Bridges Weekly Trade News Digest • Volume 9 • Number 7 • 2nd March 2005
WTO Fisheries Subsidies Talks Move Forward
Fisheries subsidies discussions in the WTO Negotiating Group on Rules on 21-23 February focused on a new submission by Japan — this time officially supported by Korea and Chinese Taipei — that further described its approach to developing disciplines on such subsidies. Many observers expressed cautious optimism regarding the progress of the talks, but stressed that much work remained to be done to hammer out the details of possible disciplines, in particular how they will deal with special and differential treatment (S&D) for developing countries.
In their submission (TN/RL/W/172), Japan, Korea and Chinese Taipei criticised the November 2004 submission by the "Friends of Fish" (Argentina, Chile, Ecuador, New Zealand, the Philippines and Peru; see BRIDGES Trade BioRes, 19 November 2004). Specifically, they argued that the "Friends of Fish" proposal’s ‘negative list’ approach — i.e. a blanket ban on subsidies with specific exceptions to be subsequently negotiated — was inconsistent with the Agreement on Subsidies and Countervailing Measures (SCM). The Japanese-led proposal said that the SCM Agreement provides only for a ‘positive list’ approach that explicitly prohibits only certain subsidies that have been identified as trade-distorting. They also contended that the November submission would by eliminating an effect test, differentiate fisheries from other sectors which are disciplined based on their trade impacts, as well as limit flexibility in the use of policy tools in a changing environment.
The submission went on to further elaborate on Japan’s previous proposal (see BRIDGES Trade BioRes, 11 June 2004). The countries note that all fisheries subsidies deemed to directly cause serious harm to fisheries resources should be prohibited ("red box" subsidies), including subsidies for enhancing the capacity of fishing vessels and those related to illegal, unreported and unregulated fishing. Notably, the new proposal does not include Japan’s previous caveat that capacity-related subsidies would only be prohibited for vessels operating in poorly managed fisheries. Instead, it simply states that resource management issues should be considered in the negotiations.
Regarding "green box" (non-actionable) subsidies, the submission would permit grants that have positive effects on fish stock recovery, research and development, social security, and welfare. It also called for some flexibility for all countries to protect their small-scale subsistence fisheries and supported granting developing countries some space to apply subsidies that would normally be prohibited.
Despite the Japan-led submission’s critical stance on the "Friends of Fish" approach, even those on the other side of the debate saw the new proposal as a "fairly big step forward" and a significant improvement upon the previous one, with fewer qualifications on "red box" subsidies. However, they said that the "green box", though less expansive than before, still required further clarification. Several observers also welcomed Korea and Chinese Taipei’s support for the proposal, as it constituted their official recognition of the need to discipline fisheries subsidies. New Zealand, however, wondered how the countries planned to address the "grey area," i.e. subsidies that did not fall clearly in either of the two categories. Members also questioned how the Japan-led proposal’s approach would improve transparency with regard to subsidies programmes.
Many felt that the proposal marked sufficient progress to allow countries to put aside continued differences over the broad approach (i.e., bottom-up, as proposed by Japan, Korea and Chinese Taipei, versus top-down, as proposed by the "Friends of Fish") and instead get down to discussions on the actual details and substance of the subsidies programmes. Members generally recognised the need to address the special concerns of developing countries, in particular small and vulnerable states, as highlighted in an earlier submission by the small island developing states. However, some developed countries expressed concerns that S&D provisions could be used by some of the larger developing countries to create major fleets, thereby undermining the objectives of the disciplines. In this context, Brazil noted that any disciplines should not prohibit countries from building their own fleets to exploit their national waters within sustainable limits. Brazil and India said they would submit proposals on S&D shortly.
The next meeting of the Negotiating Group on Rules is currently scheduled for 11-13 April.
ICTSD reporting.