TWN Info Service on WTO and Trade Issues (Jul21/19)
19 July 2021
Third World Network

Ministers declare fisheries text as imbalanced & preserves the status-quo
Published in SUNS #9390 dated 19 July 2021

Geneva, 16 Jul (D. Ravi Kanth) – Trade ministers and senior officials from an overwhelming majority of countries on 15 July stated unambiguously that the current draft text for concluding an agreement in the Doha fisheries subsidies negotiations is imbalanced and can hardly secure the consensus needed to move the negotiations forward.

They said that the current draft consolidated text will retain the status-quo by allowing the big subsidizers to continue with their industrial-scale fishing that is mainly responsible for the global depletion of fish stocks.

The Ministers/senior officials apparently urged the World Trade Organization director-general Ms Ngozi Okonjo- Iweala and the chair of the Doha Rules negotiating body, Ambassador Santiago Wills from Colombia, to issue a revised text on account of the structural imbalances and contradictions found in the draft text issued by the chair on 30 June, said people familiar with the development.

After the day-long virtual meeting, the WTO DG Ms Okonjo-Iweala and the chair Ambassador Wills made several hyperbolic claims of grand “success” at the meeting.

The WTO DG and the chair touted the grand “success” of the virtual trade ministerial meeting that apparently provided political guidance to move forward the negotiations on fisheries subsidies.

However, the claims made by the DG and the chair at the concluding press conference, if tested on a “truth meter”, could result in them finding themselves being embarrassed for their alleged misleading statements and lies, said participants from several countries.

More importantly, many developing countries and their coalitions tore into the draft text for its “kid-glove” treatment of the big subsidizers who have contributed immensely to overcapacity and overfishing (OC&OF) and thereby, to the global depletion of fish stocks.

They expressed grave concerns over the specific carve-outs being provided to the big subsidizers to continue with their industrial-scale fishing that has led to the global depletion of fish stocks.

Ministers and senior officials from developing and least-developed countries, who took part in the meeting, called for prohibiting harmful subsidies in the OC&OF pillar.

Almost 100 developing countries demanded that special and differential treatment (S&DT) should provide “policy space” to develop their respective fishing sectors and should be based on the principle of common but differentiated responsibilities as set out in the climate change agreement.

The Pacific group of small island states, including Fiji, Solomon Islands, and several others raised sharp concerns about the lack of appropriate and effective special and differential treatment in accordance with the United Nations Sustainable Development Goal (SDG) 14.6, said several participants, preferring not to be quoted.

Even the United States made it clear that more work needs to be done to reflect its concerns, including on the issue of forced labour (in the fisheries sector).

The US Trade Representative (USTR) Ambassador Katherine Tai cautioned that an agreement for argument’s sake is difficult to accept.

Out of the 104 ministers and officials who made their interventions during the day-long meeting, some two dozen countries such as New Zealand, Australia, and other APEC (Asia-Pacific Economic Cooperation) members accepted the draft text as a basis and also agreed with the treatment of S&DT for poor and vulnerable countries, said people who asked not to be quoted.

WTO DG & CHAIR’S “HYPERBOLIC” STATEMENTS

Yet, the DG and the chair of the Doha fisheries subsidies negotiations made statements in the concluding press conference about the grand “success” of the meeting that seemed to differ sharply from the statements made by ministers and senior officials.

“The text has been agreed by all members and we could not have wished for a better outcome,” Ms Okonjo-Iweala told reporters.

She said the fundamental conclusion is the fact that members agreed to use the text issued by the chair on 30 June “as a basis”.

The second thing, said Ms Okonjo-Iweala, is that members want to conclude a balanced, quality agreement away from technical status.

The DG said technical assistance and financial assistance for capacity-building to least-developed countries will contribute to their sustainability.

Apparently, a day before the virtual ministerial meeting, several least-developed countries were told that they will get technical assistance and financial assistance and that they should issue positive and favourable statements in support of the text, said diplomats, who asked not to be quoted.

At the press conference, the DG claimed that there is “political will” to move forward, suggesting that “virtually every minister recognized the S&DT for artisanal fishing communities and fishers with some caveats.”

FAILURE TO PROVIDE ASSESSMENT ON WAY FORWARD

Despite claiming unprecedented success at the meeting, the DG and the chair cancelled the third session involving their assessment on the “way forward” on some allegedly flimsy grounds of differing time zones and difficulty to connect, said people familiar with the development.

The real reason for cancelling the session on the “way forward”, which was scheduled to be presented by the DG and the chair, was apparently due to their inability to formulate a way forward in the face of entrenched positions and differences, said people, who preferred not to be quoted.

“We are simply horrified by the statements made by the DG and the chair as they contained more lies than an honest assessment,” said several participants, who asked not to be quoted.

“The credibility of their statements further eroded our trust in this DG and the chair for leading the negotiations with integrity,” participants said.

THREE DIFFERENT NARRATIVES

Three different narratives emerged with respect to the statements made at the meeting.

