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In this article, the author questions the legitimacy of the general ban on trade in seal products adopted by the European Union. It is submitted that the EU Seal Regime, which permits the marketing of Greenlandic seal products derived from Inuit hunts, but excludes Canadian and Norwegian seal products from the European market, does not ensure a satisfactory degree of animal welfare protection in order to justify the comprehensive trade restriction in place. It is argued that the current ineffective EU ban on seal products, which according to the WTO Appellate Body cannot be reconciled with the objective of protecting animal welfare, has no legal basis in EU Treaties and should be annulled. Keywords: Trade in seal products; animal welfare; rights of indigenous peoples; EU law; WTO law; Arctic (Published: March 2015) Citation : M. Hennig. “The EU Seal Products Ban – Why Ineffective Animal Welfare Protection Cannot Justify Trade Restrictions under European and International Trade Law.” Arctic Review on Law and Politics, Vol. 6, No. 1, 2015, pp. 74–86. http://dx.doi.org/10.3402/arctic.v6.77

If the representative consumer of a country is risk averse then the choice of trade controls must take account of their effects on the fluctuations of domestic real income. If the world price of the importable is uncertain and risk aversion is high then the optimal policy for achieving a ceiling on expected imports involves a reduction in imports and a rise in the domestic price as the world price falls. Moreover, a quota is superior to a tariff in achieving the ceiling. Under domestic uncertainty, a tariff is superior to a quota but it could be optimal to reduce the domestic price as imports increase. Economists have long recognized the equivalence of price and quantity controls under certainty. The comparison of these control modes and the characterization of the optimal form of control under uncertainty has been undertaken by two groups of authors. Weitzman (1974, 1978) considered a planning authority which faces uncertainty about the costs and benefits of producing a good. He showed that the ranking of price and quantity controls depends on the curvature of the cost and benefit functions and that an optimal policy can be considered as a mixture of price and quantity controls. His work was developed by Laffont (1977), Ireland (1977), Malcomson (1978) and Yohe (1978). In the context of international trade, the comparison of tariffs and quotas under uncertainty has been undertaken by Fishelson and Flatters (1975), Pelcovits (1976), Dasgupta and Stiglitz (1977), Young (1979, 1980a,b) and Helpman and Razin (1980).' Recently, Young and Anderson (1980) showed that the policy maximizing expected consumer's surplus given a constraint on expected imports (expected import expenditure) is a specific tariff (an ad valorem tariff). In contrast to Weitzman's planning model, the price instrument is superior to the quantity instrument-whatever the curvature of the benefits function.2 The conclusion of Young and Anderson appears to provide a strong argument against using quantity instruments to restrict trade. However, the expected surplus criterion is a valid welfare measure only if the marginal utility of income is constant. In this paper we characterize the optimal form of trade restriction if the representative consumer of the importing country exhibits risk aversion toward income fluctuations. The optimal policy can have surprising properties-properties which, with high risk aversion, are better approximated by a quota rather than a tariff. Hence the "second best" justification for using quantity controls to restrict trade turns out to depend on

American federal regulation and prohibition of trade with Iron Curtain countries can be discussed from many angles. There is the historical approach-how our present levels of trade restriction came about. There is the economic analysis-how efficacious these controls have been to accomplish whatever economic objectives they were or are thought to serve. There is the political assessment involving international politics-how the expansion, or maintenance, or contraction of trade regulation has served or serves our international political objectives of creating and maintaining the cohesion of the West against efforts in the East to frustrate a world striving to develop in diverse ways. There is the political assessment involving domestic politics-how the creation, expansion, maintenance, and contraction of trade regulation by the Administration in power is related to efforts by the political party out of power to make domestic political capital out of the level of trade regulation with Communist or Communist-dominated countries. And, finally, there is the military analysis-how does trade regulation in fact affect the military potential of putative enemies. A truly adequate analysis of our regulation of trade with Iron Curtain countries would need to include and to combine all these approaches. Obviously this task is beyond the scope of this paper if something more than a series of declaratory propositions of doubtful utility were desired, wholly apart from problems of competence to perform it. I propose instead to undertake a somewhat more manageable task, though one which may nonetheless be of some interest and importance. I should like to outline briefly the existing levels of our restrictions on trade with Iron Curtain countries; to indicate the extent to which they differ from those of our allies and friends in the West; to point out the extent to which our restrictions are imposed by Act of Congress or are merely authorized by Congress and thus can be changed by an administration without formal congressional participation; and finally, to indulge in some mild guesses as to future levels of our regulation of trade with Iron Curtain countries in view of the circumstances thus disclosed, and the fact that there has been on foot for some time progressive relaxation of trade restrictions which appears highly likely to continue.'