MC12, WTO Fish

MC12 – Fish subsidies agreement: what is left for ministers to decide

The final draft of a new WTO agreement on fisheries subsidies was submitted to trade ministers late on Wednesday (24 November), as officials in Geneva made their final push towards what would be the organisation’s first major multilateral agreement in more than 20 years.

The committee responsible has made substantial progress towards achieving their primary aim, which was to deliver a ‘clean’ legal text for discussion at the 12th WTO ministerial meeting which starts next Tuesday (30 November).

But the draft text still contains 26 pairs of square brackets – denoting points on which there is as yet no consensus.

These points will have to be resolved when ministers assemble in Geneva next week.

In essence, the main outstanding areas of difference revolve around two core issues:

a. the extent to which developing countries are exempted from the full scope of the subsidy restrictions – or ‘special and differential treatment’, in the WTO jargon;

b. the extent to which fuel subsidies to fishing vessels are covered by the scope of the agreement.

A ban on fisheries subsidies – but with plenty of exemptions

The core provisions of the agreement have been emerging during exhaustive negotiating rounds over the past few months.

There is to be a ban, in principle, on government subsidies which fall into one of three categories: those which benefit vessels which are fishing illegally, those which support fishing on overfished stocks, and those which “contribute to overcapacity or overfishing”.

In the case of the first two categories, the only outstanding question is whether or not developing countries should be given a two-year grace period to eliminate any such subsidies which are directed towards artisanal or inland fisheries.

But the picture is more nuanced in the ‘overcapacity or overfishing’ category, which is covered by Article 5 of the agreement.

In principle, there is to be a ban on a wide range of government subsidy types – grants for new vessels, support for buying new equipment, reductions in social security charges, etc – in cases where this entails a risk of impacting negatively on the biological state of a vulnerable fish stock.

Scoping the exemptions for developing countries

But there is a blanket exemption for any country which can demonstrate that “measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level”.

And in addition, developing countries are to be temporarily exempted from these provisions for a given period – the length of which is still to be determined – or permanently exempted if the country in question is not a major contributor to fish stock depletion.

In the latter case, the currently proposed criterion is that the country’s share of total annual global fish catches does not exceed 0.7%.

These exemption criteria remain the most heavily disputed part of the agreement, with the whole of the relevant section – Article 5.4 – currently in square brackets.

Least developed countries are to be fully exempted from all of the ‘Article 5’ provisions – with the only outstanding point of contention being the length of the grace period for delaying application of the provisions when a country ‘graduates’ out of LDC status.

Direct and indirect fuel subsidies

The other main area still to be resolved relates to fuel.

Subsidies granted specifically to provide fuel for fishing boats are included in the scope of the agreement – but there are still arguments about whether non-specific government fuel subsidies,  which happen to benefit the fisheries sector inter alia, should also be disciplined.

The latest draft indicates that these types of fuel subsidy should indeed be included – but again, square brackets in the text denote that this remains a point of contention.

Forced labour language awaits agreement

The other contentious area in the agreement relates to the last-minute proposals tables this summer by the Biden administration aiming at tackling forced labour in the fishing sector.

The obligations foreseen in the text are ‘mild’ for the WTO members. The relevant sub-paragraph of article 8 of the draft agreement foresees an obligation for WTO members to notify to the institution, on an annual basis, “any vessels and operators for which the Member has information that reasonably indicates the use of forced labour, along with relevant information to the extent possible”.

The quoted language is in brackets and is one of the 26 items ministers will need to agree on next week.

Agreement seen as ‘within grasp’

Officials are nevertheless optimistic that these outstanding areas of disagreement are few enough in number, and sufficiently focused, to make resolution by ministers next week a realistic possibility.

“The current draft reflects an honest attempt to find a balance in members’ positions and I think it is the most likely way we can build consensus, without undermining our sustainability objective, and successfully conclude more than 20 years of negotiations,” said Santiago Wills of Colombia, the chair of the fisheries negotiating committee.

“We have grounds to be optimistic. An Agreement on Fisheries Subsidies, one that will help both the planet and people, is within our grasp,” Wills said.

“It is also an opportunity to build trust in multilateralism, and the opportunity for WTO members to succeed in negotiating new rules for the 21st century. This will also be a big step for sustainability of the global commons. We have that opportunity next week at MC12 — let’s take it and deliver.”

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