Two dozen countries led by New Zealand and other members of the so-called Group of Friends of Fish and also the APEC members said the text is a basis for concluding the agreement while concurring with the treatment accorded to poor and vulnerable artisanal fishers and fishing communities with several conditions.

The European Union too supported the current text as a basis and even sought more stringent conditions for availing of special and differential treatment by developing countries.

The EU, which opposed the inclusion of non-specific fuel subsidies, called for special treatment to protect its access agreements, which act like food aid in agriculture, said people, who asked not to be quoted.

The second narrative came from the large majority of developing and least developed countries, including India, South Africa, Jamaica on behalf of the ACP (Africa, Caribbean, and Pacific) group, Mauritius on behalf of the African Group, and the least-developed countries among others.

The trade ministers/officials from these countries called for targeting harmful subsidies without providing any specific carve-outs, said people who asked not to be quoted.

The third narrative came from the United States, which called for including the issue of forced labour, and for substantially more work to make the text palatable, said people, who asked not to be quoted. (See below.)

“UNEQUAL, UNFAIR, UNJUST”

In a hard-hitting statement, India’s trade minister Mr Piyush Goyal said that he is “disappointed” that members are “still short of finding the right balance and fairness in the agreement.”

He said it is important not to “repeat the mistakes made during the Uruguay Round that allowed unequal and trade- distorting entitlements for select developed Members, particularly in agriculture, while unfairly constraining less developed members who did not have the capacity and resources to support their industry or farmers then.”

He said “fisheries are a common endowment to humanity, a global public commons,” suggesting that “the sharing of this should be in an equitable and just manner.”

He warned against finalizing an “unbalanced or unequal agreement.”

On the issue of sustainability, he said that “it is essential that big subsidizers take greater responsibility to reduce their subsidies and fishing capacities, in accordance with the principles of “Polluter Pays” and “Common but Differentiated Responsibilities”.”

He said that any agreement must take into consideration “different stages of development and current fishing arrangements that reflect their current economic capacities.”

Therefore, the Indian minister said “any agreement will have to provide for balancing current and future needs.”

Mr Goyal said that “the per capita fisheries subsidy given by most developing countries is minuscule compared to advanced fishing nations”, arguing that “countries (like) India who are yet to develop fishing capacities, cannot be expected to sacrifice their future ambitions, while protecting those members providing huge subsidies and over-exploiting fisheries resources and continue to engage in unsustainable fishing.”

He said that the “sustainability-based approach in the Overcapacity and Overfishing pillar in the current form will create significant inequity” and it is “unequal, unfair, unjust!”

Despite severe opposition to the inclusion of fuel subsidies, the Indian minister said that “if non-specific fuel subsidies are not brought under disciplines, another major disparity will be introduced by large harmful subsidies out of any disciplines.”

Without naming the European Union, which uses access agreements to send its huge industrial-scale fleets for fishing in other countries’ maritime waters, the Indian minister said “giving special treatment to non-recovery of subsidies under Government-to-Government fisheries “access agreements” is akin to cherry-picking.”

He said that any new agreement must support the international laws of the sea and “the sovereign rights of coastal States to explore, exploit and manage living resources within their maritime jurisdiction, enshrined in international instruments, must be preserved.”

India called for “appropriate and effective special and differential treatment (S&DT) in the true spirit as enshrined in the guiding principles of the Marrakesh Agreement.”

Therefore, “limiting S&DT to poor and artisanal fishermen only is neither appropriate, nor affordable and not acceptable,” said India, suggesting that S&DT has to be for a country as a whole.

Mr Goyal called for covering significant ground to make the text balanced, to meet the just concerns of developing and LDC Members.

India will be submitting proposals very soon to address our concerns including incorporating “common but differentiated responsibilities” in sharing this common endowment, he said.

SOUTH AFRICA’S INTERVENTION

In a similar vein, South Africa said that more work is needed “for an acceptable and balanced outcome” that gives primacy to coastal states to manage their maritime resources.

South Africa said the hybrid approach in the OC&OF pillar can only be agreed to if it avoids carve-outs to the biggest subsidizers.

South Africa said most developing countries are at the earlier stages of developing their fisheries sectors, and they do not contribute to overfishing.

It argued that it will not accept rules that impede their developmental prospects, suggesting that members must avoid a one-size-fits-all approach.

“The developing countries have showed flexibilities and we are at a point (where) other members must show flexibilities to conclude the negotiations,” it said, suggesting that special and differential treatment cannot be limited to transitional periods and capacity-building.

ACP GROUP

Jamaica, on behalf of the ACP Group, said that “significant work is needed, including textual language, prohibiting harmful subsidies that contribute to overcapacity and overfishing and IUU (illegal, unreported, and unregulated) fishing while preserving the sovereign rights of maritime countries.”

The ACP Group, said Jamaica, is not able to agree on a 12 nautical mile limit for artisanal fishers, suggesting that they should have the right to fish in the EEZ (200 nautical miles) area. Jamaica said “no” to onerous transparency and notification requirements.

