MEMBERS CLASH OVER HOW TO DISCIPLINE FISHERIES SUBSIDIES

Members clashed over the shape of future WTO rules on fisheries subsidy spending during a 14 June meeting of the Negotiating Group on Rules.

In particular, a new proposal from Japan, Korea, and Taiwan was criticised by countries that argued that far broader restrictions on subsidy payments would be necessary in order to counteract the rapid depletion of marine fish stocks.

Delegates had a similarly mixed reaction to a new paper from the African, Caribbean, and Pacific (ACP) states focussing on access fees and the industry's economic impact in the developing world.

Japan, Korea, Taiwan proposal called insufficient

The Japan-led proposal appealed to Members to prohibit specific types of subsidy payments as opposed to the blanket ban with some exceptions supported by countries including the US, New Zealand, and Brazil (see BRIDGES Weekly, 6 June 2007, http://www.ictsd.org/weekly/07-06-06/wtoinbrief.htm#1).

Japan, Korea, and Taiwan argued that this 'bottom-up' or 'positive list' framework would be enough to sufficiently lessen overfishing, and would be more workable than sweeping eliminations. Korea contended that delegates' priority was to reach consensus on fisheries disciplines, and that this proposal represented the strongest compromise. Taiwan echoed this sentiment, praising the paper for striking the right balance.

Countries including Australia, Chile, New Zealand, and the US contested this supposed 'balance' and reiterated their calls for more extensive disciplines. New Zealand asserted that the Asian nations' approach, which would permit some subsidies for building and purchasing fishing vessels, did not go far enough and failed to "follow the momentum of the negotiations." It further argued that Japan's exemption for payments to small-scale fisheries amounted to a "get out of jail free" card given that 90 percent of the country's fishing fleet was accounted for by ships of less than five gross tonnes and thus likely to fall under this categorisation. Taking a similar view, the US said the proposal contained too many loopholes enabling circumvention.

Both New Zealand and the US are members of the 'Friends of Fish' group, a loose coalition of countries that have long supported a blanket ban with a list of specific negotiated exceptions.

Some delegates fell between the two groups. Notably Norway, which has co-sponsored papers with the 'Friends of Fish' before, and the EU, which is not a member of the group, expressed support for the positive list approach but hesitation about other aspects of the proposal. Norway welcomed the proposal but expressed concern that it contained too many exemptions. The EU applauded the proposal, but criticised it for being insufficiently developed.

Defining subsidies divides Members

Fisheries conservation aside, access fees have been another pressing concern for many delegations. These are payments that a government offers another nation - typically a small coastal state - in exchange for the right to fish in that nation's waters. The access-granting state receiving the payment generally lacks the capacity or resources to capitalise on its fish stocks.

Heeding a call from rules group Chair Ambassador Guillermo Valles Galmes (Uruguay), to increase discussions on this issue, the ACP group earlier this month distributed a communication on the importance of access fees to developing nations (see BRIDGES Weekly, 13 June 2007, http://www.ictsd.org/weekly/07-06-13/story6.htm).

At the recent meeting, the Solomon Islands presented the proposal on behalf of the group. It reiterated the ACP bloc's call for government-to-industry access payments to be shielded from new rules, just like government-to-government fees. While the latter are not widely considered to artificially lower the cost of fishing, some countries argue that government-to-industry fees are de facto subsidies, since remote governments often sell access rights to private fishing fleets below cost - i.e., for less than the amount of access fees paid to the coastal nation.

The ACP group wants all access fees to be exempt from WTO challenge, noting that such payments account for 25 percent of total government revenues in several Pacific island countries. Several members of the bloc spoke in favour of the proposal, including coastal countries Mauritius, Barbados, Fiji, Cuba, Egypt, and Cote d'Ivoire. The EU likewise expressed full support for the ACP position.

Raising the issue of balance once again, India said the most important objective would be to optimise revenue protection and marine conservation.

The US and New Zealand opposed the paper, calling attention to sustainability concerns. New Zealand cited an independent study that demonstrated how the transfer of rights from governments to private industry at subsidised rates has led to overfishing; it argued, therefore, that such transfers should be banned. If these fees were permitted, it continued, the coastal nations would have to cope with the subsequent ecological -- and economic -- effects. Thailand, Chile, Australia, and Costa Rica backed this point of view, and noted their support for disciplines on the transfer of access rights.

Looking ahead

Much of the focus of the next rules meeting, scheduled for the week of 9 July, will be on establishing disciplines for developing countries that will balance conservation and economic concerns. The chair will not put down a draft agreement text before the upcoming meeting, but it is unclear whether such a text might appear before the WTO's August holiday. One delegate said that the "one certainty is that [a] rules [text] will not be out" before NAMA or agriculture.

Sources say that the timing of a comprehensive rules text - which will also address anti-dumping rules and industrial subsidies - could depend upon the US administration and the prospects for the renewal of its trade promotion authority (TPA). Anti-dumping rules are controversial in the US Congress, and some lawmakers may be reluctant to renew the administration's negotiating mandate if they fear major changes to the US' ability to impose additional duties on dumped imports. At least in terms of anti-dumping, some delegates do not want a rules text before the Bush administration's TPA is renewed, which is thought possible if Members manage strike a framework deal on tariff and subsidy cuts on agriculture and industrial goods.

Thus, although much is unknown, Members expect that the future course of the negotiations will become clearer in July.

ICTSD reporting.