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TWN
Info Service on WTO and Trade Issues (Jul23/08) Geneva, 17 Jul (D. Ravi Kanth) — Many developing and some developed countries apparently responded positively to a proposal tabled by Indonesia that seeks to arrive at a balanced framework for disciplines concerning the overcapacity and overfishing (OCOF) pillar in the Doha Fisheries Subsidies Agreement (FSA), during the fourth “Fish Week” that concluded at the World Trade Organization on 14 July. The restricted room document (RD/TN/RL/172*) circulated by Indonesia on 11 July, seen by the SUNS, has brought to the fore the alleged imbalances and asymmetrical provisions of the previous draft agreement issued prior to the WTO’s 12th ministerial conference (MC12) held in Geneva in June 2022. More importantly, the proposal has based the framework for OCOF disciplines after taking into consideration the principle of common but differentiated responsibilities as well as the “polluter-pays” principle, said people familiar with Indonesia’s room document. Indonesia has suggested that any agreement on fisheries subsidies must be in tune with the United Nations Convention on the Law of the Sea (UNCLOS), emphasizing that the proposed FSA must not violate the provisions in the UNCLOS (see details of Indonesia’s proposal below). Significantly, the Indonesian proposal seems to have “shown the mirror” to big subsidizers like the European Union, the United States, Japan, Korea, Chinese Taipei, and China among others who have allegedly provided massive subsidies for large-scale industrial fishing contributing to OCOF that has caused the global depletion of fish stocks, said people, who saw considerable merit in the proposal. CHAIR’S ASSESSMENT Amidst the modest progress made in addressing the OCOF disciplines over the last four and a half months, the chair of the Doha fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, emphasized that “bridge-building and problem-solving is the need of the hour”, in a statement issued at a press conference on Friday. He said there are “eight submissions, counting, from proponents of varying profiles, along with elements from texts members are considering from MC12.” The chair said, “We are establishing a fuller picture of members’ ideas, which is vital for unlocking a fair and effective solution to subsidies contributing to overfishing [and] overcapacity,” in the face of the apparent “mess” that his predecessor former Ambassador Santiago Wills of Colombia (who is currently the head of the WTO’s General Council and Trade Negotiations Committee Division) created by tabling an allegedly imbalanced and asymmetrical draft text. “This step is crucial for formulating elements that can be used as the starting point for text-based negotiations in the autumn (previously the chair had said “fall”)”. Ambassador Gunnarsson provided an account of progress made since the first “Fish Week” in March to the fourth “Fish Week” that concluded Friday. He said members “considered a table he prepared to help them to explore commonalities and possible overlaps among positions and proposals.” The chair suggested that most of the eight documents tabled by members “contain an explicit prohibition of subsidies contributing to overcapacity and overfishing, in some cases limiting the prohibition to large-scale industrial fishing.” The table, according to Ambassador Gunnarsson, “also notes varying ideas for the themes of sustainability-based flexibility, distant-water fishing, and special and differential treatment among others.” He intends to update the table next week by incorporating ideas from the new proposals. MORE “FISH WEEKS” The chair intends to hold a “Fish Week” every month after members resume work in September after the summer break (in Europe). The chair acknowledged that one-third of WTO members, including Switzerland, Singapore, Seychelles, the United States, Canada, Iceland, the United Arab Emirates, the European Union (which comprises 27 members), Nigeria, Belize, China, Japan, and Gabon – have submitted their instruments of acceptance (of the Protocol of the Fisheries Subsidies Agreement). However, the partial FSA will come into effect only after two-thirds of WTO members accept the Protocol. INDONESIA OFFERS A “BLUEPRINT” During the fourth “Fish Week” that ended on 14 July, Indonesia circulated a restricted room document illustrating “certain ideas on how to move forward on disciplines for subsidies that contribute to overcapacity and overfishing (OCOF).” Indonesia underscored the importance of “fulfilling the mandate of SDG 14.6 and the 12th WTO Ministerial Decision through disciplines on OCOF, that recognize appropriate and effective special and differential treatment (SDT) for developing and least developed countries Member as an integral part of the WTO fisheries subsidies negotiation.” The MC11 mandate agreed at the WTO’s 11th ministerial conference (MC11) held in Buenos Aires, Argentina, in December 2017, as well as the United Nations Sustainable Development Goal 14.6 unambiguously state: “by 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU [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.” According to Indonesia, the continued divergent views “have shown that the SDT (special and differential treatment) and OCOF issue” go beyond the previous draft texts issued by former chair Ambassador Wills. CARVE-OUTS FOR BIG SUBSIDIZERS It said “while reviewing these proposals (WT/MIN(22)/W/20 and WT/MIN(21)/W/5),” Indonesia continues to take into consideration “the existing imbalances in global fishing, where a few WTO Members, particularly developed