In Brief

BRAZILIAN FISHERIES PROPOSAL EXPLORES ROLE OF RFMOS IN WTO

A formal meeting of the WTO Negotiating Group on Rules on 17 March considered a Brazilian text on fisheries subsidies tabled at the end of 2005. The Brazilian text (TN/RL/GEN/79/Rev.1) (see BRIDGES Weekly, 7 December 2005) is a comprehensive proposal for an additional set of rules on fisheries subsidies, including special and differential treatment, and elicited detailed drafting suggestions from across the WTO Membership. In particular, Brazil's proposal to use the UN Food and Agricultural Organisation (FAO) and regional fisheries management organisations (RFMO) statistics and quotas as a benchmark to establish sustainability garnered questions from both developing and developed countries. The proposal allows developing countries that are part of an RFMO to grant capacity-enhancing subsidies, so long as the fishing capacity remains within the sustainable level of exploitation as defined by the particular RFMO. Norway, Japan, New Zealand and some developing countries suggested that many RFMOs do not have the capacity to determine the sustainability of fisheries for the purposes of the WTO. They also pointed out that many countries are not members of RFMOs and argued that the proposal's criteria for non-RFMO members were too strict. In reaction to concerns about the role of RFMOs in their proposal, Brazil committed to presenting a new draft of their proposal which "rethinks" the environmental dimension and role of RFMOs by 20 April.

Additional elaboration was also requested on Brazil's proposal to carve out grants to "patently at risk" fisheries -- those considered "overexploited", "depleted" or "recovering" by the FAO or by a RFMO -- from the overall exemption for subsidies to small-scale and artisanal fisheries. While the Brazilian proposal suggests that artisanal and small-scale fishing are different, many developing country delegates considered artisanal and small-scale fisheries to be the same. A developing country delegate said that while artisanal fisheries in developing countries should be exempted from subsidy disciplines, those in developed countries should not.

ICTSD reporting.

WTO SPS CTTE DISCUSSES EU NOVEL FOODS REGULATION

At a meeting of the WTO Committee on Sanitary and Phytosanitary Measures on 29-30 March, several developing countries expressed concerns that the EU's new draft novel food regulation would hinder their ability to export "small exotic traditional products" based on their rich biodiversity. The original Novel Foods Regulation (Regulation No. 258/97) was drafted during the height of the BSE crises and adopted in 1997, and requires anyone wanting to place a food product on the EU market to first evaluate whether the food is "novel" and, if so, they must subject the food to an rigorous safety assessment. Under the law, novel foods are those which were not used for human consumption to a significant degree within the EU before 15 May 1997, though it may exclude foods "obtained by traditional propagating or breeding practices, and having a history of safe use". The law, which originally also to covered genetically modified organisms (GMOs), is going through an amendment process that has tried to take into account concerns that the wording and coverage of the regulation is unclear and could hinder the ability of cash-poor but diversity-rich communities to connect with emerging international markets for exotic foods.

At the meeting, Colombia, Ecuador and Peru, supported by Paraguay, Costa Rica, Honduras, El Salvador, Chile, Brazil, Mexico, Argentina, Uruguay, Benin and India, said that biodiversity products which have been available in the countries for centuries are safe, and should not be legislatively lumped together with GMOs. The EU responded by saying that the amended regulation was not targeted at biodiversity products, but rather new technologies and products. It added, however, that the category of "biodiversity products" was broad and in the past had included some that have proved harmful. Therefore, the EU said, it was also in the exporters' interests for their products to be cleared as safe. It said that concerned countries should discuss the new draft regulation in Brussels, where it is still being modified, and promised to explain the draft better to the next SPS Committee meeting.

For more information on the Novel Foods Regulation, see the GTZ Issue Paper on the topic at http://www.underutilized-species.org/documents/nfr/gtz_novel_food_fact_sheet.pdf

ICTSD Reporting.

