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TWN Info Service on WTO and Trade Issues (Dec20/26)
23 December 2020
Third World Network


Rules Chair issues second revised draft text on fisheries subsidies
Published in SUNS #9260 dated 23 December 2020

Geneva, 22 Dec (D. Ravi Kanth) – The chair of the Doha Rules negotiations, Ambassador Santiago Wills from Colombia, on 18 December issued, under his own responsibility, the second revised draft consolidated text on fisheries subsidies, ostensibly to capture the “progress” that members have made so far in the fisheries subsidies negotiations.

However, a cursory glance at the nine-page second revised draft consolidated text (RD/TN/Rl/126/Rev.2) contains only minor changes and tweaking of language in various provisions that are not helpful to the developing countries, said a fisheries trade negotiator, who asked not to be quoted.

The restricted nine-page draft text, said Ambassador Wills, is the collective work of the “Negotiating Group”.

The chair said that the sources for the revised second draft text are based on “the facilitators’ work, previous working documents (including document TN/RL/W/274/Rev.6 and the 2007 Chair’s text in TN/RL/W/213) and suggestions and comments made during meetings.”

Ambassador Wills argued that adopting language “from different sources is not always possible as words and phrases have to be adapted to the format and context of the draft consolidated document so that the whole text reads coherently and consistently.”

The chair said that “everything in the draft consolidated document is without prejudice to any Member’s positions or views.”

He emphasized that the entire document is effectively in square brackets and nothing in it can be considered agreed.

Ambassador Wills said that “each delegation’s view on one issue depends on how other issues are addressed.”

“Therefore, there is no agreement on any provision until there is agreement on all provisions, and everything in the draft consolidated document, whether in square brackets or not, is open for discussion,” the chair argued.

The chair said that “if a certain suggestion that has been made is not reflected in the text, this does not mean it has been rejected. To the contrary, as I explained in my report to the TNC [Trade Negotiations Committee], this simply reflects the need for more thorough discussion to mature those ideas, including in regard to their placement and in relation to other elements, before they can be included in the text.”

Lastly, the chair said that “the eventual form of the new disciplines – the “Instrument” – remains to be decided,” suggesting that during the last heads of delegation (HoD) meeting on 29 September, “there were different views on whether the new disciplines should be in the form of a standalone agreement or an annex to the SCM Agreement.”

The chair is planning on convening meetings to discuss the elements of the second revised draft text from 13 January, said a negotiator, who asked not to be quoted.

As regards Article 1 dealing with the scope, the chair said that he made a change that “payments from one government to another government under fisheries access agreement are not within the scope of the Instrument, by clarifying that those payments would not be deemed to be subsidies under this instrument.”

On Article 2 concerning definitions of what would constitute fish or fish products, the chair said the definition of “fish” was added in the second revised draft.

Ambassador Wills said the definition of “fishing” and “fishing related activities” and “vessel” were taken from the Agreement on Port State Measures.

On the disciplines in Article 3 dealing with Illegal, Unreported and Unregulated (IUU) fishing, the chair said the language was sourced from the work of the facilitator for this pillar that was circulated on 10 April.

On Article 4 concerning “overfished stocks (OFS),” the chair said that there have not been major changes due to suggestions from members. Apparently, members said:

* First, many Members have pointed to a potential overlap between the disciplines in this pillar and the disciplines on overcapacity and overfishing (OCOF). Thus, they preferred to continue the work to clarify the OCOF pillar before engaging substantively in the OFS pillar;

* Second, the text as it currently stands is relatively clean, with relatively few brackets and clear choices in the form of alternative texts; and

* Third, key substantive issues under this pillar overlap with issues in other pillars that we have been discussing.

On Article 5, which deals with disciplines concerning overfishing and overcapacity (OCOF), the chair said that “some of the more important revisions were made to what are now Articles 5.1 and 5.2.”

The current structure of the discipline, according to the chair, “reflects the long-standing divergence on the basic approach to the disciplines on OCOF.”

“Specifically, some Members prefer a list of subsidies that would simply be prohibited,” while “other Members oppose such an approach on the basis that not all of the listed subsidies would contribute in every instance to OCOF.”

Effectively, the major subsidizers such as China, the European Union, the United States, Japan, Korea, and Chinese Taipei among others “prefer a prohibition based on the contribution of a subsidy to overfishing or overcapacity in a particular fishery, taking into account policies and measures implemented to maintain fish stocks at a sustainable level.”

