WTO Corner blog, WTO dispute settlement, WTO Fish

WTO Corner: Fish subsidy talks, EU vs China “anti-suit” injunctions

Fisheries subsidies negotiators sat down again properly for talks after the postponement of the late 2021 ministerial meeting. The EU is bringing a new big-ticket case against China in the WTO regarding what it basically sees as Chinese court extra-territorial over-reach on patent protections. By Chris Horseman and Iana Dreyer.

WTO fish subsidy negotiations in limbo pending rescheduling of MC12

The WTO’s negotiations on a deal to curb subsidies to the fisheries sector are effectively in limbo while officials await a decision on a revised date for the next WTO ministerial meeting.

This has become clear following a meeting on Tuesday (15 February) of the fisheries negotiating committee in Geneva. The meeting was the first of its kind since MC12 was postponed at short notice following the emergence of the Omicron Covid variant in late November.

Following this week’s meeting, the chair of the fisheries negotiating group, Colombia’s Santiago Wills, said members had expressed a general view that the progress made in the talks prior to November should not be lost.

But, in the absence of a revised date for ministers to come together and take the difficult political decisions needed to get the deal over the line, there was not much incentive for the talks to move forward either.

“From these various consultations [with WTO members], I got the general sense that members are interested in using the current period to continue trying to make progress toward concluding the negotiations as soon as possible,” the chair said at the Negotiating Group’s informal meeting.

Reducing the options for ministers

Wills had tabled a draft final text on fisheries subsidies on 24 November – in the week before the planned date for MC12 – which contained only a relatively small number of points still to be decided.

The fear had been that with the indefinite postponement of MC12, the momentum towards a deal detected late last year may be lost.

But a Geneva trade official quoted Wills as saying that numerous members had expressed the view that the latest draft agreement was the outcome of intensive efforts over a lengthy period, and that members should work to reduce, rather than expand, the number of options in the text to make it easier for ministers to take the final decisions.

“Members seem keen to get the agreement finished, which is encouraging, but real progress will need a deadline to motivate it,” one close observer of the negotiations told Borderlex.

A decision on a revised date for MC12 is expected to be taken when the WTO’s General Council convenes on Wednesday and Thursday next week (23 and 24 February).

Latest indications suggest that the meeting could be scheduled for early May or mid-June this year.

EU trade ministers agreed at their informal meeting early this week to push for an in-person WTO ministerial to take place in Geneva by the end of June at the latest, if at all possible.

EU sues China over “anti-suit” injunctions

The European Union has decided to file a new WTO dispute against China over alleged breaches of the TRIPS agreement on intellectual property.

“China severely restricts EU companies with rights to key technologies (such as 3G, 4G and 5G) from protecting these rights when their patents are used illegally or without appropriate compensation by, for example, Chinese mobile phone manufacturers,” says the European Commission.

“The patent holders that do go to court outside China often face significant fines in China, putting them under pressure to settle for licensing fees below market rates.”

Since August 2020 Chinese courts have started issuing “anti-suit injunctions” against EU companies suing Chinese companies abroad for breaching essential patents.

The cases involve on the Chinese side Huawei, ZTE, Oppo, Xiaomi and China-based Samsung entities, and on the European side Ericsson, Sharp, Conversant and InterDigital.

The EU does not per se put in question the recourse by courts to anti-suit injunctions when IP cases are still pending in China. But to the EU the problem is that this policy seems to be systematic – “a measure of general and prospective application” – which in the complainants’ view hampers patent protection rights outside China.

In its legal submission to the WTO, the EU cites violations of the TRIPS agreement dedicated to intellectual property rights, was well as China’s WTO accession protocol.

The EU’s legal submission also maintains that China has not published government decisions on which decisions of court cases are based. “China has failed to publish at least three decisions that were mentioned in official Chinese government publications and referenced as guiding materials.”

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