Canada and Norway failed to overturn a European Union ban on their seal products on Monday (25 November) when the World Trade Organization ruled the bloc had a right to outlaw imports of the furs on moral grounds.
Canada said it would appeal against the WTO decision, and that any public opposition to its seal trade was based on "myths and misinformation".
Many animal rights groups have long said the commercial killing of seals and their pups for fur and other products is cruel.
Canada and Norway challenged the EU ban on their imports four years ago, saying it violated global trade rules.
The trade body did support part of their case on Monday, saying the EU had been discriminatory in how it managed exemptions to the ban offered to indigenous groups and people killing seals as a way of managing fish stocks.
But the WTO ruled the overall EU ban fulfilled "the objective of addressing EU public moral concerns".
"Canada remains steadfast in its position that the seal harvest is a humane, sustainable and well-regulated activity. Any views to the contrary are based on myths and misinformation, and the (WTO) Panel's findings should be of concern to all WTO members," several Canadian ministers said in a joint statement.
Norway and the EU have 60 days to decide whether to join Canada in appealing against the ruling.