TWN Info Service on WTO and Trade Issues (Jul17/12)
17 July 2017
Third World Network

EU, Indonesia table revised proposals on fisheries subsidies
Published in SUNS #8503 dated 17 July 2017

Geneva, 14 Jul (Kanaga Raja) -- Both the European Union and Indonesia have introduced their revised proposals on fisheries subsidies at an informal meeting of the WTO Negotiating Group on Rules on Thursday.

According to trade officials, the revised proposals are expected to be discussed in depth at a later meeting of the Rules Group on 17-18 July, as the meeting on Thursday (13 July) was meant only for the introduction of these two revised proposals.

The revised textual proposal introduced by the European Union (TN/RL/GEN/181/Rev. 1), now includes the addition of a transition period during which all members are allowed to grant or maintain subsidies that increase fishing capacity, but with a condition attached.

The provision states: "1.2 The Parties may grant or maintain subsidies set out in Article 1.1 during a transitional period of [X] years following the entry into force of this Agreement, provided that the vessel benefiting from the subsidy does not target fish stocks that are in an overfished condition."

Article 1.1 in the textual proposal states as follows:

"1.1 The Parties shall not grant or maintain any of the following subsidies:

"(a) subsidies that increase the marine fishing capacity of a fishing vessel or support the acquisition of equipment that increases the ability of a fishing vessel to find fish;

"(b) subsidies that support the construction of fishing vessels or the importation of fishing vessels; and

"(c) subsidies for the transfer of fishing vessels to other countries including through the creation of joint ventures with partners of those countries."

At the informal meeting on Thursday, the EU said this revision responds to requests by the developed members for time to adjust their fleets and for developing countries to prepare their fish stock assessments.

The revised proposal also now includes a provision that bans subsidies that contribute to over-fishing.

The relevant provision in the revised proposal states: "In addition to the subsidies prohibited under Article 1.1, the Parties shall not grant or maintain any subsidies for fishing outside the territorial sea that negatively affect targeted fish stocks that are in an overfished condition."

According to trade officials, the EU maintained that it was never opposed to such a rule and that it was instead considering the level of precision needed for implementing it.

Furthermore, the EU said that this new provision on over-fishing includes an exemption for subsidies granted to fishing activities within a member's "territorial sea".

The EU explained that this refers to the belt of coastal waters that extends at most to 12 nautical miles from the baseline of the coastal state.

The proposal further includes an Annex that sets out an illustrative list of subsidies that in the EU's view, do not negatively affect targeted fish stocks that are in an over-fished condition.

Annex I of the revised EU proposal states as follows:

"ILLUSTRATIVE LIST OF SUBSIDIES THAT DO NOT NEGATIVELY AFFECT TARGETED FISH STOCKS THAT ARE IN AN OVERFISHED CONDITION

"(a) subsidies that improve fishery management systems and thus promote sustainable fisheries including subsidies for research and development activities;

"(b) subsidies that improve hygiene, health, safety and working conditions for fishers;

"(c) subsidies aiming at improving the concerned Party's capacity to fight against IUU [Illegal, Unreported and Unregulated] fishing;

"(d) subsidies for permanent cessation of fishing activities provided that the fishers concerned effectively cease all fishing activities within a reasonable time-frame after receiving the subsidy concerned."

A further addition in the EU's revised proposal are some notification requirements relating to conservation and management measures amongst others.

Article 3 in the revised proposal states as follows:

"3.1 The Parties shall notify, in accordance with the provisions of Article XVI: 1 of GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures, subsidies that support, directly or indirectly, marine fishing activity.

"3.2. In addition to the information set out in Article 25.3 of the Agreement on Subsidies and Countervailing Measures, the following must be included in the notification:

"(a) programme name;

"(b) legal basis and granting authority for the programme;

"(c) level of support provided;

"(d) type or kind of marine fishing activity supported by the programme; and

"(e) in the case of developing and least developed countries, for any of the subsidies under Article 1.1, information whether the Party concerned makes use of the flexibilities provided for in Articles 4.1 and 4.2.

