Fisheries Negotiations at the WTO: Small Bait for Large Catch

Abstract

Fisheries subsidies negotiations have been a protracted issue ever since the launch of the Doha Development Agenda in 2001. Members of the World Trade Organization (WTO) have intensified their efforts to conclude the negotiations by the 12th WTO Ministerial Conference to be held in 2021. At present, significant divergences exist between developed and developing countries in the WTO on the formulation of disciplines on fisheries subsidies. This chapter will discuss the key contentious issues of the various fisheries subsidies proposals, including the recent Chair’s text of July 2020. The chapter discusses the major imbalances, including the lack of policy space for development, the imposition of stringent management measures, compromising the rights of developing countries in UNCLOS and the low ambition of special and differential treatment. The chapter further discusses how the existing proposals benefit the market access agenda of the developed economies. It also cautions that a similar scenario of the imbalance experienced by developing countries in the Agreement on Agriculture will be repeated in the existing fisheries subsidies negotiations if the contentious issues remain unresolved in the final agreement. The paper also provides a strategic way forward in relation to a balanced special and differential treatment for member’s consideration.

Appendices

Annex 2.1 List of Fisheries Access Agreement for the European Union with Coastal States

Country	Expiry date	Type	Total EU contribution per year	Sectorial support per year
Cabo Verde	Protocol provisionally entered into force on 20 May 2019
Comoros	Protocol expired on 31.12.2016.  Agreement denounced
Cook Islands	13.10.2020	Tuna	385 000/350 000 €	350 000 €
Côte d'Ivoire	31.7.2024	Tuna	682 000 €	352 000 € (2yrs) - 407 000 €
Gabon	Protocol expired on 23.07.2016
Greenland	31.12.2020	Mixed	16 099 978 €	2 931 000 €
Guinea- Bissau	New protocol being negotiated, legislative procedures underway
Kiribati	Protocol expired on 15.09.2015
Liberia	8.12.2020	Tuna	715 000 €/ 650 000 €/ 585 000	357 500/ 325 000/ 292 500
Madagascar	Protocol expired on 31.12.2018
Mauritania	15.11.2019	Mixed	61 625 000 €	4 125 000 €
Mauritius	07.12.2021	Tuna	575 000 €	220 000 €
Micronesia	Protocol expired on 24.02.2010
Morocco	New Agreement and its implementing Protocol entered into force on 18 July 2019
Mozambique	Protocol expired on 31.01.2015
São Tomé and Principe	18.12.2024	Tuna	840 000 €	440 000 €
Senegal	19.11.2019	Tuna (+ hake component)	1 808 000/1 668 000 €	750 000 €
Seychelles	17.1.2020	Tuna	5 350 000 € in 2014To 5 000 000 in 2019	2 600 000 €
Solomon Islands	Protocol expired on 8.10.2012
The Gambia	30.7.2025	Tuna (+ hake component)	550 000 €	275 000 €
Equatorial Guinea	Protocol expired on 30.06.2001

