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TWN
Info Service on WTO and Trade Issues (Oct22/14) WTO:
DG spurns questions on "legal scrubbing" of MC12 fisheries
deal Geneva, 24 Oct (D. Ravi Kanth) -- The World Trade Organization's Director-General, Ms Ngozi Okonjo-Iweala, has allegedly spurned demands from several countries for the "legal scrubbing" of the Fisheries Subsidies Agreement reached at the WTO's 12th ministerial conference (MC12) in June, allegedly violating key tenets of the Marrakesh Agreement in the rules-based, member-driven intergovernmental organization, said people familiar with the development. A restricted room document (RD/TN/RL/163*) on the recent retreat on fisheries subsidies, held in the Hilton Evian Hotel in France on 10 October, has revealed the DG's "top-down" approach on the remaining unfinished fisheries subsidies negotiations by ruling out any further discussion on the issue of "legal scrubbing" of the agreement, which was raised by many members at the meeting. The room document, seen by the SUNS, was issued on 20 October. In response to demands from the members on the issue of "legal scrubbing", the DG said, as cited in the document, "And then there were issues like legal scrubbing in almost every discussion. Without pronouncing one way or the other I think there is an Agreement, it is there. Let's move on with the second wave like a two-track thing." By insisting that there is an agreement on "legal scrubbing", the issue will not go away, said a retreat participant, suggesting that unless the "legal scrubbing" issue is discussed in a full session at the WTO, it remains on the table, the participant said. "LEGAL SCRUBBING" The issue of "legal scrubbing" was first raised by the United States during a General Council (GC) meeting in July. Although the US appears to have indicated in a small-group meeting of trade envoys that it is ready to implement the agreement, Washington has not formally said so at a recent GC meeting, the participant said. Nevertheless, several developing countries raised the issue during recent meetings, including at the retreat. India, for example, raised the issue, saying it looks forward to a quick "legal scrubbing" of the text of the agreement. Several other developing countries also called for "legal scrubbing." Some developing countries said that they want "legal scrubbing" to be done before the final agreement, said people, who asked not to be quoted. The European Union, Australia, and many other countries have opposed the issue of "legal scrubbing" on grounds that once the Protocol amending the WTO Agreement was agreed, there is no room for "legal scrubbing." Against this backdrop, at the meeting at the Hilton Evian Hotel on 10 October, the facilitators maintained that countries had raised the issue of "legal scrubbing". For example, the facilitator, Ambassador Clare Kelly of New Zealand, said that "a few Members raised concerns about legal scrubbing. Others underscored that they were going ahead with their ratification process and did not see a need for it. Moreover, no mandate for legal scrub was given and several noted that domestic processes for ratification already have started." Another facilitator, Ambassador Dr Adamu Mohammed Abdulhamid of Nigeria, said that "some Members also observed the issue of legal scrubbing and deliberated on it." Similarly, another facilitator, Ambassador Petter Oleberg of Norway, said "finally, the point of legal scrub did emerge, but not in the sense that it was needed right away. Rather, there was a discussion on whether to engage in such an exercise after the second wave." If three facilitators referred to the issue of "legal scrubbing" in varying observations and levels of emphasis, it is possible that many countries had raised this issue, underscoring the need for a thorough legal vetting of the agreement, said a trade envoy, who asked not to be identified. Yet, the DG, who is the chair of the Doha Trade Negotiations Committee (TNC) in a member-driven intergovernmental organization, seems somewhat determined to bury the issue of "legal scrubbing", when she said "let's move on with the second wave like a two-track thing," the trade envoy said. Under paragraph 4 of Article VI of the Marrakesh Agreement, the DG is required to adhere to what members decide through consensus at the WTO. Paragraph 4 of Article VI of the Marrakesh Agreement states: "The responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively international in character. In the discharge of their duties, the Director-General and the staff of the Secretariat shall not seek or accept instructions from any government or any other authority external to the WTO. They shall refrain from any action which might adversely reflect on their position as international officials. The Members of the WTO shall respect the international character of the responsibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence them in the discharge of their duties." CONFUSING SIGNALS The retreat at the Hilton Evian Hotel, which was conducted according to Chatham House rules in five different groups led by five different facilitators, focused on two issues. The issues are "what is the scope of issues that should be addressed in the second wave of negotiations?" and "what should be the starting point for these negotiations?" In her opening statement, the DG said that "the objective of this retreat is to brainstorm on the "second wave" of negotiations on fisheries subsidies." "To put this in context, I would start by recalling that this work is different from, and does not in any way take away from, the importance and urgency of Members quickly depositing your acceptance of the complete Agreement that we already have - the one gavelled by Ministers at MC12," she said. She touted the partial Fisheries Subsidies Agreement reached at MC12 in June, saying that "it