DG queers pitch on partial outcome on subsidized IUU vessels

The WTO Director-General stepped into the fray in a bid to nudge member states towards a partial outcome at MC11 on addressing subsidies contributing to illegal, unreported and unregulated (IUU) fishing.

by D. Ravi Kanth

GENEVA (4 DEC): WTO Director-General Roberto Azevedo on 1 December queered the pitch for a partial outcome at MC11 to prohibit subsidies for vessels contributing to illegal, unreported and unregulated (IUU) fishing, several trade envoys told the South-North Development Monitor (SUNS).

Even though there is no consensus on a partial outcome for IUU subsidies, Azevedo held a heads-of-delegation (HoD) meeting on 1 December and followed it up with one-on-one meetings with countries that are objecting to a deliverable at this juncture without having clarity on the remaining issues, particularly special and differential flexibilities.

Many countries said they are ready to live with a best-endeavour outcome on IUU subsidies while continuing negotiations on all the issues, especially special and differential flexibilities, after the Buenos Aires meeting, said trade envoys who asked not to be quoted.

Prior to the HoD meeting, the chair of the Doha rules negotiations, Ambassador Wayne McCook of Jamaica, had concluded week-long talks during which sharp differences emerged among key members. The rules negotiating group meet closed on 30 November with members insisting that their specific concerns on language should be inserted in the draft ministerial decision on fisheries subsidies.

Circulated late on 30 November in time for the HoD meeting, the draft decision contained many instances of bracketed text which indicated lack of consensus.

Members’ views

India sought to insert in the preamble specific language that referenced the Doha Work Programme (DWP) and the 2005 Hong Kong Ministerial Declaration. This was supported by a large number of developing countries, including the members of the Africa, Caribbean and Pacific (ACP) Group and least-developed countries.

However, the United States made clear that it will not accept any reference to the DWP or the Hong Kong Ministerial Declaration, following which the text was put in square brackets, said participants after the meeting.

The European Union inserted language for linking the outcome on fisheries subsidies to the WTO Agreement on Subsidies and Countervailing Measures (ASCM) in which the EU had already made proposals for enhanced transparency and notification requirements. It insisted that any agreement on fisheries subsidies would be part of the ASCM.

The EU-proposed text in paragraph 4 of the draft ministerial decision said that “Members re-commit to implementation of existing notification obligations under Article 25.3 of the ASCM thus strengthening transparency with respect to fisheries subsidies.

“[Members further commit to work towards additional transparency in respect of fisheries subsidies [taking into consideration the capacity constraints of developing countries including LDCs].]”

India, the ACP countries and other members opposed the EU’s linking the agreement on fisheries subsidies to the ASCM on grounds that the mandate for eliminating fisheries subsidies does not refer to the ASCM.

The large majority of countries said the proposed agreement on fisheries subsides is a standalone agreement and free from the ASCM, said an ACP participant.

Many countries said that they can live with paragraph 1 of the draft decision which says: “Building on the progress made since the 10th Ministerial Conference as reflected in documents TN/RL/W/274/Rev.1,RD/TN/RL/ 29/Rev.3, Members agree to continue to engage constructively in the fisheries subsidies negotiations, [with a view to] adopting, by the Ministerial Conference in 2019, an agreement on comprehensive and effective disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU-fishing recognizing that appropriate and effective special and differential treatment for developing and least developed Members should be an integral part of these negotiations.”

The reason many countries insisted on paragraph 1 is that “it references two most important documents, which are essentially a synthesis of the members’ proposals and language, reflecting the state of negotiations as to where we [members] are”, the participant said.

But some countries were ready to accept the chair’s initial formulation which referred to the W/274 document that only recognizes the core disciplines of IUU, overfished stocks, overfishing, transparency, capacity-building, and special and differential treatment.

“The document W/274 does not contain the definitions, various other elements, including scope, and it became important for developing countries to reference the outcome to both RL/29 and W/274, as they have to be read together for members to continue further work,” the participant said. “If we had only reference to one document and not the other, even the partial outcome would not be possible.”

Therefore, most members said they could live with paragraph 1. And many countries, particularly the ACP members, said they can accept the discipline on IUU if it includes the flexibilities, particularly special and differential treatment, said another participant.

“The problem really is that for all of us [the ACP members] to implement the disciplines on IUU and have it on our national rules will be difficult because we don’t have capacity,” said another ACP member.

“It also ignores our demand for special and differential treatment in respect not of illegal but also unreported and unregulated activities – we wanted a specific carve-out just in terms of implementation period for longer time, while the proposal is that we implement IUU virtually immediately, and this is an SDG-minus outcome,” the participant added.

Members want the necessary safeguards to implement the agreement, the participant said. “If the decision is implemented then we have to implement it immediately – and what happens to all the transition periods we require?”

The EU and New Zealand on behalf of the Friends of Fish coalition insisted on language that overfished stocks are not negatively affected.

Many countries opposed the EU’s formulation on the issue of negatively affected stocks, the participant said.

DG’s question

At the HoD meeting, Azevedo posed the question: “Do you really want a process outcome that would say we continue to work or do you want to attach to that something more, namely a partial deliverable?”

According to trade envoys present at the meeting, Azevedo said there are political questions in paragraph 2 of the draft ministerial decision on IUU and overfished stocks, and as a result if members are not able to agree on a mandatory outcome, then it is only a best-endeavour outcome.

The Director-General said there is less of a problem with an outcome on IUU than on overfished stocks. “If you can’t finalize a hard, binding outcome on both of them, then prioritize on IUU,” he suggested.

He said many delegations are going to continue working towards such an outcome only on IUU, trade envoys said.

The US said while it is interested in a comprehensive outcome, there is no time now to negotiate even an outcome on IUU subsidies. It said it cannot accept a low-ambition outcome as it would affect the overall agreement. The US demanded only an outcome on the transparency paragraph.

New Zealand said it still wants an agreement, suggesting that members conclude the work on the legal text by next year.

The EU supported New Zealand and also referenced the outcome to SDG target 14.6.

The ACP Group said they could work on paragraph 2 only if there are safeguards in respect of special and differential treatment and so forth.

India said it cannot support an outcome on paragraph 1 and is not ready to accept paragraph 2.

The Director-General held one-on-one meetings with key members but it is not clear whether all the issues would be sorted out on 4 December.

In sum, Azevedo is taking an unusual interest in mobilizing support for an outcome on IUU subsidies while turning his back on other issues, particularly improving special and differential flexibilities as demanded by a large majority of countries, said trade envoys who asked not to be quoted. (SUNS8589)   

Third World Economics, Issue No. 651/652, 16 October – 15 November 2017, pp7-9