The Doha Round negotiations on rules governing fisheries subsidies are showing signs of progress, with the chair of the talks describing two new proposals as "quite helpful" for helping him to produce draft negotiating texts to present to WTO Members.

Nevertheless, Chair Ambassador Guillermo Valles Galmés (Uruguay) told a 28 September meeting of the Negotiating Group on Rules - which covers fisheries negotiations - that he would issue texts only after the chairs of the agriculture and industrial goods committees revise the draft deals that they presented to Members in July. Rules negotiating texts would also have to address industrial subsidies and the contentious talks on anti-dumping rules (see related story, this issue).

Some delegates saw the mention of a draft agreement as a sign that the rules negotiations might be able to move forward despite the deadlock on the central issues of agriculture and non-agricultural market access (NAMA).

With breakthroughs on agriculture and NAMA looking increasingly unlikely before late autumn or the end of the year - if at all - governments would have to be well-placed to wrap up talks in areas such as rules and trade facilitation in order to finalise a Doha Round package before the 2008 US election campaign is in full swing.

One of the new papers is a joint submission by Argentina and Brazil (TN/RL/GEN/151), which sets out draft provisions for 'special and differential treatment' (S&DT) for developing countries in future WTO rules on fisheries subsidies. The Indonesian paper (TN/RL/GEN/150/Rev.1), which addresses most issues in the talks, also includes potential rules for S&DT.

Both proposals were discussed during the rules group's meeting from 24-28 September. Valles Galmés commended the two documents for generating valuable discussions on the "critical issue" of S&DT. Differences on the issue, which will determine the extent to which developing countries will be allowed to subsidise their fisheries sectors in ways denied to industrialised nations, have bedevilled the negotiations as of late.

Indonesia revises position, not just proposal

Indonesia's text is a substantially changed version of a full-fledged draft fisheries agreement it tabled in July, reworked, in its own description, to make "enforcement and interpretation easier."

In the revised proposal, Indonesia says that it seeks to unite the two principal approaches under consideration for disciplining fisheries subsidies: the 'top-down' general prohibition on payments with negotiated exceptions, and the 'bottom-up' methodology, which would only ban specific kinds of subsidies. Unlike the earlier version, the paper's provisions stop short of a blanket ban on fisheries subsidies, but simply make them 'actionable' - i.e., subject to challenge at the WTO.

Indonesia argues that for the sake of consistency, fisheries subsidy disciplines should be similar to the current Agreement on Subsidies and Countervailing Measures (ASCM), which bans subsidies for export performance and import substitution, and makes the rest 'actionable,' prohibited only when they are deemed to harm other countries' trade interests. Thus, it calls for prohibiting fisheries subsidies only if they would hurt other countries as defined by the existing ASCM, or if it provokes adverse effects to fisheries resources. The proposal says that alleged injury to marine resources resulting from fishery activity would be evaluated in light of criteria including catch volumes, regional and national management schemes, and fishing access right payments. Subsidies that boost a country's capacity to produce fish products would be deemed to cause "serious prejudice," and would thus be prohibited.

Heavy criticism greets Indonesian proposal

Many delegations were critical of the Indonesian proposal, especially for its failure to include a general prohibition on fisheries subsidies. New Zealand critiqued Indonesia for eliminating the "backbone" of the negotiations. Other advocates of broad prohibitions such as the US and Brazil, expressed extreme disappointment with the proposal, calling it less ambitious than the others on the table and a major step backward for the negotiations. Chile echoed this, arguing that Indonesia failed to conform to the Hong Kong Ministerial Declaration's mandate for "the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and over-fishing."

The Indonesian paper also set out S&DT exemptions for developing countries. For instance, subsidies for artisanal fishing would be allowed, based on proximity to the shore and vessel size. Likewise, assistance is permitted to 'small-scale fisheries' within territorial waters for gear, fuel, and the construction, repair, or modernisation of boats less than 20 metres in length. Further carve-outs would allow developing countries to fund fishing vessels for the exploitation of fisheries within their own exclusive economic zones and fishing rights held on the high seas or elsewhere under regional arrangements.

Norway, though it has argued against a general prohibition, was quite critical of the Indonesian proposal, saying it would weaken current disciplines and allow a complete carve-out for developing countries. On the other hand, Fiji, speaking on behalf of the group of African, Caribbean, and Pacific (ACP) countries, said that the provisions on small-scale fishing were too restrictive.

The Japanese delegation, a stalwart supporter of the 'bottom-up' approach, said that while it appreciated Indonesia's efforts to bridge gaps, certain elements of the proposal still needed clarifying. Korea and Taiwan, two other staunch opponents of blanket bans on fisheries opponents, also sought further clarification.

Courtney Sakai, campaign director for marine activist group Oceana, criticised Indonesia's revised proposal for going back on the general prohibition. Indonesia "really misses the mark," she told Bridges.

Sources report that Indonesia may table yet another revision of its proposal this week.

Brazil-Argentina paper receives warmer welcome

The Brazil-Argentinean paper received a much warmer reception. The joint sponsors, both of which support a broad prohibition on fisheries subsidies with limited exceptions, said the new proposal represented a convergence between their earlier individual submissions. Brazil underlined the importance of allowing developing countries to, under specific conditions, develop their fisheries resources.

In short, the proposal would allow developing countries to subsidise the construction and repair of fishing vessels and support fishing fleets with fuel or ice, so long as this only exploits non-endangered species in national waters. Similar assistance would be allowed if used to help fill fishing quotas agreed with a regional fisheries management organisation based on international standards. Subsidies that bolster the subsistence and livelihood of fishermen and their families would also be permitted.

China, Thailand, India, Costa Rica, and Chile were among several delegations to acknowledge general agreement with the paper.

The EU noted its accordance with the proposal, though they called for additional clarifications in the provisions to prevent abuse by developing countries. In a similar vein, Australia and New Zealand said they supported the paper, but expressed concern about possible circumvention. New Zealand stressed that developing countries should not be given blank cheques.

The US said the paper was "very valuable," but expressed regret over its omission of special treatment for small and vulnerable economies.

As for the sceptics of the top-down approach to disciplining fisheries subsidy spending, Norway objected to allowing developing countries to subsidise fishing vessels for use in the high seas, while Japan expressed similar reservations about permitting them to subsidise large fishing vessels.

Oceana's Sakai, for her part, welcomed the paper from Brazil and Argentina, saying it "provides a real, workable approach that can potentially accommodate the interests of developing members in promoting a vibrant fishing sector, while providing for conservation and sustainability."

During the discussions last week, the chair had praised delegations for expressing the desire to bridge gaps. At the 'wrap-up' meeting on 28 September, Valles Galmés said that despite the disagreements and criticism, the discussions on Indonesia's paper demonstrated that there was near-consensus at least on the prohibition of measures that promote overcapacity and over-fishing. He said that Members would need to agree on the extent to which S&DT for developing countries should cover fishing outside their territorial waters.

Government payments to boost the size and capacity of fishing fleets have been blamed for contributing to the dramatic depletion of global marine fish stocks. Some claim that the fisheries subsidies negotiations have the potential to be the Doha Round's single greatest contribution to the environment.

The next meeting of the rules negotiating group is scheduled to start on 15 October.

ICTSD reporting; "Developing Countries Propose WTO Fisheries Deal," REUTERS, 26 September 2007.