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Info Service on WTO and Trade Issues (Feb24/06) Geneva, 6 Feb (D. Ravi Kanth) — The chair of the Doha fisheries subsidies negotiations on 5 February acknowledged that despite “constructive engagement” during the last several days, “some significant divergences in positions and overall approach still remain” on various issues concerning subsidies contributing to overcapacity and overfishing (OCOF) ahead of the World Trade Organization’s 13th ministerial conference (MC13) beginning in Abu Dhabi on 26 February. In his five-page speaking notes delivered at a plenary meeting, seen by the SUNS, the chair, Ambassador Einar Gunnarsson of Iceland, lamented that “we have about two weeks before we have to send something to Ministers, so we need to resolve these major issues as soon as possible.” The chair held a meeting with trade envoys from 60 WTO members on 4 February to elicit their views, but sharply irreconcilable differences came to the fore on several issues at the meeting, said people familiar with the discussions. As previously reported in the SUNS, many developing countries seem to be sharply concerned over how the large subsidizers contributing to OCOF are going to be allowed to continue with their subsidies under seemingly weak two-stage sustainability criteria, as well as the alleged failure to include the issue of distant-water fishing in the list of prohibited subsidies. Besides, the chair’s draft consolidated text is seemingly tilted in favour of the large subsidizers while adopting a narrow range of flexibilities under the special and differential treatment (S&DT) provisions for developing countries, said people familiar with the chair’s draft text. Against this backdrop, the chair seems to have realized the proverbial “writing on the wall” and spelled out the major “outstanding issues” in five categories. According to the chair’s email, they include: * “First, the criteria to determine which Members should fall under Article A.1.1 (a) or Article A.1.1 (b). Very much related to this are Article B.6 and some parts of Article B.3; * Second, how to deal with subsidies to distant water fishing. While many delegations recognize that the text in Article A.2 is a compromise approach, we are still hearing strong and opposing views on it: on the one hand aiming to expand its scope (for example, proposals to drop the contingency language, and/or to establish a moratorium on such subsidies), or on the other hand to provide certain flexibilities for using such subsidies, or to deal with them under Article A.1.1; * Third, special and differential treatment, most notably Article B.4, dealing with subsidies to what we could loosely refer to as “artisanal” fishing. We also continue to hear calls for a subsidies cap as a basis for certain developing country Members to access SDT. Some Members see these proposals as inherently linked; * Fourth, the transparency provisions in Article C. Some of these are free-standing (such as Forced Labour and non-specific fuel subsidies), while others are directly linked to the operation of the disciplines and thus need to be borne in mind as we refine the text in Article A. We have not yet had a detailed discussion of many of the provisions in Article C; and * Fifth, the various figures in the SDT provisions bracketed and whether they are in nominal figures or presented in [X] or [Y]. These figures have been with us for a while, and I have not seen much movement from any side.” The chair said that he intends “to organize most of our engagement during this coming week around these issues, which I see as fundamental to reaching an outcome at MC13.” Ambassador Gunnarsson appears to have induced a “feel-good” factor despite the unbridgeable differences by saying that “while gaps still remain, they remain undeterred and believe we can find a path to conclude the negotiations.” It appears for some members that the differences are insignificant and that “most provisions could already be drafted and sent to Ministers today.” Apparently clinging to the old adage that “nothing is agreed until everything is agreed”, the chair said: “Given so many inter-linkages in the provisions, there is still much work to do this week and there are even some provisions that we have yet to discuss in detail.” He underscored that “a holistic and policy-driven perspective is essential for us to reach agreement,” following last week’s focus on Articles A and B, and some parts of Article C. The chair said he wanted to issue a document but “given the substantial gaps that remain at this juncture, such a document can only be a reflection of what I see as the current status of the negotiations, rather than necessarily an outline of possible landing zones.” He asked the Secretariat on 4 February “to share this document on the screen so I can run you through it.” Ambassador Gunnarsson gave his “assessment” or version “of the current status of the negotiations and it is strictly limited to Article A.1.1, Article B and Article C.4.” He went on to say that “some may agree with my assessment, some may disagree,” adding that his “opinion is no more valuable than yours (members).” In his assessment that was displayed in track changes on a big screen at the meeting on 4 February, the chair provided the following observations. ARTICLE A.1 The chair told members that from the outset, the first sentence of Article A.1.1 (a) is now a placeholder for the criterion to place Members into the two tiers. (As per the chair’s draft text (TN/RL/W/277), the first sentence of Article A.1.1 (a) reads: “For a Member that is amongst the 20 largest providers of fisheries subsidies by annual aggregate value as notified to the WTO pursuant to Article C.4, a subsidy is not inconsistent with Article A.1 if the subsidizing Member demonstrates that measures are implemented that can reasonably be expected to ensure that the stock or stocks in the relevant fishery or fisheries are at a biologically sustainable level.”) The chair explained that “as Members’ views on this matter remain substantially divergent, the placeholder reflects various options concerning the criteria that are currently on the table.” He suggested that, “While the aggregate level of subsidization remains the most supported approach, another option to