The World Trade Organization (WTO) Appellate Body (AB) recently upheld a WTO panel decision to allow the European Union’s (EU) ban on trade in seal products. The justification for the ban is that the seal hunt is contrary to public morals.
In an era where animal rights and health concerns play an important role in consumer policies, the decision may be a watershed precedent. It could well usher in more trade restrictions in the agri-food sector based on public morals and animal welfare concerns, considering that the treatment of farm animals has become the subject of ever increasing scrutiny and concern. Will the Seal decision embolden animal welfare advocates in pressing their governments to adopt trade restrictions against countries or industries with poor track records in terms of animal welfare? Time will tell, but the AB has left the door wide open for countries to determine the public moral justification as they see fit, with very little restriction.
In previous years, environmental concerns came to the forefront in WTO decisions dealing with dolphin-safe tuna fishing and the impact of shrimp fishing on turtles. Will these issues now be re-visited through the lens of public morals? What other animal ethics issues might be tackled through trade restrictions justified on public morals grounds? Shark fin products and foie gras immediately come to mind, but it is likely many more disputes will arise as countries consider the full implications of the case and use it to push the limits of the public morals justification.
Summary of the WTO challenge
By way of background, the European Union Seal Regime (ESR)1 banning the trade in seal products applies to both internal and imported products and encompasses seal skins, fur, blubber, meat, omega-3 oil, pills and any other products derived from seals. In particular, it prohibits the importation or marketing of any seal product. Along with a general prohibition however, the ESR has also included certain exceptions, which allowed the marketing of seal products in the EC. These exceptions relate to seal products derived from hunts conducted by Inuit or indigenous communities (the IC exception), seal hunts conducted for marine resource management purposes (MRM) and seal products brought by travellers into the EU in limited circumstances (the Travellers exception). The ESR laid out specific rules for each one of the exceptions.
The initial WTO dispute resolution panel upheld the EU’s measure, justifying it on public moral grounds. But the panel also criticized certain aspects of the ban, noting that it is applied in a discriminatory way to imported products. Canada appealed the panel decision but the WTO AB ultimately found that the ban was justifiable under a “general exception” pursuant to Article XX(a) of the General Agreement on Tariffs and Trade 1994 (GATT), which specifically allows WTO members to adopt certain trade-restricting measures “necessary to protect public morals.”
Together with Norway and Iceland, Canada contended that the ban is inconsistent with the GATT and the WTO Agreement on Technical Barriers to Trade (TBT Agreement). Specifically, Canada claimed that the exceptions to the trade ban in the EU regulations afforded more favorable treatment to some of the EU Member States, mainly to Sweden and Finland, as well as to Greenland, which forms part of Denmark’s territory. Additionally, Canada claimed that the ESR created obstacles to trade that were more restrictive than necessary to fulfill a legitimate objective.
The EU contended that the measure was specifically aimed at addressing the public moral concerns regarding the welfare of the seals and that it was, therefore, justified under the general exception provision of GATT Article XX (a). Furthermore, the EU maintained that no other measure could achieve the goal of protecting its public moral concerns on seal welfare in the way that the ESR would.
The AB overturned some of the specific rulings made by the panel but in the end it held that the ban was justifiable under the GATT Article XX (a) exception. However, it did find that certain exceptions (IC, MRM and Travelers Exception) were discriminatory and contrary to the most-favored nation principle in GATT Article I: 1. As such, the EU would have to modify the exceptions to avoid the unfair advantage or disadvantage that some countries might be subject to.
Essentially, according to the AB, the EU simply had to demonstrate that the seal hunt was a risk to the public morals of the EU, which it did by referring to legislative history, public surveys and demonstrating a declining trend in the use of seal products due to a general disdain about the seal hunt and its perceived inhumane aspects. The AB noted that countries should be left to apply for themselves the concept of public morality, according to their own systems and scales of value.
Canada argued that the EU was not being consistent in enforcing its public morals, since the EU is tolerant of animal suffering when it comes to the slaughter of other animals. One example that surfaced in that context is foie gras, the production of which is widely considered to be inhumane. While the production of foie gras has been banned in numerous European countries, the consumption has not, and France has continued to produce it.
At any rate, the WTO AB held, citing the US – Gambling decision,2 that the WTO members have the right to determine the level of protection they consider necessary. That is, even if they felt the hunt of any animals was contrary to their public morals, it is within their right to afford protection to one or more of them, provided that they conform to the GATT and the TBT Agreement.
The AB held that the ESR generally fell under the scope of GATT Article XX (a) and was thus justified on the basis of protection of EU’s public morals. However, the AB ultimately held that IC exemption, particularly the one enjoyed by Greenland, could not be justified because the Inuit hunt conducted in Greenland greatly resembles a commercial hunt. In fact, the AB found that virtually all of Greenland’s seal hunt falls under the IC exemption and most of it is used for commercial purposes. For this reason, the AB deemed it contrary to the overall objective of the ESR.
The AB has given the EU one year to amend the IC exception to make it conform to the standard of Article XX.
Implications for other products
The AB`s Seal Products decision sets an important precedent confirming the broad discretion that WTO countries retain in determining what constitutes a violation of their public morals. With respect to animal welfare concerns, the decision also confirms that countries are free to choose which animals and which methods of harvesting to sanction. Being tolerant of one form of animal cruelty does not disqualify a country from imposing trade restrictions on another. In other words, when it comes to public morals, countries are not required to be entirely consistent in their approach.
The decision appears to leave the door wide open for countries to impose trade restrictions on the basis of public morals. On the other hand, the AB decision does indicate that countries need to present a compelling case that their public morals justifications are legitimate. In the Seals case, the AB made a point of referring to the substantial evidence submitted by the EU confirming the high degree of public disapproval for the hunt. It remains to be seen, therefore, whether the case will encourage countries to impose more trade restrictions based on public morals. One thing is clear, however, countries that are inclined to do so will find much to like the in the AB’s decision.