Fisheries Subsidies Negotiations in the WTO Background and current state of play

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Fisheries Subsidies Negotiations in the
WTOBackground and current state of play

• By Manleen Dugal
• June 2 2009, Geneva

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Doha and Hong Kong Mandate

• Doha Mandate (2001)
• to clarify and improve WTO disciplines on
  fisheries subsidies, taking into account the
  importance of this sector to developing
  countries
• Para 9, Annex D of HKD (2005) ..strengthen
  disciplines on subsidies in the fisheries sector,
  including through the prohibition of certain
  forms of fisheries subsidies that contribute to
  overcapacity and over-fishing.
• and
• .Appropriate and effective special and
  differential treatment for developing and
  least-developed Members should be an integral
  part of the fisheries subsidies negotiations,
  taking into account the importance of this sector
  to development priorities, poverty reduction, and
  livelihood and food security concerns

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Statistical facts concerning the state of global
fisheries resources

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Some other interesting statistics

• Fleet overcapacity has been on an increasing
  trend, approximating 50 percent in 2008, despite
  a relative decline in fleet sizes (FAO, 2009)
• Global fishing fleets remain far larger than can
  be sustainably employed (FAO, 2008)
• Productivity of marine capture fisheries has been
  essentially flat since the late 1980s due to
  increasing levels of depletion (FAO, 2008)

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Statistics on worldwide fisheries subsidies

• Total global annual fishing subsidies are worth
  USD 15-35 billion and come in a wide variety of
  forms such as direct cash grants, tax breaks,
  loan guarantees and provision of goods and
  services (World Bank Technical Paper 1998, WWF
  (2001))
• and
• 80 of the global fisheries subsidies is granted
  by developed countries (Joint Study by World Bank
  and FAO)
• 90 of all officially reported fishing subsidies
  are granted by only seven members Japan, EU, US,
  Canada, Russia, Korea and Chinese Taipei (WWF
  factsheet, 2009)

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Economic rationale behind the Mandate

• Fisheries subsidies cause overcapacity and
  overfishing resulting in depletion of fish stocks
• Fisheries subsidies cause trade distorting
  effects through production and export market
  distortions
• FRIENDS OF the FISH Group Australia, Chile,
  Ecuador, Iceland, New Zealand, United States,
  Peru, Philippines

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The legal rationale behind the Doha mandate

• Legal inadequacy of existing disciplines under
  the ASCM to address all fisheries-related
  concerns
• Significant practical problems in applying ASCM
  disciplines to fisheries issues
• The general rules of the ASCM are not designed to
  address the exceptional and distinctive market
  distortions that subsidies in the fisheries
  sector can generate.

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High Stakes for the ACP Group

• Residents of many ACP countries are familiar
  with the sight of foreign commercial fishing
  vessels plying the waters off their coasts, often
  in direct competition with local fishing
  communities. A number of them have also witnessed
  the depletion of native fish stocks that can
  result from the activities of subsidized foreign
  fleets (Schorr, 2004)
• Small island states and other coastal
  developing countries (which would include several
  ACP states) are among the most likely to be
  injured by the overfishing and market distortions
  that result from harmful fishing subsidies
  maintained by major fishing powers. (Schorr,
  2004)

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• Draft legal text of the Chair of the WTO
  Negotiating Group on Rules (Fisheries) and
  reactions of WTO Members on key elements

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The Prohibition

• The list of prohibitions in the current list
  under the Draft Chairs Text includes
• subsidies provided for vessel acquisition,
  construction, repair, renewal, renovation,
  modernization for fishing and service vessels
• subsidies for operating costs of fishing or
  service vessels (including licence fees or
  similar charges, fuel, ice, bait, personnel,
  social charges, insurance, gear, and at-sea
  support)
• Subsidies for in-or near-port processing
  activities for products of marine wild capture
  fishing subsidies for port infrastructure
• Subsidies for price and income supports
• Subsidies contained in the onward transfer of
  fishing rights under fishing access arrangements
  between Members
• Subsidies where benefits are conferred to IUU
  vessels (Article I, Draft Chairs Text, 2007)

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Proposed Provisions for Special and Differential
Treatment (SD) for LDCs and non-LDC fishing
operations

• Blanket exemption for Least-Developed Countries
  (LDCs) from the proposed prohibited list of
  subsidies, i.e., unlimited and unconditional
  right to provide fisheries subsidies.
• General view that SD provisions for non-LDC,
  non-subsistence fishing operations should not
  amount to a "blank check

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Proposed SD treatment for subsistence-oriented
fisheries

• Carte Blanche exemptions for subsidies to
  subsistence-oriented fisheries, with only
  indicative management conditionality
• Conditions placed on the current definition of
  subsistence-oriented fishing in the Draft Chairs
  text - too narrow?

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Proposed Treatment for non-LDC small-scale and
industrial fisheries

• Conditional exemptions for subsidies to port
  infrastructure and other physical facilities,
  income support for fishers, and price support for
  fishers products
• Limitation placed on use of certain
  capacity-enhancing subsidies and operating cost
  subsidies, to decked vessels less than 10m in
  length only.

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Proposed Treatment for non-LDC small-scale and
industrial fisheries

• Limitation contained in the Draft Chairs Text
  for exemptions for capacity-enhancing subsidies
  provided to vessels active within a Members EEZ
  only.
• Additional conditions (additional to Article V)
  placed on the above of exemptions, as follows
  1) prior scientific stock assessment of fish
  stocks 2) assessment being subject to peer review
  at the FAO

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Proposed Treatment for non-LDC small-scale and
industrial fisheries

• Explicit exclusion of government-to-government
  transfer of funds from the scope of the
  prohibition
• SDT exemptions for subsidy elements contained in
  the onward transfer of fishing rights, where the
  fishery in question is within the EEZ of a
  developing country Member

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Proposed Treatment for Fisheries management
Systems

• Internationally recognized best practices
• As reflected in, e.g.
• Code of Conduct (FAO)
• Fish Stocks Agreement (FAO)
• Compliance Agreement (FAO)
• - Including technical guidelines and plans of
  action for the aforementioned instruments

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Proposed Treatment for Fisheries management
Systems

• List of compulsory measures relating to the
• Management and conservation of fish stocks,
• Fishing capacity, effort and catch, and
• Fishing vessels.

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Proposed Treatment for Fisheries management
Systems

• Management and conservation of fish stocks
• Science-based stock assessment
• Species-specific quotas, seasons and other stock
  management measures
• Research and other measures related to
  conservation and stock maintenance and
  replenishment

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Proposed Treatment for Fisheries management
Systems

• Fishing capacity, effort and catch
• Capacity and effort management measures
• Establishment and allocation of fishing rights,
  or allocation of exclusive quotas, and related
  enforcement measures
• System for reporting data on effort, catch and
  discards

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Proposed Treatment for Fisheries management
Systems

• Fishing vessels
• Vessels registries
• Vessel monitoring

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Proposed Treatment for Fisheries management
Systems

• Adoption and implementation of pertinent
  domestic
• Legislation
• Administrative/judicial enforcement mechanisms

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Proposed Treatment for Fisheries management
Systems

• Transparency
• Notification of information on the nature and
  operation of national fisheries management system
  to relevant FAO body/another relevant intl
  organization
• Notified information is subject to peer review
• Peer review is precondition for granting of
  subsidies

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Proposed Treatment for Fisheries management
Systems

• Notification to SCM Committee of references for
• domestic legislation and enforcement mechanisms
• Notifications made to other intl organizations
• Documents related to the peer reviews conducted
  by those organizations
• Contact information for enquiry point
• Enquiry point to answer all reasonable enquiries

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