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TWN
Info Service on WTO and Trade Issues (Nov23/08) Geneva, 15 Nov (D. Ravi Kanth) — The contours of the proposed outcome on the second part of the negotiations on the Doha fisheries subsidies agreement at the World Trade Organization appear to be somewhat fuzzy, with little clarity on how to discipline the big subsidizers that have allegedly contributed to overcapacity and over-fishing (OCOF), which has led to the global depletion of fish stocks, said people familiar with the discussions. During the week-long discussions on fisheries subsidies held in the Doha rules negotiating group on 6-10 November, negotiators apparently dabbled with several ideas on tackling the harmful OCOF subsidies allegedly provided by the big subsidizers like the European Union, the United States, China, Canada, Japan, Chinese Taipei, and Korea among others. However, there appears to be little or no clarity on how the discussions will progress during the final eighth round of negotiations to be held next month before the WTO’s 13th ministerial conference (MC13), scheduled to take place in Abu Dhabi in February 2024. At issue is the level of prohibitions that ought to be imposed on the big subsidizers, while enabling the developing countries, which did not create the problem of OCOF that resulted in the global depletion of fish stocks, to avail of special and differential treatment (S&DT) in order to develop their nascent/incipient fisheries sectors, said people, who asked not to be quoted. While members had concluded the first part of the fisheries subsidies agreement at the WTO’s 12th ministerial conference (MC12) held in Geneva last June, it is the second part or wave of negotiations for crafting effective disciplines for tackling subsidies contributing to OCOF that will determine whether the so-called WTO Fisheries Subsidies Agreement is an agreement “worth its salt.” Former Brazilian trade minister Celso Amorim had said several times during the Doha trade negotiations that no agreement is better than a bad agreement. CHAIR’S EMAIL TO MEMBERS In his email sent to WTO members on 14 November, the chair of the Doha fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, praised members for their “constructive participation” during last week’s fisheries subsidies negotiations, saying that members “covered a lot of ground.” The chair said that members “started the week with a discussion on the manner in which the list in Article A.1 functions, and the effects that modifying the list may have.” Article A.1 of the draft text (RD/TN/RL/174) issued by the chair on 4 September refers to subsidies contributing to OCOF, including: (1) subsidies to construction, acquisition, modernization, renovation, or upgrading of vessels; (2) 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); (3) subsidies to the purchase/costs of fuel, ice, or bait; (4) subsidies to costs of personnel, social charges, or insurance; (5) income support of vessels or operators or the workers they employ; (6) price support of fish caught; (7) subsidies to at-sea support; and (8) subsidies covering operating losses of vessels or fishing or fishing related activities. In his email, Ambassador Gunnarsson said that members dived deep to “discuss the possible merging of the sustainability-based conditionality in Articles A.1.1 and A.1.2.” Article A.1.1 states that “a subsidy is not inconsistent with Article A.1 if a subsidizing member not falling under Article A.1.2 demonstrates in its regular notification of fisheries subsidies under Article 25 of the SCM (Subsidies and Countervailing Measures) Agreement and Article 8 of the Agreement on Fisheries Subsidies that measures are implemented to maintain the stock or the stocks in the relevant fishery or fisheries at a biologically sustainable level …” The African Group, India, and Indonesia among others have severely questioned the flexibilities accorded to the big subsidizers under the rubric of the “sustainability” criterion. In his email, the chair characterized the discussions as “really fruitful,” adding, “What I can say with confidence having carefully followed the discussions is that the hybrid approach remains with the broadest support as the right way to structure the discipline on overcapacity and overfishing, although those supporting this approach have different views on certain modalities associated with it.” The chair’s assessment seems to be couched in language that does not seem to reveal the true picture, as some members have rejected the hybrid approach, comprising the list approach and the effects approach. The chair indirectly acknowledged the challenge relating to Article A, insisting that “the challenge before us is to find a formulation that achieves two ends. First, the text ought to retain certain essential features of the hybrid approach that enjoy broad support, namely a meaningful prohibition, with sustainability-based flexibility, and a focus on addressing the largest subsidizers.” “Whatever the eventual solution looks like, our aim remains to fulfil the Senior Officials’ guidance to construct a discipline that meaningfully curtails subsidies that contribute to overcapacity and overfishing.” Without naming the members, the chair said: “Indeed, as some of you stated this week, the meaning of special and differential treatment provisions cannot be judged in isolation from the strength of the main discipline.” S&DT PROVISIONS It is well known that special and differential treatment (S&DT) provisions ought to provide