TWN Info Service on WTO and Trade Issues (Mar21/22)
23 March 2021
Third World Network

Fisheries talks deadlocked over specific carve-out to major subsidizers
Published in SUNS #9311 dated 23 March 2021

Geneva, 22 Mar (D. Ravi Kanth) – The Doha fisheries subsidies negotiations remain deadlocked over the specific carve-out provided by the chair for major subsidizers to continue with their industrial-scale fishing subject to demonstrating their implementation of sustainable marine conservation programs, said people familiar with the development.

During the March cluster of meetings that ended on 19 March, the chair of the Doha Rules negotiations, Ambassador Santiago Wills from Colombia, acknowledged that positions remained unbridgeable on the core provisions of Articles 5.1 and 5.2 of the second revised draft consolidated text on prohibiting subsidies in the overcapacity and overfishing (OC&OF) pillar.

According to Article 5.2 of the second revised draft text (RD/TN/RL/126/Rev.2), “a member may grant or maintain subsidies referred to in paragraph 5.1 (which lists all harmful subsidies in the context of OC&OF) if it demonstrates that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.”

This provision in Article 5.2 gave a “green light” to the big subsidizers to continue with their subsidies on industrial-scale fishing, said several people, who asked not to be quoted.

The chair appears to have introduced that carve-out based on the proposals made by the big subsidizers such as the European Union, Japan, and Korea, along with a few other countries, who had contributed to the grave problem of overcapacity and overfishing and depletion of global fish stocks.

On the first day of the March cluster of meetings on 17 March, the chair came under intense pressure for his apparent bias towards some proposals tabled by members on artisanal fisheries, particularly for ignoring a proposal tabled by Cameroon which seeks a complete carve-out for artisanal and small-scale fisheries, said people who took part in the meetings.

The controversy arose because the chair had scheduled discussions on a proposal tabled by Argentina, Chile, and Ecuador concerning the specific exemptions to be granted to artisanal fisheries, while ignoring other proposals on artisanal fisheries.

The proposal by the three South American countries seeks exemption for artisanal fisheries from two pillars – overfished stocks in Article 4 and overfishing and overcapacity in Article 5, in the proposed second revised draft text issued by the chair in December last year.

The disciplines in these two pillars – overfished stocks, and overcapacity and overfishing – “shall not apply to low income, resource-poor or livelihood fishing and fishing-related activities at sea with the aim of, among others, ensuring food security; provided that these activities are performed within a [12] nautical miles area from the coast baseline. The activities mentioned in this Article shall nevertheless comply with the applicable domestic legislation.]”

The three countries did not clarify what is meant by “fishing-related activities” in their proposal issued on 22 February.

When the proposal came up for discussion on 17 March morning, South Africa sought to know why the chair has not held discussions on two other proposals concerning artisanal fisheries, said people familiar with the proceedings.

Apparently, Cameroon and the LDC group had also submitted proposals on the special carve-out for artisanal fisheries.

Cameroon, for example, submitted a proposal on 19 February, seeking a general carve-out for artisanal fisheries in all three pillars such as disciplines on Illegal, Unreported, and Unregulated (IUU) fishing, overfished stocks, and overcapacity and overfishing.

According to Cameroon’s proposal,”this instrument (the proposed agreement in scope) does not apply to artisanal and small-scale fishery. For the purpose of this Agreement, each member shall, upon ratification, communicate its national law and policies on artisanal and small-scale fishery and notify in advance of any changes that may occur.”

Effectively, Cameroon’s proposal did not insist on any conditions such as the limit of 12 nautical miles for artisanal fisheries.

And unlike the proposal from the three South American countries, which proposed exemption only in two pillars, Cameroon’s proposal sought exemption in all three pillars of the fisheries subsidies negotiations, said people, who took part in the meeting.

Several members severely quizzed the chair for not including Cameroon’s proposal in the scheduled discussion on artisanal fisheries, pointing out that it is unfair that the chair has ignored Cameroon’s proposal.

In the face of attempts at finger pointing, several members demanded that Cameroon’s proposal must be discussed along with other proposals, the person said.

Cameroon’s proposal contained in document RD/TN/RL/136 and issued on 19 February is as follows:

* 1.3: “This Instrument does not apply to artisanal and small-scale fishery. For the purpose of this Agreement, each member shall, upon ratification, communicate its national law and policies on artisanal and small-scale fishery and notify in advance of any changes that may occur.”

