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TWN
Info Service on WTO and Trade Issues (Jun21/04) Geneva, 8 Jun (D. Ravi Kanth) – As the World Trade Organization’s director-general strongly advocates for an agreement on fisheries subsidies on World Ocean Day on 8 June, the United States has brought the controversial issue of forced labour into the fisheries subsidies negotiations allegedly to target China at the eleventh hour, said people familiar with the negotiations. On World Ocean Day, the WTO DG Ms Ngozi Okonjo-Iweala, who also chairs the Doha Trade Negotiations Committee (TNC), and the chair of the Doha fisheries subsidies negotiations, Ambassador Santiago Wills from Colombia, issued calls for concluding an agreement on fisheries subsidies by 15 July. Without mentioning that the proposed fisheries subsidies agreement is part of the Doha Rules negotiations that were launched in 2001, the DG said that “two decades is too long for ending subsidies that finance the relentless overexploitation of our ocean.” “Governments need to deliver a WTO fisheries subsidies agreement now,” Ms Okonjo-Iweala said. WTO Members, she said, “have made real progress but we’re not there yet. Next month, trade ministers from around the world will meet virtually to look at these negotiations. We must seize this opportunity to narrow the remaining gaps”. Even though the proposed language on the disciplines concerning the IUU (illegal, unreported, and unregulated) fishing pillar, the over-capacity and over-fishing pillar, and the overfished stocks pillar, as mentioned in the draft consolidated chair’s text (TN/RL/W/276) fails to live up to the United Nations Sustainable Development Goal (SDG) 14.6 and the Buenos Aires ministerial decision of December 2017, the DG said that “WTO rules on fishing subsidies will help to prevent the collapse of global fish stocks.” She emphasized that members “need these rules for the sake of the environment, food security and livelihoods worldwide.” At a time when millions of people are either suffering or dying from the worsening COVID-19 pandemic with the WTO having failed so far to contribute to an agreement on the proposed TRIPS waiver, the DG said that “it’s time to turn the tide in favour of ocean health and a globally sustainable blue economy.” The UN SDG 14.6 calls on WTO members to, by 2020, “prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU 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.” Having missed the 2020 deadline, attempts are now being made to provide specific carve-outs in the crucial OC&OF (overcapacity and overfishing) pillar for major industrial-scale fishing by big subsidizers that include China, the European Union, Japan, the United States, Korea, and Chinese Taipei among others, said people who are participating in the negotiations (See SUNS #9353 dated 27 May 2021). In his statement on World Ocean Day, Ambassador Wills, whose controversial draft text seems to have created more problems than solutions, argued that “it will take hard decisions from 164 members, but it is doable.” “Members are working hard getting the text as close as possible to a draft on which ministers can make the remaining political calls,” the chair said, adding that “the ocean is calling, and we must not let her down.” REALITIES ON THE GROUND Meanwhile, a day before the issuance of the statement on World Ocean Day on 8 June, there were several controversial developments at the meeting that was convened by the Rules chair on 7 June. Perhaps, the most controversial aspect is the demand made at the meeting by the United States that wants “forced labour” to be declared a prohibited subsidy for fishing in the high seas in Article 5.2 of the chair’s text, said people who took part in the meeting. In an apparent attempt to target China, which is allegedly engaging in forced labour in its fishing activities in the high seas, the US demanded that members must include language on forced labour in the final fisheries subsidies agreement, said people, who asked not to be quoted. Even though controversial social clauses such as labour standards were rejected at the Seattle ministerial meeting in 1999 and subsequently, attempts to bring labour standards through the back door were blocked time and time again at the WTO, the US, under the Biden Administration, has made the issue of forced labour as its strategic priority in the fisheries subsidies negotiations, while severely undermining special and differential treatment for the developing countries. While opposing appropriate and effective special and differential treatment for developing and least-developed countries in the IUU, OC&OF and overfished stocks pillars, the US has sought specific carve-outs in the OC&OF pillar, said people who took part in the negotiations. CHAIR’S EMAIL TO MEMBERS Ahead of the meeting on 7 June, the chair sent an email to Members on 3 June stating his intention to discuss “the prohibitions in Articles 5.2 and 5.3.” “Concerning these Articles,” the chair said, “some delegations (the United States, Australia, and Brazil among others) emphasized the importance of specific disciplines for subsidies to fishing in areas where there is no control of fishing activities and/or for subsidies that are contingent on fishing outside a subsidizing Member’s EEZ (exclusive economic zone).” “However, other delegations (China) have stated that subsidies to fishing beyond the subsidizing Member’s jurisdiction do not necessarily contribute to overcapacity and overfishing, and they have also stated that if these disciplines are retained in the text, they should cover certain types of subsidies that are seen as particularly harmful, such as subsidies to fuel, whether specific or not,” the chair said. The US and other big subsidizers have been opposing the inclusion of fuel subsidies in the disciplines as demanded by several developing countries, including India and China among others, said people familiar with the negotiations. In his email, the chair said that “also, while several members support Article 5.2(b) which would exclude the non- recovery of payments under government-to-government access agreements from disciplines on subsidies to fishing in areas beyond national jurisdiction, other delegations have raised objections to such an exclusion. They are concerned that