Paul Davis is sworn in as the 12th Premier of Newfoundland and Labrador on Friday Sept. 26, 2014, at Government House in St John's, N.L. THE CANADIAN PRESS/Paul Daly

ST. JOHN'S, N.L. - Newfoundland and Labrador's premier says he'll maintain fish processing rules that could trigger penalties under a free trade deal with Europe unless Ottawa delivers related compensation.

Paul Davis said Monday he'll hold Prime Minister Stephen Harper accountable for his share of a $400-million fund at the heart of a dispute that has no end in sight.

"There could be penalties levied against the federal government, which my folks would argue would be much greater than the $280 million that we expect to receive in this agreement as it is now," Davis said outside the legislature.

"Our support for CETA is contingent on them living up to their obligations."

Davis met in Ottawa on Friday with Harper to discuss what the premier says was the federal government's commitment to pay $280 million of a fishery transition fund. The province was to cover the rest of the $400-million investment.

It was to include research, marketing and help displaced workers in the struggling sector, Davis said.

His position is that the cash was in exchange for the province giving up minimum processing requirements that helped protect fish plant jobs.

In a statement after the meeting Friday, the Prime Minister's Office said an unspecified amount is available for direct losses, but no "blank cheque" was ever offered.

Davis has threatened to enforce those processing rules and pull his province's support for the Comprehensive Economic and Trade Agreement if the dispute can't be worked out.

He said Monday that he plans to make his case before MPs, senators and perhaps even members of the 28-country European Union.

Davis has accused the federal government of changing the rules mid-game.

He said regional federal minister Rob Moore is belatedly linking any compensation to losses associated with the lifting of processing requirements.

Davis stressed that the fishery fund was meant, rather, to ensure a viable industry into the future and offset losses that can't be fairly estimated in advance.

Moore in a statement Monday said Ottawa does not want an intergovernmental dust-up.

"Our government is not interested in confrontation on this issue," he said. "We remain focused on fulfilling our commitment to provide compensation for losses associated with the removal of minimum processing requirements in Newfoundland and Labrador, as per our original agreement with the province. That is why we have already allocated $280 million for this fund."

Moore said he looks forward to receiving the province's "specific proposals" for that cash.

He also emphasized the free trade deal signed earlier this fall "will create tariff-free access to the European market of 500 million customers for Newfoundland and Labrador's world-class fish and seafood markets."

Provincial Opposition Leader Dwight Ball said crucial details weren't nailed down before former premier Kathy Dunderdale announced the $400-million fishery fund in October 2013.

At the time, not a single federal minister attended to share in the joint credit.

"That was the big mistake, was the announcement in advance of having the signature on the page," Ball said outside the legislature.

He suggested the province seek a legal opinion on documents and emails that both the province and Ottawa say support their different perspectives.

Davis scoffed at the suggestion. He said Harper would probably love to see the matter tied up in court for a decade or more.

It could be another two years before CETA is fully implemented as details and legal text are finalized.

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News from © The Canadian Press, 2014