"vertical" text on fisheries, assessment by Rules Chair
Published in SUNS #8553 dated 16 October 2017
Geneva, 13 Oct (Kanaga Raja) - The proponents of the seven textual
proposals, put forward in the ongoing negotiations on fisheries subsidies,
have submitted a new "non-paper" compiling these proposals.
The non-paper was provided at an informal meeting of the WTO Negotiating
Group on Rules on 12 October.
According to trade officials, the Chair of the Negotiating Group on
Rules, Ambassador Wayne McCook of Jamaica, told the meeting that this
text reflects the proponents' collective efforts to compile their
proposals into an "integrated, vertical document."
Employing the analogy of a handoff of the baton in a relay race, the
Chair remarked: "This leg requires careful attention and technique.
If you run the curve well, you will win the race."
According to the Chair, high-level officials attending the informal
ministerial meeting in Marrakesh earlier this week gave an impression
of having strong expectations of a fisheries subsidies outcome at
the upcoming 11th WTO Ministerial Conference in Buenos Aires (beginning
on 10 December).
Therefore, said the Chair, there is much pressure to see how the remaining
time can be used effectively to provide ministers with an outcome
document that they can decide upon.
The proponents behind the seven textual proposals on fisheries subsidies
tabled so far are New Zealand, Iceland and Pakistan (TN/RL/GEN186);
the European Union (TN/RL/GEN/181/Rev. 1); Indonesia (TN/RL/GEN/189/
Rev. 1); the African, Caribbean and Pacific (ACP) Group of countries
((TN/RL/GEN/192); Argentina, Colombia, Costa Rica, Panama, Peru and
Uruguay (TN/RL/GEN/187/Rev. 2); the Least Developed Countries (TN/RL/
GEN/193); and Norway (TN/RL/GEN/191).
Ambassador McCook had called a meeting for 12-13 October where he
said that he plans to share the vertical/ integrated text for the
consideration of the membership, as well as provide an assessment
of the issues and outline some suggestions for the next steps (see
SUNS #8550 dated 11 October 2017).
According to trade officials, the Rules Group meeting continues on
Friday (13 October) with the proponents expected to introduce the
new document and members are to be given the opportunity to comment
and pose questions.
The rather heavily square-bracketed 13-page "non-paper"
on fisheries subsidies, which the proponents said is introduced "as
a tool to facilitate negotiations" in the Negotiating Group on
Rules, contains a Preamble and eight Articles as well as an Annex.
The eight Articles pertain to definitions, scope, prohibited subsidies
(illegal, unreported and unregulated fishing, overfishing/overfished/un-assessed
stocks, over-capacity/capacity enhancing), standstill, special and
differential treatment, transparency/notification, transitional provisions,
and institutional arrangements.
According to trade officials, at the meeting on 12 October, the proponents
said they had worked hard, sometimes overnight, on the document.
South Africa, on behalf of the ACP Group, said members are invited
to introduce textual suggestions using the document as basis.
South Africa and Indonesia further said that the new document is not
meant to replace proponents' individual proposals, which remain relevant
and on the table.
The European Union and Argentina (on behalf of the six Latin American
countries) said that the document is intended as a tool to facilitate
New Zealand said that the document is an outcome but not a final negotiated
outcome. The talks need to be intensified, it added.
According to trade officials, Senegal, on behalf of the Least Developed
Countries (LDCs), said that while they supported intensification of
negotiations, they also called on members to give the 30 countries
that make up the LDC group more time to consult among themselves.
ASSESSMENT BY THE RULES CHAIR
In his summary assessment of the negotiations on fisheries subsidies
on 12 October, the Chair shared with the members some thoughts about
where he thinks "we are in our collective work on the negotiations,
and what I see as critical issues that are emerging."
"I know that different delegations have different levels of ambition
in these negotiations, and this is something that of course we will
have to deal with further down the road," said the Chair.
"That said, I see maintaining the current atmosphere and way
of working that we have achieved in this Group as a critical enabling
condition that will remain instrumental in determining whether there
will be a fisheries subsidies outcome at MC11 [eleventh WTO ministerial
conference in Buenos Aires this December]."