“In my attempt to find a compromise, in each version of the draft consolidated document, I have put together elements from both approaches,” the chair said.

In short, the chair has continued to provide reverse special and differential treatment (S&DT) to the major subsidizers, said a developing country negotiator, who asked not to be quoted.

On Article 5.7 dealing with S&DT in the OCOF pillar, the chair said that the text remains largely unchanged due to “significant differences in views.”

The remaining articles such as (1) Article 6 on specific provisions for LDC members, (2) Article 7 on technical assistance and capacity building, (3) Articles 8 to 10 on other cross-cutting issues, including the notification and transparency, (4) Article 9 dealing with institutional arrangements, (5) Article 10 concerning dispute settlement, and (6) Article 11 relating to final provisions, reveal some significant changes as well as inclusion of provisions that were not there earlier.

THE SECOND REVISED DRAFT CONSOLIDATED TEXT

The second revised draft consolidated text in full is highlighted below:

Article 1: Scope

1.1 This [Instrument] applies to subsidies, within the meaning of Article 1.1 of the 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.

1.2 [Notwithstanding paragraph 1 of this Article, this [Instrument] 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.]

Article 2: Definitions

For the purpose of this [Instrument]:

(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 the vessel, or any person on board, who is in charge of or directs or controls the vessel.

Article 3: Prohibition on subsidies 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 or unregulated (IUU) fishing.

3.2 For purposes of paragraph 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 waters 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, in areas and for species under its competence; or (d) [a subsidizing Member for activities by vessels it subsidizes; or] (e) [a port State Member for a vessel that is in one of its ports, provided it acted in cooperation with the flag State and, where appropriate, the coastal State, or acted in a situation where the flag State did not within a reasonable period of time inform the port State of action undertaken in response to alleged IUU fishing by vessels flying its flag when such allegations have been reported to the flag State by the port State concerned.]

3.3 (a) An affirmative determination under paragraph 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) [The prohibition under paragraph 3.1 shall apply where the determination under subparagraphs 3.2[(a), 3.2(c), and 3.2(e)] is based on positive evidence and follows due process, [in accordance with relevant international law]].

(c) [If the flag State [or subsidizing Member] is known, a Member shall promptly notify the flag State [or subsidizing Member] of the initiation of an IUU investigation [, and provide an opportunity to the flag State [or subsidizing Member] to provide information to be taken into account in the determination.]]

3.4 [In applying the prohibition in paragraph 3.1, the subsidizing Member may take into account the [nature, gravity and repetition] [seriousness] of IUU fishing committed by a vessel [or operator]].

3.5 [The prohibition in paragraph 3.1 shall apply as long as the sanction resulting from a determination triggering the prohibition remains in force, or as long as the vessel [or operator] is listed as engaged in IUU fishing, whichever is the longer. In no case shall the duration of the prohibition be less than [X] months from the date on which it first took effect.]

3.6 [Each Member shall ensure that this provision is effective in securing compliance, discouraging infractions and depriving offenders of benefits accruing from their IUU fishing activities.]

3.7 Each Member shall have laws, regulations and/or administrative procedures in place to ensure that subsidies referred to in paragraph 3.1, including such subsidies existing at the entry into force of this [Instrument], are not granted or maintained.

3.8 Each Member shall notify to the WTO [PLACEHOLDER – RELEVANT BODY] its laws, regulations and/or administrative procedures referred to in paragraph 3.7. This notification shall be made no later than the entry into force of this [Instrument]. Each Member shall promptly notify any subsequent amendments to its relevant laws, regulations and/or administrative procedures.

3.9 [The prohibition under paragraph 3.1 in respect of unreported and unregulated fishing, shall not apply to:

(a) subsidies granted or maintained by developing country Members, including Least Developed Country (LDC) Members, for fishing or fishing related activities by vessels other than large scale industrial fishing vessels within their territorial sea;

(b) [PLACEHOLDER – TRANSITIONAL PERIOD SDT FOR UU]]

Article 4: Prohibition on subsidies concerning overfished stocks

4.1 No Member shall grant or maintain subsidies for fishing or fishing related activities regarding an overfished stock when any of the following situations related to that stock are present: (a) lack of recovery of the stock; or

(b) continuous reduction in the level of the stock.

4.2 A fish stock is overfished if it is:

[ALT1 recognized as overfished by the Member under whose jurisdiction the fishing is taking place or by a relevant RFMO/A based on best scientific evidence available to and recognized by them.]

