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Info Service on WTO and Trade Issues (Jul24/14) Geneva, 15 Jul (D. Ravi Kanth) — The World Trade Organization’s Director-General, Ms Ngozi Okonjo-Iweala, on 14 July held a one-on-one meeting with the Indian trade minister Mr Piyush Goyal in Zurich, seeking India’s support for concluding the fisheries subsidies negotiations and a decision on the time-frame on agriculture at the upcoming General Council meeting next week, said people familiar with the development. The bilateral meeting between the WTO DG and the Indian trade minister lasted for about 45 minutes and it came at a time when the chair of the Doha fisheries subsidies negotiations, Ambassador Einar Gunnarsson of Iceland, seemingly faces a major crisis after India severely criticized his proposed additional provisions addressing fisheries subsidies contributing to overcapacity and overfishing (OC&OF), said people familiar with the development. On 12 July, the chair seemingly huddled into small groups to overcome the apparent “fiasco” he faced when his draft additional provisions on fisheries subsidies contributing to OC&OF began unravelling, said people familiar with the development. On 14 July, India posed three challenges against the chair’s proposed additional provisions concerning the OC&OF subsidies, criticizing the chair on the inherent asymmetries within the provisions in his draft text, said people familiar with the development. The three proposals circulated by India on 11 July are: “Analyzing the Impact of the Chair’s Proposed OCOF Disciplines under the Additional Provisions on Fisheries Subsidies on the Sustainability of Global Marine Fish Stocks”; “Communication on Fisheries Subsidies”; and “Implementing Appropriate and Effective Special and Differential Treatment under the Additional Provisions on Fisheries Subsidies”. In a rather surprising move on 11 July, Iceland, the country represented by the chair of the Doha Negotiating Group on Rules overseeing the fisheries subsidies negotiations – Ambassador Einar Gunnarsson – submitted a draft General Council decision (WT/GC/W/943) on “Additional Provisions on Fisheries Subsidies”. The draft GC decision submitted by Iceland sought approval from members on the additional provisions at the upcoming GC meeting on 22 July. It wants members to decide on the following: “1. The Protocol amending the WTO Agreement, attached to this Decision (the “Protocol”) is hereby adopted and submitted to the Members for acceptance. 2. The Protocol shall hereby be open for acceptance by Members. Members that, at the time of accepting the attached Protocol, have not yet accepted the 2022 Protocol, can accept the attached Protocol only together with the 2022 Protocol. 3. The Protocol shall enter into force in accordance with the provisions of paragraph 3 of Article X of the WTO Agreement.” It seems rather puzzling that Iceland chose to circulate the above proposal even as its trade envoy is the current chair of the Doha Negotiating Group on Rules, which oversees the fisheries subsidies negotiations. SMALL-GROUP MEETINGS It appears that the chair held four small-group meetings on 12 July to address various issues raised by members, said a trade envoy, who asked not to be quoted. Several countries including India raised serious issues with the draft additional provisions without even convening a formal meeting of the Negotiating Group on Rules. They asked what was the material basis of the draft additional provisions that seem to be replete with specific carve-outs for the big OC&OF subsidizers with weak and ineffectual sustainability notification and transparency requirements, said people familiar with the proceedings. As reported in the SUNS, the additional provisions contain easily manoeuvrable notification requirements for the ten big subsidizers like China, the European Union, Japan, Korea, Chinese Taipei and the United States among others in the tier-one sustainability criterion. Further, the additional provisions give a “free pass” to distant water-fishing nations like the EU and China to continue with their fishing-related subsidies through diluted notification provisions, said people familiar with the development. The chair’s draft additional provisions are expected to come up for discussion at the Doha Trade Negotiations Committee (TNC) meeting on 15 July, said people familiar with the development. Despite India’s three proposals that require a revisit of the proposals for any decision to be made at the upcoming GC meeting, attempts are allegedly being made to go ahead with the draft GC decision, said people familiar with the development. INDIA’S PROPOSALS India’s first proposal (WT/GC/W/945) on “Analyzing the Impact of the Chair’s Proposed OCOF Disciplines under the Additional Provisions on Fisheries Subsidies on the Sustainability of Global Marine Fish Stocks” showed serious deficiencies/flaws in the chair’s draft text on grounds that it goes against the mandate in United Nations Sustainable Development Goal 14.6. India said: “As mandated by Sustainable Development Goal 14.6, negotiations on the overcapacity and overfishing (OCOF) pillar