TWN Info Service on WTO and Trade Issues (Jan21/03)
14 January 2021
Third World Network

Switzerland to host virtual ministerial meeting on 29 January
Published in SUNS # 9263 dated 14 January 2021

Geneva, 13 Jan (D. Ravi Kanth) – Switzerland has decided not to convene the annual informal trade ministerial meeting “for once, on the margins of the World Economic Forum in Davos” due to the worsening COVID-19 pandemic.

However, it has indicated that the meeting will instead take place on a virtual platform on 29 January to prepare the agenda of proposed WTO reforms for the WTO’s 12th ministerial conference (MC12) to be held later this year as well as to accelerate the Doha fisheries subsidies negotiations.

In a communication sent to the select countries last month, and seen by the SUNS, the Swiss vice-president and economy and trade minister Mr Guy Parmelin told his counterparts that “in these uncertain times, multilateral organizations such as the WTO are particularly important to devise solutions to current global problems, including challenges arising from the health crisis.”

Emphasizing that “a predictable, transparent, non-discriminatory and open global trading system is essential for broad-based, sustainable economic recovery,” Mr Parmelin underscored the need “to carry on the WTO reform” for addressing current challenges in many areas.

Mr Parmelin wants the trade ministers to address two questions at the meeting on 29 January.

They include:

1.”What do you see as key priorities for MC12, and what are the necessary conditions to achieve concrete results?”, and

2. “As the end-2020 deadline foreseen in SDG 14.6 (concerning an agreement on fisheries subsidies) could not be met, what are the key elements that need to be agreed upon as a matter of priority in order to bring the negotiations on fisheries subsidies to a successful conclusion in the near future?”

Meanwhile, members are expected to discuss virtually at the WTO from 18 January several bracketed issues in the second revised draft consolidated text on fisheries subsidies.

“The draft remains one-sided and is tilted heavily in favour of the big subsidizers engaged in industrial-scale fishing, thereby failing to address the fundamental issues concerning over-capacity and over-fishing, overfished stocks, and the appropriate and effective special and differential treatment provisions,” said a negotiator, who asked not to be quoted.

The second revised draft text, which was issued on 18 December, contains several unresolved issues ranging from scope, definitions, prohibitions on subsidies to illegal, unreported and unregulated (IUU) fishing, prohibitions on subsidies concerning overfished stocks, prohibitions on subsidies concerning overcapacity and overfishing, specific provisions for LDC members, notifications and transparency, dispute settlement, and final provisions among others.

In an email sent to members on 6 January, the chair of the Doha Rules negotiating body, Ambassador Santiago Wills from Colombia, suggested that the January cluster of meetings will focus on bilateral meetings.

The chair said that he will hold an informal meeting on 19 January (next Tuesday) starting from 3 pm, “open to all interested parties, to discuss Article 10 (of the second revised draft text) on dispute settlement.”

Ambassador Wills said that in the discussion on dispute settlement last year, “one specific issue raised was whether non-violation claims should be allowed under the fisheries subsidies disciplines.”

The chair wants members to answer, “should non-violation claims be allowed under the fisheries subsidies disciplines, and if not, should the draft of Article 10 state this? For example, one possibility could be to keep the current drafting and add some text to state that Article XXIII:1(b) of GATT 1994 does not apply. Another possibility could be to delete the references to GATT 1994 and replace them with a new text with no reference to non-violation claims.”

The chair said that he intends to host an informal open-ended meeting on 20 January “to discuss footnote 13 to Article 5.2. As explained in RD/TN/RL/126/Rev.2/Add.1, this footnote was revised based on the concerns that the earlier drafting could be narrowly interpreted to refer to maximum sustainable yield (MSY) or related reference points, and therefore would not be accessible to Members whose systems do not operate on the basis of these reference points.”

Article 5.2 in the second revised draft text relating to prohibitions concerning overcapacity and overfishing states: “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.”

