Hoof and Mouth Ban by EU (HOOF)
CASE NUMBER: 33
CASE MNEMONIC: HOOF
CASE NAME: Hoof and Mouth Ban by EU
A. IDENTIFICATION
1. The Issue
On April 8, 1993 the European Union (EU) banned imports of
livestock, meat, milk, and dairy products from 18 Central and
Eastern European countries after cases of hoof-and-mouth disease
were reported in northern Italy. The Italians claimed that the
disease was found in cattle shipped from the former Soviet Union
through either Slovenia or Croatia. Under EU law, if proof
exists that a country has livestock that is afflicted by hoof-
and-mouth disease, import barriers can legally keep these animals
from spreading their disease to the importing country. In this
case, it was not proven that hoof-and-mouth disease was present
in their livestock. Nevertheless, the EU restricted the import
of cloven-hoofed animals from 18 Central/East European countries.
Some argue that the main reason for the ban is that agriculture
is heavily protected and subsidized under the Common Agricultural
Policy. Any threat to price stability or wages due to increased
competition from imports from the East could trigger the powerful
farm lobby to insist on import bans, under the guise of health
restrictions.
2. Description
Hoof-and-mouth disease is a viral infection found in cloven-
footed animals, in this case swine and sheep. If one of these
animals is known to have the disease, it is illegal for a country
to export them to the EU or the United States. The banning of
the importation of infected animals is due to the effects of the
disease: it causes death or permanent disability, interrupts
growth, leads to miscarriages, impedes reproductive inefficiency,
and decreases milk production. In all of the cases, the effect
is to decrease the value of trade because the infected animal
cannot produce as much as it can when it is healthy.
The EU, led by Italy and France, claimed that east European
farmers were exporting diseased livestock. However, they had no
proof. The last case of hoof-and-mouth disease in Poland,
Hungary, the Czech and Slovak Republics, and Bulgaria (the
signatories to the European Agreements) was detected in 1974.
Each of the five countries in turn promptly retaliated by banning
meat and dairy imports from the EU. The bans were lifted against
all countries except Poland after they agreed to give 48 hours
warning before exporting animals and to accept quarantine periods
of 14 days. Polish producers refused to abide by the quarantine
rules because they believed that the rules would cost them too
much money.
On April 8, 1993 Owispol, a small private livestock trading
company in Warsaw sent trucks carrying 549 lambs to Belgium.
German customs officials turned the truck back and 12 of the
lambs died on the return trip. However, the Polish farmers would
not re-accept the lambs because ewes reject their lambs if they
are separated for more than two days. Many of the lambs died.
On July 15, 1993, the EU and Poland reached a compromise on
quarantine for animals before shipment. The new rules increased
meat and dairy exporters' costs by 10 percent. The ban on Polish
meat and the quarantine rules will mean a one-third reduction in
their meat quota to the EU, which is 190,000 heads of cattle,
150,000 calves, and 750,000 sheep.
Under the European Agreements, which liberalize trade
between the EU and eastern Europe, "sensitive items," such as
steel, textiles, and agriculture, are either excluded or limited
by numerical ceilings. Because these "items" make up to 35-45
percent of East European exports, the Agreements have not been
that helpful for the economic transformation in the East. The
import ban simply exacerbated the economic problem, while at the
same time also widened the political problems between east and
west Europe.
This is not the only case where outward EU policy of
liberalization towards Eastern Europe was countered by effective
protection. EU restrictions on steel imports were placed on
East Europe in early 1993 because of dumping claims. In fact,
eastern production costs are much lower because of the huge wage
disparity between east and west.
There are other instances of the EC banning imports of meat
for health reasons. The European Community (EC), on January 1,
1989, banned the sale of meat from hormone-treated cattle as
being a health risk and blocked imports valued at $100 million a
year from the United States. Most U.S. cattle are given hormone
implants because they accelerate growth without greatly
increasing the demand for feed. The EC claimed that its ban was
designed to protect citizens' health, but American officials
thought it was designed to protect European farmers from
competition. Even though methods of hormone use are so
sophisticated now that it is often impossible to tell whether or
not meat in the supermarket comes from a treated animal, the EC
insisted that it would accept only beef that the exporting
government had certified that the animals were never given
hormones. The United States announced a 100 percent tariff on
European imports including tomato sauce, canned tomatoes, wine
coolers, beef, fresh hams, instant coffee and fruit juice. Soon
after, a settlement was reached between the EC and United States.
Several nations in the EC, accused the British of exporting
beef with bovine spongiform encephalopathy (BSE), nicknamed the
"mad cow" disease because infected animals became aggressive and
staggered clumsily. Although the British government stated that
British beef was safe to eat, France, the largest overseas buyer
of their beef, announced a ban on all imports. Germany,
Luxembourg, and Austria took similar action. The French action
provoked the sharpest reaction. Some claimed that the Paris
embargo was not related to mad cow disease, but was aimed at
protecting French cattle growers from competition. French
farmers claimed that the British could not sell beef at home
because of the scare and were dumping it in France at cut-rate
prices.
The French embargo against British beef ended when Britain
agreed to export only cattle younger than six months. The
embargo against beef from the east continues. Ultimately, the EU
will have to reconcile its political desire to help former
communist countries with the economic reality that limits market
concessions.