Country	Period
Faeroe Islands	2006–2012
Norway	2009–2015

1. Source European Commission

Northern agreements

Annex 2.2 Summary of WTO Fisheries Subsidies Negotiation Proposals

Year	Document	Context
2017	TN/RL/GEN/181/Rev.1 European Union	WTO disciplines on fisheries subsidies linked to SDG 14.4, disciplines on overcapacity and conditioning special and differential treatment on stringent management measures
2017	TN/RL/GEN/187/Rev.2 Argentina, Columbia, Costa Rica, Panama, Peru, and Uruguay	Provision on IUU, overfishing, overcapacity, transparency, and technical cooperation. Similar to the EU proposal the provision on overcapacity provides flexibility to already existing capacity holders. Mention of overfishing raising issues of fish stock assessment and linkages to fisheries management. The Transparency mechanism is beyond the existing requirements of the ASCM agreement, however, the focus on subsidies disciplines are only confined to specific subsidies
2017	TN/RL/GEN/189/Rev.1 Indonesia	Disciplines on Prohibitions and SDT Focuses on specific subsidies in the scope of disciplines however application limited to capture fisheries and excludes artisanal fisheries. However, has stringent conditions for developing countries to meet the special and differential treatment provisions by linking these to management measures of fish stock assessment and management plans
2017	TN/RL/GEN/191 Norway	Provision on the prohibition of subsidies for vessels engaged in IUU
2017	TN/RL/GEN/192 Africa, Caribbean, and Pacific (ACP)	The ACP proposal focuses on article 1 of the ASCM on specific subsidies. It, however, excludes inland fisheries, aquaculture and recreational fishing and claims for disputed waters. Additional exclusions include subsidies for disaster relief or safety, research and development, the sustainability of fish stocks, the acquisition and installation of equipment for vessels and crew safety, adoption of technology and improving compliance with fisheries management and climate change. The ACP proposal considers prohibited subsidies for IUU fishing. For overfishing and overcapacity, the prohibition is applied to large scale industrial fishing and fishing activity outside the EEZ. Thus, retaining members right under UNCLOS. For developing countries that hold fisheries resources, this is useful for it to develop its fisheries sector. On the other hand, for the developed countries that have maintained vessel capacity, such subsidies are to be prohibited. As such, the proposal aims to create a balance On the SDT for the ACP proposal, the disciplines on overfishing and overcapacity do not apply to LDCs. There is also a transitional period granted for small scale fisheries of developing countries to improve its reporting and regulation requirements. Moreover, the SDT proposal also provides for targeted technical assistance and capacity building to developing countries including LDCs and SVEs in addressing institutional and financial difficulties as well as assistance to establish a reporting mechanism and regulation as well assistance to conduct stock assessments, monitoring control and surveillance of fish stock and research and development On Transparency provisions, the ACP proposal on the notification is in accordance with GATT Article XVI of GATT 1994 and Article 25 of the ASCM. Additionally, the notification provision is specific to mentioning that confidential information, including confidential business information, should not be required for notification
2017	TN/RL/GEN/193 LDC	The scope of the LDC proposal is similar to the ACP. It has excluded inland fisheries and aquaculture but provided for specific definitions for both inland fisheries and aquaculture which are limiting. The LDC proposal includes prohibition for capacity enhancing subsidies for vessel or operators engaged in illegal fish transhipment at sea; capacity enhancing subsidies supporting large scale fishing activities outside of the subsidizing member’s maritime jurisdiction. Subsidies for acquisition, construction, repair, renewal, renovation, modernization of fishing vessels, or any equipment that increases the ability of fishing vessels to fish and find fish. Subsidies for operating costs including licence fees or similar charges, fuel, ice, bait, personnel, social charges, insurance and at sea support, or operating losses of such vessels or activities The LDC proposal is imposing on developing countries and includes disciplines on small scale fisheries which will affect a large number of low income and poor resourced fisherman. However, the LDC proposal has carved LDCs from undertaking such commitments. On developing countries, the LDC proposal has linked it to article 61 and article 62 commitments of the UNCLOS as a condition for granting of subsidies but has not balanced these with Article 202 on technical assistance to developing countries On notification and transparency requirements the LDC proposal has carved obligation out for LDCS but is imposing notification requirements for article 25.3 of the ASCM which includes management measures on developing and developing countries alike and imposing limited flexibility to developing countries
2017	TN/RL/GEN/195 China	China’s proposal focused on the prohibition of IUU fishing In the Preamble China has made a note of SDG 17.10, 14.6, the Doha and Hong Kong Ministerial Declaration and the IPOA-IUU The subsidies disciplines apply to the member country granting it and not necessarily the flag of the vessel The determination of IUU by flag member to be made in accordance with its domestic laws and regulations. In the event the flag state and the subsidizing states being different, countries would need to cooperate The determination of the IUU can be made by members through due procedure or by RFMO lists The investigation for IUU fishing activities to be undertaken jointly by the flag member with the relevant RFMO The procedure for the determination of IUU is clear and something which is applied in practice. The element of cooperation between the RFMOs is, however, vital for it to work The SDT provision for the China proposal is not strong. The IUU measures cover all the fisheries, including small scale, artisanal and subsistence farming. Members are only provided a transitional period to adhere to the measures. This may be difficult for developing countries with small scale fisheries that would require further targeted assistance aside from transition periods alone
