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TWN
Info Service on WTO and Trade Issues (Apr24/15) Geneva, 15 Apr (D. Ravi Kanth) — The chair of the Doha fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, on 12 April issued two documents for members to mull over some difficult issues on which ministers failed to reach an agreement on prohibiting subsidies contributing to overcapacity and overfishing (OCOF) at the World Trade Organization’s 13th ministerial conference (MC13) in Abu Dhabi, said people familiar with the discussions. “I encourage you all to carefully study these documents and use the next couple of weeks to consult informally with each other,” the chair wrote to Heads of Delegation in his email on 12 April. The Abu Dhabi ministerial meeting on 2 March failed in the two key areas of agriculture as well as on fisheries subsidies that contribute to overcapacity and overfishing. The first document (TN/RL/W/278) issued by the chair refers to the text sent by the Minister-Facilitator via email on the morning of 1 March at MC13. It contains low-ambition middle-ground provisions replete with flexibilities for tackling subsidies that contribute to overcapacity and overfishing provided by the ten large subsidizers, said several people who asked not to be quoted. The text did not disclose who the ten large subsidizers are. However, this will come to be known within six months after the agreement comes into force, as members are required to notify their subsidies within four months. For the first time, the draft text clubs together developing countries with the large subsidizers while subjecting them to a plethora of transparency and notification requirements based on the so-called hybrid approach, said a capital-based official, who asked not to be quoted. “These provisions appear to balance the specific flexibilities accorded to the large subsidizers on the one side, and the limited exemptions granted to developing countries on the other,” the official said. Significantly, the chair did not suggest in the addendum whether the Pacific Group of countries proposed a “standstill” agreement on OCOF subsidies given the large subsidizers, said people who asked not to be quoted. The draft final Abu Dhabi text falls well short of fulfilling the targets set out in the mandate of the United Nations Sustainable Development Goal 14.6, said people familiar with the negotiations. According to the mandate, WTO members are required, by 2020, to, “prohibit certain forms of fisheries subsidies which 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.” The five largest subsidizers are China, the United States, Korea, the European Union, and Japan, with OCOF subsidies running into more than US$22 billion. According to Ambassador Gunnarsson, the second document (TN/RL/W/278/Add.1) is an explanatory addendum that “contains background, context, explanations for the draft additional provisions.” “I hope that these documents, which are attached, are useful to you in recalling the work done and progress made in Abu Dhabi, and to further assess how we can bring the process forward,” the chair wrote in his email attached to the documents. After explaining the process that was adopted at MC13, the chair said that “despite ambitions of presenting the elements of a package deal in a textual form, by the middle of the night between 29 February and 1 March, we were not able to circulate such a document because consultations continued non-stop.” “At that point, Secretary Eyjolfsson (the Minister-Facilitator from Iceland) decided instead to circulate a complete version of the text incorporating the elements of the package on which he had been consulting with Members,” the chair noted. Though the text contains no bracketed language, the chair said that it includes “yellow highlight in five places which, at that time, were deemed to require resolution before being able to present Members with a final text for adoption.” These five highlights are: * the transition period placeholder in Article B.1; * the transition period placeholder in Article B.3; * the placeholder in footnote 25 for references to Member statements of commitment not to avail themselves of SDT; * Article C.2(a) on transparency in respect of forced labour; and * Article C.3 on transparency in respect of non-specific fuel subsidies. The chair, however, did not mention the specific exemptions given to the big subsidizers in Articles A.1.1 and A.2 HIGHLIGHTS The first highlight concerning “the transition period placeholder in Article B.1” deals with the exemption to least-developed countries for implementing subsidies that contribute to overcapacity and overfishing, as listed in Article A.1. Article B.1 states that: “Article A.1 shall not apply to LDC Members. A graduated LDC Member may grant or maintain the subsidies referred to in Article A.1 to fishing or fishing related activities for a maximum of X years after a decision of the UN General Assembly to graduate that Member from the “Least Developed Countries” category.” The OCOF subsidies are listed in Article A.1. It states: “No Member shall grant or maintain subsidies to fishing or fishing related activities that contribute to overcapacity or