Explaining the Genesis of a Trade Dispute: the European Union’s Seal Trade Ban

Why has the European Union (EU) enacted a trade ban on seal products provoking a trade dispute with Canada, while it is the most ardent supporter of the multilateral trade regime and was about to start free trade negotiations with Canada? Rational functionalist explanations of compliance with international trade rules suggest that trade officials in the EU concerned with reputation costs and exporters concerned with the risk of retaliation should have prevented the ban.

This article shows from an institutionalist perspective that if the European Parliament and the Council are little concerned with reputation costs and exporters do not mobilize against regulation under uncertainty that their exports will be affected by retaliation, the agenda‐setting power of the Commission is insufficient to ensure World Trade Organization (WTO) consistency. Compliance with WTO rules is contingent on domestic political processes, and in the EU, it is dependent on inter‐ and intra‐institutional tradeoffs of WTO consistency and non‐trade objectives