Bridges Trade BioRes • Volume 6 • Number 9 • 19th May 2006

NEW TEXTUAL PROPOSALS ON FISHERIES SUBSIDIES TABLED AT THE WTO

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NEW TEXTUAL PROPOSALS ON FISHERIES SUBSIDIES TABLED AT THE WTO

WTO talks on fisheries subsidies made considerable headway at an 8-10 May meeting of the Negotiating Group on Rules, with three new submissions tabled that propose draft text for the eventual disciplines. Brazil’s revised draft text — presented by Fisheries Minister Jose Fritsch in a strong show of political support — attracted much attention at the meeting, and was welcomed by many WTO Members as a valuable input to the discussions. The first text-based proposals by the EU as well as Japan, Korea and Taiwan attracted many questions in addition to criticism that their low levels of ambition would not force major subsidisers to substantially change current practices.

Brazil proposal tries to accommodate Members’ concerns

Many WTO Members expressed appreciation for Brazil’s efforts to incorporate their concerns and comments into the third revision of its draft text (TN/RL/GEN/79/Rev.3). The revised text retains the overall "top-down" broad ban on fisheries subsidies of the previous version. In response to Members’ concerns (see Bridges Trade BioRes, 3 April 2006), the revised text drops virtually all references to regional fisheries management organisations (RFMOs), including as a means for evaluating the sustainability of developing countries’ subsidies to enhance fishing capacity. Instead, the revised text stipulates that special & differential treatment (S&D) provisions for developing countries would only allow them to provide capacity-enhancing subsidies to a fishery if it was not ‘patently at risk’ as established by the UN Food and Agriculture Organization.

In addition, the text includes revised provisions on artisanal and small-scale fishing subsidies. Subsidies to ‘artisanal fishing’ — i.e. relating to the subsistence of fishermen and their families — would be permitted for both developed and developing countries without having to fulfil any sustainability criteria. Subsidies to small-scale fishing — which is carried out on a commercial basis — in fisheries that are not deemed ‘patently at risk’ are permitted, but are presumed to cause adverse effects and are therefore actionable. In the case of a dispute, the defendant, i.e. the country providing the subsidy, would have to prove that the adverse effects do not exist. This presumption would be waved for developing countries under the S&D provisions, thus effectively shifting the burden of proof to the complainant. Subsidies to small-scale fishing in fisheries that are patently at risk are not specifically mentioned in the revised text and would consequently fall under the broad ban.

Several Members, in particular small island states, argued against differentiating between artisanal and small-scale fishing. Some, including Barbados and New Zealand, contended that exemptions for artisanal and small-scale fishing should not apply to developed countries, but rather exist only for developing countries under the S&D provisions. In their submission, Japan, Korea and Taiwan proposed that subsidies for artisanal and small-scale fisheries — defined solely on the basis of boat length — would be allowed for all Members.

The revised paper’s S&D provisions would allow government-to-government payments for accessing a developing country’s national waters or to purchase fishing quotas under an RFMO, without any sustainability conditions or limits.

However, the EU, echoed to a lesser extent by some developing countries, felt that the proposal might be too complicated and impractical. Brazil stressed that it should only be seen as a starting point and expressed willingness to further discuss and amend its details.

Japan, Korea, Taiwan elaborate bottom-up approach

In their first submission proposing draft text for possible disciplines, Japan, Korea and Taiwan outlined the subsidies that they believe should be prohibited and those that should be non-actionable, as well as S&D provisions (TN/RL/GEN/114). The three countries have long supported a ‘bottom-up’ approach that would identify specific fisheries-related subsidies for prohibition, in contrast to the overall ban with negotiated exemptions sought by the ‘Friends of Fish’ group.

The ‘Friends of Fish,’ Brazil and many developing countries welcomed the text from Japan, Korea, and Taiwan, but continued to object to the overall approach they were taking. Particularly strong criticism was levelled at the proposal’s S&D provisions, which would accord such treatment only to developing country Members listed in Annex II (still to be elaborated) as well as to those countries whose production of fish from marine capture fish stocks fell either below a to-be-defined percentage of the world total, or below a certain weight threshold. Some Members felt that this provision was too simplistic for the complex issue it sought to address. China and Mexico in particular strongly objected to the resulting differences in treatment among developing countries. While most developing countries account for only a small share of world production, some countries, such as China, Mexico and Peru, would likely not be eligible for S&D under the proposal, depending on the thresholds agreed.

EU draft text under fire

The draft text put forward by the EU, which aims to provide a middle ground between the ‘Friends of Fish’ and Japan, Korea and Taiwan while also reflecting Brussels’ internal reform of the Common Fisheries Policy, prompted many requests for clarification and elaboration (TN/RL/GEN/134).

Members in particular criticised the broad (and somewhat unclear) scope of definition of S&D which would exempt developing countries from the disciplines as long as they did not increase their fishing capacity "to an extent that it is an impediment to the sustainable exploitation of fishery resources worldwide". Some delegates also pointed to seeming inconsistencies between its subsidy categories, which would prohibit grants for vessel ‘renovation’ while permitting them for vessel ‘modernisation’.

Concerns were also voiced over the role the EU proposed for the Permanent Group of Experts (PGE) — a group of five independent persons "highly qualified in the fields of subsidies and trade relations" that exists under the Agreement on Subsidies and Countervailing Measures — in the implementation of the disciplines. The EU would have the PGE be charged with reporting on Members’ subsidisation practices. Moreover, under the S&D provisions, any Member would be able to refer to the PGE whenever they feel that "impediments to sustainable exploitation" are taking place (or are imminent). Some Members said that the proposal would effectively move some negotiations and disputes to a body which was not qualified to deal with these issues.

Several informal plurilateral consultations were also held on related issues, and are expected to continue at the next meeting of the Rules Group, currently scheduled for 12-23 June.

For a list of Members’ submissions on fisheries subsidies, see http://www.trade-environment.org/page/theme/tewto/para28.htm.

ICTSD reporting.