explore is if the final outcome could be a mixture of the various criteria reflected in the placeholder.” The chair added that the “proposed textual modifications regarding the demonstration standard in Article A.1.1 (a) resolve the ambiguities raised with regard to the previous version of the text.” He further clarified that the standard in Article A.1.1 (a) now is “to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level, and the demonstration shall include an explanation of how those measures ensure, or can reasonably be expected to ensure, that the stock or stocks in the relevant fishery or fisheries are maintained at a biologically sustainable level”. The chair said that the above language “is accompanied by a footnote, which reinforces, for greater clarity, the widely acknowledged understanding that the biologically sustainable level of stocks are influenced by factors beyond the control of the subsidizing Member.” He gave further clarifications by saying that “a new footnote has been added to the chapeau of the provision indicating, for greater clarity, that a Member is free to supplement, revise, or correct its notifications.” Ambassador Gunnarsson went on to say that reference to Article A.1.1 (b) has been highlighted to reflect some Members’ position that the notification requirements applicable to Members in the two tiers of the main discipline might be differentiated depending on progress regarding the criteria for the two tiers. (Article A.1.1 (b) states: “For a Member not falling under Article A.1.1 (a), a subsidy is not inconsistent with Article A.1 if the subsidizing Member demonstrates through its regular notifications of fisheries subsidies under Article 25 of the SCM Agreement, Article 8 of the Agreement on Fisheries [Subsidies], and Article C that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.”) The chair maintained that, “To ensure that notifications are conducive to an effective Committee scrutiny, the language indicating that the notifications must enable Members to “effectively” evaluate the consistency of notification with the relevant conditions has been included in the chapeau.” ARTICLE A.2 On Article A.2, the chair said that “much more work needs to be done on this provision and I am yet to detect much movement in Members’ positions.” (Article A.2 states: “(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) [PLACEHOLDER: POSSIBLE FLEXIBILITY FOR SUBPARAGRAPH (a)])” ARTICLE B In the chair’s draft text, Article B deals with special and differential treatment. “Article B: Special and Differential Treatment B.1 The prohibition under Article A.1 shall not apply to LDC Members. A graduated LDC Member may grant or maintain the subsidies referred to in Article A.1 to fishing and fishing related activities within its Exclusive Economic Zone (EEZ) and in the area and for species under the competence of an RFMO/A through which the Member has fishing rights, for a maximum of [X] years after the entry into force of a decision of the UN General Assembly to exclude that Member from the “Least Developed Countries” category. B.2 A developing country Member may grant or maintain the subsidies referred to in Article A.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. A Member remains exempted until its share exceeds this threshold for three consecutive years. It shall be re-included in Article B.2 when its share of the global volume of marine capture production falls back below the threshold for three consecutive years. B.3 (a) Except as provided for in Article B.6, a developing country Member not covered by Article B.1 or B.2 may grant or maintain the subsidies referred to in Article A.1 to fishing and fishing related activities within its EEZ, and in the area and for species under the competence of an RFMO/A through which the Member has fishing rights, for a maximum of [X] years after the entry into force of these disciplines. Thereafter, such a developing country Member that would otherwise fall under Article A.1.1(a) may instead apply Article A.1.1(b) in respect of subsidies referred to in Article A.1 for a maximum of [Y] years. A developing country Member intending to invoke this provision shall inform the Committee on Fisheries Subsidies in writing within one year of the date of entry into force of these disciplines. (b) Subsidies granted or maintained under subparagraph (a) shall be exempt from actions based on Article A.1 and Article 10 of the Agreement on Fisheries Subsidies for a period of two additional years after the end of the period referred to in the first sentence of subparagraph (a). (c) A developing country Member to which subparagraph (b) applies may request an extension of the period referred to in that provision through the Committee on Fisheries Subsidies. The Committee shall take into account the specific circumstances of that Member, and shall give sympathetic consideration to developing country Members that demonstrate concrete progress toward implementing Article A.1. B.4 Except as provided for in Article B.6, a developing country Member not covered by Article B.1 or B.2 may grant or maintain the subsidies referred to in Article A.1 for low-income, resource-poor [and][or] livelihood fishing or fishing related activities up to [12][24] nautical miles, measured from the baselines, including archipelagic baselines. B.5 While applying Article B, a Member shall endeavour to ensure that its subsidies do not contribute to overcapacity or overfishing. B.6 A developing country Member engaged in fishing or fishing-related activities in any area further than one FAO Major Fishing Area beyond the one(s) adjacent to its natural coastline shall not have access to Articles B.1, B.2, B.3, and B.4.” The chair made several changes in Article B and clarified provisions as well as omitted a few provisions. The chair also brought changes in Article C dealing with transparency and notifications. In short, the chair’s latest iterations and changes indicate that there appear to be several difficulties with the so-called sustainability approach that he had followed. “Furthermore, there are seemingly noticeable asymmetries that still need to be addressed in the next ten days before the text is sent to ministers,” said people, who asked not to be quoted. +
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