TWN Info Service on WTO and Trade Issues (May17/05)
5 May 2017
Third World Network

New proposal on fisheries to undermine S&DT flexibilities
Published in SUNS #8455 dated 4 May 2017

Geneva, 3 May (D. Ravi Kanth) -- Attempts to undermine special and differential flexibilities for developing countries are being considered as part of the disciplines for prohibiting fisheries subsidies that are being promoted as a major deliverable for the World Trade Organization's eleventh ministerial meeting in Buenos Aires later this year, rules negotiators told SUNS.

In a 7-page joint proposal, the three countries - New Zealand, Iceland, and Pakistan - used the United Nations Sustainable Development Goal target 14.6 as a basis for finalizing comprehensive disciplines for prohibiting fisheries subsidies.

"By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation," the sponsors argued.

A comprehensive agreement on disciplines for prohibiting fisheries subsidies, according to the sponsors, is a sine qua non at the eleventh ministerial meeting ostensibly to address "the marine environment and millions of livelihoods that depend on healthy fish stocks," as well as for the "WTO itself."

"Globalisation and the multilateral trading system are being questioned more now than perhaps at any time in recent history," the sponsors argued in their proposal, which is at the core of the US trade agenda.

Without itself tabling any concrete proposal on fisheries subsidies during the recent phase of accelerated talks, the US nearly achieved its goals by getting proposals tabled through several South American and other countries.

The US is prepared to address fisheries subsidies in the Doha rules negotiations, but not improvements needed in trade remedies such as anti-dumping and subsidies and countervailing measures, several negotiators said.

The sponsors include Pakistan that houses millions of people living below the poverty line and facing a financial breakdown.

Surprisingly, they have ignored another major SDG goal, namely, "End hunger, achieve food security and improved nutrition, and promote sustainable agriculture."

This SDG Goal 2 calls on countries to end hunger by 2030 and promote food security by doubling the agricultural productivity and the incomes of small-scale food producers, particularly women, indigenous family farmers and equal access to land.

More important, the SDG Goal 2 also called for "correct[ing] and preventing trade restrictions and distortions in world agricultural markets by the parallel elimination of all forms of agricultural export subsidies and all export measures with equivalent effect, in accordance with the mandate of the Doha Development Agenda."

For inexplicable reasons, the WTO director-general Roberto Azevedo and a group of industrialized and developing countries have ensured that the SDG target 14.6 trumped over the SDG Goal 2 during the current phase of preparations for the Buenos Aires meeting, said several trade envoys from African, Asian, and South American countries.

"The Nairobi decision for eliminating export subsidies without eliminating the export credits and food aid provided by the US is meaningless," said a trade envoy who asked not to be quoted.

Against this backdrop, the three sponsors on prohibited fisheries subsidies have listed several elements such as "effective prohibitions", "appropriate and effective special and differential treatment", "transitional arrangements", "standstill provision[s]", "anti-circumvention" and "transparency, monitoring and review provisions."

The proposed disciplines on "prohibitions" include:

(i) subsidies provided to illegal, unreported and unregulated (IUU) fishing;

(ii) subsidies to fishing activities where stocks are not assessed or are assessed as being overfished; and

(iii) subsidies provided to fishing activities on the high seas and in the waters of another Member.

These three prohibitions, the proponents argued, "would apply to all specific subsidies of all Members" and "Members would not be able to introduce any new subsidies in these areas or maintain existing subsidies beyond a specified limited transitional period."

Further, "all specific fisheries subsidies not subject to new prohibitions would remain actionable under the Agreement on Subsidies and Countervailing Measures (SCM)."

The three sponsors justified their proposed prohibitions for addressing the "sustainability" problem.

Without naming China, which is being portrayed as the major provider of subsidies for IUU fishing, the sponsors argued that "the IUU related prohibitions draw on submissions to date, including those of the EU and Japan which make the case for a subsidy prohibition based on existing IUU vessel lists in the same manner as port entry is denied to IUU vessels under the FAO Port State Measures Agreement."

Further, "states already have obligations to assess stocks and ensure they are at or above sustainable levels, therefore such a prohibition would support these existing commitments and would not require any giving up of policy space," the sponsors argued, without explaining how the policy space would be maintained.

As regards the "Special and Differential Treatment (S&DT) needs", the three proponents said S&DT has "to be proportional to, and appropriate for, the disciplines and not undermine their effectiveness."

"The three proposed prohibitions should apply equally to all subsidies from all Members," the sponsors argued, maintaining that "it would not be appropriate to accord S&DT on these prohibitions."

"S&DT for developing Members, in particular for Least Developed Countries (LDCs), may however be appropriate in the context of additional prohibitions, the transparency provisions or the transitional arrangements, including targeted capacity building," the sponsors suggested.

For countries that have these subsidies, "a limited transitional arrangement is proposed to provide Members until 2020 to bring their programmes into conformity with the new prohibitions," the sponsors maintained.

But, for China which is being targeted most in the proposed disciplines, the proponents said "in the case of prohibited subsidies provided to IUU fishing, it would seem inappropriate to provide a transitional period."

Using SDG Target 14.6 that includes a standstill commitment, the sponsors said, "unless comprehensive prohibitions are established on all forms of fisheries subsidies which contribute to overcapacity and overfishing it would seem prudent to include a standstill commitment using language similar to that adopted at Rio+20 (to refrain from introducing new subsidies that contribute to overcapacity and overfishing or from extending or enhancing existing ones) which was reaffirmed by the 2030 Agenda (paragraph 11)."

"It is therefore proposed to establish and monitor a standstill commitment in the WTO that covers all subsidies which contribute to overcapacity and overfishing not covered by the prohibitions," the proponents maintained.

The proposed disciplines include language on anti-circumvention.

It says "an additional discipline would be necessary to clarify that the new disciplines are attributable to the Member conferring them, regardless of recipient nationality, vessel flag, or the rule of origin" so to ensure that there is no circumvention.

In a room document circulated on 2 May, the ACP (African, Caribbean, and Pacific) group sought to know "what forms and types of S&DT are developed country members willing to provide to developing and least developed countries in coastal and island states to implement disciplines and comply with the prohibitions."

The ACP also questioned "a link or conditionality [that] has been placed on developing countries' access to and having effective fish management regimes and plans in place."

The ACP group asked "is this a price or cost to be paid for S&DT and are developed countries willing to commit to provide technical assistance and capacity building including financial assistance to enable developing countries and LDCs to manage and effectively monitor and regulate their fishing resources?"

It also sought to know whether there should be a moratorium on disputes against developing countries and LDCs for a period of the transition period.

On behalf of the least-developed countries, Cambodia raised several issues concerning "artisanal and small scale fisheries", especially whether there will be a carveout, and flexibility for disciplines to allow subsidies exclusively for domestic fish stocks occurring only in economic exclusive zones.

In short, efforts to finalize a standalone agreement on fisheries subsidies are being stepped up while ignoring other issues in the Doha rules dossier, several trade envoys told SUNS. +