Bridges Weekly Trade News Digest • Volume 11 • Number 21 • 13th June 2007
SVEs and ACP Group Weigh In On Fish Subsidies Debate
Different blocs of WTO Members have moved to protect their interests in the Doha Round fisheries subsidies negotiations, circulating separate communications around an early-June deadline for submitting proposals for discussion at a meeting of the Negotiating Group on Rules later this week.
The group of African, Caribbean, and Pacific (ACP) states sought to ensure that access fees - payments in return for rights to fish in a country’s territorial waters - remained shielded from new subsidy disciplines. Such fees make up an important part of government revenue in several ACP countries. Meanwhile, eleven small and vulnerable economies (SVEs) tabled a joint proposal on special and differential treatment for developing countries in a future set of WTO rules on fisheries subsidies.
ACP encourages dialogue on access fees
The ACP proposal, dated 1 June, called for all transactions related to fisheries access fees to be exempt from new disciplines on fisheries subsidies. The issue of access fees has featured prominently in fisheries discussions. While the ACP has made similar demands in statements on access fees, the recent communication aimed to crystallise their view into a formal written document to encourage further dialogue.
Access fees are payments made by distant-water fishing nations (DWFN) in exchange for the right of entry to smaller coastal states’ exclusive economic zones. These arrangements are bilateral, contractual agreements, often between developed countries and coastal developing nations that lack the capacity to capitalise on their fisheries resources. For coastal nations, these payments are critical sources of income; they are estimated to constitute more than a quarter of total government revenue of Pacific island countries.
Fisheries access agreements are either government-to-government or government-to-industry. In the latter, the remote governments transfer their access rights to a private fishing fleet, often for less than the full amount of access fees paid to the coastal nation. This is where the current debate lies. While government-to-government fees are generally not considered subsidies and are thus exempt from any new disciplines, there is no consensus on whether government-to-industry fees should be similarly protected.
The US, Brazil, and Argentina all consider government-to-industry payments to be subsidies, based on the discrepancy between the fees paid to the coastal nation and the price paid by the private enterprises for the acquisition of fishing rights. Because this is not a ‘fair trade price’, in the words of Argentina’s proposal, it can thus be considered a subsidy.
In contrast, the ACP proposal argued for all transactions related to access fees paid by DWFNs to be exempt from any new disciplines. They are concerned that a classification of government-to-industry payments as subsidies would lead to decreases in government revenue.
SVE group calls for S&DT for developing countries
The 11 SVEs, which included Nicaragua, Barbados, Cuba, Fiji, and the Solomon Islands, urged Members to insert flexibilities, technical assistance, and capacity building in any fisheries subsidies rules. They argued that this would boost opportunities for growth in the fisheries sector in developing countries, as well as safeguard the crucial revenue-generating function that the industry currently fulfils.
In the paper, the SVEs outlined principles to guide the creation of special and differential treatment (S&DT) provisions. They pointed to the sector’s socio-economic importance to poorer nations, where it aids employment, livelihood security, income, and nutrition, and said that this could be compromised without carefully crafted disciplines.
The group of SVEs appealed to developed countries to go beyond simply providing developing countries with longer periods for implementing new commitments, and to "instead support the development of the fisheries sector in small, vulnerable economies." Pointing to the Doha and Hong Kong Ministerial Declarations, the group asserted that developed nations had been mandated to provide tangible support to developing countries, SVEs, and LDCs in ways that will directly help increase productivity and trading potential.
The text noted that developing countries have a limited capacity to implement effective management structures and carry out research and analysis. It argued, therefore, that making S&DT conditional on management capacity would penalise them, especially SVEs and least-developed countries. Therefore, any such connections in new fisheries subsidies disciplines should require developed countries and international organisations to provide developing nations with technical and financial assistance to strengthen their capacity to meet such standards.
Another element of future disciplines addressed in the paper is the definition of artisanal and small scale fisheries. The SVEs proposed that both be well defined based on their different economic roles, and recommended that any definitions take into consideration the sectors’ economic impact.
The SVEs paid heed to the environmental concerns behind recent proposals from the US and Brazil calling for wide-ranging prohibitions on subsidies in order to halt overfishing. However, they argue that "small, vulnerable economies, LDCs, and some other developing countries have had such a minimum [sic] impact on over fishing and overcapacity that the proposed restrictions on these countries would be unduly punitive."
Delegates are studying both papers, but say that they would prefer to comment only after the next meeting of the rules group, which is scheduled for 14-15 June.
ICTSD reporting.