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TWN
Info Service on WTO and Trade Issues (Jul24/23) Geneva, 24 Jul (D. Ravi Kanth) — Amidst an alleged demonstration of “irrational exuberance” and attempts at steamrolling decisions, members of the World Trade Organization on 23 July ended the first half of this year on a rather sombre note of failure, with little or no consensus on any of the targeted issues, including on disciplines on fisheries subsidies contributing to overcapacity and overfishing (OCOF) that is mainly responsible for the global depletion of fish stocks, said people familiar with the discussions. On the first day of the WTO’s General Council (GC) meeting on 22 July before the summer break commences, members failed to reach consensus on Brazil’s proposal on moving the agriculture negotiations forward (WT/GC/W/939/Rev.2), under the overall direction and guidance of the GC with an altered mandate that sought “to change the goalposts”, said several participants who asked not to be quoted. On another controversial issue concerning the proposed integration of the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement (WT/GC/W/927/Rev.1), the opponents stuck to their earlier reiterations that the IFDA cannot be brought into the WTO both on procedural and systemic grounds, said people familiar with the development. As reported in SUNS #10052 dated 24 July 2024, the rather puzzling political spectacle witnessed concerning a request by the African Group on the appointment of the WTO Director-General (WT/GC/W/948) that allegedly sought to circumvent the WTO rules to advance the selection process of the incumbent WTO Director-General, Ms Ngozi Okonjo-Iweala, for a second term, seems to have set a new trend in the GC meetings, said several people familiar with the development. Significantly, in varying levels of emphasis and echoing some “constructive ambiguities”, the DG seems to have adopted an “activist” role in influencing the controversial proposals like Brazil’s on agriculture, the 126-member initiative on investment facilitation for development, which was primarily a Chinese initiative since 2016, and on fisheries subsidies, said several trade envoys who asked not to be quoted. Aside from the DG’s allegedly active promotion of these three issues, the GC chair, Ambassador Petter Olberg of Norway, also seemingly showed his hand and allegedly broke “the dignity of the chair he occupied”, namely, one that required him to be completely impartial and neutral on issues where there are sharp divisions, said trade envoys who asked not to be quoted. To recall, the high standards set by the previous Norwegian GC chair, Ambassador Kare Bryn, almost 24 years ago, ensured that the rules were strictly adhered to under any circumstances, said several former trade envoys, who asked not to be quoted. FISHERIES SUBSIDIES During the discussion on disciplines on fisheries subsidies contributing to OCOF on 23 July, the GC chair apparently gave the floor first to Iceland that called for a decision on the controversial draft additional provisions on fisheries subsidies proposed by the Icelandic chair of the Doha fisheries subsidies negotiations, Ambassador Einar Gunnarsson, said people familiar with the discussions. Iceland seemingly made a strong case at the meeting for adopting a decision on the draft text (TN/RL/W/279) containing “additional provisions on fisheries subsidies”, particularly dealing with fisheries subsidies contributing to overcapacity and overfishing, said people familiar with the discussions. A trade official from Iceland apparently argued that the draft additional provisions on fisheries subsidies addresses all the concerns raised by members, said people familiar with the discussions. INDIA’S THREE PROPOSALS After Iceland, the GC chair gave the floor to India to present its views on its three proposals which not only severely criticized the chair’s draft additional provisions but also exposed the alleged asymmetries in the draft text, including the apparent “free pass” given to the big subsidizers to continue with their billions of dollars in OCOF subsidies under seemingly weak and circumventable notification requirements based on a two-tier sustainability criteria, said people familiar with the discussions. 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 Stocks” highlighted the alleged serious deficiencies/flaws in the text on grounds that it goes against the mandate set out in United Nations Sustainable Development Goal 14.6. The United Nations Sustainable Development Goal 14.6 has stated, “by 2020, 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.” India’s proposal states: “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, it 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).” The three proposals tabled by India on 11 July highlighted the alleged deficiencies in the chair’s draft additional provisions, which seemingly remain inconsistent with UN SDG 14.6, said people familiar with the development. FISHERIES CHAIR’S INTERVENTION After Iceland and India, the GC chair apparently gave the floor to Ambassador Einar Gunnarsson of Iceland, the chair of the Doha Negotiating Group on Rules (NGR), which oversees the fisheries subsidies negotiations, to provide his assessment, said people familiar with the discussions. Although the full statement of the NGR chair has so far not been circulated, it is clear that the report he provided following the small-group meetings on 18 July revealed the irreconcilable differences, including his attempts to address some of the concerns raised by members. After the presentations, the GC chair then opened the floor for members to express their views. The big subsidizers like China, the European Union, the United States, and other members not only praised the draft