FISHERIES SUBSIDIES NEGOTIATIONS LOOK AT INFRASTRUCTURE, HONG KONG

Negotiations on fisheries subsidies during the 26 October session of the WTO Negotiating Group on Rules focused on whether the large sums spent on building and maintaining fisheries infrastructure should be specifically targeted by new disciplines.

Discussions centred on a paper from New Zealand (TN/RL/GEN/70) that called for fisheries subsidies to be included as a category in the disciplines, citing statistics that such subsidies account for over 40 percent of industrialised countries' global financial transfers related to fisheries. Members' positions were polarised between those that broadly supported the submission and those reluctant to make a distinction between general infrastructure subsidies and those related specifically to fisheries. The proposal's inclusion of subsidies to port facilities proved particularly controversial. The WTO Agreement on Subsidies and Countervailing Measures (ASCM) specifically exempts grants for the provision of "general infrastructure."

New Zealand said that its paper was intended to initiate a dialogue on the category of "subsidies to fisheries infrastructure." It noted that Members would need to reach a clear understanding of what types of programmes would constitute fisheries infrastructure as opposed to general infrastructure in order to be able to establish new rules for their treatment. Arguing that subsidies that are specific to fisheries infrastructure could have an effect on overfishing and overcapacity, it called for them to be prohibited under new disciplines.

The paper proposes that the negotiating process start by trying to identify types of programmes that could be classified as fisheries infrastructure, as little detailed information is currently available on spending in the area. It makes a preliminary attempt to define three sub-categories, namely subsidies to port facilities, subsidies to the development of fishing communities, and subsidies to processing facilities for fisheries products. Conservation or research would be treated as separate, non-infrastructure categories.

Can fisheries infrastructure be distinguished from other kinds?

The Friends of Fish -- a loosely defined group of countries seeking tighter rules on fisheries subsidies that includes Australia, Argentina, Chile, New Zealand, Philippines, Peru, Norway, Iceland and the US -- saw it as a good starting point for discussing an important but neglected category of subsidies, saying that greater detail was necessary.

However, Japan, Korea and Taiwan were reluctant to introduce a distinction between subsidies for fisheries infrastructure and those for general infrastructure. Citing the example of ports used for multiple purposes, they argued that differentiating between them was effectively impossible. Korea declared that disciplining the use of infrastructure subsidies would amount to an infringement on countries' sovereign right and political duty to develop their domestic infrastructure.

The EU and China were ambivalent on the issue. While they welcomed the consideration of subsidies to fisheries infrastructure, they also pointed to the problem of multiple use of port facilities. The EU instead pushed for subsidies to be examined at the boat level, rather than for infrastructure. The Friends of Fish responded that addressing boat-level subsidies in isolation from the rest of the production chain would be insufficient.

Subsidies to develop fishing communities to be protected

The other two types of infrastructure identified by New Zealand, subsidies for the development of fishing communities and those to processing facilities, were less controversial than port subsidies. While China, Korea, Hong Kong and the EU felt that addressing processing facilities would touch on too many aspects beyond fisheries, other Members supported the idea of disciplining spending in this area. However, Members -- particularly developing countries -- supported New Zealand's proposal to consider exempting grants to infrastructure development in fishing communities from outright prohibition. Developing country Members stressed the importance of a clear definition of the type of "infrastructure development" and "fishery communities" covered by any exemption. New Zealand's paper only includes the provision of housing and of transport infrastructure for fishermen in the community development category. Indonesia spoke out in favour of expanding the definition to include additional support measures such as subsidised bait and fuel.

Diverging opinions on draft text for Hong Kong

At the end of the meeting, Members discussed the content of the draft text that they are to submit to the Hong Kong Ministerial Conference. In general, delegates felt that they had made significant progress over the past year, which ought to be reflected in the Ministerial Declaration. In particular, they now have consensus that new disciplines on fisheries subsidies are necessary, overcoming earlier opposition to the negotiations themselves.

Delegates are now looking to ministers in Hong Kong to guide the process forward by outlining a mandate for subsequent negotiations. They feel that work should intensify in 2006 so that new rules can be agreed upon by the end of the year. After concluding the current technical stage of discussing specific types of fisheries subsidies, Members will go back to negotiating the overall approach that they will take to disciplining them, as well as how to provide special and differential treatment for developing countries. Only after these questions are resolved can Members turn to text-based negotiations.

Latin American countries such as Argentina and Chile want the draft text for Hong Kong to include specific deadlines for the conclusion of the different stages of the negotiations. Japan and Korea, which oppose the Friends of Fish's proposal for a broad ban of fisheries subsidies with well-specified exemptions, advocated reopening the structural discussions as soon as possible. New Zealand would like to address the issue only after Hong Kong.

Chair Ambassador Guillermo Valles Galmes of Uruguay announced that he would soon submit a paper based on input from the group to WTO Director-General Pascal Lamy for the November General Council meeting in preparation for Hong Kong. No more formal discussions are scheduled on fisheries subsidies until the Ministerial Conference in December.

ICTSD reporting.