FISHERIES SUBSIDIES TEXT REPRESENTS A STRONG STARTING POINT, SAY DELEGATES

WTO Members expressed overall satisfaction with a set of potential multilateral disciplines on fisheries subsidy spending put forward by the Chair of the Doha Round rules talks, during the negotiating committee's meetings on 12 and 14 December.

While there was not unanimity on the specifics of each provision in the draft text put forward by Chair Ambassador Guillermo Valles Games (Uruguay), the majority of delegates agreed it was a strong starting point for further negotiations. Delegates described last week's discussions as productive and forward-looking.

Chair Valles Games' text, circulated on 30 November, was phrased in the form of potential future articles of WTO rules governing fisheries subsidies. The Doha mandate instructs Members 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.

Reactions from the room

Following the release of the text, Members lauded the Chair for skilfully dealing with issues that in previous months had seemed ambiguous, roughly defined, and/or contentious. Delegates also commended his synthesis of key debates in a way that reflected not only economic concerns, but sustainable development interests as well.

"The chair's text goes far to show that the WTO can, in fact, deliver and contribute to a 'win-win-win' for the environment, trade and sustainable development," said US Ambassador Peter F. Allgeier in a statement.

Yet, criticism was not absent from the discussions. Sources close to the negotiations said that this was not surprising: all the "usual suspects" fell along the same sides of the debate as in recent months, particularly when it came to prohibitions on particular types of spending.

In his draft text, Valles Games attempted to bridge the gap between advocates of a 'top-down' blanket ban on fisheries subsidy payments with negotiated exceptions, and countries wanting a 'bottom-up' ban only on specific kinds of subsidies, most vocally Japan, Taiwan, and Korea. The text would ban several types of fisheries subsidy payments, especially those that boost fishing capacity or create other incentives to fish. Subsidies covering the construction, operating and fuel costs of fisheries vessels, for instance, are among those slated for prohibition.

Korea described the text as a disguised "top down" approach; Taiwan said it was difficult to think of any subsidy that would be allowed. Japan too expressed unhappiness with the prohibition of subsidies for port infrastructure, operating costs, and near-port fishing processing, in particular. These activities, Japan argued, have little effect on overcapacity fishing and thus should be exempt from any prohibitions. Critics of Valles Games' handling of prohibited subsidies called the disciplines too broad, too deep, beyond the mandate of the group, and outside the competency of the WTO.

On the other side of the debate, New Zealand, Australia, and the US, among others, expressed satisfaction with the text. Australia and New Zealand pointed to the positive environmental outcomes that could result from these negotiations, noting their timeliness following the Bali climate change conference. Echoing this sentiment, the US said that the draft was an ambitious and promising start for defining future negotiations and provisions.

Small fish in a big pond

Special and differential treatment (S&DT) provisions for developing countries have been contentious, dominating discussions in recent months. Proposals for giving developing countries significant leeway to support their fisheries sectors were criticised for encouraging overfishing, leaving negotiators befuddled over how the chair would try to address this issue.

During last week's meetings, however, many delegations -- particularly developing country Members -- pointed to the strength and substance of the S&DT rules Valles Games set out in the text, generally expressing satisfaction with them. The group of least developed countries (LDCs), the group of African, Caribbean, and Pacific (ACP) countries, small and vulnerable economies (SVEs), and Pacific island members were among those to voice support for the Chair's treatment of the sticky topic.

Not all Members shared the same enthusiasm, however. China and Brazil described the provisions as too rigid and overly burdensome. India said that with one million artisanal fishermen in their country, they had concerns about the conditionalities they needed to meet to qualify for special and differential treatment.

Concern over the handling of small-scale fishermen was also raised by Members, including Japan, Korea, Taiwan and Norway, who advocated for shielding all small-scale fishermen-not just those in developing countries-from prohibitions. In the text, subsidies for this activity come only under S&DT and would be restricted to LDCs and developing country Members.