contains a strong set of subsidy disciplines along with all of the other provisions needed to make those disciplines operational and enforceable." Without specifying the number of countries, the DG went on to say that "so many Members are in the middle of their domestic processes of acceptance of that final text already agreed by Members." When several countries were asked, the SUNS was told that the agreement is not a priority for them at this juncture and the process of ratification has been pushed "to the back burner." Therefore, it is unclear who these "many Members" are, as stated by the DG, said people, who asked not to be quoted. Again, the DG seems to have echoed her oft-repeated statement by saying that "for the sake of the ocean and of the people whose livelihoods depend on it, it is critically important for Members to deposit their instruments of acceptance of that agreement as soon as possible so that it can begin to deliver concrete results." The real existential problems due to climate change such as the huge floods in Pakistan, how to contain life- threatening hurricanes, and forest fires are the main issues of the day and not certainly a Fisheries Subsidies Agreement that has allegedly failed to live up to the United Nations Sustainable Development Goal (SDG) Target 14.6. According to the SDG Target 14.6, WTO members are required, by 2020, to "prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, eliminate subsidies that contribute to IUU (illegal, unreported and unregulated) fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation." In her statement, Ms Okonjo-Iweala said "this retreat is to really brainstorm about how we approach the second wave of negotiations, to address "outstanding issues"." She went on to say that "you (the members) will all recall that the draft text sent to Ministers ahead of MC12 is different from what was gavelled as the new and final Agreement on Fisheries Subsidies. In particular, over the course of the Ministerial, some important issues that failed to garner consensus were omitted from the final text. To ensure that we revisit those issues, and promptly, Ministers mandated the Negotiating Group on Rules to continue negotiations to add more disciplines in those areas in a second wave of negotiations, separate from the already concluded agreement." "As such, paragraph 4 of the Ministerial Decision outlines our mandate for these further negotiations: * To continue negotiations based on the outstanding issues in document WT/MIN(21)/W/5 and document WT/MIN(20)/W/20; and * Based on those negotiations, to make recommendations by MC13 for additional provisions particularly as they relate to certain forms of fisheries subsidies that contribute to overcapacity and overfishing, recognizing that appropriate special and differential treatment should be an integral part of these negotiations." However, it appears unclear as to why the DG did not mention the document WT/MIN (22)/W/20 or the draft text sent to ministers days before MC12. That document on the most crucial overcapacity and overfishing pillar contained asymmetrical provisions with carve-outs for the big subsidizers like the European Union, the United States, China, Canada, Japan, Korea, and Chinese Taipei among others. BRIEF SUMMARIES Even though the five facilitators delivered brief summaries of the discussions that took place in their consultations with members, it is difficult to decipher/interpret the level of intensity of the discussions on specific issues or for that matter the emphasis on the key subsidizers such as China, the European Union, the United States, Japan, Korea, and Chinese Taipei among others raised on the specific elements of the draft provisions on the most harmful subsidies in the overcapacity and overfishing pillar. The facilitator for the first group, Ambassador Nadia Theodore of Canada, said "although not all Members have the same skin in the game, and not all Members have the same place in the world in relation to the Agreement, all of us agree that harmful fisheries subsidies are a global commons issue." Ambassador Theodore's statement that "not all Members have the same skin in the game" and "not all Members have the same place in the world in relation to the Agreement" could raise some alleged "racist" connotations, said a person, who asked not to be quoted. Interestingly, Canada is one of the major subsidizers in the overcapacity and overfishing (OCOF) pillar that has contributed to the global depletion of fish stocks. The Canadian facilitator's remark that "everyone wins in the end when we have a comprehensive and effective Agreement," sounds somewhat puzzling when the major subsidizers have not only captured the global fish catch, they are also not willing to pay for the damage they have caused, said a South American trade envoy, who asked not to be quoted. Ambassador Theodore said that "many Members underscored that finding the way through in overcapacity and overfishing (OCOF) is paramount," adding that "this is not an exhaustive list. A few issues were raised in this context of the scope of issues to be discussed in this next wave. And they included: de minimis; how we integrate special and differential treatment (SDT); transitional periods; understanding that it is key to success, ideas such as operationalizing the fish fund, even before the Agreement comes into force; artisanal fishing." The Canadian facilitator said: "The idea of artisanal fishing also came up in our group, and the idea of transitional phase-in periods also came up in the context of SDT, as well as distant water fishing, and presumptively harmful subsidies. "How do we square the circle? While many want to subsidize, we also recognize that we cannot do it the same way we have been. We also had some discussions on horizontal issues, such as non-specific fuel subsidies and access agreements. "And then lastly, in