US PROPOSAL CALLS FOR MAJOR CUTS TO COMMERCIAL FISHING

30 March 2007

US PROPOSAL CALLS FOR MAJOR CUTS TO COMMERCIAL FISHING SUBSIDIES The US on 21 March launched a far-reaching proposal to modify international trade rules to prohibit most government subsidies to commercial fishing, in an effort to halt the depletion of marine life globally.

The US is currently seeking input on the proposal from delegates and it has already elicited complaints from Japan, South Korea, Portugal, and Spain, all traditional opponents of constraints on fisheries subsidies. After receiving comments on the text, the US plans to submit a formal version at the next session of the Negotiating Group on Rules, tentatively scheduled for 30 April.

The new text represents the US' first comprehensive framework for future disciplines on commercial fisheries subsidies. It builds on the country's past positions, and is believed to have the support of a broad coalition of countries, including Brazil, Argentina, Chile and New Zealand.

Role of Doha in preserving marine fisheries

Washington claims that its proposal represents an important step towards slowing the over-harvesting and depletion of fish stocks around the world. "Tough fisheries subsidy disciplines are an essential complement to strong fisheries management programs to ensure that wild fish stocks remain sustainable for future generations," said US Trade Representative Susan Schwab. She described the proposal as "a clear win for trade, the environment and sustainable development."

A 2006 report by the University of British Columbia put worldwide annual government spending on fisheries subsidies at about USD 34 billion. Of that, environmentalists blame some USD 20 billion in harmful payments, such as those that go toward building new fishing boats, for three-quarters of the world's overfishing. Japan, the EU, and China are the biggest subsidisers, respectively doling out about USD 5.3 billion, USD 3.3 billion, and USD 3.1 billion annually.

Scientists warn that global fish stocks risk irrevocable collapse within 50 years unless steps are taken to curb overfishing (see Bridges Weekly, 8 November 2006, http://www.ictsd.org/weekly/06-11-08/inbrief.htm#4). According to Courtney Sakai, campaign director for marine advocacy group Oceana, strong WTO rules limiting fisheries subsidies could play a crucial role in doing so. "The international fishing fleet is so distorted by government subsidies that it is no wonder there are any fish left at all. It's about time we cut the bait and the WTO represents the best way to do that," she said.

Under the Doha mandate, Members are supposed to "clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to developing countries… with a view to enhancing the mutual supportiveness of trade and environment." The negotiations on such subsidies have been described as offering the greatest potential environmental benefits of any issue in the round. The gains would not be limited to conservation: fish is a heavily-traded good, an important commodity for developing countries in particular, and the source of at least 20 percent of the daily protein intake of 2.6 billion people worldwide, especially in developing countries. Worldwide it is estimated that one billion people depend on fish for their livelihood.

Broad ban, with negotiated exemptions

The new proposal unveiled by the US calls for a broad prohibition on commercial fishing subsidies, targeting any initiatives that encourage wild-capture fishing for commercial purposes, such as payments for ships, fuels, and loan guarantees.

Specific negotiated exceptions to this ban would be available to policies that do not encourage increased fishing capacity, such as the removal of boats through buyback schemes, re-education for fishermen, and research initiatives focused on marine conservation. However, the proposal stressed that these exemptions will need to be strongly disciplined to ensure that they do not become a loophole for promoting overcapacity.

The US, along with the other members of a loosely-defined group of countries called the 'Friends of Fish', including Australia, Argentina, Chile, Ecuador, and New Zealand, has long supported a blanket ban with a list of negotiated exceptions. New Zealand in particular is viewed by marine conservationists as an early champion of aggressive disciplines on fisheries subsidies, and has worked with the US to get such an agreement at the WTO.

In contrast, Japan, South Korea, and Taiwan have taken the opposite approach: instead of a blanket prohibition, they want a negotiated list of specific banned types of subsidy payments.

Under the proposal, access fees would be counted as subsidies by the typically rich countries that pay them to developing country governments in return for the right to fish in their territorial waters, unless they meet certain conditions. They would not be treated as subsidies to the recipient coastal states. Access fees are an important source of revenue for some small island states.

The paper also calls for a periodic review of the new rules' impact and points to methods for increasing transparency, avoiding circumvention of the regulations, and helping countries make the transition into conformity with the policy.

The US' proposal does not outline any specifics on special and differentiated treatment for developing countries, but did refer to a recently revised Brazilian proposal (TN/RL/GEN/79Rev.4) that envisaged exceptions permitting payments to fisheries activities related to the subsistence of fishing communities in developing countries.

Washington claims that the current subsidy rules enable inefficient economic practices and distort market forces, leaving many fishing industries at a distinct disadvantage against heavily subsidised fleets such as those of Japan and the EU. "Our proposal will help level the playing field for the US and other fishing communities that are disadvantaged by large subsidy programs," said Schwab.

Following the release of the proposal, the US Congress passed a resolution encouraging the slashing of harmful fishing subsidies that lead to overfishing worldwide.

Sources noted that despite their different approach to the issue, countries such as Japan and South Korea have been actively involved in the negotiations. The EU, whose position lies somewhere in between the Asian Members and the US, has been relatively silent, and delegates say that it is waiting to see how the negotiations evolve.

The European Commission's own attempts to encourage member states to slash catches by their fishing fleets have been deemed inadequate by conservationists.

Talks on the US proposal will continue over the coming weeks in the run-up to the end-April session of the negotiating group.

ICTSD reporting; "US Proposes Ban on Fishing Subsidies in Global Trade Talks," BLOOMBERG.COM, 21 March 2007; "US unveils Doha plan to cut fishing aid," FINANCIAL TIMES, 21 March 2007; "US Doha Round Initiative to Prohibit Harmful Fisheries Subsidies," US FED NEWS, 21 March 2007; "Kiwis Lead Way on Global Overfishing," THE NATIONAL BUSINESS REVIEW, 23 March 2007; "Hope for Trade Talks after G33 Concession," FINANCIAL TIMES, 22 March 2007.

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