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Info Service on WTO and Trade Issues (Apr23/10) Geneva, 14 Apr (D. Ravi Kanth) — The chair of the World Trade Organization’s Doha fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, on 12 April apparently posed several questions to members on issues concerning the prohibition of subsidies contributing to overcapacity and overfishing among others, said people familiar with the discussions. The chair wants members to reflect on his latest questions at the second “fish week” starting on 25 April. Many developing countries had already expressed their strong views that special and differential treatment (S&DT) should be anchored on common but differentiated responsibilities, the “polluter pays” principle, and aligning with “recent international developments such as the BBNJ (Marine Biodiversity of Areas Beyond National Jurisdiction under the United Nations Convention on the Law of the Sea) treaty.” With conflicting assessments/approaches having come to the fore during focused consultations at the first “fish week” last month, the chair apparently sought to focus more on questions centering on the previous draft ministerial texts that seemingly provided several carve-outs to the big subsidizers such as the European Union, the United States, Japan, Korea, Chinese Taipei, and China for retaining some of their subsidies, if they could demonstrate that they are adopting sufficient measures for protecting certain fish stocks. Members expressed divergent views/assessments on several issues that were discussed in the small-group and plenary meetings last month. Significantly, key members remained far apart, particularly on proposed disciplines in the crucial overcapacity and overfishing (OC&OF) pillar as well as on special and differential treatment. The chair, in his email to members on 27 March, had acknowledged that “many members emphasized the relevance of concepts such as the “polluter pays” principle and the principle of common but differentiated responsibility”. However, he maintained in that email that it is important to discuss the approaches based on the previous draft ministerial texts as contained in WT/MIN(22)/W/20, and WT/MIN(21)/W/5. Surprisingly, the chair had already ruled out any prospect of re-opening the two previous draft texts – i.e. WT/MIN(22)/W/20 and WT/MIN (21)/W/5. QUESTIONS FOR FOCUSED MEETINGS FROM 25 APRIL In his latest email sent to members on 12 April, Ambassador Gunnarsson asked members to reflect on several issues that he has raised. These issues include:
(These two draft texts were issued by the previous controversial chair Ambassador Santiago Wills of Colombia, who later became the Director of the Council and Trade Negotiations Committee Division at the WTO).
CHAIR’S FIRST QUESTION From the statements made by members in the earlier meetings, they seemingly remained divided as some sought the prohibition of all harmful subsidies without any specific carve-outs for the big subsidizers involved in providing subsidies that contributed to overcapacity and overfishing (see SUNS #9755 dated 3 April 2023). Several developing countries including India repeatedly raised the issue of the “polluter pays” principle, suggesting that the big subsidizers must proportionately undertake bigger commitments while providing a range of flexibilities to the developing countries, who did not create the problem of the global depletion of fish stocks through the provision of subsidies contributing to overcapacity and overfishing. Against this backdrop, it would be interesting to see how members would reflect on the chair’s first question of arriving at a “best approach making operational the prohibition on subsidies contributing to overcapacity and overfishing.” CHAIR’S SECOND QUESTION As regards the chair’s second question on the extent to which the approaches and elements in WT/MIN(22)/W/ 20 and WT/MIN(21)/W/5 would be appropriate and sufficient, it is clear from past statements of members that there seems to be sharply divergent views on this. While the big subsidizers as well as several other countries seemingly expressed their approval for the disciplines proposed in the two draft texts issued by the previous chair, a large majority of developing and least-developed countries did not approve of the elements, especially on the special and differential treatment provisions. The most controversial Article 5 in the previous draft texts seemed to have divided members horizontally, said a trade envoy, who asked not to be quoted. A South American envoy told the SUNS on 13 April that the provisions on S&DT are problematic for them to accept, suggesting that they would be seeking substantial improvements. Article 5 on subsidies contributing to overcapacity and overfishing states: “5.1 No Member shall grant or maintain subsidies to fishing or fishing related activities that contribute to overcapacity or overfishing. For the purpose of this paragraph, subsidies that contribute to overcapacity or overfishing include: (a) subsidies to the 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. 5.1.1 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. 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). (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 or a coastal non-Member and outside the competence of a relevant RFMO/A (regional fisheries management organization/arrangement). 5.4 A Member shall take special care and exercise due restraint when granting subsidies to vessels not flying that Member’s flag. 5.5 (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 exclusive economic zone and the area of competence of a relevant RFMO/A [for a maximum of 7 years after the entry into force of this Agreement][up to the year 2030]. Subsidies granted or maintained under this paragraph shall be exempt from actions based on Articles 5.1 and 10 of this Agreement for a period of 2 additional years after the end of the period referred to in the prior sentence. A developing country Member intending to invoke this provision shall inform the Committee in writing within one year of the date of entry into force of this Agreement. (b) (I) A developing country Member may grant or maintain the subsidies referred to in Article 5.1 to fishing and fishing related activities if its share of the annual global volume of marine capture production does not exceed [0.8] per cent as per the most recent published FAO data as circulated by the WTO Secretariat. (ii) A Member remains exempted until its share exceeds the threshold in Article 5.5(b)(I) for three consecutive years. It shall be re-included in Article 5.5(b)(I) when its share of the global volume of marine capture production falls back below the threshold for three consecutive years. (c) A developing country Member may grant or maintain the subsidies referred to in Article 5.1 for low income, resource-poor and livelihood fishing or fishing related activities, up to [12][24] nautical miles measured from the baselines, including archipelagic baselines. (d) While applying Article 5.5, a Member shall endeavour to ensure that its subsidies do not contribute to overcapacity or overfishing.” Several developing countries seem to reckon that they were “pushed to the wall” on the S&DT provisions (in paragraph 4 of Article 5) while the big subsidizers were provided special carve-outs (in articles 5.1 and 5.1.1) “served on a platter”, said trade envoys, who preferred not to be quoted. CHAIR’S THIRD AND FOURTH QUESTIONS The chair’s third and fourth questions on “how should the disciplines on subsidies contributing to overcapacity and overfishing address subsidies to large scale fishing, including fishing in distant waters”, and “what considerations, criteria, and principles are relevant to disciplining such subsidies,” seem to be targeted against China, said people, who preferred not to be identified. It appears that there could be a face-off on these two questions, with several big subsidizers like the US, the EU, and a few others on the one side, and China on the other. CHAIR’S FIFTH QUESTION The chair’s fifth question on “how should the disciplines on subsidies contributing to overcapacity and overfishing address small-scale or artisanal fishing, and what considerations, criteria and principles are relevant to providing appropriate and effective flexibilities for subsidies to such fishing for developing and least- developed Members”, is likely to raise divergent views. Issues such as common but differentiated responsibilities and the proposed BBNJ treaty could come into play while discussing the above question. +
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