the bulwark for developing and least developed countries to develop their nascent/incipient fisheries sectors. However, the chair’s remarks on S&DT seemed somewhat confusing, said a trade negotiator, who asked not to be quoted. On the issue of S&DT provisions, which is a crucial pillar of the proposed Fisheries Subsidies Agreement, the chair said: “I must be honest with you again, I heard more positions than bridging solutions. But I am not discouraged, as it is not unexpected that when the pressure is on to achieve an outcome the level of discomfort may increase temporarily.” Commenting on the S&DT provisions contained in Article B of the draft text, the chair said that “on Article B.2, I heard an acknowledgement from practically all Members that subsidies for certain vulnerable fishers in developing country Members should be afforded special and differential treatment.” Article B.2 states: “A developing country Member may grant or maintain the subsidies referred to in Article A.1 for low income, resource-poor, and livelihood fishing or fishing related activities up to [12][24] nautical miles from the baselines, including archipelagic baselines.” In Article B.3, it is further clarified that: “A developing country Member may grant or maintain the subsidies referred to in Article A.1 to fishing or fishing related activities if its share of the annual global volume marine capture production does not exceed [0.8] percent as per the most recent published FAO data as circulated by the WTO Secretariat …” Against this backdrop, Ambassador Gunnarsson said in his email: “The challenge here is to find a way to safeguard such vulnerable fishers while also having appropriate mechanisms in the provision to keep it focused. What we gained from this week is interest on the part of a considerable number of Members to explore bridging solutions to try to better define or identify the specific types of beneficiaries of the subsidies that would qualify for this SDT, whether through geographical limitations or certain ways of describing the beneficiaries of this provision or some combination of these or other factors.” Given the stand adopted by some industrialized countries in that there will not be a blank cheque given to the developing countries on the S&DT provisions, it is clear that if there is a blank cheque being given to the big subsidizers to continue with their subsidies contributing to OCOF under some rather questionable “sustainability” criterion, then there has to be a blank cheque for S&DT provisions for developing countries that are not responsible for the global depletion of fish stocks, said an observer, who asked not to be quoted. In his email, the chair said that he found “instructive the discussions among Members as to fisheries subsidies data that would be central to the practical operation of Article B.3 ALT.” Article B.3 ALT states: “A developing country Member may grant or maintain the subsidies referred to in Article A.1 to fishing and fishing related activities if its subsidies to fishing and fishing related activities do not exceed the annual aggregate value of [USD X] as per […].” “At the same time, I recognize that many want to see this as a standalone provision, while others either don’t approve of it or only see it as an option to Article B3.” Finally, the chair observed that, “It is clear that Members from all sides of the discussion want to see how the special and differential treatment provisions, as a whole, will interact with the disciplines in Article A.1, as a whole.” THE WAY FORWARD “Going forward,” the chair said that, “It is critical that we start now to see more progress toward narrowing differences and finding compromise language. You can expect me to push you more strongly towards this end. I think we can all agree that before we can produce something tangible, we will need to intensify our work.” The chair urged members to understand that they are “now in a continuous negotiating mode.” The chair said that he plans to hold meetings from next week by contacting “Members on specific issues and in various configurations. We will need to put our heads together to draft bridging language.” He said: “We have all appreciated the very transparent manner in which we have been engaging so far. We have used various formats including: plenaries; parallel meetings where others can listen in; interactive thematic sessions; and deep dive sessions.” Noting that discussions in various formats “have enabled us to build trust in the process and with each other,” he said: “We will continue to use all possible formats to move our process forward and I will remain guided by the principles of transparency and inclusiveness.” “Given the strong call to mainly focus on disciplines, I think that our immediate task is to continue to build on what we did this week by convening drafting sessions on Article A. I am aware that we have other pending issues and will think about how and when will be best to start those discussions,” he said. The chair said that he would now “like to start a process looking at the legal form of the disciplines we are negotiating, that is, the relationship between them and the current Agreement on Fisheries Subsidies. I will come back to you with further details on this early next week.” In conclusion, the next four weeks are likely to decide on the progress or lack of it in crafting credible disciplines in the OCOF pillar without which there will not be a Fisheries Subsidies Agreement at MC13. +
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