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TWN
Info Service on Sustainable Agriculture
Trade: WTO Fisheries Subsidies Agreement may take time for
ratification Geneva, 24 Jun (D. Ravi Kanth) -- The developing countries appear to have locked themselves into what several WTO members reckon as a "toothless" Fisheries Subsidies Agreement that was concluded at the World Trade Organization's 12th ministerial conference (MC12) on 17 June, said people familiar with the decision. The new agreement will remain only on paper and "static" for all purposes without an immediate value until an accompanying protocol is ratified by two-thirds of WTO members when they submit their instruments. Normally, the ratification process is time-consuming and it may take several years. In 2014, India held up on signing the protocol to the Trade Facilitation Agreement (TFA) until it had secured the perpetual "peace clause" for public stockholding (PSH) programs for food security in developing countries. "A temporary slimmed down multilateral agreement to discipline fisheries subsidies was achieved," said a negotiator, who asked not to be identified. The negotiator said that "no text was agreed on subsidies contributing to overfishing and overcapacity," adding that "negotiations will continue to bring a new modified agreement in line with the UN Sustainable Development Goal (SDG) 14.6." The agreement includes a prohibition on subsidies to a vessel or operator found to have been engaged in illegal, unreported and unregulated (IUU) fishing, if "heavy" transparency provisions by the coastal Member are complied with, with a right to the subsidizing Member to limit the duration of such limited prohibition. Secondly, it includes an absolute prohibition of subsidies for fishing in high seas not under the competence of regional fisheries management organizations or arrangements (RFMO/As). However, in practice, every area is under the competence of RFMO/As. This is a landmark prohibition that assumes that competence of RFMO/As over areas of the high seas equates to sustainability. Thirdly, the provision on overfished stocks will allow the continuation of subsidies regarding most vulnerable stocks in the first phase of the agreement. Also announced was a dedicated trust fund of around USD 10 million (of which USD 1.3 million is allocated as overhead for the WTO Secretariat) to provide technical assistance and capacity building for developing countries to implement the agreement, mainly to prepare notifications, including those not related to fisheries, the negotiator said. The Fisheries Subsidies Agreement (FSA), seeking the elimination of subsidies granted to IUU fishing and overfished stocks, appears to be a specific boon for the United States and other big subsidizers, said people, who asked not to be quoted. It has been well established by various studies and reports that the big subsidizers such as the European Union, the United States, Canada, Norway, Japan, and Korea among others, through their subsidies, have mainly contributed to the global depletion of fish stocks. Yet, the burden of commitments appears to be gradually shifting to the developing countries, who had little or no contribution to the global depletion of fish stocks, said several MC12 participants, who asked not to be identified. Interestingly, the "incomplete" FSA on eliminating subsidies for IUU fishing and overfished stocks is being hailed for its environmental benefits and protection of those who rely on fishing for their livelihoods. The WTO director-general Ms Ngozi Okonjo-Iweala on 17 June asserted that "WTO members have for the first time concluded an agreement" on fisheries subsidies "with environment at its heart". She said that the fisheries subsidies agreement is also "about the livelihoods of the 260 million people who depend directly or indirectly on maritime fisheries." Ms Okonjo-Iweala said "the agreement prohibits support for Illegal, Unreported and Unregulated (IUU) fishing, it bans support for fishing in overfished stocks." The DG maintained that the fisheries subsidies agreement "takes a first but significant step forward to curb subsidies for overcapacity and overfishing by ending subsidies for fishing on unregulated high seas." "As important as the prohibitions is the transparency that will finally shed light on the actual level of subsidies going to fishing" and "you have committed to further negotiations to build on these disciplines," the DG said in somewhat glowing terms. Surprisingly, the FSA does not appear to be consistent with either the UN SDG 14.6 or the ministerial decision that was concluded at the WTO's 11th Ministerial Conference (MC11) in Buenos Aires, Argentina, in December 2017. The decision (WT/(MIN)/64 or WT/L/1031) reached at MC11 states: "The Ministerial Conference Decides as follows: 1. Building on the progress made since the 10th Ministerial Conference as reflected in documents TN/RL/W/274/ Rev.2, 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 country Members and least developed country Members should be an integral part of these negotiations. 