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TWN
Info Service on WTO and Trade Issues (Nov21/10) Geneva, 9 Nov (D. Ravi Kanth) – The chair of the Doha fisheries subsidies negotiations on 8 November issued his second revised draft text that appears to have tilted the level-playing field in favour of the big subsidizers to continue with their industrial-scale fishing, while bringing about differentiation among developing countries for availing of special and differential treatment, said people engaged in the negotiations. The second revised draft text has brought to the center stage of the negotiations the specific demands of the United States such as on forced labour and differentiation among developing countries for availing of special and differential treatment (S&DT). Ahead of the World Trade Organization’s 12th ministerial conference (MC12) that is expected to start in Geneva on 30 November, the chair, Ambassador Santiago Wills from Colombia, issued an eight-page draft text that appears to have perpetuated the existing asymmetries, said people, who asked not to be quoted. The specific carve-outs allegedly being provided to the big subsidizers – China, the European Union, the United States, Japan, Canada, South Korea, and Chinese Taipei among others – would enable them to continue with their industrial-scale fishing that is largely responsible for the depletion of global fish stocks over the past several decades. In contrast, the chair has sought to bring about differentiation among developing countries for availing of S&DT on a best endeavour framework. The developing countries, especially India, Indonesia, South Africa among others have a hard battle to wage in the next two weeks as well as at MC12, said people familiar with the chair’s textual proposals. The chair seems to have turned a blind eye to the “polluter-pays” principle as well as the principle of “common but differentiated responsibilities” enshrined in the Paris Climate Change Agreement. The chair’s textual proposals also seem to have set aside the mandate that trade ministers had agreed to at the WTO’s 11th ministerial conference (MC11) held in Buenos Aires, Argentina, in December 2017. That mandate, based on the United Nations Sustainable Development Goal (SDG) 14.6, called for “comprehensive and effective disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU-fishing while recognizing that appropriate and effective special and differential treatment for developing country Members and least developed country Members should be an integral part of these negotiations.” CHAIR’S REMARKS In his opening remarks at a meeting of the Doha Rules negotiating body on 8 November where the second revised draft text was introduced, Ambassador Wills claimed that “the biggest substantive changes are with regard to special and differential treatment for developing and least developed countries, including an exemption from the main discipline on subsidies contributing to overcapacity and overfishing.” The chair said that the S&DT provided to developing countries with a higher share of global catch would also benefit from a transitional period (of five years) which was already contained in the older text. “No specific duration of this transition period is suggested in the revised text – rather this question is represented in the text by a negotiable X number of years, to reflect the fact that some developing country Members are seeking transition of up to 25 years, while some other Members consider that any transition period should last for only a few years.” Barring the citing of the transition period of 25 years that has to be negotiated with countries like the US, the EU, and Brazil, the chair appears to have turned a deaf ear to India’s proposal by not including it in the second revised draft text, said a trade official, who asked not to be quoted. The chair highlighted that “the text takes a big step in a direction sought by these Members by including an exemption from the main discipline on subsidies contributing to overcapacity and overfishing.” In that particular provision, the exemption applies to subsidies: “1. Of least-developed country Members; 2. Of developing country Members whose annual share of the global volume of marine capture production does not exceed a certain threshold. This is known as the “de minimis approach.” In this draft, that threshold is suggested at 0.7%, but subject to negotiations. This is a change from the previous text because it removes the time limit on the exception as long as the member falls under the de minimis criteria. 3. And in respect of developing country Members’ low income, resource-poor or livelihood fishing and fishing- related activities up to 12 nautical miles from shore.” Surprisingly, the chair appears to remain utterly silent on the specific carve-outs being provided to the big subsidizers to continue with their industrial-scale fishing, said several trade envoys, who asked not to be quoted. It seems to have become a ritual at the WTO to demonstrate that the inter-governmental body actually serves the interests of the developing countries when, in reality, it has consistently undermined their specific needs and the policy space needed for sustainably developing their marine sectors, said a trade envoy, who asked not to be quoted. MAIN ELEMENTS OF SECOND REVISED DRAFT TEXT The eight-page second revised draft text (TN/RL/W/276/Rev.2) contains language on eleven proposed articles. They include: (1) scope; (2) definitions; (3) subsidies contributing to illegal, unreported and unregulated (IUU) fishing; (4) subsidies regarding overfished stocks; (5) subsidies contributing to overcapacity and overfishing; (6) specific provisions for LDC members; (7) technical assistance and capacity building; (8) notifications and transparency; (9) institutional arrangements; (10) dispute settlement; and (11) final provisions. Of the eleven articles, agreement on four articles is crucial for any outcome at MC12. They include disciplines concerning the IUU pillar (Article 3), the overfished stocks pillar (Article 4), the overcapacity and overfishing (OC&OF) pillar (Article 5), and notification and transparency provisions (Article 8) which covers forced labour and enhanced notification and transparency procedures. Up until now, most of the negotiating battles being waged were around the proposed language in Article 5 concerning the OC&OF pillar. It includes a list of prohibited subsidies that contribute to overcapacity and overfishing. The prohibited subsidies in Article 5.1 include: (a) subsidies to construction, acquisition, modernization, renovation or upgrading of vessels; (b) subsidies to the purchase of machines and equipment for vessels (including fishing gear and engine, fish- processing machinery, fish-finding technology, refrigerators, or machinery for sorting or cleaning fish); (c) subsidies to the purchase/costs of fuel, ice, or bait; (d) subsidies to costs of personnel, social charges, or insurance; (e) income support of vessels or operators or the workers they employ; (f) price support of fish caught; (g) subsidies to at-sea support; (h) subsidies covering operating losses of vessels or fishing or fishing related activities; and (i) [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). 