Bridges Trade BioRes • Volume 7 • Number 22 • 18th December 2007
Fisheries Subsidies Text Provides Good Starting Point, Delegates Say
At a WTO meeting on fisheries subsidies last week, Members provided their initial reactions to a new draft text for trade rules in this area. While not all Members agreed on the specific details of each provision, the majority of delegates were content with the draft text - at least as a starting point for further negotiations.
The Chair of the negotiations on fisheries subsidies, Ambassador Guillermo Valles Games’ (Uruguay), released the draft consolidated text on 30 November (see Bridges Trade BioRes, 30 November 2007). The text was phrased in the form of potential future articles of WTO rules governing anti-dumping and countervailing measures, including the text specific to fisheries subsidies. Under the Doha Mandate, Members are instructed to “clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to developing countries… with a view to enhancing the mutual supportiveness of trade and environment.”
WTO Members offered their initial comments on the new text during meetings of the Negotiating Group on Rules on 12 and 14 December.
Subsidies checklist
In his text, Valles Games bans several types of fisheries subsidy payments, especially those that boost fishing capacity or create other incentives to fish. In this way, the text attempts to bridge the principal cleavage in the negotiations between the numerous advocates of a ‘top-down’ blanket ban on fisheries subsidy payments (with negotiated exceptions), and countries that want a ‘bottom-up’ ban only on specific kinds of subsidies, most vocally Japan, Chinese Taipei, and Korea.
Among those slated to be banned, for instance, are subsidies covering the construction, operating and fuel costs of fisheries vessels. Other types of support for the fishing industry - such as for port infrastructure “exclusively or predominantly for activities related to marine wild capture” fishing, including storage and processing facilities - are also prohibited in the text. The objective is to curb overfishing, conserve global fisheries resources, and encourage fisheries management, as reiterated throughout the draft document.
Some subsidies would be permissible for all countries, provided that they maintained an international-standard fisheries management system. These include payments aimed at improving fishing vessel safety without increasing fishing capacity; reducing the environmental impact of fishing; and re-training fisheries sector workers into unrelated occupations. Governments would also retain the ability to grant limited fishing access to certain individuals and groups, so long as this did not affect migratory fish stocks or other countries’ “identifiable fishing interests.”Small fish in a big pond
Over recent months, special and differential treatment (S&DT) provisions for developing countries has been a contentious topic dominating discussions, with negotiators expressing befuddlement over how the Chair would try to address this issue.
Under the S&DT rules set out in the text, least-developed countries (LDCs) would be fully exempt from any disciplines prohibiting subsidies. Non-LDC developing countries would be allowed to provide otherwise-banned subsidies, including those that boost capacity, to small-scale fisheries characterised by non-mechanised fishing, family- or association-based fishing operations, catches consumed largely by fishing families, and the absence of a “major employer-employee relationship.” The subsidised activities would have to be confined to their territorial waters.
So long as functional fishery management systems that aim to conserve fish stocks are in place, developing countries would be able to subsidise port infrastructure, and provide income and price supports. These management schemes are supposed to follow practices described in various international agreements, such as UN accords on migratory fish stocks and a UN Food and Agriculture Organisation (FAO) code of conduct on responsible fisheries. Construction subsidies would be allowed for harvesting verifiably sustainable levels of fish stocks within countries’ exclusive economic zones.
‘Access fees’- that is, the payments that a government offers a coastal state in exchange for the right to fish in that nation’s waters - have been another crucial issue for some developing countries, particularly small and vulnerable coastal countries. The African, Caribbean, and Pacific (ACP) group of states has consistently advocated for access fees to be excluded from the scope of the disciplines, arguing that such payments are critical sources of government revenue. In the Chair’s text, government-to-government subsidies are not considered subsidies and are thus non-actionable. However, payments made from one government to another and then transferred to an external, third party - such as industry - are treated as subsidies and are prohibited, unless certain conditions are in place that would lessen the risk of overcapacity fishing.
