Bridges Trade BioRes • Volume 9 • Number 1 • 23rd January 2009

New WTO Rules Text Outlines Fisheries Roadmap

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The chair of the WTO rules group reeled in controversial language related to fisheries subsidies in the latest draft rules text released on 19 December. Unlike the prior text – which contained hard language calling for a ban on specific subsidies – December’s text outlines only a ‘roadmap’ for future discussions.

The document had been expected to be released a few months earlier, but was ultimately put on hold so as not to distract from a strong end-of-year push to conclude critical negotiating areas of industrial and farm goods. When efforts on those fronts failed to produce results by mid-December, the chair of the rules group, Ambassador Guillermo Valles Galmés of Uruguay, released his draft text.
The rules group is charged with strengthening disciplines on subsidies in the fisheries sector. A particular challenge for the group on this front has been to balance the need to protect the world’s fish stocks from overfishing – a goal that the chair says all delegations appreciate – and the need to afford a just amount of ‘special and differential treatment’ to the world’s poorer countries, many of which rely heavily on the sector.

Prior rules text too strict for some countries

The 2005 Hong Kong ministerial declaration called on the Negotiating Group on Rules to “strengthen disciplines on subsidies in the fisheries sector, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and over-fishing.”

The November 2007 rules text took this into account, providing a detailed legal text - Annex VIII of the SCM Agreement - for a new agreement on fisheries subsidies. The text would have prohibited government support for construction, operating and fuel costs of vessels, and port infrastructure development exclusively or predominantly linked to wild capture fishing – including storage and processing facilities.

Some subsidies would have been permissible for all countries, provided that they maintain an international standard fisheries management system. These included payments aimed at boosting fishing vessel safety without increasing fishing capacity, reducing the environmental impact of fishing, or re-training fisheries sector workers.

The 2007 text would have exempted least-developed countries (LDCs) from the disciplines altogether, and allowed non-LDC developing countries to provide otherwise-banned subsidies.

However, it soon became clear that many governments considered the proposed disciplines too strict. Canada, the EU, Japan and Norway said Members should be allowed to subsidise bait, fuel, insurance and port infrastructure in certain cases, as well as offer assistance to small-scale fishermen affected by high oil prices. And India objected to the conditions attached developing country subsidies to small-scale fishing, such as limiting boat length to 10 metres.

Roadmap lays out fundamental questions for moving forward

Given the controversy over several issues in the 2007 text, Valles took a step back this time by replacing the legal language of the previous draft with a roadmap for future work on the matter. “We have no pre-existing agreement to which to revert, and the differences among delegations go to the very concepts and structure of the rules,” the chair explained.

Thus, rather than revising the prior text, Valles proposed a ‘roadmap for discussion’, which consists of fundamental questions that must be clarified for the negotiations to move forward. These questions include general considerations, such as why, in view of the Hong Kong mandate, a particular kind of subsidy should or should not be prohibited. Other questions ask how to ensure that any permitted subsidies would not in practice contribute to overcapacity or overfishing, how to objectively determine if a fishery is ‘overfished’, and identifying the extent of the group’s mandate to discipline subsidies in the sector.

Environmental group Oceana welcomed the chair’s new approach to the fisheries talks.

“Oceana strongly and actively supports the WTO mandate to limit fisheries subsidies that contribute to overcapacity and overfishing,” Courtney Sakai of Oceana said. “The new roadmap offers a productive way for negotiators to move forward in implementing an effective agreement that achieves these objectives.”

Members still divided on anti-dumping

The new draft text also includes new language on anti-dumping and non-fisheries related subsidies disciplines. In an introductory note to the document, the chair stressed that while some compromises had been struck, Members remained starkly divided on several issues, most notably a long-controversial anti-dumping tool known as zeroing.

Nevertheless, some incremental progress has been made in the 13 months since the previous text was released, and the chair has vowed to intensify the group’s work beginning in early February in an effort to narrow gaps in the rules talks, one of several negotiating areas that have prevented the seven-year-old Doha Round talks from reaching a successful conclusion.

Additional Resources

For a comprehensive analysis of the new rules text, see Bridges Monthly, Vol. 12 No. 6.
The 30 November 2007 draft text can be found here.
The 19 December 2008 draft text can be found here

ICTSD reporting.