Bridges Weekly Trade News Digest • Volume 11 • Number 26 • 18th July 2007

No Consensus On Fisheries Subsidies As Delegates Break For Summer

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Convergence on fisheries subsidy disciplines continued to elude delegates to the WTO Negotiating Group on Rules at the committee’s last gathering before the global trade body’s annual August break.

Discussions at the 10 July meeting focused on two new proposals on special and differential treatment (S&DT) for developing countries, and artisanal and small-scale fisheries. The papers, from Indonesia (TN/RL/GEN/150) and Brazil (TN/RL/W/212), followed appeals by the chair for a clearer definition of these issues, which Members have struggled to outline over recent months.

Marine conservationists and coastal states also petitioned the WTO on these issues ahead of last week’s meeting.

Members remain divided into two broad camps on how to structure rules aimed at curbing fisheries spending and consequent over-fishing. Japan, Korea, Taiwan and the EU want a ‘bottom-up approach’ that would ban specific types of subsidy payments, such as those that directly contribute to increased fishing capacity. They contend that this would make for clear, workable, and effective fisheries regulations.

In contrast, several countries, including New Zealand and the US, have argued for a ‘top-down’ method that would ban all fishing subsidies save for some negotiated exceptions. Supporters of this approach argue that a comprehensive prohibition represents the best option for halting over-fishing.

Indonesia’s proposal echoes the latter sentiment, calling for a blanket ban with carve-outs for S&DT and artisanal and small-scale fisheries.

Diving into murky waters

In its proposal, Indonesia defines ‘artisanal fishing’ as subsistence-based fishing close to the shore with a proportionate engine-to-tonnage ratio, primarily carried out by individuals or families. ‘Small-scale fishing’ is similarly delineated based on the volume of operations and their proximity to coastal lines. The continued allowance of subsidies for both artisanal and small-scale fishing would be conditional upon governments’ proving that support is not contributing to over-fishing, and that it is following a fisheries management programme.

Where countries lack the capacity to demonstrate or monitor resources, Indonesia included a provision that would require developed countries to offer their poorer counterparts technical assistance to strengthen fisheries management capacity and to help them fully engage in national and regional fisheries management organizations (RFMO). This, Indonesia said, would allow developing countries to access relevant scientific information and engage in marine research and conservation activities, both vital components to maintaining healthy global fish stocks.

Indonesia also appealed to Members to create a subgroup to the Subsidies and Countervailing Measures Committee, comprised of fisheries experts from Member governments and international institutions. This subcommittee would be called upon to provide scientific information and guidance when Member states contest the potential elimination of subsidy programmes.

Common divisions, common lines

Members from both sides of the fisheries debate lauded the Indonesian proposal for being one of the first to comprehensively outline technical assistance, special and differential treatment, and artisanal and small-scale fisheries.

Nevertheless, the traditional divisions prevailed. New Zealand, Chile, Thailand, Brazil and the Philippines welcomed Indonesia’s call for sweeping prohibitions on fisheries subsidies. They praised its text for bringing together the rules group’s previous work on the issue. The US also expressed support for the proposal, but asked whether the exemption for small-scale fisheries represented too large a carve-out from the proposed disciplines.

Japan, Korea, and Taiwan, on the other hand, expressed their objection to Indonesia’s paper, report sources. Taiwan went a step further, noting that the proposal would risk transforming the WTO into a fisheries management organisation.

The EU also expressed opposition to the Indonesian proposal, because of the provision that would make it mandatory for developed countries to provide technical and financial assistance to developing nations. As the delegated stated, the EU already endows developing countries with significant funding, but this is not seen as an obligation, whereas Indonesia’s text would.

Members brainstorm, Brazil outlines recommendations

Following the formal meeting on fisheries subsidies, the Negotiating Group on Rules held an informal brainstorming session focusing primarily on Brazil’s recent proposal on artisanal and small-scale fisheries. Drawing from its previous submissions, Brazil’s newest text once again calls for a broad prohibition of subsidies, but with an additional delineation of specific exemptions for S&DT.

Brazil defines artisanal and small-scale fisheries

In its text, Brazil argues that since artisanal and small-scale fisheries create only negligible effects on fish stocks, subsidies and resources should continue to be permitted. Following along similar lines as Indonesia’s proposal, this exemption would be conditional upon Members’ observing best practices and implementing fisheries management programmes.

Brazil defines artisanal and small-scale fisheries as those relying on non-mechanised means. Other issues taken into account include how the fishing activities are performed, such as whether the fisherman works mainly with himself and his family for a small profit trade.

Brazil also calls for additional S&DT provisions to allow poorer countries the policy space to develop their industry, such as through modernising fleets. Here again, this flexibility would be permitted only within certain, well-defined parameters, to guard against over-fishing.

Fighting for fish

In anticipation of last week’s meeting, marine conservationists and some coastal states once again called for a broad elimination of fisheries subsidies.

Marine advocacy group Oceana on 9 July released a report on the state of the world’s fisheries. It also outlined ways for the WTO to incorporate policies that would halt over-fishing and support marine conservation.

Oceana called on WTO Members to agree to disciplines on fisheries subsidies that support marine conservation and work towards replenishing global fish stocks before they are irrevocably depleted. The group also recommended that subsidies should be allocated for strengthening effective fisheries management systems, rather than operating costs such as modernising vessels.

Similarly, Kenya, along with a loose coalition of other coastal states including Mauritius and Madagascar, petitioned the WTO on 9 July to eliminate subsidies to the fishing sector. "Over-fishing is the single most largest threat to the survival of the industry and unless the WTO eliminates the massive subsidies it provides to the sector across the globe, we are going to see this practice go on un abetted and we risk clearing entire fish population," said Simon Helphill, a board member of the Kenyan government’s Marine and Fisheries Research Institute (KEMFRI).

While this move is consistent with Kenya’s stance on fisheries subsidies, it is not shared by all coastal developing countries. In early June, for example, a group of eleven small and vulnerable economies (SVEs), including Pacific island nations such as Fiji and the Solomon Islands, put forth a text (TN/RL/W/210) arguing that blanket bans would be "unduly punitive" for them, especially in light of their minimal effect on over-fishing (see BRIDGES Weekly, 13 June 2007).

Out for summer

Despite progress within the fisheries discussions in recent months, significant divisions persist. Moreover, several Members have expressed concern about moving forward until the state of other negotiating areas - especially the deadlocked talks on agriculture and industrial goods trade - is more clearly defined. Delegates say that the overall impasse in the Doha Round talks might be more of an obstacle to the fisheries subsidies negotiations than differences on the issue itself.

The next meeting of the Negotiating Group on Rules is scheduled for the end of September.

ICTSD reporting.