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TWN
Info Service on WTO and Trade Issues (Jul24/20) Geneva, 22 Jul (D. Ravi Kanth) – The proposed draft decision on disciplines on fisheries subsidies that contribute to overcapacity and overfishing (OCOF) has been dropped from the agenda of a crucial meeting of the World Trade Organization’s General Council (GC), to be held on 22-23 July, following a meeting on 19 July of the GC chair, the WTO Director-General, and the chair of the Doha fisheries subsidies negotiations, said people familiar with the development. On 19 July morning, the GC chair, Ambassador Petter Olberg of Norway, the DG, Ms Ngozi Okonjo-Iweala, and the chair of the Doha fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, held an urgent meeting to avert a possible “fiasco” stemming from the unbridgeable differences over the draft additional provisions on fisheries subsidies (TN/RL/W/279), said people familiar with the development. The differences seem to have arisen due to the allegedly asymmetrical provisions designed specifically to let the big subsidizers walk away with a “free pass” to continue with their tens of billions of dollars in subsidies based on seemingly weak/circumventable notification requirements, said people familiar with the discussions. The crisis is over the allegedly “kid gloves” treatment accorded to the big subsidizers like China, the European Union, Japan, Korea, the United States, Chinese Taipei, and several other industrialized countries based on the allegedly dubious two-tier sustainability criteria, as well as over the treatment of distant-water fishing in the chair’s draft additional provisions, said people familiar with the discussions. The crisis burst into the open on 18 July during the small-group discussions (see below) and it has been building up since the WTO’s 13th ministerial conference (MC13) in Abu Dhabi that ended on 2 March amidst a partial collapse in the negotiations, said people familiar with the development. Consequently, the WTO issued a new GC agenda (WT/GC/W/949) on 19 July afternoon that does not contain the draft decision on what is often referred to as the Fish-2 agreement, which was there in an earlier version of the agenda, under the heading “For action/decision”. Instead, the agenda now contains the following six proposed decisions: “1.1 For action/decision
However, the agenda contains for discussion (only) a draft decision from Iceland on the chair’s draft additional provisions on OCOF subsidies, while India has also tabled three proposals that severely criticize the chair’s draft text, said people familiar with the development. Interestingly, the GC agenda still contains several controversial items such as “Moving Agriculture Negotiations Forward” tabled by Brazil, “Incorporation of the Investment Facilitation for Development Agreement into Annex 4 of the WTO Agreement” and an unprecedented request from the African Group to allegedly circumvent the WTO rules to advance the DG selection process to ensure that the incumbent Director-General gets a second term seemingly to avoid a veto by the Trump administration should it clinch victory in the upcoming US elections in November, said people familiar with the proposal. All three controversial proposals appear to hang in the balance, said people familiar with the negotiations. It remains to be seen which way the final decision will go on the DG’s selection process as several capitals have not made up their minds one way or the other, said a person, who asked not to be quoted. FISHERIES SUBSIDIES The chair of the Doha fisheries subsidies negotiations, which take place in the Doha Negotiating Group on Rules (NGR), Ambassador Einar Gunnarsson of Iceland, provided a two-page report on what happened in his consultations with a select group of countries. In his email sent to members on 18 July “on small group meetings on distant water fishing and on strength of the (OCOF) disciplines”, seen by the SUNS, the chair informed members that he held consultations with a group of countries on these two issues. The group of countries that attended the meeting included Bangladesh, Brazil, China, the European Union; Fiji, Iceland, India, Norway, Singapore, Trinidad and Tobago, Turkiye, and Vanuatu. Even though the discussions “were constructive and extremely useful”, the chair said in his email, “we continue to see very strong and irreconcilable negotiating positions requesting on one end of the spectrum a full and unconditional prohibition on subsidies contingent on DWF (distant water fishing) based on the premises that such subsidies are the most harmful.” “On the other hand, there is a request to delete the DWF-specific provision altogether on the premise that Article A.1 (which lists the prohibited subsidies) already sufficiently captures [subsidies] of that type.” The EU and China are allegedly the main beneficiaries of the provisions on distant water fishing, said several fisheries experts, who asked not to be quoted. Though the chair did not name the countries seeking complete deletion of the DWF-specific provision, it appears that the countries that called for these changes include India, Bangladesh, Brazil, and Indonesia among others, said a trade envoy who asked not to be quoted. Without naming the countries, the chair said, “however, the vast majority of members participating saw [Article] A.2 (in TN/RL/W/279) as the only viable compromise.” “On the other hand, the view was presented that Article A.2 provides for a weaker discipline than A.1, or at least that it had been so diluted compared