Bridges Trade BioRes • Volume 6 • Number 5 • 17th March 2006
WTO FISH SUBSIDIES NEGOTIATIONS CONSIDER DRAFT TEXT
WTO FISH SUBSIDIES NEGOTIATIONS CONSIDER DRAFT TEXT
On 15 March, WTO Members in the Negotiating Group on Rules continued discussions on possible text for new rules on fisheries-specific subsidies. While new proposals from New Zealand, Japan, Chinese Taipei and India were examined, most time was spent on new draft legal text put forward by New Zealand. Several delegates criticised the text for being too broad in its scope and coverage and inadequate in its coverage of special and differential treatment (S&DT) for developing countries.
First ‘Friends of Fish’ legal draft raises many questions
New Zealand, a leading Member of the "Friends of Fish" group of countries that advocate a broad ban on fisheries subsidies with certain exceptions, put forward draft legal text for a new fisheries-specific amendment to the Agreement on Subsidies and Countervailing Measures (ASCM) (TN/RL/GEN/100). It seeks to prohibit all subsidies that "confer a benefit directly or indirectly on any natural or legal person engaged in the harvesting, processing, transport, marketing or sale of fish and fisheries products" within the scope of six HS categories, while listing particular fisheries subsidies that would be exempted from the broad ban. While Members generally welcomed the fact that New Zealand was finally coming up with legal text that provided a relatively simple architecture which could be turned into a workable framework, delegates were also somewhat disappointed that the proposal did not elaborate on many of its components, including some on which there had been ample discussion in previous sessions.
Some Members, including the EC, Canada, Norway, Japan, Korea and Chinese Taipei and a number of developing countries, were critical of the large scope of the proposed "top-down" ban. Japan, Korea and Chinese Taipei called the proposed rules too broad, both in terms of their scope and their suggested product coverage, and claimed that parts of it were out of the Negotiating Group’s mandate to address overcapacity and overfishing.
Many developing countries, including several small and vulnerable coastal states, were particularly concerned about the proposal’s extension of disciplines to canned and processed fish. The Solomon Islands argued that the new agreement should not apply to subsidies given to upstream and value-added activities in the interest of developing the fishing industries of small and vulnerable economies. They also reminded Members that the intention of the disciplines is to prevent over-fishing and argued that they should therefore only cover capture fisheries. Manufactured fish products of mixed origin would, they said, be as a result better dealt with within the context of the existing ASCM.
Approximately 25 developing countries, including Brazil, India and several Latin American and African, Caribbean and Pacific countries, expressed their disappointment with the proposed S&DT to be provided for developing countries. New Zealand’s proposal only offers to exempt a certain de minimis amount of developing countries’ subsidies from the general prohibition, but does not elaborate on the types of subsidies and how much would be exempted. Both the EC and several developing countries claimed that de minimis was not likely to be enough to allow these countries to pursue legitimate developmental and social objectives, and also asked for more detail on how such a provision could be applied in practice.
Several developing countries were also concerned that subsidies to artisanal fisheries do not feature among the proposal’s list of permissible subsidies, which includes subsidies to access payments, aquaculture, research related to fisheries management, vessel decommissioning, certain infrastructure, certain social insurance programmes and natural disaster relief. The New Zealand proposal does not elaborate in detail on each of these exemptions and conditions to be met for them to be triggered, but it notes that such specification should follow. Several Members expressed concern that these details had not been elaborated on, given the extensive discussion that had been held on these issues in previous talks.
Japan and Chinese Taipei reiterate position; India enters discussions
Neither Japan nor Chinese Taipei, who together with Korea are the traditional opponents of the Friends of Fish ‘top-down’ approach to new disciplines, have so far come forward with proposed legal draft to provide an alternative the textual proposals by New Zealand and Brazil, the only ones that exist at this point (see also Bridges Trade BioRes, 9 December 2005 for further details on the Brazilian proposal). Accordingly, discussions were short on their new papers in which they reiterate their preference for a ‘bottom-up’ approach that would generally permit fisheries subsidies with specific prohibitions.
Japan’s paper (TN/RL/W/201) described two kinds of subsidies that it thought merited prohibition, namely "subsidies for the construction of new fishing vessels resulting in capacity enhancement" and for "fishing vessel modification for capacity enhancement". While most Members agreed that those kinds of subsidies ought to be addressed, they also pointed to technical difficulties in assessing the actual capacity of fishing vessels. New Zealand also challenged Japan’s proposal to only prohibit subsidies to new vessel construction if the old vessel is not withdrawn as a result, arguing that overall capacity in this case would still be enhanced due to the longer time that new vessels could be used.
Chinese Taipei (TN/RL/W/202) suggested that grants to promote fish stock recovery, social security, welfare, and research and development, should be allowed under the disciplines, notwithstanding that ‘bottom-up’ approach they have usually argued for identifying specific types of subsidies that should be prohibited by, not exempted from, the disciplines. There was a general recognition among Members that governments must retain the possibility to address such social issues.
India, in its first written contribution to the negotiations, identified a number of "general characteristics" of small-scale, artisanal fisheries which it felt could be more useful than trying to develop a common definition (TN/RL/W/203). The submission also stressed the need for S&DT in any new disciplines. It contended that disciplines on fisheries subsidies shifted the ambit of the ASCM from trade distortions to problems related to over-fishing and overcapacity, as a result of which developing countries would require policy space additional to that already provided for in the agreement. Developing countries supported India’s proposal and asked it to come back with draft text in order to give substance to its propositions.
Fisheries subsidies will be further discussed at the next negotiating session of the Rules Group from 24 April to 5 May.
ICTSD reporting.