Canada doubts EU trade sanctions in fish dispute (Adds minister's denial of trade violation, 11th para)

By Mark Bendeich

SYDNEY, March 13 (Reuter) Canadian International Trade Minister Roy MacLaren said on Monday he doubted the European Union (EU) would impose trade sanctions against his country for its seizure last week of a Spanish fishing boat.

MacLaren, speaking to Reuters while on a visit to Australia, denied Canada had miscalculated by seizing the Spanish trawler Estai in international waters, a move that prompted the EU on Sunday to raise the threat of trade sanctions against Canada.

"If the European Union were to decide to proceed in that direction it would have to comply with the requirements of the World Trade Organisation and justify its sanctions within the terms of the WTO," MacLaren told Reuters.

"If you get retaliation, unjustified retaliation, the WTO provides for counter retaliation, which can lead to something of an uncomfortable situation for both sides, so I rather doubt the EU would choose trade retaliation as an effective

response," MacLaren said.

Canadian gunboats seized the Estai last Thursday 28 miles (45 km) beyond Canada's 200 mile (320 km) limit after firing across its bow.

The Estai was one of a fleet of about 17 Spanish and Portuguese trawlers fishing for Greenland halibut, or turbot, allegedly in excess of the EU's quota set by the Northwest Atlantic Fisheries Organisation.

The EU and Canada are disputing rights to take Greenland halibut in international waters off Canada's east coast.

Spain has reportedly responded to the Canadian action by dispatching a second warship to the disputed Grand Banks region of the North Atlantic.

Spain is demanding the immediate release of the Estai, but it remains docked in St John's Harbour in Newfoundland until a court hearing on Tuesday decides whether its owners can post a bond against one count of illegal fishing.

The Estai's 24 crew members are free to return to Spain, but remain on board.

MacLaren denied the ship's seizure amounted to a trade violation and said Canada's stand off with the EU was a conservation issue, not a trade dispute.

"Why anyone would use trade measures in this dispute, I don't quite see how they justify that," MacLaren said.

"Canada's objective is to preserve a rapidly diminishing fish stock which is in imminent danger of extinction."

Trade between Canada and the EU is estimated at C$30 billion (US$21.3 billion) annually, including C$1.6 billion ($1.1 billion) in Canadian fish and farm exports.