3. Related Cases
Keyword Clusters
(1): Domain = EUROPE
(2) : Bio-geography = TEMPerate [TEMP]
(3): Environmental Problem = HEALTH
4. Draft Authors: Katherine Sebold and Kevin Kurland
B. LEGAL Clusters
5. Discourse and Status: DISagreement and INPROGress
The EU agreed to lift the ban on meat and dairy exports only
after stricter enforcement of export certification procedures and
quarantine rules were imposed. At the same time, reciprocal bans
from on EU imports were also dropped. The EU could not locate
the source of the hoof-and mouth-disease, and the political
ramifications were very costly because of EU vows to liberalize
east-west trade flows. The problem was solved on April 26, 1993
for all east and central European countries except Poland. An
agreement was reached with Poland on July 15, 1993.
6. Forum and Scope: EURCOM and REGION
7. Decision Breadth: 17 (EC and European Agreement
members)
8. Legal Standing: TREATY
C. GEOGRAPHIC Clusters
9. Geographic Locations
a. Geographic Domain : EUROPE
b. Geographic Site : Eastern Europe [EEUR]
c. Geographic Impact : European Community [EURCOM]
10. Sub-National Factors: NO
11. Type of Habitat: Temperate [TEMP]
D. TRADE Clusters
12. Type of Measure: Import Ban [IMBAN]
After Italy claimed that a case of hoof-and-mouth disease
had arrived in a shipment from the former Soviet Union that
passed though either Croatia or Slovenia, the EU banned all meat
and dairy products from 18 central and east European countries.
To many, it appeared that the EU members simply generalized a
specific case to justify the import ban across all 18 countries.
13. Direct vs. Indirect Impacts: DIRect
An import ban on beef and dairy products directly affects
trade between EU and Central and East European countries.
Because Hungary, Poland, the Czech and Slovak Republics, and
Bulgaria are signatories to the European Agreements, they could
not fulfill their export quotas to the EU, reducing beef and
dairy producer profits.
14. Relation of Measure to Environmental Impact
a. Directly Related : YES MEAT
b. Indirectly Related : NO
c. Not Related : NO
d. Process Related : YES HEALTH
15. Trade Product Identification: MEAT
Table III-33-1 shows the trade profiles for several east
European countries. Poland sends 58 percent of its exports to
the EU and Hungary 50 percent. At the other extreme, Slovakia
sends only 22 percent. The difference in dependence (imports
versus exports) on the EU differs between the east European
countries. Hungary and Poland have the highest relative
dependence on EU exports, especially in the food and livestock
sectors. Table III-33-2 also shows two countries, Hungary and
Slovakia, and their relative trade dependence. The table shows
the low degree of trade between these two countries.
[Tables III-33-1 and III-33-2 about here]
16. Economic Data
Eastern and central European countries are in various stages
of economic and social disarray. Moreover, they have few means
for earning hard currency and the depriving them of this market
is important to some countries' export profiles.
17. Impact of Measure on Trade Competitiveness: BAN
EU agricultural producers gain because the import ban limits
their competition. This especially hurts Central and East
European producers, whose wage rates are so much lower than the
EU. EU producers are also insulated by the protective
agricultural markets. For many of these countries that export to
the EU, this is their biggest trade partner and therefore they
are at an economic disadvantage.
18. Industry Sector: FOOD
19. Exporter and Importer: CROATia and European Community
[EURCOM]
E. ENVIRONMENT Clusters
20. Environmental Problem Type: HEALTH
A U.S. study showed that between 6-13 percent of livestock
would die if infected with the hoof-and-mouth virus. The disease
also causes an additional 10 percent loss because of
miscarriages. The disease especially affects cattle and lambs;
in both animals there is about 10-23 percent loss occurs if the
virus occurs.
21. Name, Type, and Diversity of Species
Name: Cattle
Type: Animal/Vertibrate/Mammal/Even Toed Ungulate
Diversity: NA
22. Impact and Effect: MEDium and REGULatory
23. Urgency and Lifetime: MEDium and 1-3 years
24. Substitutes: LIKE products
Other meat could be substitutes from a variety of sources.
VI. OTHER Factors
25. Culture: NO
26. Trans-Border: NO
27. Rights: NO
28. Relevant Literature
"A Food Fight as Big as the Atlantic." Newsweek
(January 9, 1989).
Bobinski, Christopher. "Community Lifts Ban on Polish Meat
Deliveries." The Financial Times (July 16, 1993).
Brittan, Samuel. "Iron Curtain in the Way of Trade."
The Financial Times (April 29, 1993).
"Why Eastern Europe is Getting a Warm Embrace From the EC."
Business Week (September 16, 1991).
Marsh, David and Barber, Lionel. "Morsels from a Groaning Table."
The Financial Times (June 7, 1993).
Pomfret, John. "Is Another Curtain Descending on Europe?" The
Washington Post April 27, 1993).
PlanEcon Review and Outlook for Eastern Europe. Washington, DC:
Planecon (July 1993).
"Europe Bans Boeuf a l'Estradiol." Science (January 13, 1989).
Vanous, Jan ed. "Review of East European
Foreign Trade Developments in 1992." PlanEcon Report
IX, Nos. 22-25 (June, 29, 1993).
Whitney, Craig R. "East Europe Still Waits for the Capitalist
Push." The Financial Times (April 30, 1993).
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