AFRICAN GROUP

On behalf of the African Group, Mauritius said members must squarely focus on targeting the subsidies provided to large-scale industrial fishing.

Mauritius suggested that S&DT is a core component of the WTO agreements, arguing that “African countries need policy space to develop their fisheries.”

“With a mere 2.44% of the global fisheries subsidies, our countries should not be made to bear the brunt of the disciplines, as we do not contribute in any significant manner to harmful subsidies,” the African Group said.

Mauritius argued that “S&DT must be effective to enable us to leverage our resources for economic development, it cannot be time limited or confined to artisanal and subsistence fisheries, and limited to technical assistance or capacity-building.”

The African Group reaffirmed that “a fisheries subsidies agreement should not alter the sovereign rights of members covered by existing international agreements,” especially the primacy of coastal states in IUU fishing determination.

Furthermore, the agreement should ensure that determinations made, indeed lead to a prohibition of subsidies, said Mauritius, arguing that “leaving discretionary power to the subsidizing members would render any agreement ineffective.”

In conclusion, the African Group said, “this agreement necessitates flexibility from all sides but more particularly from those who contribute to overfishing and overcapacity through harmful subsidies.”

It added that the negotiations should not seek to bring the management programmes of members under WTO scrutiny.

CHINA’S INTERVENTION

China said it is ready to work on the basis of the current text and consider its basic landing zones. There is no place for new issues to be inserted in the text, it argued, in what appears to be an obvious reference to the US decision to introduce forced labour in the text.

As regards the special and differential treatment, China said S&DT should be provided to artisanal and poor fishers in developing countries and LDCs. It argued that “as a developing country with a large fisheries sector, China will assume its international responsibilities commensurate with its level of development and capability.”

China called for revising the chair’s text on the overcapacity and overfishing pillar, adding that it should remain balanced and consistent with the negotiating mandate.

On issues of territoriality and jurisdictional issues, China said the final text must guarantee that the WTO should not be involved in critical issues such as territorial sovereignty. China said that its President Xi Jinping wants to pursue “green” and environmentally sustainable policies.

INDONESIA’S INTERVENTION

Speaking on behalf of the minister, a senior Indonesian official said “the negotiations in Geneva could strike the right balance in ensuring common but differentiated responsibility.”

“This principle will be critical in ensuring significant reduction of harmful subsidies which contribute to overfishing and overcapacity and efficiently eliminating subsidies for IUU fishing,” Indonesia said.

On the special and differential treatment, Indonesia said that “while we share the view that we need to protect the vulnerable artisanal fishers, we may have differences on what constitutes artisanal fishers in each jurisdiction.”

Jakarta cautioned that “harmonizing such a term will not ensure symmetrical commitment among members.”

Hence, “we should allow each jurisdiction on how to regulate such vulnerable, artisanal and small-scale fishers,” the Indonesian official said.

Indonesia argued that members “should also look at the fact that only less than 20 percent of total global subsidies are received by artisanal and small-scale fishers. Most of the subsidies are received by the distant water fishing vessels, operated by operators that work in a highly complicated structure.”

This kind of fisheries should be the priority target of the disciplines, Indonesia said, adding that “many developing and least-developed countries are deprived from the opportunity of fair trade in fisheries because they cannot compete on subsidies.”

Indonesia said even if their fishers can compete, “as they catch closer to their shore, they will get further hurdles with tariff in importing countries that make it extremely difficult to compete with large subsidizing nations.”

In light of this situation, Indonesia said “we should objectively engage in the negotiation and take into account the concern of every member.”

Indonesia reiterated its view that “this discipline (on S&DT) should not detach from the development agenda of developing and LDC members, especially those who rely on artisanal and small-scale fisheries for local economy, food security and poverty alleviation.”

US SEEKS INCLUSION OF FORCED LABOUR IN TEXT

The third narrative came from the United States, which called for including the issue of forced labour and for substantially more work to make the text palatable, said people, who asked not to be quoted.

In her intervention, the US Trade Representative Ambassador Katherine Tai drew several markers for an outcome that can be considered “meaningful.” She asked rhetorically whether the current negotiating text reflects the best that members can do after 20 years.

She said while the text contains some of the basic elements needed to reach a meaningful outcome, “our work is not yet done as other key elements are still missing.”

Ambassador Tai said “this text can serve as the basis for a member-led, text-based negotiation, but it does not yet contain the elements required for reaching conclusion.”

In addition to pushing for effective disciplines on the most harmful fisheries subsidies, she called for addressing the “use of forced labour” on grounds that it is a serious problem.

Commenting on the special and differential treatment for artisanal fishers and fishing communities, she said the US is prepared to consider “flexibilities for particularized situations that do not result in the pitfalls of a blanket approach.”

She asked “is it enough to have an agreement for argument’s sake”, suggesting that members deserve more and can achieve more.

In short, the meeting exposed the fault-lines in the draft consolidated text promoted by the WTO DG and the chair, notwithstanding their seemingly inaccurate claims.