are guided by the objective of conserving global marine resources by prohibiting certain forms of fisheries subsidies that contribute to OCOF. Ensuring the sustainability of the global marine ecosystem has, therefore, been the primary driver of the OCOF subsidy negotiations.” India argued that “in order to accomplish its sustainability objective, the OCOF subsidy disciplines must rein in the activities of large-scale industrial fishing fleets involved in deep-sea and distant-water fishing (DWF)”, which “historically exploited and depleted the fisheries resources and benefited from substantial government support and subsidies for their extensive operations.” Further, India said “the OCOF disciplines should not curtail the aspirations of smaller players looking to expand their fishing capabilities and develop their fisheries sector.” It noted that the chair’s draft text (TN/RL/W/279), “is largely based on a hastily concluded compromise during the closing stages of the 13th Ministerial Conference (MC-13).” More importantly, according to India, “the draft text could undermine the sustainability goals of the OCOF pillar by failing to effectively discipline states that have historically subsidized their fisheries sector to develop large- scale industrial fishing capabilities.” India said its submission focused “on two aspects of W/279: the two-tiered demonstration requirement under the sustainability clause and the disciplines on distant water fishing nations (DWFNs).” In conclusion, India stated explicitly in its proposal that “the current draft text proposed by the Chair raises significant concerns about its ability to effectively regulate states that have historically subsidized their fisheries sector, leading to massive industrial fishing capacities.” India stated that “the two-tiered demonstration requirement and the dilution of disciplines on DWFNs present significant loopholes that may perpetuate unsustainable fishing operations, particularly by large-scale industrial fishing nations.” India underscored the need for a careful “review” of “these aspects of the current draft text to ensure that it effectively aligns with the sustainability goals of the OCOF pillar without unfairly burdening developing countries.” The second proposal (WT/GC/W/946) by India deals with specific concerns on disciplines concerning OCOF as contained in the draft additional provisions. India said that its concerns are two-fold: (i) the two-tiered demonstration requirement and (ii) the dilution of disciplines on distant water fishing (DWF) nations present significant loopholes that may perpetuate unsustainable fishing operations, particularly by large-scale industrial fishing nations that have historically subsidized their fisheries sector leading to its current industrial prowess. According to India, “the current hybrid approach does not advance the objective of sustainability.” It urged “the membership to consider the affirmative determination approach, as outlined in the overfished pillar.” India argued that “on the subject of levelling the playing field for developing countries and LDCs through the implementation of strong and effective SDT provisions, we must bear in mind that sustainability cuts across environmental, social, and economic dimensions. The loss of one dimension will impair the others.” New Delhi cited three key issues with the chair’s draft additional provisions. They include: “(i) Stringent conditionalities and notification obligations for SDT towards small-scale and artisanal fishers, which require immediate attention to avoid the dilution of their SDT entitlement: (ii) the disregard of the sovereign rights of coastal states as outlined under the UNCLOS (United Nations Convention on the Law of the Sea) by not carving out the EEZ from the disciplines; and (iii) the need to provide a longer transition period in waters managed by RFMO/As (regional fisheries management organizations/arrangements) for developing country Members to effectively adjust to the OCOF subsidy disciplines without jeopardizing their socio-economic development.” It reiterated “the three horizontal issues that need to be addressed in order for the comprehensive disciplines on fisheries subsidies to achieve their sustainability objective.” These horizontal issues include: (i) the inclusion of non-specific fuel subsidies within the scope of the comprehensive disciplines; (ii) treating the onward transfer of rights under government-to-government access arrangements (which are entered into by the EU with several neighbouring Mediterranean countries) to operators and vessels as a subsidy under the comprehensive disciplines; and (iii) excluding from the scope of Article 4 of the AFS (Agreement on Fisheries Subsidies) multi-species fishing and related activities within the EEZ of coastal states by fishermen using non-selective fishing gear.” India regretted the process adopted by the chair, saying that “while members are unable to have an open and constructive dialogue post-MC13, at the same time, there is a motion to adopt the text prematurely, despite the fact that many outstanding issues remain unresolved.” New Delhi