[ALT2 at such a low level that mortality from fishing needs to be restricted to allow the stock to rebuild to a level that produces maximum sustainable yield (MSY) or alternative reference points based on the best scientific evidence available to and recognized by the Member.]

4.3 A Member may grant or maintain the subsidies set out in Article 4.1 if the subsidies and/or other appropriate measures are implemented in a manner that ensures rebuilding of the stock to a biologically sustainable level as determined by the coastal Member under whose jurisdiction the fishing is taking place or a relevant RFMO/A in areas and for species under its competence.

4.4 [For the purposes of [paragraphs 2 and 3 of this Article], in case of overlap between the area of jurisdiction of a coastal Member and the area of competence of a RFMO/A, the determination made by the coastal Member shall prevail.]

4.5 (a) [The prohibition under paragraph 4.1 shall not apply to subsidies granted or maintained by developing country Members, including LDC Members, for fishing or fishing related activities within their territorial sea.

(b) [PLACEHOLDER – TRANSITIONAL PERIOD SDT FOR OFS]]

Article 5: Prohibition on subsidies concerning overcapacity and overfishing

5.1 No Member shall grant or maintain subsidies to fishing or fishing related activities that contribute to overcapacity or overfishing.

5.1.1 For the purpose of paragraph 5.1, subsidies that contribute to overcapacity or overfishing [include]: (a) subsidies to construction, acquisition, modernisation, renovation or upgrading of vessels; (b) subsidies to the purchase of machines and equipment for vessels (including fishing gear and engine, fish-processing machinery, fish-finding technology, refrigerators, or machinery for sorting or cleaning fish); (c) subsidies to the purchase/costs of fuel, ice, or bait; (d) subsidies to costs of personnel, social charges, or insurance; (e) income support of vessels or operators or the workers they employ; (f) price support of fish caught; (g) subsidies to at-sea support; and (h) subsidies covering operating losses of vessels or fishing or fishing related activities.

5.2 Notwithstanding paragraph 5.1, a Member may grant or maintain subsidies referred to in paragraph 5.1 if it demonstrates that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.

5.3 No Member shall grant or maintain subsidies:

(a) contingent upon, or tied to actual or anticipated fishing or fishing related activities at sea in areas beyond the subsidizing Member’s jurisdiction (whether solely or as one of several other conditions), including subsidies provided to support at-sea fish-processing operations or facilities, such as for refrigerator fish cargo vessels, and subsidies to support tankers that refuel fishing vessels at sea;

(b) provided to fishing or fishing related activities outside of the jurisdiction of a coastal Member and outside the competence of a relevant RFMO/A.

5.3.1 With respect to subparagraph 5.3(a), the mere fact that a subsidy is granted or maintained to vessels or operators that may be engaged in fishing or fishing-related activities in areas beyond the subsidizing Member’s jurisdiction shall not for that reason alone be considered a prohibited subsidy within the meaning of subparagraph 5.3(a).

5.3.2 [PLACEHOLDER – NON-RECOVERY OF PAYMENTS UNDER GOVERNMENT-TO- GOVERNMENT ACCESS AGREEMENTS]

5.4 [No Member shall grant or maintain subsidies for a vessel not flying the flag of the subsidizing Member.]

5.5 [PLACEHOLDER – CAPPING]

5.6 [PLACEHOLDER – LIST OF NON-HARMFUL SUBSIDIES]

5.7 (a) [[The prohibition under paragraph 5.1 shall not apply to subsidies granted or maintained by LDC Members for fishing or fishing related activities.]

(b) [The prohibition under paragraph 5.1 shall not apply to subsidies granted or maintained by developing country Members for fishing or fishing related activities within their territorial sea.]

(c) [ALT 1 The prohibition under paragraph 5.1 shall apply to subsidies granted or maintained by developing country Members including LDC Members, for fishing or fishing related activities within their EEZ and the area of competence of RFMO/A if all the following criteria are met: i. the Member’s GNI per capita exceeds US$5,000 (based on constant 2010 US dollars) for three consecutive years; ii. the Member’s share of the annual global marine capture fish production exceeds 2% as per the most recent published FAO data; iii. the Member engages in distant water fishing; and iv. the contribution from Agriculture, Forestry and Fishing to the Member’s annual national GDP is less than 10% for the most recent three consecutive years.]

[ALT 2 OTHER FORMS OF TRANSITIONAL MECHANISM]]

Article 6: [Specific provisions for LDC Members]

6.1 [Provisions relating to LDC Members shall continue to apply for a transitional period of [X] years after the entry into force of a decision of the UN General Assembly to exclude a Member from the “Least Developed Countries” category.]

