New texts in WTO “rules,” fisheries talks released amid broader uncertainty

9 November 2015

Submissions have been made in the context of multilateral talks governing trade rules in key areas, including around fisheries subsidies, which have been spotlighted in other processes such as the UN 2030 Sustainable Development Agenda. 

Several new texts have been circulated in recent weeks in the WTO’s Rules Negotiating Group, even as members of the global trade body tussle over the broader package of possible outcomes for its Tenth Ministerial Conference (MC10) due to be held in just over a month in Nairobi, Kenya.

The new inputs build on a relative resurgence of energy within the rules talks ahead of the 31 July deadline for WTO members to negotiate a “post-Bali work programme,” so called after the organisation’s 2013 ministerial conference held on the Indonesian archipelago, which was meant to chart a path forward for completing the long-running Doha Round.

The work programme deadline ultimately passed without an outcome, leaving WTO members with little time to determine what sort of outcome they aim to see for the Nairobi meet.

Within the context of the WTO Doha Round, the rules negotiations covers efforts at improving global trade disciplines relating to anti-dumping duties and procedures; subsidies and countervailing measures; provisions applying to regional trade agreements (RTAs); and the establishment of disciplines on fisheries subsidies.

Australia and Peru on 2 November and 20 October respectively released draft ministerial decisions on fisheries subsidies. Last month also saw the 28-nation EU put forward a technical paper following up on a proposal made in July for improvements in transparency across the four rules negotiating areas. A communication from Japan, meanwhile, was circulated on 22 October following up on a co-sponsored paper by 11 other WTO members published in June focused on boosting transparency and due process in anti-dumping investigation proceedings.  

In addition to the aforementioned documents, a communication from a group of six countries also in June had outlined elements for effective disciplines on fisheries subsidies to be included in the post-Bali work programme and for an outcome at MC10, followed by technical paper issued by New Zealand in July. (See BioRes, 8 July 2015)

Earlier this year the African, Caribbean, and Pacific (ACP) Group of countries tabled a series of elements for the work programme talks, specifying the need to reach agreement on a fisheries package in time for the December ministerial meet. (See BioRes, 26 March 2015)

The ACP Group has also now tabled a new proposal which builds on these elements, specifically for fisheries subsidies disciplines.

With WTO members now in the process of evaluating what sort of package may be delivered in time for December, sources say that the ongoing rules talks specifically are complicated by the lack of clarity with regard to the overall Nairobi outcomes and consequently how negotiations in the group should move forward in this context, despite the range of submissions now on the table.

Fisheries subsidies draft decisions

Peru’s draft decision on fisheries subsidies was reportedly discussed during an informal rules negotiating group meeting on Thursday 29 October, alongside conceptual discussion on some other topics, including around anti-dumping rules and transparency across the four rules areas.

Recalling a mandate agreed at a 2005 WTO ministerial meet held in Hong Kong, Peru’s proposal would see ministers decide to establish, within a predefined period, prohibitions on subsidies to fishing activities affecting overfished stocks and those provided to any vessel engaged in illegal, unreported, and unregulated (IUU) fishing. Experts note that the proposal appears to underline the prohibitions’ application with respect to vessel construction and fuel subsidies, in so far as they contribute to the two activities identified.

The proposal would also see WTO members provide information in key areas such as fuel subsidies where these may have an impact on fisheries; the status of fish stocks in the fishery for which the subsidy is provided; and total imports/exports per species.

Lima’s draft specifies consideration of appropriate and effective special and differential treatment (S&DT) of artisanal fisheries as a crucial issue for food security, local community development, and poverty reduction worldwide.

The Australian draft decision, meanwhile, recalls the UN’s recently adopted 2030 Agenda for Sustainable Development and its call for action on fisheries subsidies that contribute to overcapacity and overfishing. (See BioRes, 30 September 2015)

With due regard also to the WTO’s 2005 Hong Kong outcome, Canberra proposes enhanced transparency and improved monitoring in relation to notifications around subsidies relating to the fisheries sector, within the meaning of Articles 1.1 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) and in so far as these are “specific” to a particular enterprise or industry as stipulated in Article 2.

The proposal would also commit members to notifying in the WTO information on fisheries subsidies on top of that required in Article 25 of the SCM Agreement, including the programme name, its legal authority, level of assistance provided and purpose, fisheries affected by the programme, whether or not it relates to exports, fish stocks status, and any relevant conservation or management measures in place.

The WTO’s Committee on Subsidies and Countervailing Measures would then review this additional information. The proposal notes that the sharing of information would not prejudge a subsidy’s legal status under the General Agreement on Tariffs and Trade (GATT-1994) or the SCM Agreement.