cautioned that “such actions carry the risk of perpetuating the ongoing imbalances in the development of the fishing sector – especially as the concerns of developing members have not been adequately addressed.” It called for further “consultations”, with “the objective of identifying practical and long-lasting solutions that will guarantee that all members are well equipped to achieve the SDGs in all of its three pillars in a holistic and balanced manner.” India said it is “open to finding the appropriate landing zones. Further, we will remain engaged and constructive towards a final and meaningful outcome before the MC14.” India’s third proposal (WT/GC/W/947) focused on “Implementing Appropriate and Effective Special and Differential Treatment under the Additional Provisions on Fisheries Subsidies”. It said that the United Nations Sustainable Development Goal (SDG) 14.6 “sets out the negotiating mandate for the overcapacity and overfishing (OCOF) pillar. It, inter alia, calls for prohibiting certain forms of subsidies contributing to OCOF while also recognizing that appropriate and effective special and differential treatment (SDT) for developing and least developed countries (LDCs) should be an integral part of the negotiations.” India said that “the need to implement appropriate and effective SDT under the OCOF pillar stems from the principle of sustainable development, recognized by the Marrakesh Agreement, that calls for a balance between the environmental, social and economic dimensions of development.” India highlighted “the principle of common but differentiated responsibilities and respective capabilities (CBDR- RC).” It said: “Applying the CBDR-RC principle to the OCOF subsidy disciplines implies that large industrial fishing nations, who have historically contributed to the depletion of global marine resources – not just in their waters and on the high seas but also in the exclusive economic zone (EEZ) of other countries where they have access arrangements – should shoulder a greater share of the responsibility than states that have not contributed in the same way. Additionally, the CBDR-RC principle stipulates that the resource constraints and capabilities of developing nations must be considered when determining their responsibilities in a sustainability context.” According to India, “several considerations need to be taken into account in order to implement appropriate and effective SDT under the OCOF pillar.” These considerations include “addressing the needs of small-scale and artisanal fishers, whose livelihoods depend on fishing, and the food security concerns of states that rely on fisheries as a source of nutrition,” India said. “It is also important to consider the capacity constraints of developing countries and LDCs to establish and maintain effective fisheries management systems to adhere to the disciplines,” India said, suggesting that “it involves the aspiration of developing coastal States to enhance their fishing capacity and engage in large-scale industrial fishing in the future.” POLICY SPACE At the outset, India said “it is important to note that given the harm posed by fishing regarding overfished stocks and illegal, unreported and unregulated (IUU) activities, Members have agreed to a limited SDT in relation to these pillars.” “The SDT for developing countries, including LDCs, in relation to the IUU and overfished pillars, is limited to a two-year transition period up to the EEZ from the date of entry into force of the Agreement on Fisheries Subsidies (AFS),” India said. As regards the OCOF subsidy disciplines, India said “developing countries demand stronger SDT, given their comparatively less harmful impact on the health of fish stocks.” Questioning the S&DT provisions in the chair’s latest draft text (TN/RL/W/279), India argued that “SDT for the OCOF pillar entails an exemption from the obligation to prohibit subsidies contributing to OCOF contained under Article A.1.” In its elaborate proposal explaining the asymmetrical treatment meted out to the developing countries, India emphasized “the necessity of a strong SDT within the OCOF pillar to ensure a balanced approach to sustainable development across environmental, social, and economic dimensions.” It said that the current draft text “stipulates stringent conditionalities and notification obligations for SDT towards small-scale and artisanal fishers, which requires immediate attention to avoid the dilution of their SDT entitlement.” India argued that “it is crucial to exclude the EEZ from the OCOF disciplines to respect the sovereign rights of coastal states as outlined under the UNCLOS.” “In addition, allowing a longer transition period in waters managed by RFMO/As is vital for developing country Members to effectively adjust to the OCOF subsidy disciplines without jeopardizing their socio-economic development,” India concluded. In conclusion, India’s three proposals seem to have exposed how agreements are allegedly biased in favour of the main “culprits” who are regarded as being historically responsible for the global depletion of fish stocks. +
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