"Indeed if we lose this, I cannot see a way that we could generate
a draft for Ministers in Buenos Aires that will provide them with
a clear basis for making those final decisive calls," Ambassador
Turning to the issues, the Chair pointed out that there are three
tracks on which possible disciplines would be pursued - illegal, unreported
and unregulated fishing (IUU), overfishing or overfished stocks and
"We have seen a number of promising ideas which could contribute
to building some convergence with respect to prohibitions relating
to subsidies contributing to IUU fishing and subsidies in respect
of overfished stocks," he said.
"There is a general acceptance of the situation of global overcapacity
but we are yet to see how best to address this in the light of widely
varying national approaches and assessments in this regard. That said,
while there is a lot of convergence around the general proposition
that these sorts of subsidies are harmful, as we have deepened our
discussions of the respective proposals, we have discovered considerable
complexity in these areas."
Before getting into the specifics in these areas, Ambassador McCook
also pointed to what he saw as clear convergence on some of the key,
cross-cutting foundational elements:
"First, there seems to be a general agreement that we are talking
about subsidies disciplines in the realm of marine wild capture fishing
and related activities only - to the explicit or implicit exclusion
of inland fishing and aquaculture.
"Second, we also seem to have general agreement that the measures
that would be disciplined are certain specific subsidies as defined
in Articles 1 and 2 of the SCM Agreement.
"Third, I have noted from our discussions that in terms of chapeau
language to the specific proposed disciplines there also is a lot
of convergence regarding not "granting or maintaining" whichever
particular instances of subsidization would be prohibited.
"Fourth, there is convergence that subsidies would be attributable
in all cases to the subsidizing Member."
According to the Chair, in all of these areas the precise drafting
that would garner consensus has not yet emerged but conceptually there
is a degree of convergence.
This is important as it provides a solid foundation for the further
elaboration of the disciplines themselves.
Regarding whether disciplines would cover subsidies for any land-based
activities, in addition to those on-board, discussions are continuing.
And for another important cross-cutting issue, territoriality, the
Chair said, "we have had good and constructive engagement on
proposed language aimed at ensuring that anything we do here does
not prejudice these broader issues that are outside the WTO's remit.
While still works in progress, we are moving in a positive direction
on all of these points."
PROPOSALS ON IUU FISHING
On the proposals related to IUU fishing, the Chair pointed out that
a number of issues would need to be resolved.
An initial issue is how "IUU" fishing would be defined in
the WTO rules. Here, virtually all Members refer to Article 3 of the
International Plan of Action on IUU.
Some cross-reference this definition in a dynamic way while others
consider that the existing definition should be statically reflected,
via fixed cross-reference or by incorporation of the text into the
Another issue here is whether this definition would have direct legal
effect in WTO rules or instead would serve as a source to be wholly
or partially reflected in national legal definitions.
Another issue is how the prohibition would be formulated - in respect
of subsidies "related to" IUU fishing, a relatively broad
formulation; or instead in respect of subsidies "provided to
or benefiting" "vessels", or "owners", or
"operators", or all three.
In this connection, some delegations consider that the latter types
of formulations would be clearer and thus more implementable.
There also are differences of view as to whether any such reference
should be only to vessels, or also to owners and/or operators, and
in the latter two cases whether it should be those "involved
in" or instead those "controlling" the operations of
the vessels in question.
Ambassador McCook highlighted that another main issue related to IUU
is what the basis or bases would be for an IUU determination that
would trigger the subsidy prohibition.
Here, the proposals generally refer to IUU vessel lists of RFMOs (regional
fisheries management organisations), as well as to lists of or determinations
by a flag state or a subsidizing Member. Some proposals also refer
to lists of or determinations by coastal states.
"The degree of deference that would be accorded to each of these
potential bases remains under discussion," he noted.
For some Members, all RFMO lists would be accepted at face value,
for others these lists would be accepted so long as they were established
with recognized due process and transparency, and for others they
would be accepted where the subsidizing Member was party to the listing
RFMO, with acceptance of other RFMOs' lists subject to national law.
Some Members also identify non-discrimination and openness for any
WTO Member to join as additional criteria for acceptance of RFMO IUU
"Determinations by a flag state or subsidizing Member seem less
inherently problematic, based on our discussions, as these situations
would essentially be internal, domestic determinations in respect
of one's own vessels or owners or operators. There has not been a
lot of discussion on these situations."
