WTO Weighs Seal Product Ban

At the end of 2013, the World Trade Organization’s (WTO) first-ever consideration of an animal welfare issue resulted in a landmark, if mixed, decision by a dispute settlement panel. The panel ruled that although the European Union’s ban on imports of seal products violated WTO anti-discrimination rules, it was nonetheless valid because it fulfilled the objective of addressing the European public’s moral concerns about seal welfare. In this article, AWI explores the background to the WTO’s momentous decision and considers its implications for seals—and animal welfare in general—under international trade law.

Almost a million seals from at least 15 species are hunted around the world each year. The majority are killed in Canada, Greenland, Namibia, Russia and Norway. In Canada, more than 97 percent of the animals—slain for their valuable fur—are pups younger than three months old. In addition to skins, commercial products from seal hunts include oil for animal feed and omega-3 supplements, and meat. Seal hunts are also conducted by indigenous hunters for subsistence purposes (although by-products are often sold, as well), and thousands of seals are killed each year in the name of protecting fisheries. Although most seals are shot, some are still clubbed to death.

Despite banning the import of skins and products from harp and hooded seal pups in 1983, the EU remained a major importer of other seal products. However, several member states—concerned about the cruelty of seal-hunting methods—adopted national bans on importing seal products. Eventually in 2009, the EU harmonized the patchwork of domestic laws by adopting Regulation (EC) No 1007/2009, which bans the trade in seal products in the EU, whether imported or produced by member states. In justification of the measure, the regulation refers repeatedly to the interest of the European public in protecting the welfare of seals.

The regulation establishes two major exemptions to the ban. It allows the “placing on the market” of seal products from “hunts traditionally conducted by Inuit and other indigenous communities” that “contribute to their subsistence.” It also allows the marketing on a “non-profit basis” of products from "hunting that is regulated by national law and conducted for the sole purpose of the sustainable management of marine resources” (such as culling to protect fisheries). Most seal products entering the EU under the first exception come from hunts by indigenous people in Greenland, while most products from culled seals come from Sweden and Finland.

In 2010, Canada and Norway filed a challenge to the EU regulation at the WTO, claiming that the ban and its exemptions breached key provisions of both the Agreement on Technical Barriers to Trade (TBT Agreement) and the General Agreement on Tariffs and Trade (GATT). One of their main arguments was that the exemptions from the ban discriminated against Canadian and Norwegian seal products—providing better treatment (more access to the EU market) for seal products from Greenland, Finland and Sweden. According to Canada and Norway, the EU’s distinction between, on one hand, Canada and Norway’s commercial hunts and, on the other hand, the large hunts in Greenland (with more than 100,000 seals killed annually) and the seal culls in Sweden and Finland (which are motivated at least in part by a desire to support the fishing industry) is not legitimate. The latter hunts give rise to the same welfare concerns as commercial hunts.

Panel findings
In late November 2013, the panel ruled that the EU regulation had, indeed, violated key obligations under the TBT Agreement and GATT by restricting international trade in a discriminatory way. However, it determined that the ban was nonetheless valid because its core rationale fulfils the EU’s objective of protecting the EU public’s moral concerns on seal welfare, an objective that could not be satisfied (as Canada and Norway proposed) by labeling seal products to reflect whether animal welfare conditions had been met.

The ruling was not, however, an outright victory for the EU. The panel was not persuaded that the regulation’s exemptions for indigenous and “marine resource management” hunts were legitimate. Although the EU convinced the panel that the protection of indigenous people’s interests is sufficient justification for treating indigenous hunts differently from commercial hunts, the panel found that this exception had not been applied in an “even-handed” way. The EU also failed to persuade the panel of any justifiable rationale for distinguishing culls from commercial hunts.

If the panel’s ruling is upheld on appeal, the EU may have to modify its exemptions to ensure that they apply equally to Canada, Norway and all countries providing seal products. One option would be to remove the exemption completely, which would close the EU market to all seal products—but such a step is politically unlikely considering the interests of the member states involved. Another extreme option, for which Greenland is actively lobbying, would be to widen the exemptions to allow more Inuit-sourced products into the EU—an unsatisfactory outcome from AWI’s perspective, given the increasing commerciality of the supposedly subsistence hunts, as well as the cruel methods employed by some Greenlandic seal hunters, who use nets to trap and drown the seals. Alternatively, the EU could do nothing and face WTO-sanctioned retaliatory measures from Canada and Norway.

Although the case was not decided entirely in the EU’s (or seals’) favor, the fact that the panel upheld a flawed ban on the basis that its objective was to address the moral position of the general public could be groundbreaking for animal welfare advocates. As one commentator notes, the “public morals exception is now open for creative interpretation” and may become “the new battleground for WTO litigation.”

At first blush, this case seems to have profound implications for countries (and particularly the EU) that have already legislated against certain farming practices based on animal welfare concerns (such as the EU’s bans on battery hen cages, veal crates, and sow stalls) and wish to prohibit imports of animal products from those production systems. The case raises the hope that an importing state’s subjective understanding of public morals can serve as a legitimate basis for a policy supporting animal welfare, such as a trade ban.

However, the decision also establishes that the WTO, even after recognizing public morals as a valid basis for such a domestic policy, can still take issue with exemptions in regulations promulgated in support of the policy, as well as the way in which the policy is applied. It is also important to note that a panel could reach a different decision in a subsequent case, or overturn this decision—as both Canada and Norway have elected to appeal it. We will provide an update in a future edition of the Quarterly.

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