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TWN
Info Service on WTO and Trade Issues (Feb24/17) Geneva, 20 Feb (D. Ravi Kanth) — As trade ministers congregate in Abu Dhabi for the World Trade Organization’s 13th ministerial conference (MC13) in six days, the chair of the Doha fisheries subsidies negotiations on 19 February touted the improvements in the “additional provisions on fisheries subsidies” contributing to overcapacity and overfishing (OCOF). The chair’s draft text was issued along with other proposed decisions of the draft Abu Dhabi Package for MC13 on 16 February. Other proposed decisions of the package include (1) Abu Dhabi Ministerial Declaration (ADMD); (2) draft text on agriculture; and (3) work program on electronic commerce. At a press briefing on 19 February, the chair, Ambassador Einar Gunnarsson of Iceland, claimed that the new draft text dealing with OCOF subsidies is his “best attempt to identify the balance among Members’ positions that I see as most likely to build consensus.” He said that he remains “optimistic”, adding, “the two-tiered hybrid approach as the main discipline, with Members in the upper tier required to apply a stricter standard to demonstrate, when they provide fisheries subsidies, that they have measures in place to prevent such subsidization from harming the sustainability of the fish stocks.” Ambassador Gunnarsson said that, “The demonstration standard and the associated notification requirements have been further elaborated”, while the “hybrid approach applies considerably closer scrutiny to the Members subject to the discipline, both developed WTO Members and developing country Members other than LDCs and those Members with a very small share of (the) global catch.” It is unclear whether the elaborated “demonstration” and “notification” procedures are strong or watered down for the top 20 subsidizers that he mentioned in his previous draft text issued on 21 December last year. The chair did not explain why he clubbed together all countries such as those big subsidizers who caused the depletion of global fish stocks through OCOF subsidies, and developing countries that were in no way responsible for the current state of the oceans without fish, said a capital-based official, who asked not to be quoted. The chair claimed that “while the scrutiny of those Members in the upper tier is more intensive than what applies to those Members in the lower tier, in both cases the intention is that this increased scrutiny will pressure those Members to stop using subsidies in ways that harm the sustainability of fish stocks.” The draft text is replete with footnotes that make it easy for the big subsidizers to continue with the prohibited subsidies listed in Article A.1 of the draft text, while letting them off the hook in Article A.1.1 (a) – “… 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” through demonstrations and notification procedures. According to the draft text, Article A.1 states: “No Member shall grant or maintain subsidies to fishing or fishing related activities that contribute to overcapacity or overfishing. For the purposes of this paragraph, subsidies that contribute to overcapacity or overfishing include: (a) subsidies to construction, acquisition, maintenance, modernisation, renovation or upgrading of vessels; (b) subsidies to the purchase or maintenance 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 except for such subsidies implemented for subsistence purposes during seasonal closures; (f) price support of fish caught; (g) subsidies to at-sea support; and (h) subsidies covering operating losses of vessels or fishing or fishing related activities.” Footnote one attached to Article A.1 says, “For greater clarity, Article A.1 does not apply to subsidies to the extent they regard stocks that are overfished.” “This is a major loophole, as if you give subsidies regarding overfished stocks you can do any subsidy (listed in Article A.1),” said another capital-based official. Article A.1.1 (a) says, “A subsidy is not inconsistent with Article A.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. Such 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 and shall be made through a notification by the subsidizing Member as soon as practicable and no later than six months after a new subsidy program comes into effect, and thereafter in the Member’s regular notifications of fisheries subsidies under Article 25 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) and Article 8.1 of the Agreement on Fisheries Subsidies (AFS).” The footnotes attached to Article A.1.1 (a) suggest that the big subsidizers can manipulate their way through the “demonstration” and “notification” procedures, the capital-based official said. Several developing countries, including Indonesia and India, demanded the prohibition of OCOF subsidies, as listed in Article A.1.1, for the big subsidizers. The chair admitted that “during these negotiations, some Members proposed that the upper tier of the disciplines establish outright prohibitions on certain kinds of subsidies, or for permissible subsidization to be limited to the area within the subsidizing Member’s jurisdiction.” He said, “Those proposals have not attracted convergence.” However, he did not reveal who opposed the outright prohibition of those subsidies for the big subsidizers. According to the chair, “the main difference between the two-tier hybrid approach as it appears in the new text compared with previous texts is reflected in the criteria to differentiate the Members falling into the two tiers. This is an important way in which the disciplines of the upper tier have been strengthened.” Given the seemingly poor track record of the