TWN Info Service on WTO and Trade Issues (Feb20/07)
19 February 2020
Third World Network

South nations insist on S&DT in fisheries subsidies agreement
Published in SUNS #9069 dated 17 February 2020

Geneva, 14 Feb (D. Ravi Kanth) -- India, South Africa, Indonesia, the African Group and the ACP (African, Caribbean and Pacific) Group have demanded effective special and differential treatment (S&DT) for developing and least-developed countries in the Doha fisheries subsidies agreement, trade envoys told the SUNS.

The conclusion of such an agreement at the WTO's 12th ministerial conference (MC12) in Nur Sultan, Kazakhstan, in June was mooted by several participants at the meeting.

At an urgently convened Doha rules negotiating body meeting on Thursday (13 February), the developing countries delivered the strongest message yet on the need to prohibit subsidies for IUU (illegal, unreported, and unregulated) fishing, and overcapacity and overfishing (O&O) based on effective special and differential treatment.

The chair of the Doha rules negotiating body, Ambassador Santiago Wills of Colombia, convened the meeting, following a news report that suggested that an agreement on fisheries subsidies negotiations is unlikely to be concluded at Nur Sultan due to sharp differences over the reports prepared by the facilitators as well as the lack of direction. (See SUNS #9065 dated 11 February 2020).

At the meeting on Thursday, the chair urged members not to vent their grievances outside his negotiating sessions, said a person, who asked not to be quoted.

In his email to members on 10 February, the chair informed them that he would be discussing "acceptable landing zones" as well as preparing draft legal texts so as to finalize an agreement for prohibiting subsidies that contribute to IUU (illegal, unreported, and unregulated) fishing, and overcapacity and overfishing.

At the meeting, Ambassador Wills merely informed members that he would intensify his consultations next week for preparing a draft text, the person said.

He suggested that there has been some progress during the last two clusters in January and February, but pointed out that it has not been enough.

Ambassador Wills urged members to suggest the way forward and their concerns for finalizing the proposed agreement, the person said.

In response, many developing countries and several developed countries demanded a draft consolidated text before discussing any landing zones.

India's trade envoy, Ambassador J S Deepak, told the chair that "as you work steadfastly on the mandate, which is to discipline harmful fisheries subsidies with effective special and differential treatment for developing countries including LDCs who need it, you can count on the continued support of India," said a participant, who asked not to be quoted.

Elaborating on India's position, Ambassador Deepak suggested that "there has been almost no convergence in the O&O pillar as many different approaches are on the table."

He said "the O&O (overcapacity and overfishing) pillar requires strong disciplines on harmful subsidies to protect the ocean and for the sustainability of fishing."

Ambassador Deepak expressed satisfaction that "almost all Members have agreed to limit the scope of the accord to fishing and fishing-related activities at sea thereby keeping onshore activities out of it," suggesting that "this is a positive development as it is a cross-cutting issue across all the three pillars of the discipline."

In the face of billions of dollars of fuel subsidies provided by several developed countries as well as by some developing countries, Ambassador Deepak reminded the chair that "the other major issue in scope [for tackling overfishing and overcapacity] relates to the specificity element particularly as it relates to fuel subsidies."

India said "a dollar of fuel subsidies, whether horizontal or specific, will have the same effect on fish stock", as "fuel subsidies are substantial and constitute about 22% of all subsidies and more than 85% of these subsidies are availed of by large-scale industrial fishing vessels."

He said fuel subsidies would constitute a "large component, according to some estimates, of 4 billion dollars of harmful subsidies."

India said it favours a "small, tight Green Box which includes livelihood support for fishermen during the period in which fishing is banned and subsidies for vessel monitoring system as well as equipping boats with navigation and safety equipment."

He emphasized the need to safeguard the interests of the "large number of subsistence and artisanal fishermen who in many developing countries like India get miniscule subsidies and who would be rendered destitute without such [green box] support."

Ambassador Deepak said subsistence and artisanal fishermen "operate mostly in territorial seas and EEZ, have low fishing capacity and their presence is least damaging to the ocean."

India said that the leaders had agreed in the United Nations Sustainable Development Goal 14.6 to protect the livelihoods of such fishermen through "an effective special and differential treatment."

"Therefore, an effective special and differential treatment for developing countries and LDCs would involve a carve-out from the disciplines in the territorial sea across all the pillars as well as protecting subsidies in EEZ (exclusive economic zone), except for large-scale industrial fishing," he emphasized.

"In other words," said Ambassador Deepak, "the discipline should largely target subsidies promoting fishing on the high seas."

India cautioned against "capping subsidies at present levels", arguing that it "would reward the big subsidizers who are largely responsible for the present state of the oceans."

The US, China, and several South American countries have called for capping of subsidies with differing approaches.

India called for moving towards "a consolidated negotiating text in all areas soon and this text should reflect all the points of view put forward even if it contains a large number of brackets and alternatives at this stage."

Ambassador Deepak suggested that "more time be devoted to the plenary sessions which could be 3 to 3.5 days from the March Cluster, by when we should have a text, to make a better use of capital-based experts for inputs on technical issues."

He underscored a need for discussing "special and differential treatment elements under each pillar" till the contours of the agreement become clear.