Challenging, complex topic

Three key elements are common to several proposals tabled so far this year: the prohibition of subsidies provided to vessels engaged in IUU fishing; the prohibition of subsidies to fishing that targets overfished fished stocks; and improved transparency around fisheries subsidies.

While the various submissions underscore a willingness to act on fisheries subsidies in the WTO context, the different approaches also reflect some of the divergences between members on the issue.

The Australian proposal does not, for example, include language on prohibitions nor on S&DT. For some members, a Nairobi outcome on transparency measures alone will not be enough, and additional prohibitions or disciplines would be important.

At least two of the proposals tabled indicate that S&DT should not be applied to the limited prohibitions. S&DT has long-remained a tricky area to navigate in the fisheries subsidies talks. Fisheries provide a key source of income and nutrition in some of the world’s poorest communities and the 2005 Hong Kong mandate calls for particular attention to S&DT.

However, some members are hesitant to apply wide carve-outs from eventual fisheries subsidies disciplines for all developing countries, given that some large developing countries are among the world’s biggest fishers. “Developed” and “developing” country status is self-allocated in the WTO context and shifting geo-economic contexts have also served to heighten tensions around the issue.

Meanwhile, according to other sources reflecting on recent rules meetings, certain members have expressed concern that the additional WTO notification requirements could be too burdensome for developing economies. Some members also reportedly said that more details on the S&DT language put forward by Peru would be needed.

Beyond the question of prohibitions on subsidies to IUU fishing and activities targeting overfished stocks, as well as improved transparency, questions have also arisen with respect to how other harmful subsidies should be addressed at the WTO.

Submissions by several members refer to limits on fuel and construction subsidies. Experts have argued that removing fuel subsidies that benefit fishing would be important in order to help address issues such as IUU or overfishing by aligning incentives in the right direction.

However, some delegates have also warned that addressing fuel subsidies in the WTO might be difficult, in light of divisions on the topic during discussion of the rules chair’s text tabled in talks back in 2007 and the fact that comparing fuel subsidy levels is technically challenging.

EU transparency options

The EU’s follow-up paper on transparency broadly addresses the four rules negotiating areas and clarifies its various proposals outlined in July. On fisheries subsidies, the bloc suggests options for improving existing WTO subsidies notifications, including by drawing on ideas outlined by other members.

Additional elements for notification might be categories of subsidies by nature, management measures associated with the subsidies, fleet information, specifications on whether the subsidy might contribute to increasing fishing fleet capacity, or information on mechanisms in place to avoid subsidising vessels engaged in IUU fishing.

In relation to concerns around notification burden, meanwhile, the EU suggests adopting a “threshold” approach where only major fishing nations would be required to respect additional subsidies notifications requirements. Major fishing nations might, for example, be defined by those responsible for most marine fish capture. Alternatively, the EU suggests using a monetary threshold, and requiring notifications for subsidies that exceed this.

Other aspects of the EU paper include a proposal for improving general subsidies notifications and data by having WTO members that report on countervailing duty actions taken first check whether the subsidy measures at issue have been notified and, if not, provide “supplementary” notification information. “Countervailing,” in trade jargon, relates to the retaliatory duties a WTO member may apply if another member’s subsidised imports are hurting domestic producers.

The EU’s proposal also suggests taking up discussions on improving transparency related to members’ anti-dumping practices and on transparency related to RTAs based on two chair’s 2011 texts that reflected progress in the talks up to that point.  

Anti-dumping reform

Japan’s communication elaborates on, but is also without prejudice to, an earlier co-sponsored proposal for improving transparency and due process in relation to anti-dumping disciplines.

The paper includes series of reform proposals to the WTO’s existing Anti-Dumping (AD) Agreement rules covering among other areas, semi-annual reports; anti-dumping policy review mechanisms, disclosure and public notices, accountability, publication of legal instruments, access to non-confidential information, and calculation methodologies.

Anti-dumping investigations are used to determine if an exporter is selling products abroad at lower prices than at home or below the cost of production. Trade measures may be imposed if a link between dumping and material injury to the investigating authority’s domestic producers is found, among other conditions.

Russia also circulated a paper on 16 October on transparency in anti-dumping and countervailing duty proceedings, focused on the non-confidential presentation of information by interested parties to investigating authorities, seeking to provide similar standards around the interpretation of certain relevant articles within the AD and SCM Agreements.

Some members have resisted the AD proposals, arguing that these would require changes to existing WTO legal texts, which would be hard to secure before December. Other members expressed concern that the AD proposals do not cover aspects of improving WTO rules in this area that had previously been discussed in this context and that they would not support a cherry-picking of issues.

Meanwhile, certain members also remarked on the different nature of the proposals on AD and fisheries subsidies on the table, given that the former cover textual reform and the latter are proposed as ministerial declarations.

ICTSD reporting. 

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