EU seal case adds new protectionism to WTO

EU seal case adds new protectionism to WTO
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The WTO’s public morality exemption has seldom been employed. However, a recent successful challenge has changed that and may herald a litany of trade restrictions in the near future.

Goods, services, intellectual property, technical standards, trade-related investment measures and food safety are just some of the sectors covered by the World Trade Organization (WTO). Observers can now add public morality to that list.

In a milestone ruling, the WTO’s appellate body (AB) recently ruled against Canada and Norway and upheld an EU ban on imports of seal products. The AB agreed that this ban was “necessary to protect public morals.”

Although the 2009 embargo applies only to commercial hunting and exempts certain indigenous groups who have traditionally hunted seals, including Canada’s own Inuit, it is the first time that the WTO has issued a decision in a case involving the impact of trade regulations on animal welfare.

It also marks just the third time that the WTO has ruled on a case involving its GATT Article XX or GATS Article XIV “public morality” clauses. The other two are an Antigua-US lawsuit and a US-China dispute (both of which resulted in the AB striking down the respective respondents’ appeals to the clause).

A new precedent in the making?

It is easy to see how the EC Seal Regime case may open the floodgates to other trade-restricting measures by nations, justified by their own conception of morality. Some have speculated that, in addition to seal fur, meat and blubber, the slippery slope may soon extend to bans on other animal products, such as foie gras, veal, chicken, haggis and even lobster.

Currently permitted import restrictions that may touch on a country’s moral sensibilities range from the fairly obvious — pork in Pakistan, beef in Nepal — to the more fascinating: bikini swimsuit calendars in Vietnam and publications that threaten “state security, social and political stability” in China.

Yet, the thornier question is how do we know that usage of the public morality exception is not just old-fashioned protectionism by another name?

Indeed, in the same ruling the AB found that the EU’s application of the seal product injunction was discriminatory. It noted that the exemption for indigenous communities did not “immediately and unconditionally” extend the same level of market access to Norway and Canada as it did to Greenland, a Danish territory whose Inuit population engages in large-scale seal hunting “closely related to those of commercial hunts.” Only about 5% of both Canadian and Norwegian seal hunting is carried out by their indigenous Inuit and Sami communities, respectively.

In addition, the WTO’s Dispute Settlement Body (DSB) had earlier decided that another exemption for so-called “marine resource management” seal culls (a category under which the “vast majority” of European seal products fall) was also unlawful and not relevant to public moral concerns.

Certainly, the DSB and AB alike both “subjected the EU’s measure to rigorous scrutiny” in partially allowing a breach of those most-hallowed WTO principles of free trade: national treatment and most-favored-nation status. Nevertheless, they also acknowledged that the protection of animal welfare was not relevant, but the public moral concern of animal welfare, a clearly subjective measure, was. This flies in the face of a recent public opinion poll in six European countries.

Ruling ramifications

What does this mean? Simply put, the EC Seal Regime litigation may mark a turning point away from the two previous public morality cases, at the expense of a liberal trade regime. It shows that it is “exceedingly easy to satisfy” the WTO’s public morality clause, whose grounds for usage are not limited to actions that take place within the country (think of a ban on products that do undue harm to the environment or which are produced with child labor), and whose appeals to ethics are inherently difficult to disprove in a court of trade law.

The WTO’s effective foray into moral pluralism gives states and prominent lobbies yet another avenue for protectionist policies. If the EU Seal Regime case is properly implemented, it will have managed to annually protect several hundred thousand seals — quite the accomplishment.

However, it may have also let the genie out of the bottle. Expect more public morality WTO litigation to come.

Categories: Economics, International

About Author

Kevin Amirehsani

Kevin is a Denver-based policy and public engagement consultant. He was previously the head of operations for a solar energy startup in Lagos, researcher for the US Commercial Service in Cape Town and the Institute for Democratic Governance in Accra, and Peace Corps volunteer in Cameroon. He holds an MSc. in International Political Economy from LSE along with a B.S. and B.A. in Industrial Engineering and Political Science from UC Berkeley.