TWN Info Service on WTO and Trade Issues (May08/21)
20 May 2008
Third World Network

Trade: Need for effective S&D in fisheries, say India, Indonesia and China
Published in SUNS #6475 dated 16 May 2008

Geneva, 15 May (Kanaga Raja) -- An informal meeting of the WTO Negotiating Group on Rules on 13-14 May discussed a joint proposal by India, Indonesia and China that stressed the need for effective special and differential treatment for developing countries in the Chair's proposed text on fisheries subsidies.

India, Indonesia and China introduced a joint proposal ((TN/RL/GEN/155/Rev. 1) entitled "Need for Effective Special & Differential Treatment for Developing Country Members in the Proposed Fisheries Subsidies Text."

(The joint proposal is a revision of an earlier proposal submitted by India and Indonesia at the last meeting of the Negotiating Group in April. China has now joined as a co-sponsor in the revised submission.)

According to trade officials, India reiterated its concerns about the Chair's text, especially with S&D. It said that their proposed alternate text provides effective S&D and enough flexibility for developing countries.

India also urged the Chair to issue a revised Rules text before the start of the "horizontal process" in the negotiations.

It further said that instead of formal fisheries management systems, developing countries can use indigenous methods to control over-fishing. It also stressed that developing countries need policy space to pursue development objectives.

Indonesia said that the requirements that would enable developing countries to grant fisheries subsidies in the Chair's text are too stringent, and that many of them would be impossible to comply with fully at this time.

According to trade officials, China said that it agreed to co-sponsor the paper because it considered the subject of S&D to be important. It added that it had not made much changes to the original proposal of India and Indonesia, except for policy flexibility for developing countries to operate in remote waters.

The joint submission by India, Indonesia and China noted that the Chair's draft text on Rules has added an Annex VIII on Fisheries Subsidies to the Agreement on Subsidies and Countervailing Measures, which has been intensively discussed from December 2007 to March 2008.

The joint paper said that many developing countries have made known their strong concerns on the draft text particularly on the provisions relating to grant of Special & Differential (S&D) Treatment to developing country Members and the conditionalities of fisheries management prescribed to avail the S&D treatment.

"In this paper, we make a strong case for effective S&D provisions in the Chair's text," said India, Indonesia and China.

The paper gives a brief background of the nature of the marine fisheries in developing countries. It said that most developing countries have large sections of their population involved in fisheries. More often than not, fishing is a means of livelihood in such countries, as opposed to its predominantly commercial nature in developed countries.

Further, said the paper, the fisheries sector is characterized by unpredictability and seasonality of catch, where prices obtained for catch on any given day can be highly uncertain. Available evidence also suggests that coastal fishing communities in general, have lower levels of literacy, a lower sex ratio, and poorer conditions of housing, as compared to national averages.

Evidence also suggests that fishing communities are faced with a deteriorating quality of life as a result of pollution, sea erosion, increased pressure on coastal lands, degradation of the coastal environment and displacement.

In addition, said the paper, the technology used for fishing in developing countries is also very basic, with large sections of the fishing community using un-powered boats or at best, vessels with minimal motorization (up to 10 Horse Power outboard motors).

For example, 44% of the fishing vessels in India are un-powered, but contribute to less than 10% of the marine fish production. If the small motorized vessels (up to 10HP motors) are also taken into account, these, together with the un-powered vessels account for about 75% of the vessels and 50% of the fish production. Most of these vessels are up to 20 m length overall.

Similarly, in Indonesia, 85% of fishing vessels are small and traditional, operating mostly in the territorial waters. There are about 9,337 un-powered vessels and 77,339 small motorized vessels, which form this small and traditional fleet. Most of these vessels are also about 20 m in length.

In China, 87% of the vessels are about 20 m in length, said the paper.

It also noted that the fishing infrastructure in most developing countries is under-developed and in need of large doses of state intervention. For example, India has a long coastline of 8,118 sq km and an Exclusive Economic Zone of 2 million sq km. However, there are only about 6 major and 41 minor fishing harbours and 2,000 landing sites. Most of the landing sites are rudimentary and in need of maintenance and repair. Clearly, there is a need to build more fishing harbours and landing sites.

"It is therefore clear that developing countries need to protect the livelihood concerns of their poor fishermen and also take up major infrastructure development. Further, given the public good nature of the infrastructure and the involvement of huge investments with long gestation lags, it is clear that the State would have to continue to support such activities."

Given the above, said the paper, it is evident that the Chair's text on fisheries subsidies will not only restrict the efforts of developing countries at formulating and implementing public policies to address livelihood concerns of poor fishermen, it will also hinder their efforts at building infrastructure.