While the SVEs and ACP welcomed Valles Games' proposal, the latter group urged an adjustment of the permissible boat length under this provision to be extended from 10 to 25 metres. As outlined in the text, subsidies are permitted for developing countries based on certain conditionalities such as the size and capacity of the fishing vessels, which is currently capped at 10 metres. Delegates reported a significant focus on the issue of metres and other numbers at the recent meeting, suggesting that these discussions would benefit from the input of fisheries experts in order to avoid enforcing a "hollow discipline."

Under S&DT, as outlined in the text, LDCs would be fully exempt from any disciplines prohibiting subsidies. Non-LDC developing countries would also 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." Developing countries would be able to subsidise port infrastructure and provide income and price supports as well, so long as functional fishery management systems that aim to conserve fish stocks were in place and in line with internationally recognised best practices.

Pulling in revenues

The ACP group of states, along with the SVEs and Pacific islands, all voiced general happiness with the treatment of access fees in the Chair's text. Delegates have called this approval a real achievement on the part of the Chair who, as one delegate put it, has "taken the sting out of one of the most contentious issues."

'Access fees' -- that is, payments that a government offers a coastal state in exchange for the right to fish in that nation's waters -- have been another crucial issue for some developing countries, particularly small and vulnerable coastal countries. In the Chair's text, government-to-government subsidies are not considered subsidies and are thus non-actionable. However, the transfer of fishing rights purchased by one government from another to third parties such as industry -- potentially at cut-rate prices that do not reflect what the government paid for them -- would be prohibited if deemed to have the effect of a subsidy.

Speaking on behalf of the Pacific island countries, the Solomon Islands recalled the importance of access fees as a source of revenue for many coastal states, while expressing support for the provisions in the Chair's text.

Ambiguities abound

Delegates raised additional questions last week about possible loopholes that would permit circumvention of disciplines, as well as about unclear language, and requirements for notification and transparency.

A provision prohibiting subsidies for harvesting "unequivocally overfished stocks" (Article 1.2) provoked debates over wording and enforceability. Some delegates called this "vague and obscure." Member states opposed to broad prohibitions were reportedly finding the wording of this clause particularly difficult to digest. As one delegate commented, it is "extremely cleverly drafted." Another prickly point included in the Chair's text is the issue of international management systems. As per the draft, some subsidies would be permissible for all countries provided that they maintain an international-standard fisheries management system. These include payments that do not increase fishing capacity, with objectives such as improving safety, reducing environmental impacts, and retraining fisheries sector workers for alternate 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." In order to determine the impact of certain fisheries activities, scientific assessments of fisheries resources would be required. The results of these studies would then be subject to a peer review by the UN Food and Agriculture Organisation (FAO).

Reactions to the FAO's role in fisheries resource management were mixed during the recent talks. The FAO itself, sources have confirmed, was notified prior to the Chair circulating the initial draft at the end of November, and expressed enthusiasm about its proposed role. Delegates presume that the FAO would contribute to the negotiations in the coming months.

Advocates embrace the text

Marine advocates and environmental conservationists have demonstrated support of Chair Valles Games' treatment of fisheries subsidies in his text.

WWF released a statement calling the draft "a serious and constructive text" and "a solid basis for negotiations to proceed." While they recognised that further discussions are necessary to guarantee that provisions are enforceable and effective, they applauded the chair for including a strong and comprehensive list of prohibited subsidies and for striking a strong balance. The draft, they added, "should require only adjustments and not wholesale revisions to achieve success."

Oceana, a Washington D.C.-based marine advocacy organisation that has been heavily advocating for a broad ban on fisheries subsidies in the WTO negotiations, likewise welcomed the 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."

The next lap

Despite delegates' belief that the text is a good basis on which to proceed, the Chair himself has acknowledged his own uncertainty about how the discussions would move forward. Members are expected to continue to reflect on their positions and the Chair's text through the New Year. The next meeting of the rules group on fisheries subsidies is tentatively scheduled for the last week in January.

ICTSD reporting.