CALLS FOR EXEMPTING SMALL-SCALE FISHING FROM SUBSIDY RULES DIVIDE WTO MEMBERS

WTO Members last week disagreed on the extent to which future multilateral rules on fisheries subsidies should include exceptions for payments to the small-scale fishing sector, as Canada and some other developed countries sought controversial exemptions for their own industry.

Marine conservation groups said that the exceptions these countries were seeking would undermine the main objective of fisheries subsidies disciplines: preventing government payments from promoting the wide-scale depletion of marine fish stocks.

Canadian paper sparks controversy

At the centre of the disagreement during the 24-25 April session of the Doha Round negotiating group on rules was a new informal proposal from Canada to allow all WTO members, developed and developing alike, to support small-scale fishing.

The paper called for adding a provision to the general exceptions set out in the draft agreement on fisheries subsidies released by the chair of the rules negotiations, Uruguayan Ambassador Guillermo Valles Games, in November 2007 (see BRIDGES Weekly, 5 December 2007, http://www.ictsd.org/weekly/07-12-05/story3.htm). That text would ban a wide-range of fisheries subsidy payments, especially those that boost fishing capacity or create other incentives to fish. It also contained a relatively narrow range of exceptions under which payments would be allowed if linked to effective fisheries management, with some special provisions for developing countries.

Under the Canadian proposal, the exception would be limited to fishing within a Member's own territorial waters (as opposed to distant-water fleets), and payments would not exceed a to-be-negotiated "de minimis" percentage of the average value of fish harvested in those waters "for the three preceding years for which data is available." Governments would be able to use this exception to make ordinarily banned payments, such as those to fuel or other operating costs.

While introducing the proposal at the meeting, Canada noted that while discussions on support for small-scale fishing had focused on developing countries, it was a matter of concern for many developed countries as well. The chair's text provided special and differential treatment for small-scale fishing in developing countries, but was silent on this issue with respect to rich nations, it said.

Canada argued that it needed the freedom to provide payments under the exemption it was proposing in order to rationalise its domestic fisheries in the wake of the collapse of its Atlantic cod stocks, as well as to support programmes for aboriginal communities.

Japan, Korea, the EU and Taiwan expressed strong support for the Canadian proposal, calling it easily workable. Hong Kong agreed that support for small-scale fisheries should be allowed for all Members. Norway said that small-scale coastal fishing needed support, but was concerned with the scope of the Canadian paper. The US said that the proposal was premature.

New Zealand cautioned that rising fish prices would continuously push up the amount of spending allowed under the Canadian proposal, and that payment amounts could thus be substantial even at a hypothetical cap of 10 percent of catch value.

Australia emphatically criticised the proposal for opening the door to a large carve-out for small-scale fishing subsidies, likening the potential exception to "using a sledgehammer to kill a mouse."

Developing countries were opposed to the Canadian proposal. Many argued that the small-scale fishing sector in developed countries did not perform the crucial subsistence function that it does in poor countries. China noted that small-scale Chinese fishermen earned $3 a day - quite different from what is earned by their counterparts in rich countries. India wondered aloud if developed countries were seeking a blank cheque. Thailand, South Africa, Cuba and Turkey said special and differential treatment for small-scale fisheries should be for developing countries alone.

Some developing country delegates speculated that the Canadian paper, though purportedly a new, informal 'room document', had already been circulated and discussed among certain Members, with a coalition of defenders already in place. Many mentioned that the scope of exemptions Canada proposed would be a departure from the narrowly defined exemptions in Valles Games' text.

Environmental group Oceana suggested that Canada's proposal was "puzzling," given its experience with the collapse of its own cod stocks. "The Canadian proposal creates a hole that the entire European fishing fleet could drive through," Oceana said. "Given its experience on fisheries, it is puzzling why Canada is standing out front for the countries that provide major subsidies to send their boats around the world."

According to sources cited in the fourth UN Environment Programme Global Environment Outlook for 2007, the collapse of the Canadian east coast cod fishery in the late 1980s left 25000 fishermen and 10000 other workers unemployed.

India announced a new joint paper with Indonesia that would modify Valles Games' text to remove what they deem to be overly stringent conditions associated with the text's provisions for special and differential treatment (S&DT) for developing countries.
Several developing countries had complained that the various sustainability and other requirements developing countries would have had to meet in order to provide otherwise-prohibited subsidies were so complicated that they rendered the S&DT unusable. The draft text's conditions relate to territorial limits, size of fishing boats and the existence of management regimes. The joint paper by India and Indonesia is due to be discussed at the next meeting of the group.

Differences on subsidies vs. management resurge

Discussions on fisheries management systems and the text's requirement for a peer review of Members' management systems gave rise to a resurgence of old differences.

Developing country delegations including Argentina, Brazil, China, the Solomon Islands, Venezuela, and Turkey, though not disputing the importance of fisheries management, cautioned against overly stringent rules with which poor countries would be unable to comply.

In previous discussions of the chair's text, several Members had expressed concern about involving external institutions such as the UN Food and Agriculture Organisation in a peer review mechanism. Many countries had stressed that reporting to any external body should not be required.

Valles Games stressed that the review process he envisioned would be in the form of written questions and answers in a manner similar to the WTO Committee on Subsidies. The review would not be done by scientific experts but by trade representatives, who could draw from expertise of organisations outside the WTO.

The chair's clarification eased some of the concerns of many delegations, including Barbados (on behalf of the small, vulnerable economies), Jamaica (on behalf of the ACP countries), Thailand, China, and Egypt.

Also on the management of fisheries stocks, Japan and Korea reiterated their long-held view that monitoring and management systems would control overfishing more effectively than prohibitions on subsidies.

The EU suggested establishing a fisheries division in the WTO Secretariat, and publishing independent reports on Members' fisheries management systems.

Some delegates said that an overemphasis on management instead of effective disciplines on fishing subsidies would be a step back from the chair's text, as well as a departure from the core of Members' pledges to discipline fisheries subsidies, including through the prohibition of certain payments that contribute to overcapacity and over-fishing.

In closing, Valles Games said that the discussions had been constructive, and noted that Members' concerns were not limited to the fish, but also extended to livelihoods and employment in the fisheries sector.

The rules group's next meeting on fisheries subsidies is set for the week of 13 May.

ICTSD reporting.