it would be a substantial carve-out from the disciplines and could invite circumvention.” CHINA AND THE US At the meeting convened by the chair on 7 June, China, which is opposed to the language on Articles 5.2 and 5.3 in the chair’s text, said that subsidies contingent upon fuel subsidies increased capacities and thereby, overfishing. The chair’s draft consolidated text on Articles 5.2 and 5.3 states: 5.2 (a) No Member shall grant or maintain subsidies contingent upon, or tied to, actual or anticipated fishing or fishing related activities in areas beyond the subsidizing Member’s jurisdiction (whether solely or as one of several other conditions), including subsidies provided to support at-sea fish-processing operations or facilities, such as for refrigerator fish cargo vessels, and subsidies to support tankers that refuel fishing vessels at sea. Further, Article 5.2 (a) is attached with a footnote which says that “with respect to Article 5.2(a), the mere fact that a subsidy is granted or maintained to vessels or operators that may be engaged in fishing or fishing related activities in areas beyond the subsidizing Member’s jurisdiction shall not for that reason alone be considered a prohibited subsidy within the meaning of Article 5.2(a).” (b) Subparagraph (a) shall not apply to the non-collection from operators or vessels of government-to-government payments under agreements and other arrangements with coastal Members for access to the surplus of the total allowable catch of the living resources in waters under their jurisdiction, provided that the requirements under Article 5.1.1 are met. 5.3 No Member shall grant or maintain subsidies provided to fishing or fishing related activities outside of the jurisdiction of a coastal Member and outside the competence of a relevant RFMO/A (regional fisheries management organization/arrangement). In response, China said that it has introduced several novel features into its new fisheries management policy that will be unveiled soon, said people familiar with the development. China said that it is ready to contribute to the fisheries subsidies agreement, adding that these two provisions (Articles 5.2 and 5.3) are deviating from “the negotiating mandate and are unnecessary and discriminatory and illogical.” It cited examples as to how fish stocks in the Black Sea and in the Mediterranean have been depleted. China said subsidies contingent upon fuel subsidies increased overcapacity and overfishing, said people who took part in the meeting. China raised several concerns with the chair’s formulations, arguing that it will not accept an “unfair agreement.” US RESPONSE In its response, the United States, along with some of its allies such as Australia, supported the chair’s formulations in Article 5.2 (a) but refused to accept Article 5.2 (b). The US, in its intervention at the meeting, said that “while we have supported (the) chair’s hybrid approach to Article 5.1, we are clear that additional focus on most harmful subsidies have to be part of any outcome.” According to the US, it includes prohibitions concerning subsidies which are now reflected in Article 5.2 (a) and footnote 11. The US, which is the proponent of the language in the chair’s text, said “the prohibition addresses subsidies that are contingent upon fishing specifically directed against members’ own jurisdiction which risk contributing to IUU fishing and OC&OF fishing.” Such subsidies, the US said, “pose unique problems to the sustainability of fish stocks and must be addressed in these negotiations.” The US said that “in addition to these concerns, the use of forced labor has been widely documented with respect to vessels engaged in distant water fishing.” The US delegate maintained that “as explained in our recently submitted proposal, we can consider that inclusion of this in distant water fishing contingent upon subsidies is a prohibition and will also address members’ concern on forced labor.” US PROPOSAL ON FORCED LABOUR In its proposal on “the use of forced labor on fishing vessels” (TN/RL/GEN/205), the US said the “use of forced labor on fishing vessels has been widely documented in recent years, particularly with respect to distant-water fishing vessels, which tend to be subsidized.” “This is a problem Members have recognized in other international fora, but the Negotiating Group on Rules (RNG) has yet to address it explicitly,” the US said. It argued that “this proposal outlines an approach that works within the framework of the current draft consolidated Chair text (TN/RL/W/276) to ensure an agreement on effective disciplines on harmful fisheries subsidies can contribute to Members’ efforts to highlight and address the use of forced labor on fishing vessels.” Further, the US said that “this approach consists of (1) the inclusion of effective disciplines on harmful subsidies to fishing activities that may be associated with the use of forced labor; (2) the explicit recognition of the problem and the need to eliminate it; and (3) transparency with respect to vessels or operators engaged in the use of forced labor.” Without naming China, the US said “members are currently negotiating disciplines on harmful fisheries subsidies, including with respect to illegal, unreported, and unregulated (IUU) fishing, certain distant water fishing, and fishing by vessels not flying the subsidizing Member’s flag.” In short, the US stand has exposed its double-standards, as on the one hand it wants a specific carve-out in Article 5.1.1 from removing the subsidies listed in Article 5.1 but on the other hand it wants strong disciplines for targeting China in Articles 5.2 and 5.3 with the inclusion of the controversial element of forced labour. In response to the demand from many developing countries for limiting the scope of the exemption for the subsidies listed in Article 5.1 to be limited to the EEZ, the US wants those subsidies to be extended to fishing beyond the EEZ. Hypocritical positions and double-standards under the pretext of a compromise text have become the basis for crafting the fisheries subsidies agreement, said people, who asked not to be quoted. The proposed agreement could further deplete multi-species fish stocks instead of saving them, said people, who preferred not to be quoted.
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