Bridges Weekly Trade News Digest • Volume 7 • Number 17 • 14th May 2003
Rules: New EU Proposal On Fisheries Subsidies
The Negotiating Group on Rules met from 5-7 May to consider a number of submissions made by Members related to anti-dumping, countervailing measures and subsidies. Members also briefly considered regional trade agreements (RTAs).
New EU proposal on fisheries subsidies
The EU presented its proposal on fisheries subsidies (TN/RL/W/82, available at http://docsonline.wto.org), stressing it was based on hard- learned experience rather than a theoretical approach. The proposal followed the reform of the EU Common Fisheries Policy, agreed at the end of 2002 (see BRIDGES Trade BioRes, 23 January 2003). According to the proposal, capacity-enhancing subsidies — subsidies for marine fishing fleet renewal and for permanent transfer of fishing vessels to third countries — would be prohibited (subsequently referred to in discussions as "red box" subsidies). A separate "green box" of permitted subsidies would be created for subsidies aimed at reducing fishing capacity and mitigating adverse social and economic effects of the restructuring of the fishing sector. These would include subsidies for scrapping vessels, retraining fishermen, early retirement schemes, economic diversification, temporary breaks in fishing activities, modernisation of fishing vessels to improve safety, product quality or working conditions, and for promoting environmentally friendly fishing methods, as long as output was not increased. The "boxes" would be up for revision as necessary. The submission also highlighted the importance of resource management, noting that the FAO, OECD and UNEP may be better placed than the Negotiating Group to carry out this work. Subsidies in the "green box" would have to be reported to the Committee on Subsidies and Countervailing Measures on a regular basis, and made available to the public.
A number of interventions were made during the meeting, welcoming the proposal. Some Members of the "Friends of Fish" group (that includes the US, Argentina, Chile, Iceland, New Zealand, Norway and Peru) said they felt that while the EU proposal was a good starting point it did not go far enough, and the category of prohibited subsidies needed to be further developed. One Member commented that there was no need to negotiate a "green box" until a much broader "red box" was agreed. Japan and Korea, who oppose addressing fishing subsidies in the WTO, engaged actively in the discussions, but their positions have become increasingly marginalised. One trade negotiator noted that significant momentum had been gained on this issue and there was no turning back. He commented that the EU paper in combination with an initial US paper (TN/RL/W/77), submitted at the previous Negotiating Group meeting, and a "Friends of Fish" background paper on categories of fisheries subsidies (see BRIDGES Weekly, 26 March 2003) formed a solid basis from which to move ahead.
Also at the meeting, China introduced a paper (TN/RL/W/94) welcoming and commenting on the US paper. The paper draws attention to the special role of aquaculture, noting its "contribution to the protection of the world’s marine fisheries resources" and food supply and food safety. Aquaculture is a rapidly growing sector and accounted for 27 percent of global fish supplies in 2000, according to the FAO’s State of World Fisheries and Aquaculture.
The environmental group WWF welcomed the EU proposal, stressing the significance of the EU — a former opponent of discussions — now supporting stronger rules on fishing subsidies. The group noted, however, that the proposal could go further with regard to banned subsidies, urged caution with regard to the proposed "green box" subsidies, and suggested a more proactive approach to special treatment for developing countries, including positive subsidies to support sustainable and local, artisanal fishing methods.
US highlights link to steel subsidies agreement talks at OECD
A large number of submissions were made on improvements to the Anti- dumping Agreement (AD) and the Agreement on Subsidies and Countervailing Measures (SCM), including both new submissions and questions and answers with regard to previous submissions. The US submitted a proposal on the identification of additional issues under the anti-dumping and subsidies agreements (TN/RL/W/98), focusing on: interpretation of Domestic Production; fragmented industries; causation; cumulation; favoured exporter treatment; exclusion of companies; disclosure of essential facts; and accrual of interest. While 15 "Friends of Anti-Dumping Negotiations" want to change WTO rules to prevent abuse of anti-dumping measures and burdensome or unnecessary investigations, the US wishes to maintain maximum flexibility in the use of trade remedies and focuses on closing loopholes in the existing Anti-dumping Agreement.
The US also submitted a paper outlining its views on elements of a steel subsidies agreement (TN/RL/W/95), noting that its intention was to inform the Rules Negotiating Group on developments with respect to such an agreement, to be developed within the OECD. According to the paper, the US supports an ambitious negotiating schedule for an agreement to be incorporated into the WTO rules framework, and would prefer the basic elements to be concluded in advance of the WTO Fifth Ministerial in Cancun in September.
Concern over lack of interest in RTAs
The discussions on RTAs were brief, and some trade officials raised concerns afterward at the lack of interest in this issue among WTO Members. The number of bilateral and regional trade agreements concluded has sharply risen, and, in the words of one observer, everyone is now a part of these treaties, and so there are no demandeurs for addressing the issue at the WTO. Japan, who used to be the demandeur, has itself concluded bilateral trade agreements since 2001 and is currently involved in negotiations with Mexico and Association of Southeast Asian Nations (ASEAN) countries. During the meeting of the Trade Negotiations Committee (TNC), which followed the Rules meeting on 9 May, concerns were raised that the most favoured nation (MFN) principle was being eroded through all the regional and bilateral treaties, but these issues were not being seriously discussed in the Rules group.
The Negotiating Group on Rules is scheduled to meet on 11 June to discuss regional trade agreements, and from 18-19 June to discuss anti- dumping, subsidies and countervailing measures, including fisheries subsidies.
ICTSD reporting; "WTO: fisheries subsidies - EU tables proposal for sustainable fishing," EC PRESS RELEASE, 22 April 2003; "U.S. Identifies Eight Areas for Improvement Under WTO Dumping, Subsidies Agreements," WTO REPORTER, 8 May 2003.
.