From the EU second written submission:
189. In response to Question 21 both Canada and Norway further submit that the EU Seal Regime establishes process or production methods within the meaning of Annex 1.1 of the TBT Agreement. Canada considers that a process and production method is laid down through the IC exception; Norway alleges this both with respect to the IC and MRM exceptions.
190. The EU does not agree with Canada and Norway and submits that the EU Seals Regime does not regulate any processes and productions methods. The ban read together with the exceptions allows the placing on the market of seals products depending on the "purpose" of the hunt, which has nothing to do with methods for the production of seals products.
191. Even if the Panel were to consider, quod non, that the EU Seal Regime through its IC exception and/or MRM exception lays down a process or production method, the European Union submits that such processes and production method cannot be considered to be "related" to product characteristics, as required by the first sentence of Annex 1.1 of the TBT Agreement.
There's a policy issue here which may not have been in the drafters' minds when they wrote the definition of "technical regulation". When you ban an input product, are you therefore regulating all finished products that use the input?
Here, the question is, does a ban on the use, in some final products, of inputs of products derived from seals (e.g., seal fur in hats or coats, seal oil in Omega-3 capsules, etc.) mean that the production of the final product is being regulated?
In some sense, such a ban means that those final products cannot contain seal inputs, and thus has an impact on the method of production. For example, Omega-3 capsules cannot be produced using seal oil. But is this different from a measure that says, e.g., "Omega-3 capsules must be made in the following way," and then specifies a production method? Should these two situations be treated differently under the law?