2017	TN/RL/GEN/196 Philippines	The proposals call for prohibition of subsidies in disputed waters. This is an issue that should be solved outside the WTO
2019	TN/RL/GEN/197/Rev.2 Argentina, Australia, USA and Uruguay Argentina, Australia, USA, and Uruguay	These countries have submitted a proposal on a cap-based approach to certain fisheries subsidies negotiations. This is similar to the subsidies reduction commitments of the Agreement on Agriculture. A default cap of 50 million dollars would work in favour of developed countries. This is similar to the scenario of the Aggregate Measurement of Support which developed countries have scheduled in the agriculture subsidies. Similarly, in fisheries, most developed countries already have vessel capacity and have shifted their subsidies to non-specific. As such, providing a cap of 50 million will only benefit these developed countries further. Furthermore, looking into the modalities, members would only be required to provide up to date information on subsidies cap excluding the government expenditure on fisheries management and enforcement. The developed countries are already providing huge amounts of such subsidies gaining further flexibility by continuing to provide such subsidies. On the other hand, the developing countries including the LDCs though own major fisheries resources are yet to develop their sector and most do not have the capacity to provide such subsidies. In other words, an imbalance in the market is created, providing an advantage to developed countries. The proposal provides further division of countries into different tier for reduction of specific subsidies. There are 26 WTO members in tier 1 which include China, Indonesia, EU, USA, Russia, Peru, India, Japan, Vietnam, Norway, Philippines, Chile, Malaysia, Korea, Morocco, Mexico, Thailand, Canada, Bangladesh, and South Africa The marine capture production is not a good indicator alone to determine the subsidies cap. In approaching such measures, the developed countries are provided more flexibility then developing and least developed economies. As previously discussed, the developed countries are already providing non-specific subsidies, whereas developing countries do not have the capacity to provide fisheries subsidies. The developed countries under the cap-based approach will take minimum to no commitments at all, whereas the developing countries will commit to deeper cuts and be challenged more on socio-economics The Tier 2 countries for subsidies reduction contain a total of 64 countries which include a mix of developed, developing and least developed countries. These include Namibia, Brazil, Angola, Sri Lanka, Senegal, New Zealand, Nigeria, Pakistan, Papua New Guinea, Ghana, Cameroon, Australia, Fiji, and Kenya among others It again provides flexibility to developed countries. For New Zealand, as discussed earlier, it has already eliminated its fisheries subsidies and has undertaken the domestic sector reforms. Historically, New Zealand had provided specific subsidies. Reductions under tier 2 would again burden the developing countries to undertake deeper cuts. On the one hand, subsidies in the interest of developed countries are already carved out, and these countries can take a subsidies cap of 50million annually. On the other hand, developing and LDCs, due to resource capacities, would not be investing such huge amounts per year in the fisheries sector The technical assistance in this proposal is also conditional on the reduction of subsidies by tier 2 countries. The developed countries have already phased out specific subsidies and should it take a 50 million cap on subsidies then it would benefit them further. On the contrary, developing and LDCs may not be in a position to reduce subsidies and thus would not be able to benefit from technical assistance
		On notification, the burden of members notification is conditional to members who may want to benefit from the subsidies cap. These include all countries. However, the developed countries have the capacity to notify and benefit as opposed to developing countries
2019	TN/RL/GEN/198 Canada	This is a discussion paper on whether DSCU would need to be reviewed or not and how environmental recourse would be treated given the scope of the WTO agreement. Given that the WTO has a mandate on trade issues. The DSU also does not have the capacity to undertaken scientific evidence and management measures. For small economies, it will be even more challenging to invoke a claim given their capacity constraints
2020	TN/RL/GEN/200/Rev.1 India	India has submitted an SDT proposal In relation to IUU, for unreported and unregulated fishing India has carved out coastal waters which includes small scale fisheries and also for EEZ it as excluded small scale commercial fisheries which is important for food security and livelihood for low income and poor resourced fishermen. There is alignment to the ACP proposal of 2017 to some extent In relation to overfished stock, it has carved out territorial waters. However, the proposal has compromised the UNCLOS rights of countries in their EEZ. The phasing out of subsidies with a transition period for 2 years may seem feasible for India, but for the rest of the small economies, it may not be feasible. Furthermore, the small economies would require capacity building to be able to undertake stock assessment On overfishing and overcapacity, LDCs are exempted from prohibiting subsidies. The subsidies prohibition in relation to overfishing and overcapacity also does not apply to fishing and fishing-related activities at sea and in their territorial waters. There are four criteria which a developing country must meet in order to prohibit subsidies in relation to overfishing and overcapacity. These include: (i) their GNI per capita crosses US$ 50003 (based on constant $2010) for three consecutive years; (ii) their individual share exceeds 2% of the annual global marine capture fish production as per most recent published FAO data; (iii) they engage in distant water fishing; (iv) the contribution from Agriculture, Forestry and Fishing in their national GDP5 is less than 10%for three consecutive years

1. Source Based on various proposals submitted by the members