10] The chair has further clarified that footnote ten in Article 5.1 (i) implies that “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 to be contingent upon, or tied to, such fishing or fishing related activities.” Apparently, Article 5.1 (i), which is currently in square brackets, was introduced to take on board the specific demands of the EU and China, said a person familiar with the negotiations. EXEMPTION FOR THE BIG SUBSIDIZERS In an apparent attempt to exempt the big subsidizers from these prohibited subsidies, the chair said in Article 5.1.1 that a “subsidy is not inconsistent with Article 5.1 if the subsidizing member demonstrates that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.” According to some experts, it is easy for the big subsidizers to circumvent this condition of demonstrating that measures are being implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level. As regards the special and differential treatment provisions set out in Article 5.4, the chair has proposed the following language: (a) [A developing country Member may grant or maintain the subsidies referred to in Article 5.1 to fishing and fishing related activities [within its EEZ and the area of competence of a relevant RFMO/A] for a maximum of [X] years after the entry into force of this [Instrument]. A developing country Member intending to invoke this provision shall inform the [Committee] in writing before the date of entry into force of this [Instrument].] (b) In addition, a developing country Member may grant or maintain the subsidies referred to in Article 5.1 to fishing and fishing related activities: (i) [if its annual share of the global volume of marine capture production does not exceed [0.7%] as per the most recent published FAO data]; (ii) for low income, resource-poor and livelihood fishing or fishing related activities up to [12] nautical miles measured from the baselines. (c) While applying Article 5.4, a Member shall endeavour to ensure that its subsidies do not contribute to overcapacity or overfishing. According to a footnote in the text, “a member remains exempted until its share exceeds the threshold for three consecutive years. It shall be re-included in 5.4 (b) when its share of the global volume of marine capture production falls back to the threshold for three consecutive years.” However, a cursory look at the provisions in Article 5.1, particularly the exemption being provided to the big subsidizers in Article 5.1.1, which is set out in the “shall” language, while the S&DT provisions are anchored on a “may” framework, appear to amplify the asymmetries in the second revised draft text, said people familiar with the text. As regards countries such as India and Indonesia, which have “a higher share of global fish catch, would also benefit from a transitional period which was already contained in the older text”, “no specific duration of this transition period is suggested in the revised text – rather this question is represented in the text by a negotiable X number of years, to reflect the fact that some developing country Members are seeking transition periods of up to 25 years, while some other Members consider that any transition periods should last for only a few years,” the chair said. According to a trade envoy, who spoke on condition of anonymity, the so-called de minimis threshold of 0.7 percent appears to be flawed because it does not reflect the subsidy component. “We are disappointed with the second revised draft text as it has not adequately addressed the imbalances,” said the trade envoy. As regards the special and differential treatment provisions which are included on a best endeavour framework, the draft text seems to have brought the issue of differentiation into play by treating the ACP (African, Caribbean, and Pacific) group of countries on a special footing, while forcing India, Indonesia, and several other large developing countries to negotiate on several S&DT provisions in Article 5.4 of the second revised draft text. FORCED LABOUR The chair acknowledged that “the revised text includes language in brackets in the provisions on the prohibition of subsidies contributing to Illegal, Unreported and Unregulated fishing and in transparency and notification, aimed at addressing the issue of forced labour in certain fishing activities.” In the text, the issue of forced labour, which was introduced by the United States after the Biden Administration came into office, is included in Article 8.2 (b) which states: “[any vessels and operators for which the Member has information that reasonably indicates the use of forced labour, along with relevant information to the extent possible; and]” The chair seems to have paved the way for the entry of the controversial trade and labour issues into the WTO framework that were overwhelmingly rejected at the WTO’s third ministerial conference in Seattle, in 1999, said several people, who preferred not to be quoted. With the entry of the issue of forced labour into the negotiations at the WTO, which is a new issue that is not part of the mandate of the fisheries subsidies negotiations, the chair seems to have proved that the WTO system can be turned and twisted in favour of the concerns raised by the major industrialized countries, said trade envoys, who asked not to be quoted. INDIA’S PROPOSAL BRUSHED ASIDE Furthermore, the second revised draft text, contrary to the assurances provided by the WTO director-general Ms Ngozi Okonjo-Iweala to India, seems to have brushed aside the Indian proposal that is based on the “polluter-pays” principle as well as the principle of “common but differentiated responsibilities”, as contained in the Paris Climate Change Agreement. (See SUNS #9425 dated 27 September 2021). “The revised second draft perpetuated the imbalances that were highlighted by trade ministers in the 15 July ministerial meeting,” said a person, who asked not to be quoted. The DG, in her meetings with Indian officials in New Delhi last month, apparently assured that their proposal would be included in the second revised draft text, suggesting that India must undertake the advocacy campaign, said a New Delhi-based official, who asked not to be quoted. WTO DG’S COMMENTS In some remarks on the second revised draft text, Ms Okonjo-Iweala touted the “significant re-balancing of the provisions, including those pertaining to special and differential treatment, while, at the same time, maintaining the level of ambition.” However, the DG appears not to have commented on whether the second revised draft text adequately lives up to the UN SDG 14.6, or the Buenos Aires ministerial decision of 2017. She said “the eyes of the world are really on us,” arguing that “time is short and I believe that this text reflects a very important step toward a final outcome.”
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