6.2 [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

[The developed country Members, and the developing country Members declaring themselves in a position to do so, shall provide targeted technical assistance and capacity building assistance to other developing country Members, including LDC Members and land-locked developing country Members, for the purpose of implementation of the disciplines under this [Instrument].]

Article 8: Notification and transparency

8.1 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 [, to the extent possible,] provide the following information as part of its regular notification of fisheries subsidies under Article 25 of the SCM Agreement:

(a) [PLACEHOLDER – LIST OF SPECIFIC INFORMATION TO BE NOTIFIED]

8.2 Each Member shall notify [the relevant SCM body/the Committee established under paragraph 9.1] in writing on an annual basis of: (a) any list of vessels and operators that it has determined as having been engaged in IUU fishing; and (b) where applicable, a list of its fisheries access agreements in force with another government or governmental authority, and such notification shall consist of the titles of the agreements and a list of their parties.

8.3 A Member may request additional information from the notifying Member regarding the notifications and information provided under paragraphs 1 and 2. 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 paragraphs 1 and 2 has not been provided, the Member may bring the matter to the attention of such other Member or to the [Committee].

Article 9: [Institutional arrangements]

[9.1 There is hereby established a [COMMITTEE NAME] 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 [Instrument] at the request of any Member. The Committee shall carry out responsibilities as assigned to it under this [Instrument] or by the Members and it shall afford Members the opportunity of consulting on any matter relating to the operation of this [Instrument] or the furtherance of its objectives. The WTO Secretariat shall act as the secretariat to the Committee.]

9.2 Each Member shall, within one year of the date of entry into force of this [Instrument], inform the [Committee] of measures in existence or taken to ensure the implementation and administration of this [Instrument], including the steps taken to implement prohibitions set out in Articles [3, 4 and 5]. Each Member shall also inform the [Committee] of any changes to such measures thereafter. The [Committee] shall review annually the implementation and operation of this [Instrument], taking into account the objectives thereof.

9.3 Each Member shall, within one year of the date of entry into force of this [Instrument], provide to the [Committee] a description of its fisheries regime with references to its laws, regulations and administrative procedures relevant to this [Instrument], and promptly inform the [Committee] of any modifications thereafter. A Member may meet this obligation by providing to the [Committee] an up-to-date [URL][electronic link] to the Member’s or other appropriate official web page that sets out this information.

[9.4 The Committee shall examine [frequency] all information provided pursuant to Articles 3 and 8 and this Article.]

9.5 The [Committee] shall maintain close contact with the relevant international organizations in the field of fisheries management, especially with the Food and Agriculture Organization of the United Nations (FAO) and relevant RFMO/As.

9.6 Not later than [X] after the date of entry into force of this [Instrument] and periodically thereafter, the [Committee] shall review the operation of this [Instrument] with a view to making all necessary modifications to improve the operation of this [Instrument], taking into account the objectives thereof.

Article 10: Dispute settlement

[The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by the Dispute Settlement Understanding, and Article 4 of the Agreement on Subsidies and Countervailing Measures shall apply to consultations, the settlement of disputes, and remedies under this [Instrument], except as otherwise specifically provided herein.]

Article 11: Final provisions

11.1 Nothing in this [Instrument] shall be construed or applied in a manner which will affect the rights of land-locked country Members under public international law.

11.2 Members [should][shall] [take special care][exercise due restraint] when granting subsidies to fishing or fishing related activities regarding [commercially valuable] stocks the status of which is unknown.

11.3 Except as provided in Articles [3 and 4], nothing in this [Instrument] shall prevent a Member from granting a subsidy for [natural] disaster relief, provided that the subsidy is: (a) limited to the relief of a particular [natural] disaster; (b) limited to the affected geographic area; (c) time-limited; and (d) in the case of reconstruction subsidies, limited to restoring the affected area, the affected fishery, and/or the affected fleet up to [a sustainable level of fishing and/or fishing capacity as established through a scientific-based assessment of the status of the fishery and in no case beyond] its pre-disaster level.

11.4 (a) This [Instrument], including any findings, recommendations, and awards with respect to this [Instrument], shall have no legal implications regarding territoriality or delimitation of maritime jurisdiction.

(b) A panel established pursuant to [Article 10 of this Instrument] shall not entertain any claim that would require it to address any issues of territoriality or delimitation of maritime jurisdiction that is contested by a party or a third party.

 


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