Determinations by a coastal state, that a foreign vessel or entity
has engaged in IUU activities in the waters of the coastal state,
are more difficult for some Members, the Chair emphasised.
Here again, the central question is the degree of deference to such
determinations that might be incorporated in a WTO rule.
Issues include whether such determinations are made with due process
and transparency, how subsidizing Members would become aware of such
determinations, and whether they would be required to accept them
at face value and if so, subject to what if any conditions or criteria.
Another key issue for potential subsidies disciplines relating to
IUU is the nature and extent of any exceptions, exemptions, or scope
Here, the proposals all would prohibit such subsidies by all Members
in all waters, although some proposals distinguish unreported and
unregulated fishing from illegal fishing, and would create transition
periods for developing Members to implement the prohibitions in respect
of the "U" and the "U", on the basis that they
would need time to develop reporting and regulatory measures before
being subject to the related subsidy prohibition.
For others, no such distinction is justified, as the rules would be
about subsidies, not about IUU fishing as such.
Finally, on transparency in the area of IUU, said the Chair, "we
have a proposal that RFMOs should inform the WTO of their respective
IUU lists, and that coastal states should inform the WTO of their
IUU determinations involving foreign vessels in their waters."
Some Members have questioned the necessity or appropriateness of the
WTO receiving such information, while others consider that it would
provide necessary transparency regarding the reliability of the IUU
determinations that would trigger the subsidy prohibitions.
PROPOSALS TO PROHIBIT SUBSIDIES VIS-A-VIS OVERFISHED STOCKS
On the proposals to prohibit subsidies in respect of overfished stocks,
the Chair pointed out that a number of important scoping issues have
emerged in respect of the formulation of the prohibition itself.
One is whether we are talking about subsidies "in connection
with" or "for" or "to", "fishing"
only or also "fishing related activities" or "fishing
And further, whether a prohibition would apply to subsidies "involving"
or instead "negatively affecting" the stocks in question.
As to which stocks, a further question is whether this would be all
overfished stocks or "targeted" overfished stocks.
Those favouring the reference to "targeted" stocks are concerned
that unintended by-catch could trigger the prohibition, while others
consider that such a qualifier would overly narrow the discipline.
As for the condition of the stocks, would these be stocks that are
"in" such a condition or stocks that have been "assessed"
to be in that condition?
"In respect of these different facets of formulating this prohibition,
various Members have raised issues of clarity and implementability
on the one hand versus breadth of coverage and effectiveness of the
discipline on the other," said Ambassador McCook.
The next set of issues relates to the basis for determining that a
stock is overfished, which again would trigger the subsidy prohibition.
One question in this regard is whether the rules should contain a
substantive definition of what is meant by "overfished",
or whether instead this should be left to national authorities and
RFMOs to define and implement in accordance with their own standards
Should these be taken at face value regardless of source, or should
the rules somehow define a substantive standard?
In this regard, we have been having considerable debate about "science-based"
stock assessment, and which science that would be - science available
to the particular Member or science in a more general sense?
Would different degrees of deference be accorded to determinations
by RFMOs versus national authorities?
Related to this is whether having a quota from an RFMO is sufficient
to indicate that the stock in question is not overfished, a presumption
that figures in some proposals pertaining to subsidies contributing
Some Members point to a disconnect in some RFMOs between the stock
assessments and the quotas that are set.
The Chair pointed out that another facet of this debate is whether,
and if so how, a subsidy prohibition in respect of particular fish
stocks also would extend, as a precautionary measure, to un-assessed
stocks. In this respect, resource constraints related to assessing
stocks have frequently been pointed to, as have complexities relating
to multi-species fisheries - in terms of both targeting catch and
assessing particular stocks in such fisheries.
For these reasons, some Members call for flexible standards for stock
assessments, including references to the science available to the
subsidizing Member, reflecting Members' different abilities to assess
Whether the prohibition would extend to all subsidies in respect of
overfished stocks, or instead to those "negatively affecting"
such stocks is a further question under debate.
If the latter, the question then becomes what kinds of effects these
would be and how they would be identified and when? Would there be
a presumption that certain kinds of subsidies did or did not cause
such effects, or would effects have to be demonstrated case-by-case
after the fact?
Would it be permissible to provide subsidies for fishing on overfished
stocks if there were fisheries management in place and if so, would
such management have to meet a particular standard?
