TWN Info Service on WTO and Trade Issues (May10/08)
19 May 2010
Third World Network

Rules Group discusses new proposal on S&DT in fisheries
Published SUNS #6921 dated 10 May 2010

Geneva, 7 May (Kanaga Raja) -- A new proposal was tabled at the WTO Negotiating Group on Rules this week by Brazil, China, India and Mexico on special and differential treatment (S&DT) for developing and least-developed countries in respect of fisheries subsidies.

In their proposal (TN/RL/GEN/163) presented at an informal meeting of the Group (meeting on 3 and 5 May), the four proponents said that the text is an attempt at putting together all the latest contributions by developing countries on S&DT side-by-side with the Chair's November 2007 draft consolidated text, taking into account the debate on the pertinent questions of the December 2008 roadmap for fisheries subsidies.

The proposal contains legal draft text that deals with Article III (S&DT of developing country Members), Article IV (general discipline on the use of subsidies) and Article V (fisheries management) of the Rules Chair's first draft text.

The proponents said that their main objective is to make real the Hong Kong mandate in that "appropriate and effective special and differential treatment for developing and least-developed Members should be an integral part of the fisheries subsidies negotiations, taking into account the importance of this sector to development priorities, poverty reduction, and livelihood and food security concerns".

According to the proposal, the focus on S&DT and its applicable controls is the reason why only Articles III, IV and V of the Chair's first draft text are dealt with in this document.

"This does not mean that the proponents agree with the Chair's suggestions on the other parts of that draft text, rather the proponents just seek to convey what they believe is needed for fulfilling the Hong Kong mandate regarding S&DT," says the proposal.

"Our assumption here is that the prohibition of subsidies causing excessive fishing effort and negatively impacting fisheries resources can and shall be reconciled with the important role of fisheries subsidies in the economic development of developing countries. The applicable controls should allow developing countries to achieve development priorities, poverty reduction, and address their livelihood and food security concerns," it adds.

On the issue of small-scale, artisanal fisheries, the proponents say that they decided to bring forward a definition based on socioeconomic criteria, inspired by the current Article 6.2 of the Agreement on Agriculture.

(Article 6.2 of the Agreement on Agriculture states: "In accordance with the Mid-Term Review Agreement that government measures of assistance, whether direct or indirect, to encourage agricultural and rural development are an integral part of the development programmes of developing countries, investment subsidies which are generally available to agriculture in developing country Members and agricultural input subsidies generally available to low-income or resource-poor producers in developing country Members shall be exempt from domestic support reduction commitments that would otherwise be applicable to such measures, as shall domestic support to producers in developing country Members to encourage diversification from growing illicit narcotic crops. Domestic support meeting the criteria of this paragraph shall not be required to be included in a Member's calculation of its Current Total AMS.")

The four proponents state: "We believe that this is the best way for striking a satisfactory balance, in the absence of internationally-agreed definitions on those fisheries activities by other Organizations more directly involved in fisheries issues. Each Member should be able to work on its own definition, insofar as the criteria set forth in the future WTO disciplines are observed."

On the larger scale fisheries, the proponents say that criteria such as the boat size and the area of capture were replaced with provisions structured on the rights Members have under the international law. For those activities, the controls in Articles IV and V would fully apply, in order to implement the Hong Kong mandate consistently with its main goal: to bar harmful fisheries subsidies that create over-fishing and produce overcapacity, as well as distort trade or production. Artificial distinctions such as the Exclusive Economic Zone limitation and the 10 meters threshold were thus deleted.

The provision of fisheries adverse effects in Article IV were strengthened by a definition of these effects in paragraph 2, followed by a list of situations where fisheries adverse effects would be deemed to exist.

"We are suggesting two types of analyses under that Article: a complete one in which the occurrence of fisheries adverse effects would have to be demonstrated by the complaining Member; and a simplified one in which only the aspects presented as 'shortcuts' would need to be demonstrated."

According to the proposal, Article V was streamlined by means of splitting its paragraphs concerning the content of fisheries management systems, the relationship between them and international standards and, finally, transparency obligations.

On the content aspect, say the proponents, this proposal follows the principle that only the core elements of fisheries management systems should be included in the final Agreement, leaving room for their implementation by Members on a case-by-case basis and adequate to their fishing activities.

Notwithstanding their attempts on that matter, the proponents say that their views on Article V are dependent on a final understanding on its scope and coverage, in particular its application beyond the S&DT exceptions and the nature of the overall notification requirements of the fisheries disciplines.

In introducing their proposal at the informal Rules meeting, Brazil, China, India and Mexico expressed serious concern over the state of world fisheries, and agreed on the need to discipline subsidies that encourage over-fishing.

According to trade officials, they said that they are not seeking a "blank cheque" but only flexibility for developing countries to achieve their legitimate development objectives.

Many developing countries including South Africa, Kenya (on behalf of the African, Caribbean and Pacific countries) and Indonesia voiced general support for the proposal.

However, said trade officials, a number of other countries including the US, Norway and New Zealand criticized the flexibility that the proposal would grant to developing countries, including subsidies towards the building of large fishing vessels and fishing on the high seas.

Also at the informal meeting, Tonga, on behalf of the group of small, vulnerable economies (SVEs), welcomed the support expressed by many delegations to their textual proposal (TN/RL/GEN/162) on special and differential treatment for SVEs that was presented at the last meeting of the Rules Group.

Noting that the SVEs account for just 2.9% of global fish production, Tonga stressed the importance of the sector to the economies of the SVEs.

The US also presented its proposal (TN/RL/GEN/165) on certain provisions of the Chair's 2007 text on fisheries subsidies.

In its proposal, the US said that it strongly supports the overall structure and level of ambition in the Chair's November 2007 text, including a broad prohibition as the core discipline, together with "narrowly tailored exceptions and appropriate and effective special and differential treatment for developing Members."

In its textual proposal, the US suggests some drafting changes to several articles, including on general exceptions (Article II), general discipline on the use of fisheries subsidies (Article IV), and fisheries management (Article V).

According to trade officials, a number of Members including Australia, New Zealand and Norway expressed support for many elements in the US paper.

On the other hand, some other Members, including China and Brazil, expressed disappointment that the US did not touch upon the issue of special and differential treatment.

Japan, Korea and Chinese Taipei reiterated their opposition to a general prohibition on fisheries subsidies. They also reiterated their support for fisheries management systems.

Meanwhile, in his farewell statement to the Group, the Rules Chair, Ambassador Guillermo Valles Galmes of Uruguay, urged the Group to continue with its work on both horizontal and fisheries subsidies.

According to trade officials, he stressed the urgency of the work especially on fisheries subsidies, adding that the clock is ticking, and it is ticking louder and louder. +