By Peter Blackburn

REUTER 16/3/1995

BRUSSELS European Union and Canadian officials, on speaking terms again after Ottawa released a Spanish trawler, held talks on Thursday to try to resolve their bitter fisheries dispute, but major problems remained.

The trawler Estai, seized in international waters off Canada a week ago for what Canadian authorities alleged was overfishing, sailed on Wednesday night from St John's, Newfoundland, after payment of a $500,000 Canadian ($350,000) bond.

"We hope (the talks) will soon lead to an agreement," said European Commission spokesman Nikolaus van der Pas.

But Spain said there were still deep differences between the two sides.

"The political and juridical problem continues," Spanish Agriculture and Fisheries Minister Luis Atienza told a radio interviewer in Spain. "It is essential that full international legality is restored."

Van der Pas said conditions for a resumption of contacts between senior officials had been fulfilled with the release of the Spanish vessel.

The fact that the shipowner paid a fine was his individual decision and had nothing to do with the EU position, he said.

"It doesn't imply any EU acceptance of the Canadian (legal) position," he said.

The EU had earlier demanded the unconditional release of the vessel, which Canada charged was loaded with undersized Greenland halibut (turbot). It was in international waters off Newfoundland's Grand Banks fishing grounds.

The aim of Thursday's bilateral talks was to prepare a multilateral deal at a meeting of the Northwest Atlantic Fisheries Organisation (NAFO) in Brussels from March 22 to 24.

A major issue would be Canadian fish protection laws.

Canada introduced measures on March 3 to extend its jurisdiction beyond the 200 mile limit and on March 6 banned

Greenland halibut fishing for 60 days while a solution is found.

"Maintenance of this legislation could restart difficulties if fishing is resumed...we hope it will be suspended," Van der Pas said. "We don't accept the moratorium. We haven't accepted it and we don't accept it now."

At issue is the allocation and enforcement of international quotas aimed at safeguarding stocks of the last commercial species in the northwest Atlantic.

The EU last month rejected a 12 percent share of a 27,000 tonnes catch quota set by NAFO for 1995 and instead invoked a so called objection procedure setting itself a 69 percent limit.

Under a possible compromise, Canada, which was allocated 60 percent, and the EU may agree to take 40 percent each.

The EU said the Canadian action was a flagrant violation of international law and temporarily froze relations.

Canada, which has accused the Spanish of environmental vandalism, says that coastal states are entitled to take action under the United Nations Convention of the Law of the Sea to protect threatened fish stocks.

Greenland halibut stocks straddle Canadian and international waters. Canada has claimed that Spanish vessels threaten to wipe out stocks by taking young fish before they can reproduce.

The EU says there is no minimum fish size limit.