countries and major subsidizers, have had the capacity and opportunity to develop their fisheries and expand their fishing fleets.” “Moreover, the provision of substantial harmful subsidies to their fishing fleets, have also enabled them to exploit marine resources on a global and unsustainable scale,” Indonesia emphasized. Consequently, due to the big subsidizers (like the US, the EU, Japan, Korea, Chinese Taipei, and China) who are engaged in large-scale fishing activities beyond their exclusive economic zones, “fish stocks are depleted at an alarming rate, posing significant threats not only to our oceans but also to our future generations.” Sadly, Indonesia said, “a significant proportion of WTO Members, primarily consisting of developing and least [developed] countries, have been unable to seize the same opportunities due to their limited financial and economic capacity to support their fishing industries.” POLICY SPACE FOR SOUTH Therefore, “appropriate special and differential treatment should be implemented to address this disparity as well as to provide developing and LDC Members with enough policy space to develop the fishing industry in a sustainable manner,” Indonesia argued. More importantly, Indonesia drove home the message that “it is crucial to emphasize the common but differentiated responsibilities and polluter pays principles in addressing subsidies contributing to OCOF.” The current draft text (WT/MIN(22)/W/20), according to Indonesia, “has inevitably missed one of its important targets.” It said “instead of further regulating large-scale industrial fishing that operates outside Member’s jurisdiction, they were provided with a high degree of flexibility in Article 5.1.1. in document W20.” In its coverage of the fisheries subsidies negotiations, the SUNS has repeatedly pointed out the alleged “kid-gloves” treatment being accorded to the big subsidizers to continue with their subsidies contributing to OCOF on somewhat extraneous grounds. The SUNS has also highlighted the seemingly harsh treatment – particularly the lack of credible SDT provisions – being meted out to the developing countries. According to Indonesia in its proposal, it is clear that “small-scale fishers, particularly those from developing Members, are limited to specific areas that fall under the coastal State’s jurisdiction as regulated in UNCLOS. This might undermine the right of the coastal States to support their small-scale fishers which operate in its jurisdiction.” “In addition, as a party to UNCLOS,” Indonesia underlined “the importance of harmonizing the Fisheries Subsidies Agreement with UNCLOS, to establish a robust international regime of global fisheries, and ensure that the Fisheries Subsidies Agreement does not undermine the sovereign rights of coastal States.” It reminded members about “Article 56 [of] UNCLOS where coastal State has the sovereign rights to explore and exploit living natural resources within their Exclusive Economic Zone (EEZ).” Indonesia said that it views, “in the case of Fisheries Subsidies Agreement under the WTO, in line with the provision of UNCLOS, that it is within the coastal State’s right to subsidize their fisheries activities up to their EEZ, where coastal State has sovereign rights.” Further, it said “this concept of geographical limitation has also been agreed on in the first phase of FSA, and incorporating this concept to this pillar will also ensure the coherency of the overall comprehensive agreement of the FSA.” Moreover, referring to Article 116 of UNCLOS, Indonesia said that all States have the right to engage in fishing in the high seas. While Indonesia does not intend to reduce this right, it would like to underline that such fishing activities should be in line with international laws including the duty to conserve and manage marine resources. In light of the above, during the discussion of the previous “Fish Weeks”, aside from different views, there is one commonality that unites all of us, which is the agreement that all Members should be able to conduct sustainable fisheries, Indonesia argued. Indonesia said it “believes that such “graduation” for Members who do not have the financial and [economic] capacity to do so, must be contingent upon the provision of access and availability of technical assistance and capacity building (TACB) for them to develop the necessary requirements for a sustainable fisheries management, as required by the agreement.” Further, “the developed Members or developing Members (China) with the capacity to conduct fisheries management should do its best to ensure that the fisheries fund as envisaged in Article 7 of the adopted Fisheries Subsidies Agreement, will be sustainable and accessible to the developing Members and LDCs, as well as endeavour to provide TACB in a bilateral manner, upon request,” Indonesia emphasized. Based on the existing proposals submitted by the different WTO members as well as the previous draft texts, Indonesia said that it hopes that “this proposal will bridge the different views and further facilitate the convergence of the comprehensive text as mandated in the 12th Ministerial Conference of the WTO.” Indonesia proposed several provisions for OCOF disciplines as follows: * Indonesia said it adopts Article 5.1 of the WT/MIN(22)/W/20 document and footnote 12. * This Article regulates harmful subsidies in line with UN SDG 14.6, aiming to prohibit certain forms of subsidies contributing to overfishing and overcapacity. Article X.1.1: * Indonesia refers to Article 5.1.1 of the WT/MIN(22)/W/20 document and footnote 11. * This Article provides general exceptions to harmful subsidies listed