According to the Chair, some Members also have suggested geographic
limitations to such a prohibition. These include in particular Members'
territorial seas - out to 12 nautical miles - from such a prohibition,
in recognition of the considerable amount of small-scale and artisanal
fishing, and the attendant difficulties of assessing stocks, in those
areas and fisheries.
SUBSIDY PROHIBITIONS TO OVERCAPACITY, OVERFISHING
Ambassador McCook also drew attention to the proposed prohibitions
of subsidies contributing to overcapacity and overfishing.
In relation to overcapacity, he noted, the proposals mainly focus
on capital cost subsidies, for vessel construction, renovation, modernization,
vessel transfer, vessel acquisition, and similar elements, and for
various kinds of on- board equipment.
Some Members consider that constraining subsidies to some such capital
costs not only would address the current situation of overcapacity
but also would address, by proxy, subsidies contributing to overfishing.
In the view of some Members, it is easier and more implementable to
discipline subsidies for certain specified capital costs than to craft
a discipline on subsidies contributing to overfishing, as in their
view any kind of subsidy could have this effect, and defining "overfishing"
as opposed to "overfished stocks" would be very difficult.
Some proposals, however, take the same approach as for overcapacity,
listing certain forms of subsidies - mainly to operating costs - that
they consider most directly to contribute to overfishing and that
therefore should be prohibited.
"Here, the questions of fuel de-taxation and fuel subsidies continue
to divide opinions, with some considering finding a consensus too
difficult and sensitive, and others considering these measures among
the most direct contributors to overfishing."
Both of these sets of proposed prohibitions - of certain such capacity-
and effort-related subsidies - are accompanied in a number of proposals
by proposed S&DT (special and differential treatment) exceptions
and other flexibilities, including transition periods.
In general, said the Chair, developing and some other Members point
to a need for room to grow their domestic fisheries sectors, citing
among other things the uneven distribution around the world of fishing
capacity and excess capacity.
In this connection, some proposals would subject S&DT flexibilities
for these types of subsidies to management conditionalities, aimed
at ensuring that any subsidies to capacity and effort should not overshoot
the ability of the fisheries in question to withstand the increased
fishing activity that would result.
Another need identified is to be able to support subsistence and/or
small scale and/or artisanal fishing, whether or not formal or informal
management measures are in place.
There has been some discussion in this regard of whether flexibilities
for subsidizing these types of fisheries should be available to all
Members or only to developing Members.
Some of the proposals in respect of subsidies identified as contributing
to overcapacity and overfishing also have a significant geographic
component, applying differently to fishing activities within the subsidizing
Member's own waters and those in areas beyond national jurisdiction.
For example, in some proposals, stronger disciplines would apply in
respect of large-scale fishing outside a Member's own jurisdiction
than in respect of fishing activities in domestic waters.
A number of proposals would allow subsidies for fishing in areas beyond
national jurisdiction to fulfil quotas assigned by an RFMO, on the
presumption that having such a quota is a reliable indicator that
the fishery in question is well managed or not overfished.
The Chair noted that this presumption is questioned by some delegations.
Some of these proposals are in the context of S&D treatment and
others would apply generally to all Members.
PROPOSALS ON TECHNICAL ASSISTANCE, CAPACITY BUILDING
The Chair further pointed out that accompanying the proposals for
S&DT are proposals for technical assistance and capacity building.
"Some seek assistance to implement new subsidy disciplines, while
others go beyond this to assistance in establishing and implementing
fisheries management, including measures to combat IUU fishing."
Some delegations have responded that the nature and scope of both
the final S&DT provisions and provisions on technical assistance
and capacity building will need to be calibrated on and proportionate
to the disciplines that are agreed.
The Chair said that similar points have been made in respect of proposed
"While various proposals suggest that a range of information
related to the fisheries in question be reported to the WTO, some
delegations question the need for such information as well as the
WTO's ability to use it."
Here too there are calls by some to await further clarity on the disciplines
before deciding on what information beyond that already required by
Article 25 of the SCM Agreement should be reported in connection with
new fisheries subsidies disciplines.
"So it should be clear to all of us that we will need to work
very hard, and with a great deal of pragmatism and flexibility, to
achieve an outcome in December, even in areas of most convergence,"
the Chair concluded.