terms of talking about the starting point for our discussion, everyone agreed around our room that doing the same thing that got us to partial success, when what we are looking for is full success, will not work. Everyone also agreed that we do not have another 20 years." MORE "BALANCED" OBSERVATIONS FROM SECOND GROUP The second group facilitator, Ambassador Clare Kelly of New Zealand, said that "some in our group emphasized the importance of being guided by the key objective of environmental sustainability," adding that "some also raised that environmental, social and economic sustainability are the pillars of sustainable development and these need to be addressed in a balanced way in the negotiations, especially impacts on livelihoods, food security." As regards the starting point, Ambassador Kelly said: "No Member wanted to go straight back to text negotiations. Stepping back was mentioned. There is a need to revisit the concepts that did not lead to progress at MC12 and ask why some approaches did not work. This should, however, be done in a practical way that can advance the negotiations and not as an abstract conceptual discussion. Negotiations should not start from scratch, as we already have W/20 and W/5, but it was also recognized that there may be other approaches not captured in those documents." Ambassador Kelly maintained that "another important thread was that whichever approach will be taken, it needs to target large-scale, industrial fishing. Members must also deal with the non-specific fuel subsidies issue." The issue of non-specific fuel subsidies was raised by India in the run-up to MC12 but the former chair of the Doha Rules negotiating body, who is now going to be the director of the WTO's Council Division, omitted the issue in the draft negotiating text sent to members. Ambassador Kelly made a pertinent concluding remark: "The point emerged that there is a tendency to seek disciplines for others and carve-outs for ourselves. We need to be honest that all Members want/need to continue subsidizing." Incidentally, the DG echoed and repeated Ambassador Kelly's remark. The third facilitator, Ambassador Abdulhamid from Nigeria, said, "most Members highlighted that the focus should be on overcapacity and overfishing (OCOF) as well as special and differential treatment, while the views on the approach to OCOF varied." He said "some Members also highlighted other provisions related to OCOF, like the question of notifications and transparency or other issues, and noted their openness to discuss issues that are related to the mandate in SDG 14.6." The fourth facilitator, Ambassador Petter Oleberg of Norway, said that "the group agreed that the scope of future work should fall within the auspices of: overcapacity and overfishing (OCOF), including SDT, and transparency." Even though there is no convergence on the disciplines in the OCOF pillar, particularly the carve-outs given to the big subsidizers, he said that "divergence exists regarding the approach, in particular the use of certain proxies. On the one hand, some Members are of the view that the structure of the W/20 hybrid approach, especially the SDT elements, should be the starting point. On the other hand, some Members are of the view that while W/5 and W/20 provide us with the issues to negotiate, we should not be limited to the approaches they reflect. For instance, many said we should be more evidence-based with a focus on subsidies." The Norwegian facilitator said, "It was unanimously agreed in the group that the second wave should be evidence- based. Therefore, we need more transparency in terms of fish data and subsidies." SINGAPORE ECHOES DG'S CONCERNS The fifth facilitator, Ambassador Hung Seng Tan from Singapore, said "overall, there was broad agreement that ratification is a priority and that it should proceed in parallel with the second wave of negotiations." So far, no member has ratified the fisheries subsidies agreement and there is no clarity on how long it will take. The Protocol amending the WTO Agreement has to be ratified by two-thirds of the members before it becomes part of the WTO rule-book. In his remarks, Ambassador Tan said that "there was also broad agreement that, as a matter of urgency, we should appoint a new Chair as soon as possible." There are currently two candidates in the race for the chair of the Doha Rules negotiating body - Sri Lanka's trade envoy Ambassador Ms Gothami Silva and Norway's Ambassador Oleberg, who is being proposed by the big subsidizers and the "Friends of the Fish" group led by New Zealand, said people familiar with the race. Ambassador Tan said that "in terms of the scope of issues, overfishing and overcapacity has emerged as a convergence," adding that "special and differential treatment must be seriously addressed especially for small island developing and artisanal fishers." It is unclear as to why the Singaporean envoy, whose country has given up its entitlement to special and differential treatment at the WTO, is allegedly suggesting that SDT is not important for India and other major developing countries, said a trade envoy, who asked not to be quoted. Delivering his concluding remarks, the director-designate of the WTO's Council Division, Mr Santiago Wills, said that there is a strong desire to proceed with the "second wave" of negotiations. He suggested the following two bullet points: "* Plan A is we should conclude a comprehensive and effective agreement by MC13 as per the mandate; * The main focus of the second wave should be on OCOF and SDT." In short, the retreat on 10 October seems to have glossed over the fundamental differences on the need for "legal scrubbing" of the Fisheries Subsidies Agreement and the asymmetry in the proposed OCOF disciplines, said a developing country trade envoy, who asked not to be quoted. +
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