* 3.2 (b): “a flag State member, for activities by vessels flying its flag on the high seas and matters unaddressed by the coastal state;”

* 3.3: “A determination made by a relevant entity under sub-paragraph 3.2 shall be done in accordance with its law and regulation and international obligations.”

* 3.5.1: “The subsidizing party shall notify within [x] days, measures taken in compliance with its obligations under this Agreement pertaining to the removal, denial or suspension of subsidies granted to operators which committed IUU infringements.”

* 5.2: “Notwithstanding paragraph 5.1 and upon prior approval by all Parties, a member may grant or maintain subsidies referred to in paragraph 5.1, for a period not exceeding three years, if it effectively demonstrates that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.”

* 9.6.1: “Negotiations on the revision of this Agreement will open in year XX, from its entry into force, unless the Parties decide otherwise no later than one year before the aforesaid year. The provisions of the Agreement remain applicable for a period not exceeding two years, to the effect to facilitate the conclusion of a new Agreement. The Parties may, if necessary, extend the transitional period beyond two years.”

* 9.6.2: “If the Parties agree to terminate this Agreement, its provisions and those of any separate arrangement and agreement relating thereto, shall continue to govern the activities taking place or resulting from its implementation, until their completion, for a period not exceeding two years.”

The ACP (Africa, Caribbean, and Pacific) group provided figures about fishing by artisanal fishermen. They include:

(1) Only 19 percent of the 35.4 billion USD of global fisheries subsidies is provided to the small-scale fishing sector.

(2) 81 percent of total global fisheries subsidies go to the large-scale fishing sector.

(3) To demonstrate the inequity, a large-scale fisher receives 4 times more funds when assessing subsidies per number of fisher and 2 times more funds as subsidies per dollar landed. This undermines the economic viability of the small-scale fisheries in the long term.

In its intervention on artisanal fisheries, the African Group said members “need to be mindful of its critical role in all our countries with regard to food security and livelihood of vulnerable coastal communities that depend on fisheries.”

It cited the FAO (UN Food and Agriculture Organization), which said that “… small-scale fisheries serve as the economic and social engine, providing food and nutrition security, employment and other multiplier effects to local economies while underpinning the livelihoods of riparian communities.”

The African Group said members must endeavour to deliver on SDG 14.6.

ARTICLE 5.2 ON OC&OF

The discussions on 18-19 March, which were largely focused on Article 5.2, revealed unbridgeable positions, according to people, who asked not to be quoted.

Article 5.2 has almost nullified what was said in Article 5.1, which stated unambiguously that “no member shall grant or maintain subsidies to fishing or fishing related activities.”

Further, the big subsidizers, except Canada, remained opposed to the specific need to exempt artisanal fisheries that sustain millions of resource-poor fishermen from the disciplines in the three pillars – IUU fishing in Article 3, prohibitions on subsidies concerning overfished stocks in Article 4, and overcapacity and overfishing in Article 5.

The chair’s attempts to find common ground on several controversial issues that were contained in his second draft yielded little or no progress during the January, February, and March clusters of negotiating sessions, said people, who participated in the meetings during the three days.

The United States, which is one of the major subsidizers, apparently did not take the floor at the concluding session on Friday.

During the March cluster of meetings, the chair focused largely on Article 5.2 and on the horizontal exemption being demanded for artisanal fisheries which sustain millions of small-scale fishermen who depend on fishing for their basic livelihood.

Also, many developing countries remained opposed to a trade-off between the special carve-out being provided to big subsidizers on the one side, and negotiating effective special and differential treatment or common but differentiated responsibilities for developing and least-developed countries on the other, said negotiators, who asked not to be quoted.

The chair held three small-group meetings to find common ground on Article 5.2 but there was little meeting ground. The chair acknowledged that there is still a lot of work that needs to be done in the coming days.

At the concluding meeting with trade envoys on 19 March, the ACP group issued a strong statement setting out its positions on the issues discussed during the meeting.

According to the ACP statement, “Article 5.1 must be a clean prohibition for the most harmful subsidies to overcapacity and overfishing.”

