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WTO Corner: Fish subsidies move to end game, IP waiver negotiations now weekly

Chris Horseman and Robert Francis on the latest developments in the two critical negotiations at the WTO on fisheries subsidies and on intellectual property. 

Plans for revised compromise text as WTO fish talks enter end-game

A fresh revised text of the planned WTO agreement on fisheries subsidies is expected to be delivered to delegations in Geneva by the end of this month, as the clock ticks down towards a key ministerial meeting due to start on 15 July.

Intensive negotiations have been continuing over the past few weeks on what would be the WTO’s first new multilateral agreement in two decades, and officials are stressing that there are still many hurdles to overcome.

But a mood of very cautious optimism was evident at a stocktaking meeting in Geneva earlier this week.

“I think we are moving but we are far from doing the job. It has taken a long time and we still have large gaps. However, in spite of the difficulties before us, I do feel that we have the best chance to make a difference now. It really is within reach,” said WTO Director-General Ngozi Okonjo-Iweala.

There is broad consensus that government subsidies to the fisheries sector have contributed to the poor biological state of fish stocks in many parts of the world, and there is support for the concept of a global deal to regulate and curb such payments. But agreeing on the details is, of course, proving to be a tricky task.

The ongoing negotiations are now focusing primarily on a small number of key issues:

Special and differential treatment

The concept of differential treatment for developing countries is hardwired into most WTO agreements, but it is a problematic concept in the context of an agreement aimed essentially at preserving fish stocks.

The latest draft text released by the chair of the negotiations, Colombia’s Santiago Wills, had suggested two possible options for SDT in the context of the fish subsidies negotiations.

The latest text proposes either time-limited derogations from the agreement’s main provisions for developing countries, or an agreement that the provisions should only apply to those developing countries which make a non-trivial contribution to global fish catches.

But WTO members now appear to be homing in on some variant of the first approach.

This is because, as one participant noted in a meeting this week, exempting from subsidy prohibitions those developing countries with less than a 2.5% share of global marine catch would mean that all but five of the world’s developing countries would be completely exempt.

The questions now revolve around the length of any grace period for developing countries, and whether the exemption should be permanent for the poorest countries – who are in any case least likely to have cash to spare for fisheries subsidies.

Exemptions for subsidies aimed at supporting sustainability

There is also a general acceptance that some forms of government support to fisheries can represent part of the solution, rather than part of the problem, when it comes to overfishing.

But there is lively debate in Geneva about how to formulate any such carve-outs.

The current draft text states that “a subsidy is not inconsistent with [the overall ban on subsidies to fishing activities that contribute to overcapacity or overfishing] if the subsidizing Member demonstrates that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.”

But some countries share the concerns of environmental activists that this clause appears simply to require governments to demonstrate that policies designed to achieve these sustainability objectives are in place – rather than impose any requirement to demonstrate that these policies are actually being effective in meeting these objectives.

“It’s still an open question just what this exception would require a member to show,” commented Alice Tipping of the International Institute for Sustainable Development, in a recent blog post on the subject.

Fuel subsidies

One of the forms of subsidy which is proposed to be outlawed in the context of the rules governing overfishing and overcapacity is “subsidies to the purchase/costs of fuel”.

This is a challenging issue, as fuel subsidies are one of the most common and widespread forms of support to the fisheries sector, and are widely used by both developed and developing countries.

This is also an area where the European Union, which has been happy to position itself as a promoter of the overall fish subsidy negotiations, faces its own challenge. Fishing companies in France and Spain have already raised the alarm over the prospect of losing their current government fuel detaxation benefits.

But these and other subsidy prohibitions would only apply in the context of fisheries which were designated as ‘overfished’ – and inevitably, debate is thus also being generated as to how exactly such a designation should be made.

Distant water fishing

A proposed ban on subsidies for fishing activities which are carried out beyond the 200-mile economic exclusion zone is another area of debate. This is a particular issue for China, which relies heavily on long-distance fishing vessels to keep its huge population supplied with protein.

Next steps

Following a flurry of meetings in recent weeks, the chair of the negotiations has signalled that he will hold further contacts with members before taking stock of the situation once again towards the end of June.

It thus seems likely that a new revised text will be issued at that point, taking account of the different views expressed, and attempting to find acceptable compromise solutions.

There is also to be a meeting next Friday (25 June) at which Wills, together with Director-General Okonjo-Iweala, will outline how the ministerial meeting on 15 July will be run.

Close watchers of the talks remain hopeful that at the very least a framework deal can be concluded at the ministerial, with the main outlines of an agreement put in place.

TRIPS Council schedules weekly meetings to break patent deadlock

WTO members remain strongly divided on a potential IP waiver for COVID-19-related medical products and vaccines and have planned for weekly meetings to break the deadlock, following the informal meeting of the TRIPS Council on 17 June.

During the meeting members agreed a weekly calendar of meetings to engage in text-based discussions with the aim of coming up with a report in time for the WTO General Council on 27-28 July.

First to be discussed will be the scope of the proposed waiver put forward by South and India, with duration and implementation to be considered later once there is clarity on the former.

The EU proposal which focuses on limiting export restrictions, supporting the expansion of production, and facilitating the use of current compulsory licensing provisions in the TRIPS Agreement, will also be discussed in parallel.

The Chair of the meeting reported that other delegations have said they may present additional proposals “in the not-too-distant future” and urged them to do so as soon as possible.

The US, for its part, has still not put forward an official proposal on a waiver for vaccines, despite appearing to support such a move last month.

The next meetings within the TRIPS Council are scheduled to take place on 30 June, 6 July, 14 July, and 20 July, and these will be bolstered with additional meetings in smaller configurations.

Any decision within the TRIPs Council will need to be made by consensus.

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