WTO: SUPPORT FOR DISCLOSURE BUILDING IN TRIPS TALKS

China and Norway joined Brazil, Peru, India and other developing countries in calls for text-based negotiations on disclosure of the origin of biological materials in patent applications during an informal consultation on the relationship between the Convention on Biological Diversity (CBD) and the Agreement on Trade-related Aspects of Intellectual Property Rights (TRIPS) held on 23 March and led by WTO Deputy Director-General Rufus Yerxa (see Bridges Trade BioRes, 17 March 2006). China for the first time spoke out in favour of moving to text-based negotiations on a disclosure requirement. For its part, Norway said that although a national-based approach could be useful, it had no objections to inserting a mandatory requirement for origin disclosure and evidence of prior informed consent into the TRIPS Agreement. This position was reinforced by its statements at the CBD Conference of the Parties in Brazil (see Bridges Trade BioRes, 22 March 2006), where Norway also expressed its support for a mandatory disclosure requirement. However, and in line with its national legislation on disclosure in patent applications that has been adopted and legislation on access to genetic resources that is currently under consultation, Norway did not support a requirement for evidence of benefit-sharing.

The US was put on the defensive, reiterating its belief that a national-level contract-based approach outside the patent system was adequate to ensure equitable access and benefit-sharing. The US went on to suggest that disclosure requirements would in fact have an adverse impact on benefit sharing because it would act as a disincentive to innovation by posing additional burden on the patent system and patent holders. The EU suggested that a national based approach could be useful, along with a contract based mechanism, and that for an international disclosure requirement to be enforced terms like "country of origin", "source of biological/genetic material" would have to be adequately defined. Yerxa said while he expects consultations to continue before the May General Council meeting, he would send a "factual" report to WTO Director-General Pascal Lamy.

ICTSD Reporting; "WTO Geographical Indications, Biodiversity Talks Intensify, But No News For TNC," IP-WATCH, 24 March 2006.

GREENPEACE SAYS SUBSIDIES ARE "KILLING OCEANS AND FORESTS"

In a report released on 17 March, Greenpeace International found that subsidies to the fisheries and forest sectors amount to at least US$19 and 35 billion respectively and act as perverse incentives that harm the environment. The report -- entitled "How government funds are killing oceans and forests and why the CBD rather than the WTO should stop this perverse use of public money" -- notes that these subsidies promote the unsustainable use of natural resources by preventing economic actors from paying the full or at least the market price of production factors and natural resources. Such subsidisation could occur through implicit subsidisation, such as road building or low rent capture through low stumpage fees in the forestry sector, or through explicit subsidisation, such as financial transfers to expand capacity in the fisheries sector. The report suggests that the between US$1 and 2 trillion currently spent on all subsidies that encourage biodiversity destruction through harmful environmental and social externalities could better be spent to solve urgent development and environmental problems.

Greenpeace sets out a list of ten reasons why the Convention on Biological Diveristy (CBD) should be the international organisation leading the drive to reduce environmentally harmful subsidies instead of the WTO, including that the WTO moves slowly, focuses on economic issues and fails to "really integrate environmental and social concerns in WTO decisions". Similar to its previous report on liberalisation of trade in fish and forest products (see Bridges Trade BioRes, 20 January 2006), Greenpeace argues that the lack of real progress in four years of fish subsidy negotiations has raised the question of why trade-related environmental issues should be dealt with at the WTO, and whether the WTO indeed has the legitimacy to judge the appropriateness of specific trade and environment-related measures. Instead, it would like to see the CBD take the lead in an independent, internationally co-ordinated process of data collection and monitoring of subsidies and their environmental impacts, particularly in the forestry sector where such data is lacking. However, related discussions on how to reduce or mitigate so-called "perverse" incentives at the CBD have so far made little headway and, following a decision at the Eighth Conference of the Parties to the CBD; have been put on the backburner for at least another two years (see related COP-8 story, this issue).

The Greenpeace study is available at http://www.greenpeace.org/international/press/reports/deadly-subsidies-2

Additional resources on forests, trade and related topics are available at http://www.trade-environment.org/page/theme/nat_res/forest.htm

The ICTSD COP-8 Biodiversity and Trade Briefing on "Incentive Measures and WTO Rules" is available at http://www.trade-environment.org/output/infoxch/COP8_ICTSD_incentives.pdf

ICTSD Reporting.