"Moreover, it seems to be unfair to restrict the very subsidies that developed countries have historically given to their fishermen, especially the small and artisanal ones for developing their fishery industry."

The paper also noted that most developing countries are Members of the Food and Agriculture Organization, where many have subscribed to the various agreements such as the UN Fish Stocks Agreement and the Code of Conduct for Responsible Fisheries. They also have fisheries management systems in place or are in the process of devising and operationalizing such systems.

"However, the FAO agreements are voluntary in nature, which gives developing countries the necessary comfort and flexibility. Hence, committing to these systems irreversibly at the WTO is not only undesirable, but would also expose developing country regimes to being challenged through the dispute settlement mechanism."

The joint paper by the three countries analyses the Chair's text and goes on to explain why developing countries would have a problem in accepting the S&D provisions in their current form.

It also provides a similar rationale for the difficulty in accepting Article V (in the proposed Annex VIII in the Chair's text on fisheries subsidies) on Fisheries Management, as well as outlines the three countries' position on Notification and Surveillance requirements (Article VI) and Transitional Provisions (Article VII).

The paper also provides an Annex where amendments to the Chair's text on Fisheries Subsidies have been suggested.

The paper amongst others calls for the length of decked vessels to be raised to 24 m, and that developing countries be given the flexibility to adopt measures proposed in relation to fisheries management (Article V) and undertake domestic legislation at their own pace.

With respect to transitional provisions, the paper suggests that the period given for conformity for developing countries be raised from the proposed 4 years to 10 years.

The three countries concluded that given the development priorities, food security and livelihood concerns of developing countries, "we believe that effective special & differential treatment for small scale, artisanal fisheries in the new disciplines is essential."

According to trade officials, Thailand, also on behalf of Malaysia, the Philippines and Viet Nam, expressed support for the general thrust of the proposal, which it said meets the concerns of many developing countries. It welcomed the extension of boat length for small-scale fishing from 10 to 24 m, as well as extending the transition period for developing countries from 4 to 10 years.

Turkey expressed general support for the paper. Barbados, on behalf of the small and vulnerable economies, agreed with many points in the proposal.

Brazil said that it shared many of the concerns of the proponents, adding that the proposal goes in the right direction. It shared the proponents' diagnosis of the Chair's text, but said that the paper may have gone too far regarding the definition of artisanal fishing.

According to trade officials, Pakistan expressed support but said that the paper might have gone too far regarding fisheries management.

Solomon Islands, on behalf of the Pacific Island countries, supported many elements in the proposal and reiterated its opposition to boat length limits.

Malaysia expressed general support for the paper, adding that it has plans for granting incentives to tuna fishing.

According to trade officials, the US expressed concern that the proposal would give developing countries, some of which are major fish producers, a complete carve-out from the disciplines on fisheries subsidies. While it is very sympathetic to granting flexibility to artisanal fishing, it believed that the paper goes too far by exempting all kinds of fishing activity in developing countries.

The US also maintained that the 24-m vessels are not artisanal, and allowing subsidies to commercial fleets would be a blank cheque that could destroy fish stocks in all members, both developed and developing. It said that the paper represents a significant weakening of disciplines.

New Zealand said that there is an emerging consensus in the Group that artisanal fishing should not be subjected to conditionalities, but stressed the need to define "artisanal fishing". It argued that including 24-m boats in the definition would make all fishing activities in developing countries small-scale or artisanal.

Australia said that the paper undermines the level of ambition in the negotiations.

Chile said that it has many doubts about the proposal, adding that the paper significantly altered the Chair's text and also the level of ambition. It further said that it cannot agree to removing the requirement for subsidisers to establish a fisheries management system.

Peru said that it doesn't expect a blank cheque but rather more flexibility for developing countries. It said that fisheries management is necessary. Mexico said that its principal concern is that the proposal weakens disciplines on fisheries subsidies. It said that sustainability of fish stocks should be given priority.

According to trade officials, Norway stressed its opposition to high-seas subsidies.

The EU said that the paper seems to propose a carve-out without conditionalities for all fishing activities of developing countries in their territorial waters. It described as disappointing China's addition to the original proposal for giving flexibility to developing-country fishing in the high seas.

The EU said that it also has difficulties with the Chair's text, adding that members must accommodate each other's concerns.

Korea and Chinese Taipei reiterated that flexibilities should be given to small-scale fishing for all members - developed and developing alike. They expressed concern about the paper's position on fisheries management.

Japan expressed strong reservations, adding that the paper went too far. It said that allowing subsidies to 24-m boats and removing the requirement on fisheries management would deplete the fish stocks.

According to trade officials, the Group continues its meeting on Thursday where it is to discuss Article IV relating to general disciplines. On Friday, the Group will discuss the subject of technical assistance. +