The World Trade Organization ruled Thursday that the European Union can continue banning imports of hormone-treated beef from the United States and Canada, but those countries can also impose trade sanctions on Brussels for doing so.
Both the European Union and the United States welcomed the decision, which reverses an earlier WTO panel ruling.
"In 1999 ... the United States obtained authorization from the WTO to suspend concessions and impose additional duties on certain EU products," the office of U.S. Trade Representative Susan Schwab said. "In light of today's report, there is no need to remove those duties," it added.
EU trade spokesman Peter Power said the ruling was an important decision because the panel had found no scientific basis for questioning the legality of the 27-nation European Union's import ban.
"These clarifications will strengthen WTO members' ability to protect citizens," he said.
The World Trade Organization appeals body said the previous panel made several legal errors when it reviewed the dispute, including appointing scientific experts who were not impartial.
The appeals body said the European Union's compliance with World Trade Organization rules still must be scientifically established.
"We are disappointed that the appellate body's findings leave question of the consistency of the EU's ban unanswered," U.S. trade spokeswoman Gretchen Hamel said.
It was unclear whether the U.S. would seek a further WTO review of the ban, or simply continue to impose punitive duties worth tens of millions of dollars a year on European agricultural products.
The EU says beef treated with certain hormones poses a risk to human health. For other hormones, it has argued that a "precautionary principle" ought to be respected because scientific tests cannot yet prove their safety.
But Canada and the U.S. persuaded the WTO that there is no solid scientific evidence to support a ban. In 1999, the global commerce body authorized the United States and Canada to impose US$125 million worth of duties a year on European goods — sanctions that can now remain in force.