Question

5. Recently, State E, concerned that its nationals are being poisoned by chemical growth stimulants fed to livestock to make them grow faster and heavier, enacted legislation that forbids its livestock producers from using these stimulants and also forbids the sale of any meat from such animals within its territory. The law also forbids the importation of any animal fed a growth stimulant or any product from such an animal. Because it is impossible to detect the growth stimulant either in live animals or in their meat, the legislation requires importers to certify that the animals (or the animals from which an animal product is derived) have never been fed a growth stimulant.

   The livestock producers in State F have been using growth stimulants for many years to grow larger animals at lower cost, and they believe any possible health risk to consumers is insignificant. State F’s Ministry of Health also agrees that growth stimulants pose little risk to consumers, and it encourages its livestock producers to use them. Because State F’s livestock producers are no longer able to export their animals or the products from those animals to State E, they have asked their government to take action through the WTO on their behalf. Both State E and State F are members of the WTO. Consultation with State E proved unsuccessful, so State F asked the WTO’s Dispute Settlement Body to appoint a Dispute Settlement Panel. This has been done. How should the panel rule on State F’s request for a finding that State E’s legislation violates the latter’s obligations under GATT 1994? Discuss.

Answer 1

Since the imposition of restrictions by State E on the imports from State F is the step taken by the authorities in favor of it's residents. And also there is no wrong in taking decision for oneself. But the violation of rules comes into picture only when the decision proved unhealthy for another state. With this decision of imposing restrictions,it became quite difficult for the state F to survive in this competition.

This imposed restriction enabled state F to find market for it's produce as state E has taken a decision which in various ways accounted in downfall of the economic condition of state F. Downfall such as low investment,low foreign exchange reserve and low aggregate demand in the economy has brought about the unkeen economic conditions. And these economic conditions has made the violation of GATT 1947;because the rules and regulations of GATT 1947 also focused broadly on fair trade among the 2nations/state.

Thus,panel should rule on state F's complaint by making state F compensate for the health deterioration of the people of state E. This might be the probable solution for fair trade of goods among both the states.