Members Call for Changes in Proposed Fisheries Rules

1 May 2008

WTO Members disagreed in April on the extent to which future multilateral rules on fisheries subsidies should include exceptions for payments to the small-scale fishing sector, as Canada and some other developed countries sought controversial exemptions for their own industry.

At the centre of the disagreement was a new informal proposal from Canada to allow both developed and developing countries to support small-scale fishing.

The paper called for adding a provision to the general exceptions set out in the draft agreement on fisheries subsidies released by the chair of the rules negotiations, Ambassador Guillermo Valles Galmés, in November 2007 (Bridges Year 11 No.7 page 10). That text would ban a wide-range of fisheries subsidy payments, especially those that boost fishing capacity or create other incentives to fish. It also contained a relatively narrow range of exceptions under which payments would be allowed if linked to effective fisheries management, with some special provisions for developing countries.

Under the Canadian proposal, the exception would be limited to fishing within a Member’s territorial waters, and payments would not exceed a to-be-negotiated ‘de minimis’ percentage of the average value of fish harvested in those waters for the three preceding years for which data is available. This new exception would allow governments to make ordinarily banned payments, such as those to fuel or other operating costs.

Canada noted that while discussions on support for small-scale fishing had focused on developing countries, it was a matter of concern for many developed countries as well. The chair’s text provided special and differential treatment for small-scale fishing in developing countries, but was silent on this issue with respect to rich nations, it said.

Japan, Korea, the EU and Taiwan expressed strong support for the Canadian proposal. Hong Kong agreed that support for small-scale fisheries should be allowed for all Members. Norway concurred that small-scale coastal fishing needed support, but was concerned with the scope of the Canadian paper. The US said that the proposal was premature.

New Zealand and Australia cautioned that the proposed exemption would open the door to a large carve-out for small-scale fishing subsidies, with Australia likening it “using a sledgehammer to kill a mouse.” In a similar vein, marine conservation group Oceana suggested that the proposal created “a hole that the entire European fishing fleet could drive through.”

Developing countries also opposed the Canadian proposal. Many argued that the small-scale fishing sector in developed countries did not perform the crucial subsistence function that it did in poor countries. Thailand, South Africa, Cuba and Turkey said that special and differential treatment for small-scale fisheries should be for developing countries alone.

Differences on Subsidies vs Management Resurge

Old differences resurfaced in discussions on fisheries management systems and the text’s requirement for a peer review process for them. While not disputing the importance of fisheries management, Argentina, Brazil, China and some other developing countries cautioned against overly stringent rules (see related article on page 12).

While Japan and Korea reiterated their long-held view that monitoring and management systems would control overfishing more effectively than prohibitions on subsidies, the EU suggested establishing a fisheries division in the WTO Secretariat, and publishing independent reports on Members’ fisheries management systems.

Some delegates said that an overemphasis on management instead of effective disciplines on fishing subsidies would be a step back from the chair’s text, as well as a departure from the core of Members’ pledges to discipline fisheries subsidies, including through the prohibition of certain payments that contribute to overcapacity and overfishing.

In contrast, many Members that had expressed concern about involving external institutions such as the FAO in reviewing their national or regional fisheries management systems said some of their concerns had been eased by the chair’s clarification that the reviews would not be carried out by scientific experts, but trade representatives, who could draw from expertise of organisations outside the WTO.

Developing Country Disciplines

India and Indonesia tabled a new proposal (TN/RL/GEN/155) that would remove a number of conditions attached in the current draft to special and differential treatment (STD) for developing countries. India complained as soon as the chair’s text was released in November some of that these requirements would render SDT unusable. The joint paper proposes, inter alia, that developing country subsidies for infrastructure development, as well as income and price support, should not be linked to an operational fisheries management system. It also calls for raising from 10 to 24 metres the maximum length of boats eligible for subsidies related to capital and operational costs.

Interim Rules Papers Issued

On 28 May, chair Valles Galmés released three ‘working documents’ describing the state of play in the rules negotiations – whether on fisheries, broader WTO subsidy disciplines, or antidumping. In a cover letter, the chair explained that he did not yet have a sufficient basis to issue a formal revision of his November 2007 draft legal text (Bridges Year 12 No.1 page 7) because he had received “no hints of possible middle ground approaches nor suggestions for possible compromises or tradeoffs.” Instead, as ‘an interim step forward’, the May 2008 working papers consolidate all proposals submitted in the rules negotiations so far, including those not reflected in the November text, as well as describe Members’ reactions to the original draft. Consultations will continue in order to find the ‘compromises and balance’ necessary for a revision that “by nature will have to describe a gradually emerging consensus.”

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