Bridges Weekly Trade News Digest • Volume 9 • Number 33 • 5th October 2005
Rules: Anti-Dumping, Fisheries Discussed; Still No Clarity On HK Expectations
WTO Members focused on anti-dumping (AD) and fisheries subsidies during meetings of the Negotiating Group on Rules from 26-30 September.
Delegations considered several new submissions on AD, spending most of their time discussing a proposal that would require Member governments to consult with potentially-affected sectors of their economies before imposing AD duties. They also debated submissions addressing the issue of when such measures must be phased out. Fisheries subsidies discussions centred on a submission from a group of small coastal states calling for special and differential treatment (S&D).
Anti-dumping proposals focus on introduction, phase-out of measures
Some Members expressed strong objections to the new submission from some of the ‘Friends of Anti-Dumping Negotiations’ (FAN, TN/RL/GEN/53), a group of countries that supports tightening the rules under which Members can impose anti-dumping measures. The joint submission by Hong Kong, Israel, Japan, Korea, Norway, Singapore, Switzerland, Taiwan and Thailand elaborates on an earlier proposal to describe how Member government authorities could be required to provide "full opportunity for persons who may be affected by the [AD] measure to comment on the matter." Members raised questions about how governments would identify relevant ‘persons,’ how domestic interests were to be balanced among each other, and whether domestic decisions would be subject to overturning by the Appellate Body. While the FAN, Canada and the EU support including such a ‘public interest’ clause in the AD Agreement, many Members counter that it would be intrusive.
A new submission from Brazil, Chile, Israel, Japan, Korea, Singapore, Switzerland and Thailand (TN/RL/GEN/52) outlined possible rules and procedures for the review of AD procedures mandated by Article 11.2 of the AD Agreement. The review is intended to fill a current lack of explicit rules in AD regulation that leaves governments with a high degree of discretion with regard to when to phase out AD measures, even though they are supposed to "remain in force only as long as and to the extent necessary." The proposal provided a framework for examining what would happen if the AD duty were removed or varied. Members discussed technical difficulties involved with determining how the removal of AD measures would affect the domestic industry.
The AD Agreement and the Agreement on Subsidies and Countervailing Measures (SCM) require authorities that adopt AD measures to demonstrate a causal relationship between the dumped or subsidised imports and injury to the domestic industry, and to establish that the injury cannot be attributed to factors other than the dumped imports. However, neither agreement provides detailed instructions for how to conduct this exercise, termed ‘non-attribution analysis.’ Several Members including India and the FAN have argued that it needs to be clarified. A US paper (TN/RL/GEN/59) argued that such analysis is very complicated, making the case that it should be possible for domestic industries to obtain relief from dumping even when it is not the exclusive cause of their injury. This point proved to be particularly contentious; the FAN argued that it would weaken the AD Agreement.
Fisheries subsidies: small islands voice concerns
On 30 September, Members turned to fisheries subsidies. The presentation of a wide-ranging joint proposal on fisheries subsidies disciplines from Antigua and Barbuda, Barbados, Dominican Republic, Fiji, Grenada, Guyana, Jamaica, Papua New Guinea, St. Kitts and Nevis, St. Lucia, Solomon Islands, and Trinidad and Tobago (TN/RL/GEN/57/Rev.2) stimulated vigorous discussions. The proposal was a revised version of one that was originally submitted by some of them to the July Rules meeting, which was not discussed due to time constraints. The paper’s sponsors argued that a ‘traffic-light approach’ (classifying subsidies as prohibited, actionable, and unchallengeable) may be inadequate for addressing issues surrounding the conservation of fish stock, suggesting that multilateral environmental agreements (MEAs) and the UN Food and Agriculture Organisation (FAO) might be more suited to the task. They also expressed the fear that such an approach might let Members initiate disputes against subsidies that "directly promote overcapacity and overfishing" without having to directly link them to their trade effects, and argued that this would go beyond the technical competence of the WTO. Stressing the economic importance of fisheries to small vulnerable coastal states, the proposal called for S&D exempting the following from any disciplines: development assistance; assistance to artisanal or small-scale fisheries; access fees in fisheries access agreements; and fiscal incentives to facilitate the development of fisheries capacity in vulnerable coastal states.
A large number of delegations — including some that had not previously intervened in the discussions — responded to the proposal, hailing it as a fresh contribution to the negotiations. The EU and Australia declared themselves open to giving S&D to developing countries, pending more clarity about the future system of fisheries subsidies and the exact meaning of S&D. New Zealand voiced concerns about completely exempting entire categories of subsidies from disciplines, instead suggesting that a "de minimis" level of permissible subsidisation could be established to address development issues. It will spell this out in greater detail during the group’s next meeting.
The proposal to exempt fiscal incentives in particular raised questions and requests for clarification. Chile, Peru, Brazil and China, objected to its implicit differentiation between small vulnerable coastal states and other developing countries. The "Friends of Fish" — a loosely defined group of countries, including Australia, Argentina, Chile, Ecuador, New Zealand, Philippines, Peru, Norway, Iceland and the US, that supports a broad ban of fisheries subsidies with certain exemptions — stressed the importance of taking into account overfishing and overcapacity, as opposed to only the trade effects of fisheries subsidies.
Japan reiterated its standard position, that it would prefer to ban fisheries subsidies on a case-by-case rather than a blanket basis. One Member suggested that further clarification would be necessary, since the document attempted to address too many issues. Members also continued discussions on an earlier proposal from Australia, Ecuador and New Zealand (TN/RL/GEN/54) calling for disciplines on aquaculture, which argued that without them, countries might use aquaculture to circumvent new rules on the capture of wild fish (see BRIDGES Trade BioRes, 22 July 2005). Members generally expressed the view that aquaculture was already covered by existing disciplines, and that new disciplines should only cover wild capture. In light of their lack of enthusiasm, no further investigations of the issue are expected for the moment.
At the end of the meeting, the Chair announced that he wanted to reserve some time at the next session, scheduled to start on 24 October, for a general discussion about delegates’ expectations from the Hong Kong Ministerial Conference in December.
ICTSD reporting.