Jamaica, on behalf of the ACP group, said members of the group do not provide “these subsidies (in comparison to the subsidies provided by countries engaged in industrial-scale fishing),” adding that “our fishing effort and that of many other developing countries’ fleets in the exclusive economic zone (200 nautical miles of EEZ), includes roughly 10% of total global fishing hours.”

The group argued that “Article 5.1.1 (in the second revised draft text) deems the subsidies listed to be most harmful, in particular, when provided by major subsidizers to large-scale fishing beyond the EEZ of that subsidizing member.”

Arguing that the relationship between Articles 5.1 and 5.2 is a challenge, the ACP group said it is important to “diffuse the impression that the wording cast as sustainability is too easy for the large subsidizers to meet.”

It is hardly surprising that “when sustainability is invoked in this context, it seems contrived and designed to evade the very discipline that SDG 14.6 speaks to,” the ACP group argued.

The United Nations Sustainable Development Goal 14.6 says, “by 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation.”

The group warned that “our engagement and comments on Article 5.2 should not be understood to mean that we are open to accepting an outcome.” The group said that “Article 5.2 should be removed.”

During the discussion, some members suggested “the scope of Article 5.2 to be that if a subsidizing member chooses to invoke the Article 5.2 exemption from Article 5.1, it would only apply to subsidies to fishing within that Member’s EEZ.”

The largest group of developing and least-developed countries argued that “restricting the scope of Article 5.2 to the EEZ of the subsidizing Member makes more sense since if the most egregious subsidies go to distant water and large-scale fishing, and if these were to apply beyond the EEZ of subsidizing Members, it would enable the unabated plunder of our waters.”

Further, “this will result in a manifest sidestep of our mandate and a total nullification of the Article.”

The ACP group noted that “on the issue of the term “demonstrate”, we believe that the text for Article 5.2, as is, is flawed as it only requires that members demonstrate that measures are in place to maintain stocks.”

According to the ACP group, “a more sustainable approach would be to have members demonstrate that stocks are in a healthy condition” and “the mere existence of measures does not guarantee that stocks will not be overfished.”

It called for avoiding “the impression that Article 5.2 will open up Article 5.1 to circumvention.”

Article “5.7 and special and differential treatment, which is integral to our mandate, must be treated completely separate from the proposed Article 5.2 exemption,” the ACP group said.

“The mandate does not require us to place conditions on the S&DT,” the ACP group said.

It argued that the group is not looking to the unsustainability of our resources, adding that its members are most hit by “overfishing from foreign vessels in our waters.”

The group called for observing “proportionate responsibility,” adding that “at the same time, an agreement should allow us the space to sustainably grow our resources, provide food and job security for our fishing communities, and for poverty reduction.”

The group also expressed concern that moves to “replicate the context of the TBT (Technical Barriers to Trade) and SPS (Sanitary and Phytosanitary) agreements in the fisheries subsidies context, would be a large step in the direction of breaking our understandings that these negotiations would not substantively and de facto result in the WTO as a fish management agency.”

The group warned that members “should not turn ourselves back to the 2007 phase of these negotiations which came to a halt in 2011.”

Therefore, “if this negotiation was about fish management and bringing the WTO into this domain to monitor and enforce our management systems, there would be no need for a negotiating mandate to address fisheries subsidy,” the ACP group said.

Mauritius, on behalf of the African Group, said that it has consistently raised concerns about the implementation of Articles 5.1 and 5.2 and its effectiveness in prohibiting harmful subsidies as per the mandate.

Mauritius said that the African Group “shared during the small group process, our reading of these articles that a member can provide unsustainable subsidies if it demonstrates that measures are implemented with a view to mitigating the negative effect of those harmful subsidies. This is the letter of Articles 5.1 and 5.2.”

Mauritius said that “there is an inconsistency in the current formulation of the discipline. If a subsidy is harmful to sustainability, the reasonable and recommended action for responsible governments is not to grant or maintain that subsidy program and should, therefore, be prohibited. It would, otherwise, sound like creating a sickness and trying to cure it in parallel.”

Bangladesh proposed a dedicated discussion on the proposed exemption of small-scale artisanal fisheries from the disciplines so as to protect “the disadvantaged and vulnerable group of our society – the coastal fisheries.” It called for horizontal exemption for artisanal fisheries.