WTO: EU TAKES LONG-AWAITED NEW STANCE ON FISHERIES SUBSIDIES

At the 5-7 May meeting of the WTO Negotiating Group on Rules, the EU presented a new proposal on fisheries subsidies. While the EU has in the past been reluctant to address fisheries subsidies in the WTO, the submission takes a more proactive stance following the adoption of the EU Common Fisheries Policy reform in late 2002 where EU member states had agreed to phase out subsidies for the renewal of fishing vessels (see BRIDGES Trade BioRes, 23 January 2003),

The European submission (TN/RL/W/82, available on the WTO website), which the EU stressed was based on hard-learned experience rather than a theoretical approach, proposes that capacity-enhancing subsidies -- i.e. subsidies for marine fishing fleet renewal and for permanent transfer of fishing vessels to third countries -- would be prohibited (subsequently referred to in discussions as "red box" subsidies). A separate "green box" of permitted subsidies would be created for subsidies aimed at reducing fishing capacity and mitigating adverse social and economic effects of the restructuring of the fishing sector. These would include subsidies for scrapping vessels, retraining fishermen, early retirement schemes, economic diversification, temporary breaks in fishing activities, modernisation of fishing vessels to improve safety, product quality or working conditions, and for promoting environmentally friendly fishing methods, as long as output was not increased. The "boxes" would be up for revision as necessary. Subsidies in the "green box" would have to be reported to the Committee on Subsidies and Countervailing Measures on a regular basis, and made available to the public. The submission also highlights the importance of resource management, noting that the FAO, OECD and UNEP may be better placed than the Negotiating Group to carry out this work.

A number of interventions were made during the meeting, welcoming the proposal. Some Members of the "Friends of Fish" group (that includes the US, Argentina, Chile, Iceland, New Zealand, Norway and Peru) said they felt that while the EU proposal was a good starting point it did not go far enough, and the category of prohibited subsidies needed to be further developed. One Member commented that there was no need to negotiate a "green box" until a much broader "red box" was agreed. Japan and Korea, who oppose addressing fishing subsidies in the WTO, engaged actively in the discussions, but their positions have become increasingly marginalised. One trade negotiator noted that significant momentum had been gained on this issue and there was no turning back. He commented that the EU paper in combination with an initial US paper (TN/RL/W/77), submitted at the previous Negotiating Group meeting, and a "Friends of Fish" background paper on categories of fisheries subsidies (see BRIDGES Weekly, 26 March 2003) formed a solid basis from which to move ahead.

The environmental group WWF welcomed the EU proposal, stressing the significance of the EU -- a former opponent of discussions -- now supporting stronger rules on fishing subsidies. The group noted, however, that the proposal could go further with regard to banned subsidies, urged caution with regard to the proposed "green box" subsidies, and suggested a more proactive approach to special treatment for developing countries, including positive subsidies to support sustainable and local, artisanal fishing methods.

Also at the meeting, China introduced a paper (TN/RL/W/94) welcoming and commenting on the US paper. The paper draws attention to the special role of aquaculture, noting its "contribution to the protection of the world's marine fisheries resources" and food supply and food safety. Aquaculture is a rapidly growing sector and accounted for 27 percent of global fish supplies in 2000, according to the FAO's State of World Fisheries and Aquaculture. Various civil society groups have repeatedly raised concerns over the environmental impacts of aquaculture. In a report released in February, WWF warned that aquaculture was contribution to the pressure on already threatened fish stocks due to the large amounts of fishmeal and fish oil required to feed farmed fish.

ICTSD reporting; "WTO: fisheries subsidies - EU tables proposal for sustainable fishing," EC PRESS RELEASE, 22 April 2003.