2. Members re-commit to implementation of existing notification obligations under Article 25.3 of the Agreement on Subsidies and Countervailing Measures thus strengthening transparency with respect to fisheries subsidies." So, the big component of MC11's decision on "an agreement on comprehensive and effective disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing" still remains open. TWO COMPONENTS OF FISHERIES SUBSIDIES AGREEMENT (FSA) The new FSA, contained in document WT/MIN(22)/33-WT/L/1144, has two major components. They include: (1) the protocol; and (2) the substantive part on disciplines on subsidies contributing to IUU fishing, overfished stocks, as well as other subsidies. THE PROTOCOL The full text of the protocol setting out the norms as to when the new agreement will come into force is as follows: "Protocol Amending the Marrakesh Agreement Establishing the World Trade Organization Agreement on Fisheries Subsidies Members of the World Trade Organization; Having regard to the Decision of the Ministerial Conference in document WT/MIN(22)/33 - WT/L/1144 adopted pursuant to paragraph 1 of Article X of the Marrakesh Agreement Establishing the World Trade Organization ("the WTO Agreement"); Hereby agree as follows: 1. Annex 1A to the WTO Agreement shall, upon entry into force of this Protocol pursuant to paragraph 4, be amended by the insertion of the Agreement on Fisheries Subsidies, as set out in the Annex to this Protocol, to be placed after the Agreement on Subsidies and Countervailing Measures. 2. No reservations may be made in respect of any of the provisions of this Protocol. 3. This Protocol is hereby open for acceptance by Members. 4. This Protocol shall enter into force in accordance with paragraph 3 of Article X of the WTO Agreement. 5. This Protocol shall be deposited with the Director-General of the World Trade Organization who shall promptly furnish to each Member a certified copy thereof and a notification of each acceptance thereof pursuant to paragraph 3. 6. This Protocol shall be registered in accordance with the provisions of Article 102 of the Charter of the United Nations. Done at Geneva this seventeenth day of June two thousand and twenty-two, in a single copy in the English, French and Spanish languages, each text being authentic." The DG did not indicate or mention when this new agreement will be implemented. The DG also remained silent on whether members would be able to ratify an "incomplete" agreement without disciplines on subsidies that contribute to overcapacity and overfishing and other critical disciplines, said people, who asked not to be quoted. A cursory glance at the protocol and the actual contents in the FSA seem to reveal that the proposed disciplines on both IUU fishing and overfished stocks remain only on paper, as ratification by two-thirds of the WTO members is bound to take time. The ratification process is a time-consuming one as had happened with the Doha Declaration on the TRIPS Agreement and Public Health (almost 6 years for implementation) and the Trade Facilitation Agreement (more than three years), which was agreed in December 2013, and came into force in February 2017. According to the protocol attached to the FSA, "the protocol shall enter into force in accordance with the provisions of paragraph 3 of Article X of the WTO Agreement." According to paragraph 3 of Article X of the WTO Agreement, also referred to as the Marrakesh Agreement, "amendments to provisions of this Agreement, or of the Multilateral Trade Agreements in Annexes 1A and 1C, other than those listed in paragraphs 2 and 6, of a nature that would alter the rights and obligations of the Members, shall take effect for the Members that have accepted them upon acceptance by two thirds of the Members and thereafter for each other Member upon acceptance by it." Paragraph 3 of Article X of the WTO Agreement also states that "the Ministerial Conference may decide by a three-fourths majority of the Members that any amendment made effective under this paragraph is of such a nature that any Member which has not accepted it within a period specified by the Ministerial Conference in each case shall be free to withdraw from the WTO or to remain a Member with the consent of the Ministerial Conference." In short, until two-thirds of the WTO members ratify the new agreement, it cannot be implemented. The question, according to several people who