additional provisions on fisheries subsidies, they also signaled their willingness to join the consensus on the draft additional provisions, said people familiar with the discussions. The US appears to have said that it is ready to join the consensus even though it is not comfortable with several aspects of the draft additional provisions, said people familiar with the discussions. The US apparently criticized India, suggesting that it was provided with several opportunities during the past two years but New Delhi’s ideas/proposals seemingly failed to gather traction, a stand that was also echoed by another major distant-water fishing nation, the European Union, said people familiar with the discussions. The US stand seemingly exposed its “hypocritical double standards” on the proposed disciplines on OCOF subsidies, said a former trade envoy, who asked not to be quoted. “The US held the entire WTO hostage by paralysing the Appellate Body since December 2019 and by rejecting any number of improvements proposed by the former GC chair and facilitator, Ambassador David Walker of New Zealand,” the envoy said. China, which is seen as one of the biggest beneficiaries of the chair’s draft additional provisions, said that it is “deeply disappointed” that the item proposed by Iceland has been moved from the category of “For Action/ Decision” to the “For Discussion” section. China’s trade envoy, Ambassador Li Chenggang, said that “we come to this meeting bearing high hope and firm determination to deliver this long-awaited outcome, not only because the latest Chair’s text, in the views of the vast majority of members, strikes a delicate balance and serves as a solid basis for conclusion, but also because the fish and this planet cannot wait any longer.” “However, the opportunity has not even been given to members to make a final attempt in this meeting to deliver something for the common good,” the Chinese envoy said. China praised the NGR chair for his “hard work” and “the Secretariat team,” adding that “the current text is not perfect, and I also believe there will be no such text that could satisfy every member.” “Nevertheless, if this set of already-good disciplines could be adopted and implemented, it can certainly bring real changes to the rationale and behaviour of members when they subsidize their fishing industries,” China said. China expressed confidence that the draft text addresses “the sustainability goal of SDG 14.6,” arguing that “against this backdrop, the failure to deliver today is even more frustrating.” It called for change, emphasizing, “No reform, no success.” Indonesia’s trade envoy, Ambassador Dandy Iswara, said, “while we are focusing on the environment as one of the sustainability pillars, through SDG 14.6, we should not forget about other sustainability pillars – namely, the economic and social pillars that are also of relevance to this important issue.” Indonesia said that it will defend “the interest of our 2 million small-scale and artisanal fishermen whose livelihood and employment depend on our sea.” More importantly, the Indonesian trade envoy said the agreement should enable especially “developing members and LDCs to provide support that could accelerate the growth of their small-scale and artisanal fishing without excessive parameters and caveat(s).” Indonesia said that the agreement should ensure that “the flexibilities to Large Fishing Vessels and distant-water fishing is not overly excessive, particularly when historically, both have been heavily subsidized and contributed most to overcapacity and overfishing.” “Going forward, we believe that to create convergence toward the text, it is imperative for us to consider all three sustainability pillars – economic, environment and social – as they need to be implemented in a holistic and balanced manner,” Indonesia said. Indonesia said, “it is important that the provisions in the final text must address subsidies and practices that caused the problem in the first place, instead of punishing small-scale and artisanal fishers, whose impacts in terms of overcapacity and overfishing that endanger fish stock sustainability, is almost negligible.” Indonesia said that it “looks forward to further constructive discussions where we can bridge the remaining gaps and conclude an agreement that is fair, equitable, and promotes the long-term sustainability of global fisheries.” Many developing countries, while supporting some of the additional provisions, sought improvements in the draft text. While it is apparent that India’s challenges to the draft text were singled out by some members, the problems mentioned by other developing countries and LDCs are as important at arriving at a balanced agreement, said people familiar with the discussions. The Russian Federation is understood to have said that changes in the current draft text are highly substantial as compared to the version presented at MC13. Russia is understood to have said that “whenever a package is proposed for a decision, at least one-month notice should be provided.” In her intervention, the WTO DG said that the proposed Fish-2 agreement addressed the concerns on a balanced footing, adding that some members still have concerns that need to be addressed, said people familiar with the discussions. Even though there was no consensus on the draft additional provisions on fisheries subsidies at the meeting, the GC chair appears to have said, as he did on the issue of the DG selection process, that we shouldn’t wait until MC14 and that he will be happy to convene a special GC meeting to conclude the deal, said people familiar with the discussions. “The GC chair acted like the biggest cheerleader of the DG,” said a trade envoy, who asked not to be quoted. +
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