big subsidizers in complying with notification requirements under Article 25 of the Agreement on Subsidies and Countervailing Measures, the new agreement is unlikely to make a significant impact on the European Union, the United States, Japan, Canada, China, Korea, and Chinese Taipei among others, said several people familiar with the provisions. S&DT On special and differential treatment, Ambassador Gunnarsson said: “As of (the) entry into force, the stricter tier would apply to all developed country Members, and to developing country Members that are excluded from access to special and differential treatment, either through a legally binding provision or through a voluntary binding commitment. Both options for this SDT exclusion appear in the text for Members’ consideration.” In addition, he said after a transition period, non-LDC Members and those developing country Members above a de minimis share of global catch that are “significantly engaged” in far distant water fishing activities, as well as developing country Members that are amongst the ten largest providers of fisheries subsidies by annual aggregate value, would also be required to apply the top tier. Notification and transparency provisions have been added to operationalize the identification of the top subsidizers. While the de minimis limit of 0.8% is a concession for the ACP (African, Caribbean, and Pacific) group of countries for using the Article A.1.1 list of prohibited subsidies, the chair said, “the remaining non-LDC and non-de minimis developing country Members would apply lower tier of disciplines, but also after a transition period”, which currently remains as X years in square brackets. There is going to be a lot of higgle-haggling over the number of years at Abu Dhabi, as the big subsidizers are not ready to accept the 25-year exemption as demanded by India, said people familiar with the negotiations. While it is true that the LDC members as well as those below the 0.8% threshold of global marine catch are exempted from any demonstration or notification in the Article A.1.1 list of prohibited subsidies, “they would remain subject to the obligation to submit their regular subsidy notifications, however.” In the face of intense opposition from several developing countries like Indonesia and India, the chair seems compelled to include artisanal and small-scale fishers from “low income, resource poor or livelihood in nature as operationally defined by a Member” to continue fishing until the Exclusive Economic Zone (EEZ) limit. The proposed language for low-income, resource-poor fishers in Article B.4 states: “B.4 (a) Except as provided for in Article B.5, a developing country Member may grant or maintain the subsidies referred to in Article A.1 for small scale and artisanal fishing or fishing related activities that are primarily low income, resource poor or livelihood in nature as operationally defined by a Member, in its jurisdiction up to [12] [200] nautical miles measured from the baselines, including archipelagic baselines. (b) A developing country Member availing itself of subparagraph (a) shall notify, through its regular notification under Article 25 of the SCM Agreement and Article 8.1 of the AFS, its operational definition(s) of the fishing or fishing related activities referred to in subparagraph (a), and promptly inform the Committee of any modifications thereafter.” The chair said, “Another notable change from the previous version of the text concerns the SDT exclusion applicable to developing country Members engaged in what we have been calling “far distant water fishing”. This provision in the new text contains two alternative formulations. The first is essentially the same as the counterpart provision in the previous draft text, with certain amendments to avoid the possible unintended consequence of excluding from access to SDT developing country Members that have at most a small engagement in large scale, far distant water industrial fishing.” Further, “the second formulation, proposed by the Member most concerned, encourages developing country Members with competent fisheries management capabilities to make a binding commitment not to avail themselves of SDT”, the chair said. “Finally,” according to the chair, “the text contains a new article describing the relationship between the new Additional Provisions and the Agreement on Fisheries Subsidies. In particular, the new provisions along with the Agreement on Fisheries Subsidies would constitute the comprehensive disciplines referred to in Article 12 of that Agreement, and would achieve a comprehensive agreement on fisheries subsidies as referred to in the Ministerial Decision that adopted the Agreement on Fisheries Subsidies at MC12.” The new article in the draft text is as follows: “E.1 These Additional Provisions, along with the AFS, shall constitute the comprehensive disciplines referred to in Article 12 of the AFS and shall achieve a comprehensive agreement on fisheries subsidies in accordance with paragraph 4 of the Ministerial Decision on the AFS adopted at the Twelfth Session of the WTO Ministerial Conference. E.2 Article 1, Article 2, Article 6, Article 7, Article 8, Article 9, Article 10, and Article 11 of the AFS shall apply, mutatis mutandis, to these Additional Provisions, in addition and without prejudice to any cross-references in these Additional Provisions to specific provisions of the AFS.” In short, the draft additional procedures, while seemingly providing some improvements in the special and differential treatment provisions, fail to “prohibit” OCOF subsidies that have been availed for many years by the big subsidizers. +
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