Bridges Trade BioRes • Volume 7 • Number 11 • 8th June 2007

FISH SUBSIDIES: JAPAN CALLS FOR ‘BOTTOM-UP’ APPROACH; ACP SEEKS TO PROTECT ACCESS FEES

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FISH SUBSIDIES: JAPAN CALLS FOR ‘BOTTOM-UP’ APPROACH; ACP SEEKS TO PROTECT ACCESS FEES

Japan and the African, Caribbean, and Pacific (ACP) group of states on 1 June moved to try to protect their interests in the Doha Round fisheries subsidies negotiations, tabling separate proposals ahead of next week’s meeting of the Negotiating Group on Rules.

Just in time for a 1 June deadline for submitting new proposals in the talks, Japan’s text (TN/RL/GEN/114/Rev.2) - now co-sponsored by Korea and Taiwan - calls for a ‘bottom-up’ approach to fisheries subsidies disciplines. Unlike the blanket bans on most types of fisheries subsidies offered by the US and Brazil, Japan, Korea, and Taiwan want a ban on only specific types of payments, leaving the rest permissible. The ACP paper sought to ensure that access fees - payments in return for rights to fish in a country’s territorial waters - remained shielded from new subsidy disciplines. Such fees make up an important part of government revenue in several ACP countries.

Specific Prohibitions Rather than Blanket Ban

The Japanese-led proposal sets out draft treaty language that would ban a range of subsidies. These would include payments supporting the acquisition, modification, or construction of fishing vessels, except in cases where expenditures lead to a reduction in fishing capacity, or are intended to improve safety or replace a vessel following a natural disaster. Subsidies for shipyards are also prohibited, as is the permanent transfer of vessels to countries that do not belong to regional fisheries management organisations. The proposal also stresses that payments to vessels engaging in illegal, unreported, and unregulated fishing would be banned.

The push for prohibitions on specific forms of financial assistance, rather than a sweeping ban, has been consistently backed by large fishing Member states such as Japan’s co-sponsors and Norway. The EU, too, has expressed support for such an approach. The ‘bottom-up’ method, they claim, will make the fisheries regulations clearer, workable, and more effective.

As for subsidies that would be protected from challenge, Japan would include government-to-government payments for allowing one country’s fishing fleet to access another state’s waters, so long as the payments are published and the fisheries are adequately managed. It would also exempt assistance for vessel decommissioning programmes. The proposal includes an additional carve-out for support for small-scale fisheries, provided that they are authorised, managed, and do not exceed a to-be-determined size. The paper also puts forward regulations intended to increase transparency and more effectively monitor global fish stocks.

In its text, Japan also defines possible disciplines for special and differential treatment, stating that its main objective is to strike a balance between prohibiting overcapacity while still accounting for the significance of the sector for developing economies.

ACP Formally Dives into the Debate

The ACP proposal called for all transactions related to fisheries access fees to be exempt from new disciplines on fisheries subsidies. The issue of access fees has featured prominently in fisheries discussions. While the ACP has made similar demands in statements on access fees, the recent communication aimed to crystallise their view into a formal written document to encourage further dialogue.

Access fees are payments made by distant-water fishing nations (DWFN) in exchange for the right of entry to smaller coastal states’ exclusive economic zones. These arrangements are bilateral, contractual agreements, often between developed countries and coastal developing nations that lack the capacity to capitalise on their fisheries resources. For coastal nations, these payments are critical sources of income; they are estimated to constitute more than a quarter of total government revenue of Pacific island countries.

Fisheries access agreements are either government-to-government or government-to-industry. In the latter, the remote governments transfer their access rights to a private fishing fleet, often for less than the full amount of access fees paid to the coastal nation. This is where the current debate lies. While government-to-government fees are generally not considered to be subsidies and are thus exempt from any new disciplines, there is no consensus on whether government-to-industry fees should be similarly protected.

The US, Brazil, and Argentina all consider government-to-industry payments to be subsidies, based on the discrepancy between the fees paid to the coastal nation and the price paid by the private enterprises for the acquisition of fishing rights. Because this is not a ‘fair trade price’, in the words of Argentina’s proposal, it can thus be considered a subsidy.

In contrast, the ACP proposal argued for all transactions related to access fees paid by DWFNs to be exempt from any new disciplines. They are concerned that a classification of government-to-industry payments as subsidies would lead to decreases in government revenue.

Delegates are studying both the Japanese proposal and the ACP paper, but said that they would prefer to comment only after the next meeting of the Negotiating Group on Rules, which is scheduled for 14-15 June.

ICTSD reporting.