spoke to the SUNS, is why would countries want to ratify an "incomplete" agreement merely focused on IUU fishing and overfished stocks, when they do not know what they are going to commit to in the overcapacity and overfishing (OC&OF) pillar in the future. More importantly, after ratifying the new agreement, members would need to complete negotiations in four years (as per Article 12 of the new agreement) on the OC&OF pillar, said people, who asked not to be quoted. Though negotiations on the OC&OF pillar are supposed to begin soon, they may take at least two years, running into the WTO's 13th ministerial conference (MC13) scheduled for 2024, said people, who asked not to be quoted. Apparently, with the current chair of the Doha fisheries subsidies negotiations, Ambassador Santiago Wills of Colombia, likely to join as a Director in the WTO Secretariat, there will be much discussion on choosing the new chair, said a person, who asked not to be quoted. When asked whether he will be joining the WTO Secretariat, Ambassador Wills told the SUNS at MC12 last week that it was untrue, and that he was not aware of it. But a Colombian analyst said that Ambassador Wills was appointed by the previous right-wing government in Colombia in August 2019 under seemingly controversial circumstances, and after two months, he was appointed by then DG Roberto Azevedo as the chair of the Doha Rules negotiations in November 2019. Against this backdrop, there is considerable uncertainty as to when the FSA will come into force, and to expect any immediate gains from the agreement, as claimed by the DG, seems unlikely unless some miracle happens between now and then, said people, who asked not to be quoted. SUBSTANTIVE ELEMENTS OF FSA As regards the substantive elements of the FSA, it is relevant to mention that non-specific fuel subsidies, which was in square brackets in the previous text, has been removed from the FSA. In document WT/MIN(21)/W/5, the Indian proposal was incorporated: "[1.2 Notwithstanding paragraph 1 of this Article, this Agreement also applies to fuel subsidies to fishing and fishing related activities at sea that are not specific within the meaning of Article 2 of the SCM Agreement.]" The crucial part of the new FSA on IUU fishing is in paragraph 3.8, which states: "For a period of 2 years from the date of entry into force of this Agreement, subsidies granted or maintained by developing country members, including least-developed country (LDC) Members, up to and within the exclusive economic zone (EEZ) shall be exempt from actions based on Articles 3.1 and 10 of this Agreement." The developing countries are also subjected to a rather intrusive notification process on their IUU fishing subsidies. In a similar vein, paragraph 4.4 on "subsidies regarding overfished stocks" states: "For a period of 2 years from the date of entry into force of this Agreement, subsidies granted or maintained by developing country Members, including LDC Members, up to and within the EEZ shall be exempt from actions based on Articles 4.1 and 10 of this Agreement." Significantly, on subsidies regarding overfished stocks, the big subsidizers are allowed to grant subsidies provided "if such subsidies or other measures are implemented to rebuild the stock to a biologically sustainable level." The European Union managed to get a big carve-out for its "government-to-government payments under fisheries access agreements" as they "shall not be deemed to be subsidies within the meaning of this agreement", according to footnote two of the agreement. AGREEMENT ON FISHERIES SUBSIDIES The full text of the FSA is as follows: "AGREEMENT ON FISHERIES SUBSIDIES Article 1: Scope This Agreement applies to subsidies, within the meaning of Article 1.1 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) that are specific within the meaning of Article 2 of that Agreement, to marine wild capture fishing and fishing related activities at sea. Article 2: Definitions For the purpose of this Agreement: (a) "fish" means all species of living marine resources, whether processed or not; (b) "fishing" means searching for, attracting, locating, catching, taking or harvesting fish or any activity which can reasonably be expected to result in the attracting, locating, catching, taking or harvesting of fish; (c) "fishing related activities" means any operation in support of, or in preparation for, fishing, including the landing, packaging, processing, transshipping or transporting of fish that have not been previously landed at a port, as well as the provisioning of personnel, fuel, gear and other supplies at sea; (d) "vessel" means any vessel, ship of another type or boat used for, equipped to be used for, or intended to be used for, fishing or fishing related activities; (e) "operator" means the owner of a vessel, or any person, who is in charge of or directs or controls the vessel. Article 3: Subsidies contributing to illegal, unreported and unregulated fishing 3.1 No Member shall grant or maintain any subsidy to a vessel or operator engaged in illegal, unreported and unregulated (IUU) fishing or fishing related activities in support of IUU fishing. 