Bridges Weekly Trade News Digest • Volume 6 • Number 36 • 24th October 2002
WTO Rules Negotiations: Deep Divides Prevail On Harmfulness Of Fisheries Subsidies
At a 16-18 October session of the WTO Negotiating Group on Rules, Members continued their debate over whether and, if so, to what extent WTO subsidy rules needed to be improved with respect to government support granted to the fishing sector. Korea argued that "no reasoned determination" had so far been made on the "causality between fisheries subsidies and the depletion of stocks". However, the US — supported by ‘Friends of Fish’ Argentina, Australia, Iceland, New Zealand and Peru — countered Koreas argument by pointing to the Plan of Implementation adopted at the World Summit on Sustainable Development (WSSD) in September, which it said called for countries to eliminate harmful fisheries subsidies "exacerbating the overexploitation of fish stocks". Also at the Rules talks, negotiations focused on antidumping and subsidies issues in general, with new submissions tabled inter alia by the US, India and Brazil.
Bad subsidies or bad resource management?
In its submission (TN/RL/W/17, downloadable at http://docsonline.wto.org), Korea principally joined Japan in its argumentation put forward at the July Rules meeting (see BRIDGES Weekly, 10 July 2002) that no special disciplines were required for the fisheries sector; that some 95 percent of all fish stocks would be harvested in exclusive economic zones (EEZ) anyway; and that it considered inadequate fisheries management to be "the principal cause of stock depletion". Therefore, Korea concluded, the existing WTO Subsidies Agreement was sufficient to deal with trade practices in fish and that the "burden of proof" was thus on the other side, trade sources reported. For its part, the US in its communication entitled "Adverse Trade and Conservation Effects of Fisheries Subsidies" (TN/RL/W/21) pointed to figures provided in studies conducted by the Organisation for Economic Cooperation and Development (OECD) as well as the Asia-Pacific Economic Cooperation (APEC) forum which showed that global fisheries subsidies amounted to "between 15 and 20 percent of aggregate dock-side revenues." Moreover, it made the case that excess investments in harvesting capacity would "encourage a tendency to ‘free ride’ and ‘cheat’, which would serve to undermine effective [fisheries] management."
Japan reportedly said it supported the thrust of the Korean paper, but that, on the US paper, it was gravely concerned by the inclusion of the subject of fish stock depletion. This, according to Japan, was not covered by the Doha mandate. The EC — which is currently working on reforming its common fisheries policy (CFP) to a more pro-environment and pro-development regime (see BRIDGES Weekly, 28 June 2002) — stated that it was still not persuaded about whether fisheries subsidies would really be the root cause of stock depletion. Canada, which is concerned that technical debates on fisheries subsidies could have "spillover effects" on its provincial softwood lumber programmes, said that is was still uncertain about the need for sector-specific disciplines. WTO newcomer China stated that aquaculture played an important part in sustainable development — an aspect that must be recognised by the Rules Group, China said.
In anticipation of the Rules meeting, environmental NGO (non- governmental organisation) WWF renewed its call on governments to eliminate "the billions of dollars in wasteful subsidies that drive the depletion of the world’s fish stocks". Offering "substantive solutions to government leaders," WWF released an issue brief entitled "Turning the Tide on Fishing Subsidies: Can the WTO play a positive role?" in which it set out six key principles for making the negotiated fisheries subsidy disciplines supportive of conservation and sustainable development. These include: phasing out harmful subsidies, while taking account of developing countries needs; including "fishing access agreements" in the negotiations; promoting inter-agency cooperation with the UN Food and Agriculture Organization (FAO) and the UN Environment Programme (UNEP); and to emphasise transparency and public participation.
Antidumping
The US — for the first time in the Rules Group — presented papers on antidumping (TN/RL/W/24,W25 and W27). In its submission "Basic concepts and Principles of the Trade Remedy Rules" (TN/RL/W/27), the US outlined four "core principles" to guide the Group. Here the US, which had originally been reluctant to include a WTO review of antidumping — or trade remedy — rules in the Doha mandate, made clear that "the strength and effectiveness of the trade remedy laws" should be maintained; that "trade remedy laws must operate in an open and transparent manner"; that the focus in the negotiations should be on the "underlying trade-distorting practices"; and that dispute settlement panels and the Appellate Body should refrain from "impos [ing] on national authorities obligations that are not contained in the Agreements."
Addressing the US’ emphasis on trade-distortive practices, a Chilean official stated, "they are saying that before you look at the trade remedy rules, you have to look at the trade-distorting practices," adding that "even for Chile, antidumping measure themselves are trade- distorting." The EC expressed doubt that going down the US road of examining "root causes" of trade remedies would be productive. Referring to the US’ fourth "core principle" (standard of review), a Japanese official commented that, "we think that the panels and the Appellate Body have been working properly."
Chile and Japan are both members of an informal coalition favouring tougher rules constraining the use of antidumping measures dubbed the "Friends of Antidumping", which further comprises Brazil, Colombia, Costa Rica, Hong Kong, Israel, Mexico, Norway, Singapore, Korea, Switzerland, Thailand, and Turkey.
Subsidies
Partly based on earlier proposals tabled in the WTO Committee on Subsidies, Brazil tabled a comprehensive submission (TN/RL/W/19) calling for improving WTO rules on countervailing measures to the same level as the Antidumping Agreement. US, Norway, Japan, Switzerland, New Zealand, Chile, India, the EC, Australia, Canada and Mexico welcomed this first contribution on countervailing measures tabled at the Rules Group.
Background
The Negotiating Group on WTO Rules was established after Members agreed in Doha, Qatar last November to negotiate on the Antidumping and Subsidies and Countervailing Measures (SCM) Agreements together with rules on regional trade agreements in an effort to clarify and improve the respective disciplines and procedures (Doha Declaration paragraph 28). Para. 28 makes special mention of "disciplines on fisheries subsidies", which are further referred to in the negotiating mandate on trade and environment (para. 31). In addition, para. 28 provides that the rules negotiations shall take into account the special needs and interests of developing countries.
The WWF paper is downloadable at http://www.worldwildlife.org/commerce/fishing_subsidies2.pdf.
ICTSD reporting; "Dumping: Proponents Welcome, Criticise US Paper For WTO Rules Negotiations on Antidumping," WTO REPORTER, 18 October 2002; "Dumping: US Challenges ‘Friends Proposal On Reform Of WTO Antidumping Rules," WTO REPORTER, 21 October 2002.