Reactions from the room
Upon the release of the text, WTO Director-General Pascal Lamy commented that it was “ambitious and balanced,” and that it would “enable negotiators to work in a more intensive manner in the coming weeks.”
Many negotiators echoed this sentiment during negotiations on 12 and 14 December. Members generally lauded the Chair for skilfully treating issues that in previous months seemed ambiguous and roughly defined. They also supported his efforts to bring together all sides in a way that reflected not only economic concerns, but sustainable development interests as well. “The Chair’s text goes far to show that the WTO can, in fact, deliver and contribute to a ‘win-win-win’ for the environment, trade and sustainable development,” said US Ambassador Peter F. Allgeier in a statement on the text.
Despite the positive feelings, criticism was not absent from last week’s discussions. Several delegates raised concerns about possible loopholes that would permit circumvention, confusing conditionalities, questions of notification and transparency, and unclear language applied in the text. Members generally concurred that these imprecise technicalities needed further explication.
Article 1.2 of the text, for instance, prohibits all Members except for least developed countries from supporting the harvesting of “unequivocally overfished” stocks. Some delegates called this provision “vague and obscure,” noting that developing countries are finding this particular discipline “hard to swallow.”
Many delegates recognised the special and differential treatment provisions included in the text as a solid starting point from which discussions could advance. Least developed countries, represented by Lesotho, expressed satisfaction with the group’s exemption from prohibited subsidies. The ACP countries, small and vulnerable economies, and Pacific Island members likewise echoed support for the Chair’s treatment of S&DT and access fees in particular.
India, China, and Brazil, among others, did not share the same enthusiasm, expressing discontent for S&DT as outlined in the text. India questioned the conditionalities imposed for a country to qualify for S&DT, while China and Brazil described the text as both too rigid and overly burdensome.
Looking to extend special treatment for small-scale fishermen beyond developing and least developed countries, Japan, Korea, and Chinese Taipei shared their discontent with the absence of such a provision in the Chair’s draft. This same group of countries also expressed unhappiness with the text overall. Notably problematic for Japan, Korea, and Chinese Taipei was the prohibition of subsidies for port infrastructure, operating costs, and near-port fish processing, which Japan argued has little effect on overcapacity fishing. Korea described the text as taking a disguised “top down” approach.
While Japan, Korea, and Chinese Taipei voiced mutual discontent, New Zealand, Australia, and the US, among others, expressed collective satisfaction with the text. The draft, the US said, contained a strong level of ambition and marked a promising start for defining future negotiations and provisions. Australia and New Zealand stressed the positive environmental outcomes that could result from these negotiations.
Advocates approve
Marine advocates and environmental activists were among those demonstrating support for Chair Valles Games’ treatment of fisheries subsidies. The WWF released a statement calling the draft “a serious and constructive text” and “a solid basis for negotiations to proceed.” While they recognised that further discussions were necessary to guarantee that provisions were enforceable and effective, they also applauded the Chair for embracing key subsidies principles and for striking a strong balance. The draft, they added, “should require only adjustments and not wholesale revisions to achieve success.”
Oceana, a Washington D.C.-based marine advocacy organisation that has been heavily advocating for broad ban prohibitions in the WTO fisheries subsidies negotiations, likewise welcomed the draft text. “We are pleased to see that the chair’s text on fisheries subsidies contains a strong prohibition on subsidies that increase overcapacity and overfishing,” said Courtney Sakai, campaign director with the organisation. “Furthermore, the text reflects the importance of sustainability and fisheries management criteria for any exceptions to the broad prohibition.”
The next lap
To where the negotiations will advance, no one is quite sure. Even the Chair himself has acknowledged his uncertainty about how the discussions will structurally move forward. What is evident, however, is that delegates now have a text that they believe constitutes a strong foundation from which they can productively discuss, define, and outline fisheries subsidies. Members are expected to continue to reflect on their positions and the Chair’s text through the new year. The next meeting of the rules group on fisheries subsidies is tentatively scheduled for the last week in January.
ICTSD reporting.