Ambassador Deepak suggested the need for keeping the negotiating work as simple as possible by targeting "harmful subsidies which help industrial fishing, promote distant water fishing and which is the life blood of the fish factories in the high seas."

"At the same time, we need to protect subsidies available to small and artisanal fishermen especially in developing countries including LDCs," Ambassador Deepak said.

In her intervention, South Africa's trade envoy, Ambassador Xolelwa Mlumbi-Peter, said "an acceptable landing zone in our view has to first and foremost deliver on SDG 14.6."

She called for proper approaches for finalizing the agreement that would "deliver on all the pillars of the negotiations."

Ambassador Xolelwa cited "The Marine Policy Journal Study of 2018" that found that $35 billion of public money went into fishery subsidies in 2018.

She said the study classified $22 billion as harmful subsidies in which fuel subsidies represent nearly a quarter (22%) of all financial support provided to fishing fleets.

Since the mandate is to "prohibit certain forms of fisheries subsidies that contribute to overfishing and overcapacity," she suggested that 85% of fisheries subsidies benefited "large industrial fleets, thereby distorting markets to the detriment of small-scale artisanal fishers."

"A prohibition of subsidies targeting large industrial distant water fishing would directly address the core contributor to the devastating state our marine resources are in," she emphasized.

"In addition, it would directly address the social and environmental dimensions," Ambassador Xolelwa argued.

"The approach to deal with OFOC (overfishing and overcapacity) must respond to the mandate in SDG 14.6 and should not result in unintended consequences of prohibiting beneficial subsidies that contribute to the sustainability of marine resources such as those related to R&D, restore biodiversity, rebuild the stock and reduce effort," the South African trade envoy argued.

"The prohibition should be on certain forms of harmful subsidies and these would be those that increase fishing effort (operating costs - fuel, ice, bait) or increase fleet capacity (capital costs)," Ambassador Xolelwa said.

Commenting on the subsidies that contribute to IUU (illegal, unreported, and unregulated) fishing, she said "there is a need to ensure that Members are given adequate time to build the requisite capacity to implement the disciplines."

"This should be in the form of transitional periods to incorporate the disciplines in national legislation and capacity building to develop the measures to ensure effective implementation of the disciplines," she said.

Ambassador Xolelwa said since "30% of fish stocks globally are in an overfished condition" as per the FAO (United Nations Food and Agriculture Organization) and since WTO is not a management institution, "the disciplines must therefore prohibit subsidies to a fishing vessel or operator fishing targeted fish stocks that are in an overfished condition as determined by a coastal state in accordance with its national laws or relevant RFMO (regional fisheries management organization)."

Members, she said, "will need to agree how to make provision for beneficial subsidies that aim to rebuild the stock and promote cessation of fishing for stocks that are in an overfished condition."

Ambassador Xolelwa said "S&DT has to be an integral part of the outcome" while the disciplines for prohibited subsidies "must target large-scale industrial fishing and preserve policy space to protect the livelihoods and food security of vulnerable coastal communities, as well as support the broader blue oceans strategies of members."

She called for an "inclusive, transparent and Member-driven" process, suggesting that South Africa would support the chair's "proposal to allow three days of Plenary session during Cluster weeks so as to make progress."

Ambassador Xolelwa said "while it is important to move towards text-based negotiations, the draft text must be balanced and reflect the state of negotiations on various issues."

The ACP group urged the chair to follow "the principles of transparency, [and] inclusiveness," arguing that it is important to focus on "subsidies disciplines and not on fisheries management."

"The WTO has no mandate or competence to make pronouncements" on fisheries management, the ACP group argued.

"Our ambition is to achieve binding disciplines that hold major subsidizers accountable for the harm that their subsidies to large-scale industrial fishing cause," the ACP coordinator said.

"Effective special and differential treatment is important to all our [ACP] members, and remains an indispensable aspect of any outcome in fisheries subsidies negotiations," the ACP emphasized.

The ACP, which had earlier suggested a threshold for S&DT for developing countries of below 2% of global fish catch, said that it is "ready to work with members on shaping the best approach for strong disciplines that does not penalize developing countries who are not large-scaled distant water fishers, not responsible for subsidies causing harm and that does not reward those providing harmful subsidies to distant water fishing."

The United States said the outcome for prohibiting certain categories of fisheries subsidies must constrain the big subsidizers.

Without naming the big subsidizers such as China, the EU, Japan, and Korea among others, the US emphasized that the outcome on fisheries subsidies must "constrain" the big subsidizers, said a participant who asked not to be quoted.

"The US position on big subsidizers is self-serving as it is also the second or third biggest subsidizer," said a negotiator from a developed country.

The European Union has indicated a nuanced position that includes eliminating all subsidies to IUU fishing, while preparing a way forward on subsidies to address overfishing and overcapacity.

The EU doesn't want to prohibit all subsidies but only those that contribute to overfishing and overcapacity.

Brussels wants certain positive subsidies to be maintained, said a participant, who asked not to be quoted.

China has called for capping subsidies, the participant said.

More than 30 members made interventions on their specific concerns, insisting that the draft legal text must properly reflect all the proposals made by members. +