overfishing. For the purposes of this paragraph, subsidies that contribute to overcapacity or overfishing include: (a) subsidies to construction, acquisition, maintenance, modernisation, renovation, or upgrading of vessels; (b) subsidies to the purchase or maintenance 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 except for such subsidies implemented for subsistence purposes during seasonal closures; (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.” However, these subsidies can be granted by the large subsidizers provided they demonstrate that “measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level. Such demonstration shall include an explanation of how those measures ensure, or can reasonably be expected to ensure, that the stock or stocks in the relevant fishery or fisheries are maintained at a biologically sustainable level and shall be made through a notification by the subsidizing Member as soon as practicable and no later than six months after a new subsidy program comes into effect, and thereafter in the Member’s regular notifications of fisheries subsidies under Article 25 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) and Article 8.1 of the Agreement on Fisheries Subsidies (AFS).” During the final hours of MC13 on 2 March, the graduating LDCs were unhappy over the transition period that was accorded to them. The second highlight mentioned by the chair deals with “the transition period placeholder in Article B.3.” Article B.3 in the Abu Dhabi final text states: (a) A developing country Member not covered by the special and differential treatment provided for in Article B.1 or Article B.2 may grant or maintain the subsidies referred to in Article A.1 to fishing or fishing related activities within its EEZ, and in the area and for species under the competence of an RFMO/A through which the Member is authorized to engage in such fishing or fishing related activities, for a maximum of X years after the entry into force of these Additional Provisions. A developing country Member intending to invoke this provision shall inform the Committee in writing within one year of the date of entry into force of these Additional Provisions. (b) Subsidies granted or maintained under subparagraph (a) shall be exempt from actions based on Article A.1 and Article 10 of the AFS for a period of two additional years after the end of the period referred to in the first sentence of subparagraph (a). (c) A developing country Member to which subparagraph (b) applies may request no more than two two-year extensions of the period referred to in that subparagraph through the Committee. The Committee shall take into account the specific circumstances of that Member, and shall give due and sympathetic consideration to developing country Members that demonstrate concrete progress toward implementing Article A.1. Effectively, Article B.3 contains flexibilities for those developing countries whose global marine catch in volume terms is more than 0.8 percent (or the de minimis). Countries like India and Indonesia among others come under this category. During the failed MC13, the countries that fall under Article B.3 are given a transition period of [X] years. While the EU and other industrialized countries proposed a transition period of around 8 years, India initially sought 24 years. There was no agreement on the number of years, said several negotiators who asked not to be quoted. To avail of the specific flexibilities, including for artisanal, small-scale, and livelihood fishers, the text contained several transparency and notification requirements for compliance. The third highlight mentioned by the chair refers to “the placeholder in footnote 25 for references to Member statements of commitment not to avail themselves of SDT.” Footnote 25 states that “targeted technical assistance and capacity building assistance to developing country Members, including LDC Members, shall be available for the purposes of implementing these Additional Provisions.” The fourth highlight mentioned by the chair stems from the US proposal on forced labour. It deals with “Article C.2(a) on transparency in respect of forced labour”. In Article C.2(a), it is proposed that each Member shall notify the Committee in writing on an annual basis of: any vessels and operators for which the Member has information that reasonably indicates the use of forced labour, along with relevant information to the extent possible. The fifth highlight mentioned by the chair deals with transparency in respect of non-specific fuel subsidies. It states: “Notwithstanding Article 1 of the AFS, and to the extent possible, each Member shall notify to the Committee in writing on an annual basis of its fuel subsidies granted or maintained to fishing or fishing related activities that are not specific within the meaning of Article 2 of the SCM Agreement.” Aside from these five issues that must be negotiated, some other issues may still crop up once the text comes under discussion. Also, members may not settle for an agreement without knowing what is going to happen in agriculture and other areas, said people who asked not to be quoted. +
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