Exceptions to potential future WTO rules on fisheries subsidy spending featured prominently during a 13-16 May session of the WTO Negotiating Group on Rules. In addition to a proposal on these exceptions by India, Indonesia and China delegates discussed general disciplines and technical assistance.

The chair of the rules talks, Uruguayan Ambassador Guillermo Valles Galmes, said that he would table a new document, which would also cover fisheries subsidies, before a 'horizontal' negotiating process on agriculture and manufacturing trade begins.

India and Indonesia circulated the first draft of the paper (TN/RL/GEN/155/Rev.1) at last month's meeting of the rules group, but time constraints prevented discussion of it. Since then, China has signed on as a co-sponsor, and has emphasised the importance of special and differential treatment (S&DT) for developing countries. Previously China had called for a broad prohibition of fishing subsidies.

The sponsors of the paper maintain that the requirement in Valles Galmes' November 2007 draft fisheries subsidies text that developing countries establish formal fisheries management systems in order to qualify for the right to provide certain types of payments negates the value of the text's special and differential treatment (S&DT) provisions for developing countries to make ordinarily banned payments. These requirements, by making the S&DT provisions largely unusable, thus undermine the economic position of developing countries, they argue (see BRIDGES Weekly, 5 December 2007, http://www.ictsd.org/weekly/07-12-05/story3.htm). India stated that its proposal provides more effective and flexible S&DT than the chair's text.

Regarding 'small-scale' fishing, the joint proposal would allow developing countries to subsidise vessels up to 24 metres in length instead of the 10-metre length limit in the chair's draft (Article III:2(b)1).

In a contentious development, the proposal, in contrast to the chair's draft, would not require developing countries to construct fish management regimes to qualify for special and differential treatment. Another issue that proved sensitive was the proposal to allow developing nations to subsidise high-seas fishing.

Member reactions mixed

Overall there were mixed reactions to the proposal.

Barbados, on behalf of the small and vulnerable economies (SVEs), agreed with many points of the proposal and commended India, Indonesia and China for adhering to the more traditional view that S&DT should come with no strings attached. Brazil shared the concerns addressed in the joint proposal but indicated that it was not convinced that those issues were appropriately conveyed in the alternative legal text set out in the proposal. Meanwhile, Malaysia, the Philippines, Thailand, and Vietnam expressed general support for the original version of the proposal circulated at the last rules group meeting, but not the present one with the inclusion of high-seas subsidies.

Many delegates were already critical of the use of boat length by the chair's text to define small-scale fishing. The proposal to increase the boat length threshold to 24 metres was met with even stronger scepticism. India has consistently focused on trying to secure exemptions for small-scale and artisanal fleets. Most Members are sympathetic to granting flexibility to artisanal fishing, but many are wary that an unduly lax definition could end up being misused to encourage overfishing. New Zealand stressed the need to reach a satisfactory definition for artisanal fishing.

Canada, Korea, Norway, and Taiwan reiterated that the provisions for artisanal fleets should be included for both developing and developed countries.

Japan and the EU were among the Members that strongly opposed the proposal. One of their primary concerns was over the section of the proposal that would allow developing nations to be exempt from certain subsidy restrictions in areas beyond their exclusive economic zones (EEZs). The sponsors of the proposal argued that it was appropriate for developing countries to subsidise fishing activity on the high seas because of the benefits that developed nations have historically enjoyed from subsidised high-seas fishing. Yet many developing and developed countries alike, including Argentina, Chile and Norway, opposed granting subsidies to any high-sea fishing fleet.

Fisheries management schemes proved to be another topic of major contention. Prior to last week's meeting, several developing countries had indicated that the requirements that developing countries would have had to meet in order to qualify for S&DT were so stringent that they rendered the special treatment unusable.

Yet, as the joint proposal includes no requirements for fisheries management, it was not clear to some delegates what disciplines would actually apply to developing nations. As such, critics have also questioned the need for such a lengthy transition period when the obligations for the developing countries under the joint proposal only relate to illegal fishing and third transfer.

Others still, such as Australia and Chile, questioned whether this draft would represent progress toward achieving the overarching aim of sustaining the world's fisheries. Members such as the US and the EU expressed concern that the proposal represented too much of a carve-out for developing countries on fisheries subsidies without conditionalities.

While the proposal was met with a large amount of criticism, some delegates have commended the sponsors for expressing their point of view, as an alternative to the chair's text, and now hope that a middle road can be found between them.

Environmental concerns

International conservation group WWF has expressed concern that removing requirements for basic fisheries management systems would constitute a weakening of the proposed international rules on the payments that have been blamed for encouraging the depletion of marine fish stocks. Moreover, WWF has noted that the three sponsors of the proposal have formidable ties to the fishing industry: China has the largest fishing fleet worldwide; Indonesia is a dominant player in the global tuna industry; and India has an enormous domestic WWF argues that the rules in the chair's draft that are being resisted by India, China and Indonesia require only the most rudimentary elements of fisheries management to be in place before subsidies could be employed. The organisation further holds that many of the proposed conditions are already required by international law.

General discipline

Article IV of the chair's draft, on general subsidy disciplines, was also discussed at the meeting. This section bans subsidies that may deplete or otherwise harm shared fish reserves, such as highly migratory stock or those that straddle territorial boundaries, or stock where "another Member has identifiable fishing interests."

While some members mentioned uncertainty over how to apply or prove the term 'identifiable fishing interests,' most members supported the general thrust of the provision. The US further described this provision as an extremely important discipline. New Zealand, which also expressed support, suggested including trans-boundary fish stocks in the provision.

Technical assistance

In the latter days of the meeting Barbados, on behalf of the African, Caribbean and Pacific (ACP) countries and the SVEs presented a room document that proposed strengthening the technical assistance provisions in the chair's draft (Article III.4) to make them more 'effective and operational'.

Under the Barbados proposal, "developing countries which indicate a need for technical assistance shall be provided with such assistance through bilateral processes, through new and/or existing WTO technical assistance and support mechanisms and through other mechanisms of relevant international and regional organisations." The proposal also outlines the creation of a subcommittee within the WTO Committee on Subsidies and Countervailing Measures with the mandate to coordinate technical assistance in fisheries subsidies.

There is a general consensus within the negotiations on the value of technical assistance to fisheries in developing countries, especially regarding their obligations to meet adequate management standards. Thus, many delegations expressed support for the Barbados proposal. However, delegates have commented that the exact aid required by developing countries is still unclear. The US suggested that future action include an inventory of current assistance as well as identification of areas of need for future technical assistance.

Valles Galmes clarified that his draft would exempt LDCs from any prohibitions of fisheries subsidies without any attached conditions. The chair also highlighted the fact that the WTO did not have the expertise to address technical fisheries matters; any assessment for technical assistance would thus have to be addressed by outside organisations, such as the United Nations Food and Agricultural Organisation or the United Nations Development Programme.

The rules group's next meeting on fisheries subsidies is scheduled for 23 June.

ICTSD reporting.

21 May 2008

Source: www.ictsd.org