"3.3 The Parties shall also endeavour to include the following in the notification:

"(a) the status of the fish stock targeted by the vessel benefiting from the subsidy (for example, over-exploited, depleted, fully exploited, recovering, under-exploited);

"(b) any conservation and management measures applied to the fish stock targeted by the vessel benefiting from the subsidy; and

"(c) any fishing capacity management plan applied to the fleet to which the vessels benefiting from the subsidy belong."

Indonesia also introduced its own revised proposal (TN/RL/GEN/189/Rev. 1) that was circulated on 13 July.

According to trade officials, the revised proposal mainly aims to clarify Indonesia's intention to treat artisanal fishing, small-scale fishing, and fishing within EEZs (exclusive economic zones) and high-seas quotas as three separate instances where prohibitions on subsidies would be exempt.

In its revised proposal on proposed disciplines on prohibitions and special and differential treatment for fisheries subsidies, Indonesia said that it has revised the proposal which focuses primarily on making it simpler in providing clearer disciplines on the prohibition and the special and differential treatment provisions.

Indonesia highlighted that prohibition on subsidy related to IUU fishing has been rearranged to clarify that subsidies contributing to IUU fishing must not be tolerated, given such activities have great detrimental effects on all aspects, namely economic and social.

Indonesia underlined its priority in undertaking efforts to combat IUU fishing. Indonesia has been revitalizing the ocean as an economic driver through fisheries policy reform.

In addition, the Government of the Republic of Indonesia has enacted several regulations, inter alia, prohibition of destructive fishing gear, minimum size of captured fish, as well as formulation of fisheries management plan for 11 fisheries management areas and harvest strategy.

At the informal meeting, Indonesia said its revised proposal remained focused on prohibiting fishery subsidies that contribute to overcapacity, overfishing and illegal, unreported and unregulated (IUU) fishing.

Indonesia said it was also still using the positive list approach in the prohibition, i. e. only those subsidies listed would be banned.

Meanwhile, Norway introduced a short textual proposal (TN/RL/GEN/191) on discipline and prohibition on subsidies to IUU fishing.

Norway proposed that Members shall ensure that their subsidies programs that give support to fishing and fishing related activities include the requirement to check that the vessels are not IUU-vessels.

This requirement includes checking the owners or operators controlling the operation of the fishing vessels.

Norway noted that RFMOs (Regional Fisheries Management Organisations) have their own procedures for both including and eliminating vessels on their lists.

Regarding the requirement to check information from relevant coastal states, Norway has suggested a limit of five years on how far back authorities need to check.

Its textual proposal states:

"No Member shall grant or maintain subsidies of any kind to vessels, owners or operators engaged in illegal, unreported and unregulated fishing.

"To this end, before a Member grants a subsidy, it shall ensure that the fishing vessel neither appears on an IUU- vessel list of a Regional Fisheries Management Organization nor that the fishing vessel has operated in waters under the jurisdiction of any Member without the permission of that Member during the preceding five years."

At the informal meeting, Norway said that its intention was to have an agreement that was as enforceable, simple and practical as possible.

Norway said it was especially concerned with illegal fishing that vessels undertake outside of their flag state's territory. It said that this issue was not reflected in other proposals.

According to trade officials, Senegal, for the Least Developed Countries (LDCs), and Dominica, for the African, Caribbean and Pacific (ACP) group, said they hope to submit their own textual proposals by next week.

The Latin American group (Argentina, Colombia, Costa Rica, Panama, Peru and Uruguay), which has already submitted its own textual proposal, said that its members were still deciding whether to submit a revision.

At the informal meeting, the EU expressed its desire to have a common text that compiles existing proposals as the basis for negotiations starting in the autumn.

According to trade officials, the EU said that it would like the WTO secretariat to undertake compilation work taking into consideration existing textual proposals sent in before the next meeting of the Rules Group on 17 and 18 July. It noted the time left before the 11th Ministerial Conference in Buenos Aires in December.

It said that this request was not meant to preclude additional proposals from other members coming in at a later date.

The EU explained that such a compilation document, which it would like to have by 26 July, could be taken by delegates to their respective capitals during the summer break for review before negotiations resume in the autumn.

The chair of the Negotiating Group on Rules, Ambassador Wayne McCook of Jamaica, said that this is a matter that could be decided (at the Rules Group meeting) on 18 July. +