3.2 For purposes of Article 3.1, a vessel or operator shall be considered to be engaged in IUU fishing if an affirmative determination thereof is made by any of the following: (a) a coastal Member, for activities in areas under its jurisdiction; or (b) a flag State Member, for activities by vessels flying its flag; or (c) a relevant Regional Fisheries Management Organization or Arrangement (RFMO/A), in accordance with the rules and procedures of the RFMO/A and relevant international law, including through the provision of timely notification and relevant information, in areas and for species under its competence. 3.3 (a) An affirmative determination under Article 3.2 refers to the final finding by a Member and/or the final listing by an RFMO/A that a vessel or operator has engaged in IUU fishing. (b) For purposes of Article 3.2(a), the prohibition under Article 3.1 shall apply where the determination by the coastal Member is based on relevant factual information and the coastal Member has provided to the flag State Member and, if known, the subsidizing Member, the following: (i) timely notification, through appropriate channels, that a vessel or operator has been temporarily detained pending further investigation for engagement in, or that the coastal Member has initiated an investigation for, IUU fishing including reference to any relevant factual information, applicable laws, regulations, administrative procedures, or other relevant measures; (ii) an opportunity to exchange relevant information prior to a determination, so as to allow such information to be considered in the final determination. The coastal Member may specify the manner and time period in which such information exchange should be carried out; and (iii) notification of the final determination, and of any sanctions applied, including, if applicable, their duration. The coastal Member shall notify an affirmative determination to the Committee provided for in Article 9.1 (referred to in this Agreement as "the Committee"). 3.4 The subsidizing Member shall take into account the nature, gravity, and repetition of IUU fishing committed by a vessel or operator when setting the duration of application of the prohibition in Article 3.1. The prohibition in Article 3.1 shall apply at least as long as the sanction resulting from the determination triggering the prohibition remains in force, or at least as long as the vessel or operator is listed by an RFMO/A, whichever is the longer. 3.5 The subsidizing Member shall notify the measures taken pursuant to Article 3.1 to the Committee in accordance with Article 8.3. 3.6 Where a port State Member notifies a subsidizing Member that it has clear grounds to believe that a vessel in one of its ports has engaged in IUU fishing, the subsidizing Member shall give due regard to the information received and take such actions in respect of its subsidies as it deems appropriate. 3.7 Each Member shall have laws, regulations and/or administrative procedures in place to ensure that subsidies referred to in Article 3.1, including such subsidies existing at the entry into force of this Agreement, are not granted or maintained. 3.8 For a period of 2 years from the date of entry into force of this Agreement, subsidies granted or maintained by developing country Members, including least-developed country (LDC) Members, up to and within the exclusive economic zone (EEZ) shall be exempt from actions based on Articles 3.1 and 10 of this Agreement. Article 4: Subsidies regarding overfished stocks 4.1 No Member shall grant or maintain subsidies for fishing or fishing related activities regarding an overfished stock. 4.2 For the purpose of this Article, a fish stock is overfished if it is recognized as overfished by the coastal Member under whose jurisdiction the fishing is taking place or by a relevant RFMO/A in areas and for species under its competence, based on best scientific evidence available to it. 4.3 Notwithstanding Article 4.1, a Member may grant or maintain subsidies referred to in Article 4.1 if such subsidies or other measures are implemented to rebuild the stock to a biologically sustainable level. 