MEMBERS REMAIN DIVIDED ON FISHERIES DRAFT TEXT

WTO Members remain divided on how to structure future multilateral rules on fisheries subsidy spending, notably on the conditions under which developing countries should be allowed to provide significant amounts of support to their fisheries sectors.

During the 26-27 March session of the Negotiating Group on Rules, Members resumed discussions on a draft fisheries subsidies agreement text released by Chair Ambassador Guillermo Valles Games (Uruguay) last November.

As during the first round of talks in January, controversy centred on special and differential treatment (S&DT) for developing countries, and the text's requirements for all countries to put in place fisheries management systems in order to be allowed to provide certain types of payments to their fisheries sectors.

The text trade diplomats are discussing would ban a wide-range of fisheries subsidy payments, especially those that boost fishing capacity or create other incentives to fish. While several Members and conservation groups such as Oceana have welcomed the text as a valuable move towards cutting payments they blame for promoting wide-scale depletion of marine fish stocks, countries including Japan, the EU, and Taiwan have argued that the prohibitions go too far.

Some subsidies are permitted, according to the draft, but these must be linked to an international-standard fisheries management system. Developing countries would be allowed to provide some otherwise-banned subsidies under specific circumstances, so long as they filled a range of conservation requirements, including fishery management systems that aim to conserve fish stocks. India and a number of other developing countries have argued that these requirements are so stringent that they render the exceptions unusable. Least-developed countries would be fully exempt from disciplines on fisheries subsidy spending.

SVEs ask for exemptions

Last week, Barbados, Cuba, El Salvador, Fiji, Honduras, Mauritius, Papua New Guinea and Tonga proposed exempting the group of small and vulnerable economies (SVEs) from the disciplines normally prohibiting subsidies that support operating costs such as fuel, ice, bait, and personnel, as well as in- or near-port processing activities, arguing that "these are exactly the forms of government assistance which SVEs could provide to their fishers." It also called for boats up to 25 metres in length to be eligible for such payments. The text's current exception for small scale fishermen in all developing countries extends to boats less than 10 metres in length (along with, of course, an adequate fisheries management system). In defence of their demands, the group argued that SVEs' share of the global marine fish catch was less than 0.72 percent of the world total, and thus, they had "little or no impact on overfishing and overcapacity."

A number of members supported the SVEs' proposal, including India, the Dominican Republic, Turkey, Korea, Japan, Dominica and Brazil.
In February, India and the group of African, Caribbean, and Pacific (ACP) countries jointly called for relaxing the text's disciplines on governmental support to artisanal and small-scale fishing, arguing that this was essential for poverty reduction efforts.

Norwegian proposal on fisheries management

Also during last week's meeting of the rules group, Norway introduced an informal 'room document' proposing a series of amendments to the draft text's article on fisheries management (Article V), including alternative legal language. Norway has said that Valles Games' text is too restrictive, and has called for allowing developed countries to subsidise small-scale fishermen (an option currently available only to developing nations; see BRIDGES Weekly, 6 February 2008).

Noting that "the issue of fisheries management as a condition for subsidisation has received considerable interest during the negotiations," the Norwegian proposal purported to clarify Member's obligations to ensure that permitted subsidisation does not promote overfishing. Specifically, it distinguished between fisheries management 'systems' as the legal and institutional framework to promote conservation and sustainable use, and fisheries management 'plans' as tools directly targeted at the management of particular stocks or fisheries. It said that Members should have both an "over-arching" framework and stock-specific plans for each fishery that is subsidised, so as to ensure that subsidies to not lead to overfishing.

Notably, Norway would delete a provision in the chair's text that would require countries' fisheries management systems to undergo a peer review at the UN Food and Agriculture Organisation (FAO). Instead, Members would simply notify information about their respective systems to the FAO or, if they did not belong to the UN, to another relevant international organisation.

Several developing as well as developed country delegations said that Norway's proposed requirement for fisheries management plans for every fish stock would be burdensome and costly, and that it would not be feasible for developing countries. India said that the Norwegian proposal would be even more burdensome than the chair's text. The EU, US and New Zealand also reacted with hesitation to the proposal, sources reported.

However, a number of developing countries supported Norway's deletion of the FAO peer review provision. In general, countries have been wary of a WTO requirement for an external assessment of their fisheries management systems. Developing countries have expressed concerns about the additional processes and delays it would entail. Taiwan - which is not a member of the UN - had taken particular objection to the chair's text's involvement of another international organisation, one to which not all WTO Members belonged.

Sources said that Valles Games sought to clarify his intentions for the peer review mechanism; specifically, he wanted it to resemble the existing Trade Policy Review mechanism in the WTO.

The EU posited that the TPR mechanism was not a system effective enough to be emulated. It maintained its support for the peer review idea, although it said that Chinese Taipei's concern should be dealt with. The EU, with the support of Japan and Senegal, proposed setting up a "WTO equivalent" body in order to ensure strong enforcement mechanisms on fisheries subsidies. It is not clear, however, whether such a body would be considered to be part of the WTO or outside of it.

In addition to discussions on the new paper, Members continued their article-by-article review of Valles Games' text, which they had not been able to complete at the rules group's last session.

Delegations including Brazil, El Salvador, Thailand, Australia, Mexico, New Zealand and the US, expressed support for the provisions in Valles Games' text emphasising that permitted subsidies must not be used in ways that result in the depletion of fish stocks that either straddle different countries' territorial waters or are highly migratory. Brazil and Turkey stressed the need to address payments that affect fish stocks that migrate from one Member's territorial waters to another's.

While the chair's text would require Members that choose to provide permitted subsidies to notify them before actually making payments (Article VI), many countries, including China, South Africa, and the US argued that notification should be 'ex post', i.e., after the subsidies are granted. Thailand indicated that prior notification and evaluation would be time-consuming. China shared this view, and South Africa said it preferred notification of the measure after implementation. A number of developing countries expressed concern that the administrative burden might be too much for them. The EU said it supported the chair's text, but wanted stronger surveillance provisions.

As for the text's provisions for dispute settlement, many delegations objected to the notion that any subsidies not notified would be deemed prohibited - and thus vulnerable to litigation and potentially even trade sanctions. These delegations included Brazil, China, Turkey, Fiji, South Africa and Canada. South Africa reiterated the concern that full notification would be beyond the capacity of developing countries; India pointed to the difficulties of collating information from the entire range of national and local government bodies.

At the conclusion of the meeting, Valles Games expressed satisfaction that Members had finished reading the text, but said he remained concerned that they continued to diverge on approaches to disciplining fisheries subsidies. He urged delegations to start negotiating in earnest, and suggested that he might follow the lead of other negotiating committee chairs and start holding more informal consultations in an attempt to find paths towards consensus.

The rules group's next meeting is scheduled for the week of 21 April.

ICTSD reporting.