Footnote 13 attached to this article states that “for the purpose of this paragraph, a biologically sustainable level is the level determined by a coastal Member having jurisdiction over the area where the fishing or fishing related activity is taking place, using maximum sustainable yield (MSY), or alternative reference points such as [level of depletion, or level of or trend in time series data on catch per unit effort, commensurate with the data available for the fishery]; or by a relevant RFMO/A (regional fisheries management organization/arrangement)”.

According to several negotiators, Article 5.2 is a reverse subsidy to the big subsidizers such as China, the European Union, the United States, Japan, Korea, and Chinese Taipei among others to continue with their huge numbers of boats for industrial-scale fishing that has led to the rapid depletion of global fisheries stocks.

In his email to members, Ambassador Wills said that “to try to address this concern, and based on suggestions from Members, the footnote was changed to clarify that a variety of reference points, not necessarily related to MSY, could be used, with some examples provided.”

The chair said, “without prejudice to whether or not the prohibition on subsidies concerning overcapacity and overfishing should be based on a hybrid, list or other approach, I would like to seek your views on:

i. Whether the specific examples added to footnote 13 are adequate or appropriate to address the concern raised, and if not, what changes would be needed.

ii. Whether the language “commensurate with the data available for the fishery” in the footnote is needed and, if so, whether it should apply to one, some or all of the reference points referred to in the footnote.”

Ambassador Wills stated that on 20 January starting at 3:00 pm, he and the Swiss trade envoy Ambassador Didier Chambovey, who is acting as the “friend of the chair” on special and differential treatment, would “hold an informal open-ended meeting to discuss a possible exemption from some or all disciplines for some categories of fishers which could be subject to geographic limits and could be applicable as special and differential treatment (S&DT) or generally applicable to all Members.”

In the face of growing criticism on various proposals last month, the chair said that “there is a proposal from Ecuador, which has some support, for a general exemption for artisanal fishing in a Member’s territorial sea with a proposed understanding of how “artisanal fishing” could be characterized. There is also the approach in RD/TN/RL/126/Rev.2 which would provide, as SDT, exceptions for fishing in the territorial sea under Articles 3.9(a) for UU fishing, 4.5(a) for overfished stocks, and 5.7(b) for overcapacity and overfishing.”

“While there is some support for the proposal from Ecuador, there are also some concerns, inter alia, about how it would work in practice, whether the exclusion is too broad or too narrow, and, if the principle were to be accepted, whether and how it should be adapted to meet the specific situations of some Members,” the chair said.

He urged members to give their views on (i) whether this proposal should be amended, (ii) if so, how it could be amended, and (iii) whether this would fall under S&DT or as a general exemption.

The chair said that he will convene a Heads of Delegation (HoD) meeting along with Ambassador Chambovey on 22 January to inform trade envoys “on the work undertaken during the week, including on the consultations and other meetings we may have held during the week; outline our plans for work leading to the next cluster of meetings scheduled for the week beginning 15 February; and hear your views on both.”

Meanwhile, in a draft ministerial decision circulated by Brazil last month, Brasilia stressed that “environmental sustainability concerns must be a vital component in the conclusion of the fisheries subsidies negotiations at the World Trade Organization.”

Brazil wants members to commit to “a meaningful and ambitious outcome in the negotiations on fisheries subsidies at the World Trade Organization with a view to fulfilling the mandate from Heads of Government in the Sustainable Development Goal 14.6, and the mandate from WTO Ministers, to curb subsidies that threaten global maritime fish stocks.”

Brazil expressed sharp concern over the continued drop in the “percentage of fish stocks within biologically sustainable levels” during the past three decades as well as “certain policies and practices of massive subsidization that lead to overcapacity and overfishing and contribute to the depletion of global fish stocks, as well as to illegal, unreported and unregulated fishing”.

Even though the fisheries subsidies negotiations are part of the Doha rules agenda, Brazil claimed that “the most important multilateral negotiation of the WTO today has a sustainability purpose and note that WTO Members have a crucial and historical role to play in securing a robust agreement.”

It argued that it is the “collective responsibility for the fishing resources and the livelihoods of millions of people around the world who are dependent on capture fisheries.”

It underscored the importance and urgent need “to clarify and improve existing WTO disciplines on fisheries subsidies.”