4.4 For a period of 2 years from the date of entry into force of this Agreement, subsidies granted or maintained by developing country Members, including LDC Members, up to and within the EEZ shall be exempt from actions based on Articles 4.1 and 10 of this Agreement. Article 5: Other subsidies 5.1 No Member shall grant or maintain subsidies provided to fishing or fishing related activities outside of the jurisdiction of a coastal Member or a coastal non-Member and outside the competence of a relevant RFMO/A. 5.2 A Member shall take special care and exercise due restraint when granting subsidies to vessels not flying that Member's flag. 5.3 A Member shall take special care and exercise due restraint when granting subsidies to fishing or fishing related activities regarding stocks the status of which is unknown. Article 6: Specific provisions for LDC Members A Member shall exercise due restraint in raising matters involving an LDC Member and solutions explored shall take into consideration the specific situation of the LDC Member involved, if any. Article 7: Technical assistance and capacity building Targeted technical assistance and capacity building assistance to developing country Members, including LDC Members, shall be provided for the purpose of implementation of the disciplines under this Agreement. In support of this assistance, a voluntary WTO funding mechanism shall be established in cooperation with relevant international organizations such as the Food and Agriculture Organization of the United Nations (FAO) and International Fund for Agricultural Development. The contributions of WTO Members to the mechanism shall be exclusively on a voluntary basis and shall not utilize regular budget resources. Article 8: Notification and transparency 8.1 Without prejudice to Article 25 of the SCM Agreement and in order to strengthen and enhance notifications of fisheries subsidies, and to enable more effective surveillance of the implementation of fisheries subsidies commitments, each Member shall (a) provide the following information as part of its regular notification of fisheries subsidies under Article 25 of the SCM Agreement: type or kind of fishing activity for which the subsidy is provided; (b) to the extent possible, provide the following information as part of its regular notification of fisheries subsidies under Article 25 of the SCM Agreement: (i) status of the fish stocks in the fishery for which the subsidy is provided (e.g. overfished, maximally sustainably fished, or underfished) and the reference points used, and whether such stocks are shared with any other Member or are managed by an RFMO/A; (ii) conservation and management measures in place for the relevant fish stock; (iii) fleet capacity in the fishery for which the subsidy is provided; (iv) name and identification number of the fishing vessel or vessels benefitting from the subsidy; and (v) catch data by species or group of species in the fishery for which the subsidy is provided. 8.2 Each Member shall notify the Committee in writing on an annual basis of a list of vessels and operators that it has affirmatively determined as having been engaged in IUU fishing. 8.3 Each Member shall, within one year of the date of entry into force of this Agreement, inform the Committee of measures in existence or taken to ensure the implementation and administration of this Agreement, including the steps taken to implement prohibitions set out in Articles 3, 4 and 5. Each Member shall also promptly inform the Committee of any changes to such measures thereafter, and new measures taken to implement the prohibitions set out in Article 3. 8.4 Each Member shall, within one year of the date of entry into force of this Agreement, provide to the Committee a description of its fisheries regime with references to its laws, regulations and administrative procedures relevant to this Agreement, and promptly inform the Committee of any modifications thereafter. A Member may meet this obligation by providing to the Committee an up-to-date electronic link to the Member's or other appropriate official web page that sets out this information. 8.5 A Member may request additional information from the notifying Member regarding the notifications and information provided under this Article. The notifying Member shall respond to that request as quickly as possible in writing and in a comprehensive manner. If a Member considers that a notification or information under this Article has not been provided, the Member may bring the matter to the attention of such other Member or to the Committee. 