to the earlier reiteration before MC13 as to have become meaningless,” the chair noted. “That was, however, countered by many who see Article A.2 adding a layer on top of the discipline in A.1,” Ambassador Gunnarsson argued. “They saw the claimed harmfulness of subsidies contingent on DWF as reflected through the wording “refrain, to the greatest extent possible”.” “For these reasons, these members noted that subsidies contingent on DWF are subject to additional notification requirements and a dedicated Committee review process with a direct link to the mandated review under Article D.1 after five years of the entry into force. In that regard, the possibility of Committee recommendations of quantitative limitations or reductions of subsidy amounts was cited,” the chair said. To recall, the Uruguay Round Agreement on Agriculture (AoA), which is allegedly replete with asymmetries on the domestic support reduction commitments, was supposed to be reviewed five years after the agreement came into force. So far, the review, which was illustrated in the Doha Development Agenda that was launched in Doha in 2001, has not been completed. For all the apparent “pomp and show”, the draft agreement on disciplines on OCOF subsidies, which is seemingly inconsistent with the original mandate of the United Nations Sustainable Development Goal 14.6, is another AoA-like agreement, said several current and former trade envoys. Perhaps lack of negotiating/institutional knowledge could be responsible for these disciplines that are allegedly not even “worth the paper on which they are written”, said people who asked not to be quoted. SECOND SMALL-GROUP MEETING Meanwhile, the chair informed members that he held “another small group meeting to discuss the concerns regarding the strength of the disciplines.” In the second group, the chair included “Australia; Antigua and Barbuda; Argentina; Bangladesh; Barbados; Brazil; Canada; China; the European Union; Fiji; Guyana; India; Indonesia; Japan; Korea; Malaysia; Nigeria; Norway; Pakistan; Samoa; South Africa; Chinese Taipei; Turkey; and the United States.” Without naming the countries, the chair said: “There were few, if any, of the Members present that felt that the current formulation of the disciplines represents the optimal way of addressing subsidies that contribute to overcapacity and overfishing.” “However, this formulation constitutes a difficult compromise for many Members after years of exploring different alternatives.” “Most of the Members present expressed their willingness to conclude the negotiations at the July General Council meeting with the discipline as it is noted in document 279, or with very limited tweaks,” said the chair. “Many of these members offered that they see the draft Additional Provisions providing for a significant improvement over the status quo,” the chair added. The chair’s description of countries that supported document TN/RL/W/279 include the US, China, the EU, the Latin American countries, and other industrialized countries, as well as the so-called “Friends of the System” like Singapore. In contrast, the countries that may have opposed the chair’s allegedly two-tier approach could include India, Indonesia, Pakistan, and Bangladesh among others. Continuing his commentary, the chair said: “Some Members present had more concerns about the overall balance of the disciplines and the SDT [special and differential treatment] provisions and sought more material adjustments.” Without naming India, the chair said, “one Member continued to call for a fundamentally different approach citing deep concerns about what it sees and the failure of the disciplines to meet the underlying objectives of SDG 14.6 and questioned the timelines of continuing the negotiations at the July General Council meeting.” According to UN SDG 14.6, “by 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, 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”. Perhaps India’s timely stand could correct the continued asymmetries in the way the fisheries subsidies negotiations were conducted at the WTO, said a former Indian trade envoy who asked not to be quoted. In his email, the chair also touched upon “Footnote 3” in the draft additional provisions concerning the term “biologically sustainable level”. Footnote 3 states: “For the purposes of these Additional Provisions, the term “biologically sustainable level” is the level determined by a coastal Member or a coastal non-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. Members acknowledge that the biologically sustainable level of stocks may be influenced by factors beyond the control of the subsidizing Member.” According to the chair’s email, “some felt that the last sentence of that footnote (“Members acknowledge that the biologically sustainable level of stocks may be influenced by factors beyond the control of the subsidizing Member”) opens a loophole rendering the discipline ineffective and called for its deletion. Others maintained that this is simply a statement of the fact. A couple of Members questioned whether the drafting could be clarified.” “Despite the remaining divergences amongst Members on the strength of the disciplines, this meeting was helpful for the assessments that we all need to make,” the chair said. “I am reflecting on everything I have heard this week and I will tomorrow (Friday) consult with the Director- General and the General Council Chair on the next steps… After that I will further communicate with you on the way forward,” the chair concluded. +
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