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WTO fisheries subsidies negotiations: the key issues for MC13

WTO members will resume complex negotiations next Monday (15 January) on plans to impose new disciplines on government subsidies to the fisheries sector. The talks represent a critical part of the package of measures which will be under discussion at MC13 – the thirteenth WTO ministerial conference which begins in Abu Dhabi on 26 February. Here’s a rundown of the final issues that need agreeing.

There is general agreement on the need for such disciplines. But persistent divisions over the detail of the emerging agreement – and political issues with the wider MC13 package– mean that it is still far from clear whether a deal on fisheries can be done.

Participants in the talks have yet to agree on some of the central methodology for assessing countries’ liabilities for the proposed new disciplines. Toxic arguments are still raging over the extent to which the agreement should apply to developing countries.

At stake is an agreement to impose disciplines on state subsidies which are liable to contribute to overcapacity or overfishing.

This issue was left out of the core WTO fisheries agreement struck at MC12 in June 2022 –because there was no emerging consensus at that time.

The latest version of the draft text was presented to members shortly before the Christmas break.

It will form the basis of a more-or-less continuous set of negotiations running until a pre-MC13 ‘stocktaking’ meeting of WTO ambassadors on 14 February.

The latest draft of the agreement text features fourteen sets of square brackets – denoting points on which consensus has not yet been reached.

Ban fisheries subsidies leading to overfishing

There is at least consensus on the core structure of the agreement.

In principle – and to quote the words of article 1 of the draft text – “no member shall grant or maintain subsidies to fishing or fishing related activities that contribute to overcapacity or overfishing”.

Proscribed subsidies would include vessel construction or modernisation grants, direct fuel subsidies, and income support payments – except when these covered compensatory payments to fishers during biological ‘closed’ periods for any fishery.

There is disagreement over whether this list of banned subsidies should be indicative – offering ‘examples’ of banned subsidies – or whether it should be a closed list, with only the subsidies which are specifically listed being outlawed. India and Russia are pushing for the latter option.

It is accepted in principle that subsidies which make a positive contribution to fisheries sustainability should be exempted from this ban.

But the nature and extent of these exceptions are at the heart of the current debate.

Given that almost 90% of the world’s key commercial fisheries are deemed to be fully exploited or overfished, many countries’ national fisheries support programmes could be in jeopardy if they are unable to demonstrate compliance with these exemption clauses.

Stricter reporting requirements for world’s top 20 subsidisers

The latest draft text suggests that the world’s 20 biggest fishing subsidisers should notify the WTO within three months of any new subsidy programme being adopted.

This notification would set out the measures being taken in connection with the subsidy to ensure that fish stocks are kept at sustainable levels.

Countries not among the top 20 subsidisers would simply be required to report annually in the context of their regular fish subsidy notifications under article 25 of the WTO SCM agreement on subsidies and countervailing Measures.

A number of developing countries are in the list of the world’s top 20 subsidisers, including Thailand and Indonesia. These would benefit from a phase-in period before the higher-level notification requirements apply to them.

Other members would have the opportunity to quiz subsidisers about their notifications.

If a country provided no notifications, or if its notifications were ‘manifestly inconsistent’ with the sustainability provisions set out in the agreement, then its subsidy programme would be deemed illegal.

The text does not make clear how such ‘manifest inconsistency’ would be determined, or by whom.

Flashpoints

  • Subsidies to fishing activities abroad

One of the most keenly contested elements of the draft agreement is a clause which would outlaw subsidies paid to support fishing activities in the waters of another country.

According to data from marine conservation think tank Oceana, countries like China, South Korea, Taiwan and Thailand spend 50% or more of their fisheries subsidies budget on activities outside of these countries’ own 200-mile economic exclusion zone.

  • Special and differential treatment for developing countries

A separate issue is how the WTO principle of special and differential treatment for developing countries can be applied to the agreement.

The proposal on the table suggests that the agreement need not apply to any developing country whose share of the total global fish catch does not exceed 0.8% – a figure which remains open for negotiation.

In addition, developing countries whose total fish catch exceeded the 0.8% threshold would not be required to meet the conditions of the agreement for a given number of years after its entry into force. In earlier drafts, this period was specified as seven years, but the latest draft replaces this figure with ‘X’ – i.e. ‘to be discussed’.

Developing countries would also benefit from a ‘peace clause’ which would exempt them from challenge for an additional two years after this phase-in period ended.

Any developing country which ranked among the world’s top 20 subsiders would have a separate grace period – as yet undetermined – during which they would only have to comply with the lower-level subsidy reporting requirements.

  • Exempting aids for subsistence fishing

The draft text says that all developing countries would be allowed to provide subsidies without restriction if these are for the benefit of “low income, resource poor or livelihood fishing” in coastal waters.

Members are currently arguing over whether the word ‘or’ should be replaced by ‘and’ – a change which would impose a significantly higher qualification threshold for the developing countries concerned.

Least developed countries would in any case be entirely excluded from the scope of the agreement.

  • Forced labour 

Notifications to the newly formed WTO committee on fisheries subsidies would need to include “any vessels and operators for which the member has information that reasonably indicates the use of forced labour”.

This is an issue for which the United States has been campaigning vigorously, albeit without much support from other members.

  • Indirect fuel subsidies

The latest draft text also suggests that members should make annual notifications of non-specific fuel subsidies to the fisheries sector.

The EU has strongly resisted the inclusion of this clause. An accompanying note from the chair of the fisheries negotiating group, Iceland’s Einar Gunnarsson, states that “most members having expressed views on this provision feel strongly that it should not be retained”.

But India is known to be among a minority of countries pressing for its inclusion.

 

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