts. In Washington, U.S. Trade Representative Charlene Barshefsky applauded the three-man board's ruling and Agriculture Secretary Dan Glickman said the EU should now lift the ban.
In Brussels, EU sources asserted the finding allowed the nine-year veto to stay in place while a "risk assessment" was completed on the dangers to human health -- mainly cancer -- posed by beef from cattle fed with growth hormones.
"This was a clear and unequivocal win," said one senior U.S. trade official in Washington, a view shared by major farm and beef industry bodies in the United States who said they looked to a quick resumption of exports to major European markets.
"We deny it means that we have to lift the ban...The ruling is quite clear that we may maintain the ban," a source in the Commission, the 15-nation EU's executive body, countered.
Some trade diplomats following the case -- also brought to the WTO by Canada with backing from Australia, New Zealand and Norway -- described the EU version as "spin."
And they said the EU reaction could harden the U.S. stance in a parallel and also highly-charged row, involving many million dollars more of trade, on safety standards for poultry and other food products.
But there was no comment from the WTO pending distribution of the appeals board finding to all its 132 member countries.
Sources close to the parties in the case, first brought to the WTO in early 1996 by the United States, said the board had found that Brussels had failed to provide adequate scientific back-up for the ban.
It also recommended that the WTO Dispute Settlement Body request the EU to bring its measures into line with its obligations under WTO accords, they added.
The sources said the board upheld the basic finding of the original WTO panel that the EU ban, which U.S. farmers say is costing them some $250 million a year in lost trade, was inconsistent with a key part of the 1994 SPS agreement.
Aspects of the original panel finding overturned or modified by the board did not alter that fundamental point, they added.
The SPS accord, on Sanitary and Phyto-Sanitary measures, allows WTO member countries to take actions to protect food health and safety by limiting open trade, but only if supported by a scientific risk assessment.
The appeals judges said a risk assessment, which was not provided by the EU although it has cited evidence that hormones increase the risk of cancer in humans, had to sufficiently justify any trade restricting measures taken.
The United States and Canada argued that there was no scientific grounding for the ban and that it was aimed simply at protecting EU beef producers from competitive imports.
The analysts said the 100-page appeals board report was necessarily highly complicated and its wording inevitably left some room for Brussels to argue that all it needed to do now was produce a study on hormone health risks.
But once the Dispute Settlement Body has approved the board's report, likely next month, the EU would have to convince the United States, Canada and the other three complainants that its view was correct -- an almost impossible task.
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