in Article X.1. * Members must determine a biologically sustainable level using reference points like maximum sustainable yield. * References are made to fishing activities within the Member’s jurisdiction or RFMO/A (Regional Fisheries Management Organization/Arrangement) in areas and for species under its competence. * For multi-species fisheries, a Member instead may provide other relevant and available catch data. Article X.2: * Indonesia said that it attempts to bridge proposals such as those from the ACP (African, Caribbean and Pacific) group and six South American countries (Argentina, Colombia, Ecuador, Uruguay, Chile, and Paraguay). * Large-scale industrial fishing or fishing-related activities are not eligible for Article X.1.1. * To clarify, the definition of large-scale industrial fishing or fishing-related activities will be using RFMO’s reference of the length of overall 24 meters fishing carriers. * Certain subsidies related to personnel costs, social charges, insurance, and income support are exempted. Article X.3: * Indonesia said it proposes limiting the use of Article X.1.1 for Members engaged in fishing activities outside FAO major fishing areas where they are located. Article X.4: * Indonesia said the proposal emphasizes the importance of fulfilling UN SDG 14.6’s mandate on Special and Differential Treatment. * Indonesia wants to ensure appropriate and effective treatment for developing countries. * Specific provisions are highlighted, including exemptions for Least Developed Countries (LDCs), transitional periods based on a self-determination basis for newly graduated LDCs, and considerations for developing Members within jurisdictional areas. Article X.5: * Developing country Members (like China) who have developed fisheries capacity, would be encouraged to voluntarily self-exclude from using Article X.4. Article X.6: * To ensure compliance with Article X.1.1, Indonesia proposes for developing Members, particularly LDCs who do not have financial and economic capacity, must be provided with access to and availability of technical assistance and capacity building (TACB) in Article 7 of the FSA. * It is important to provide enough support for the said developing Members and LDCs, and thus enable them to develop the necessary requirements for sustainable fisheries management, as required by the Agreement. * Members with good fisheries management practices are encouraged to provide TACB at a bilateral level, upon request. It also proposed that “(under) X.11, 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: 1. For greater clarity, Article X.1 does not apply to subsidies to the extent that they regard stocks that are overfished. 2. For the purpose of this paragraph, a biologically sustainable level is the level determined by a coastal Member having jurisdiction over the area where the fishing or fishing-related activity is taking place, using reference points such as maximum sustainable yield (MSY) or other reference points, commensurate with the data available for the fishery; or by a relevant RFMO/A in areas and for species under its competence. 3. For multi-species fisheries, a Member instead may provide other relevant and available catch data. 4. For the purposes of clarity, Large Scale Industrial fishing or fishing related activities are those activities using vessels more than 24 metres length of overall (using RFMO’s reference). (a) subsidies to construction, acquisition, modernisation, 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. X.1.1: A subsidy is not inconsistent with Article X.1 if the subsidizing Member determines that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level. X.2: Article X.1.1 shall not apply to subsidies provided to large-scale industrial fishing or fishing-related activities, with the exception of subsidies covering personnel costs, social charges, or insurance, as well as income support for the workers employed in such activities. X.3: Article X.1.1 shall not apply to the subsidizing Members to fishing or fishing related activities beyond the FAO major fishing areas where they are located. X.4: The prohibition in X.1 shall not apply to: (a) LDC Members; or (b) A developing country Member, for a nationally determined period [starting from notification to the Committee], after the entry into force of a decision of the UN General Assembly to exclude that Member from the “Least Developed Countries” category; or (c) Developing country Members within their national jurisdiction. X.5: A developing country Member may choose to opt out of the use of X.4. X.6: Sympathetic consideration shall be given to developing Members, in particular LDCs, to be able to transition to sustainable fisheries and implement Article X.1.1 regarding Fisheries Management. Such transition is contingent upon: (a) Access and availability of targeted technical assistance and capacity building (TACB), as accorded in Article 7 of the Fisheries Subsidies Agreement; and/or (b) Best endeavour of developed Members and developing Members with good fisheries management practices to provide TACB at a bilateral level, upon request. Unlike the previous proposals tabled by various WTO members (highlighted in SUNS #9816 dated 5 July 2023), Indonesia’s proposal seems to have broken new ground for arriving at a balanced Doha Fisheries Subsidies Agreement, said a South Asian trade negotiator, who asked not to be identified. It remains to be seen whether the big subsidizers will be willing to endorse the Indonesian proposal during the intense “Fish Weeks” planned to take place from September onwards. +
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