8.6 Members shall notify to the Committee in writing, upon entry into force of this Agreement, any RFMO/A to which they are parties. This notification shall consist of, at least, the text of the legal instrument instituting the RFMO/A, the area and species under its competence, the information on the status of the managed fish stocks, a description of its conservation and management measures, the rules and procedures governing its IUU fishing determinations, and the updated lists of vessels and/or operators that it has determined as having been engaged in IUU fishing. This notification may be presented either individually or by a group of Members. Any changes to this information shall be notified promptly to the Committee. The Secretariat to the Committee shall maintain a list of RFMO/As notified pursuant to this Article. 8.7 Members recognize that notification of a measure does not prejudge (a) its legal status under GATT 1994, the SCM Agreement, or this Agreement; (b) the effects of the measure under the SCM Agreement; or (c) the nature of the measure itself. 8.8 Nothing in this Article requires the provision of confidential information. Article 9: Institutional arrangements 9.1 There is hereby established a Committee on Fisheries Subsidies composed of representatives from each of the Members. The Committee shall elect its own Chair and shall meet not less than twice a year and otherwise as envisaged by relevant provisions of this Agreement at the request of any Member. The Committee shall carry out responsibilities as assigned to it under this Agreement or by the Members and it shall afford Members the opportunity of consulting on any matter relating to the operation of this Agreement or the furtherance of its objectives. The WTO Secretariat shall act as the secretariat to the Committee. 9.2 The Committee shall examine all information provided pursuant to Articles 3 and 8 and this Article not less than every two years. 9.3 The Committee shall review annually the implementation and operation of this Agreement, taking into account the objectives thereof. The Committee shall inform annually the Council for Trade in Goods of developments during the period covered by such reviews. 9.4 Not later than five years after the date of entry into force of this Agreement and every three years thereafter, the Committee shall review the operation of this Agreement with a view to identifying all necessary modifications to improve the operation of this Agreement, taking into account the objectives thereof. Where appropriate, the Committee may submit to the Council for Trade in Goods proposals to amend the text of this Agreement having regard, inter alia, to the experience gained in its implementation. 9.5 The Committee shall maintain close contact with the FAO and with other relevant international organizations in the field of the fisheries management, including relevant RFMO/As. Article 10: Dispute settlement 10.1 The provisions of Articles XXII and XXIII of the GATT 1994 as elaborated and applied by the Dispute Settlement Understanding (DSU) shall apply to consultations and the settlement of disputes under this Agreement, except as otherwise specifically provided herein. 10.2 Without prejudice to paragraph 1, the provisions of Article 4 of the SCM Agreement shall apply to consultations and the settlement of disputes under Articles 3, 4 and 5 of this Agreement. Article 11: Final provisions 11.1 Except as provided in Articles 3 and 4, nothing in this Agreement shall prevent a Member from granting a subsidy for disaster relief, provided that the subsidy is: (a) limited to the relief of a particular disaster; (b) limited to the affected geographic area; (c) time-limited; and (d) in the case of reconstruction subsidies, limited to restoring the affected fishery, and/or the affected fleet to its pre-disaster level. 11.2 (a) This Agreement, including any findings, recommendations, and awards with respect to this Agreement, shall have no legal implications regarding territorial claims or delimitation of maritime boundaries. (b) A panel established pursuant to Article 10 of this Agreement shall make no findings with respect to any claim that would require it to base its findings on any asserted territorial claims or delimitation of maritime boundaries. 11.3 Nothing in this Agreement shall be construed or applied in a manner which will prejudice the jurisdiction, rights and obligations of Members, arising under international law, including the law of the sea. 11.4 Except as otherwise provided, nothing in this Agreement shall imply that a Member is bound by measures or decisions of, or recognizes, any RFMO/As of which it is not a party or a cooperating non-party. 11.5 This Agreement does not modify or nullify any rights and obligations as provided by the SCM Agreement. ARTICLE 12: TERMINATION OF AGREEMENT IF COMPREHENSIVE DISCIPLINES ARE NOT ADOPTED If comprehensive disciplines are not adopted within four years of the entry into force of this Agreement, and unless otherwise decided by the General Council, this Agreement shall stand immediately terminated." +
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