SHRIMP EXPORTERS TO UNDERGO US DUTY REVIEW

The US Department of Commerce (DoC) on 3 April released a list of companies that could be exempted from US anti-dumping duties on shrimp imports into the US. Dozens of exporting companies from Brazil, China, Ecuador, India, Thailand and Vietnam were said to have applied to be put on the list for consideration of administrative review of the duties that were imposed in January 2005. According to the review process, any company exporting shrimp to the US in any of the six countries subject to the duties was eligible to notify the DoC by 28 February that it would like its duty reviewed. Owing to the length of the list, the DoC will soon decide whether to narrow down the number of companies to be subject to a new assessment by randomly selecting companies from the list, or choosing the three largest companies. Firstly, though, it has asked all companies listed to fill out a detailed questionnaire on their costs and business practices, so that an evaluation can determine whether the company is still exporting at below cost ("dumping"). If the findings of the selected companies show that dumping has been reduced or has ended, the duties will be decreased or stopped; conversely, if the findings show that dumping has increased, the duties for that company would increase. The Southern Shrimp Alliance, the group of US shrimp farmers that originally filed the petition to the US government asking it to impose punitive tariffs against dumped imports, has told Commerce that it would like all companies in all countries to be reviewed as it believes that dumping continues to take place and that duties should in fact be increased.

In November 2005, the International Trade Commission decided not to revoke its anti-dumping tariffs on shrimp from India and Thailand following the December 2004 tsunami, arguing that doing so would harm the US shrimp industry (see Bridges Trade BioRes, 11 November 2005). Consultations between Ecuador and the US on the duties continue under the WTO dispute process, with sources suggesting that negotiators were bringing up the issue during ongoing talks on a Free Trade Agreement between the two countries (see Bridges Trade BioRes, 25 November 2005).

The list (also known as "initiation") for Brazil, Ecuador, India and Thailand can be found at http://www.ia.ita.doc.gov/download/shrimp/me-initiation.pdf and for China and Vietnam at http://www.ia.ita.doc.gov/download/shrimp/nme-initiation.pdf

ICTSD Reporting; "Shrimp exporters urge US to review anti-dumping duty," THE FINANCIAL EXPRESS, 2 March 2006; "Vietnamese shrimp exporters follow US anti-dumping case," CHINA VIEW, 2 March 2006; "Shrimpers demand a fair deal from US," THAI DAY, 9 March 2006; "US dumping duty on shrimp to be taken up," AJAYAN, 12 March 2006; "Shrimp exporters map strategies," VNECONOMY, 24 February 2006.

ACTIVISTS END TRADE BLOCKADE SET UP TO PROTECT ENVIRONMENT

Trade blockades set up by environmental activists on the two major bridges between Uruguay and Argentina came down on 21 March in reaction to commitments from the Uruguayan government that the construction of two pulp and paper mills on the banks of the Uruguay River would be halted (see Bridges Trade BioRes, 3 February 2006). The blockades, which Uruguayan President Tabaré Vázquez said has led to the loss of US$ 300 million in the country through trade losses, were erected by activists mobilising against the potential environmental implications of the construction of the two mills. Protestors suggested that the first environmental impact assessment of the factories were inadequate, an allegation supported by a statement of the World Bank on March 27 that the studies carried out by the Bank's International Finance Corporation (IFC) were "incomplete". Activist demands for the end of construction, or at least a new set of assessments that take into account the potential extent of contamination of the river by the two factories, the ability of the companies to mitigate these effects and the impacts on the river ecosystem and the communities that depend on it were largely satisfied on 11 March when Vazquez and Argentine president Néstor Kirchner reached an agreement. Under the agreement, Uruguay would make the companies in charge of the factories suspend construction for three months to enable a new environmental assessment, while Argentina would talk with the protestors and encourage them to end their blockade. The 21 March decision of the protestors to temporarily lay down arms was rewarded on 28 March when Spanish firm ENCE and Finnish company Botnia agreed to suspend the construction of their plants for 90 days. The high level of political commitment on the issue -- including informal suggestions during the 11 March meeting that an environmental protocol to MERCOSUR was needed -- suggests that an end to the debacle is in sight.

For extensive coverage of the issue in Spanish, see Puentes Quincenal, http://www.ictsd.org/puen_quince/06-03-29/art4.htm

ICTSD Reporting; "Metsae-Botnia confirms construction halts on Uruguay mill for up to 90 days," AFX NEWS, 30 March 2006; "Pulp mills dispute: pickets lift blockade," MERCOPRESS, 21 March 2006.