DRAFT RULES TEXT WOULD BAN WIDE RANGE OF FISHERIES SUBSIDIES

A new potential basis for negotiating future WTO rules on subsidy spending would ban a wide range of government payments to the fisheries sector that conservationists blame for promoting the wide-scale depletion of marine fish stocks.

The chair of the Doha Round negotiations on rules, Ambassador Guillermo Valles Games (Uruguay), circulated a draft consolidated text to Members on 30 November. The draft text was phrased in the form of potential future articles of WTO rules governing issues such as anti-dumping and countervailing measures, in addition to fisheries subsidies.

Until now, negotiators in the struggling multilateral talks had been considering comparable texts outlining potential parameters of an entire agreement only in the areas of agriculture and industrial goods. With revised texts on the latter two now delayed until late January - and with them, the start of final-stage negotiations - Members are trying to make progress on other issues in the round so they are positioned to reach an agreement in case they prove capable of bridging their differences in the major areas of contention (see BRIDGES Weekly, 21 November 2007).

Members are mandated 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 fisheries subsidies talks have been described as offering the greatest potential environmental benefits of any issue in the round.

Valles Games' text would ban several types of fisheries subsidy payments, especially those that boost fishing capacity or create other incentives to fish. In doing so, it attempted to bridge the principal cleavage in the negotiations: between the numerous advocates of a 'top-down' blanket ban on fisheries subsidy payments (with negotiated exceptions), and countries that want a 'bottom-up' ban only on specific kinds of subsidies, most vocally Japan, Taiwan, and Korea.

Subsidies covering the construction, operating and fuel costs of fisheries vessels, for instance, are among those slated to be banned. Other support for the fishing industry -- such as for port infrastructure "exclusively or predominantly for activities related to marine wild capture" fishing, including storage and processing facilities -- is also prohibited in the text. The objective for barring certain subsidies is to curb overfishing, conserve global fisheries resources, and encourage fisheries management, as stated in the draft document.

Some subsidies would be permissible for all countries, provided that they maintain an international-standard fisheries management system. These include payments aimed at boosting fishing vessel safety without increasing fishing capacity, reducing the environmental impact of fishing, or re-training fisheries sector workers into unrelated occupations. Governments would also retain the ability to grant limited fishing access to certain individuals and groups, so long as this does not affect migratory fish stocks or other countries' "identifiable fishing interests."

Marine conservation group Oceana welcomed the new text. "We are pleased to see that the chair's text on fisheries subsidies contains a strong prohibition on subsidies that increase overcapacity and overfishing," said Courtney Sakai, campaign director with the organisation. "Furthermore, the text reflects the importance of sustainability and fisheries management criteria for any exceptions to the broad prohibition."

Valles Games stressed that the draft WTO articles that he had put forward were merely a basis for negotiation. "I do not request or invite participants to agree to anything in these draft texts at this point," he wrote in the introduction. "These texts are not the end of our negotiating process but only the first step in a new phase involving further intensive discussions within the group." However, he asked countries to consider the proposals "as whole," noting that the time had come "to accommodate others' concerns and interests."

Following the text's release, WTO Director-General Pascal Lamy commented that the drafts were "are ambitious and balanced in all three areas they cover and they will enable negotiators to work in a more intensive manner in the coming weeks."

Developing countries permitted exemptions

Special and differential treatment for developing countries has been yet another contentious issue in the discussions, with negotiators in recent months expressing befuddlement over how the chair would try to address the issue. Critics had argued that substantial flexibilities allowing developing countries to subsidise fisheries would prevent future disciplines from effectively curbing overfishing.

Under the S&DT rules set out in the much-anticipated text, least-developed countries (LDC) would be fully exempt from any disciplines prohibiting subsidies.

Non-LDC developing countries would be allowed to provide otherwise-banned subsidies, including those that boost capacity, to small-scale fisheries in territorial waters characterised by non-mechanised fishing, family- or association-based fishing operations, catches consumed largely by fishing families, and the absence of a "major employer-employee relationship." So long as functional fishery management systems that aim to conserve fish stocks are in place, developing countries would be able to subsidise port infrastructure, and provide income and price supports. These management schemes are supposed to follow practices described in various international agreements, such as UN accords on migratory fish stocks and a Food and Agriculture Organisation code of conduct on responsible fisheries. Construction subsidies would be allowed for harvesting verifiably sustainable levels of fish stocks within countries' exclusive economic zones.

These S&DT disciplines, which stress sustainability and comprehensive management, reflect ideas proposed by Brazil and Argentina in September.

Subsidies for harvesting "unequivocally overfished" stocks would be prohibited for all Members except least-developed countries (LDCs), although the text does not spell out how this evaluation would be made. Some delegates have called this provision "vague and obscure."

'Access fees' -- the payments that a government offers another coastal nation in exchange for right to fish in that nation's waters - have been a crucial issue for some developing countries, particularly small and vulnerable coastal states. The African, Caribbean, and Pacific (ACP) states have consistently advocated for access fees to be excluded from the scope of the disciplines, arguing that such payments are critical sources of government revenue.

In response to these concerns, Valles Games' text explicitly states that government-to-government fees are not deemed to be subsidies; they thus remain permissible. However, "subsidies arising from the further transfer" of already-purchased access rights to a third party in the host nation, such as private industry, are normally prohibited - except when the host is a developing country, and the fishery is within that country's exclusive economic zone and operated in accordance with internationally-recognised best practices for fisheries management. The paper specifies that access rights must only be granted after scientific assessments of fish stocks , and that the access agreements themselves must be made public. As an additional transparency requirement, it calls for countries that purchase access rights to notify their purchase terms to the WTO.

Notably, the text calls on Member states that provide fisheries subsidies of any kind to adopt and implement domestic legislation and enforcement mechanisms for fisheries resource management based on recognised best practices. This includes stock assessments, vessel registries, and the allocation of fisheries rights, to name a few. Subsidies directed towards implementing fisheries management programmes are permitted for all countries.

Negotiations begin

A first discussion of the text is expected to take place from 12-14 December. Valles Games is likely to produce a revised version in a few months.

"Now the real negotiations begin," said Sakai "The question is, will the WTO seize or squander its opportunity to stop global overfishing? Reducing overfishing subsidies now is essential for abundant fisheries in the future."

The text is available online at http://www.wto.org/english/news_e/news07_e/rules_nov07_e.doc

ICTSD reporting.