At the 11th Ministerial Conference held in Buenos Aires last December 2017, members agreed to continue to engage constructively in fisheries subsidies negotiations with a view to adopting an agreement by the next 2020 Ministerial Conference . The aim is to agree on disciplines that prohibit certain forms of fisheries subsidies contributing to overcapacity and overfishing, and eliminate subsidies that contribute to illegal, unreported and unregulated (IUU) fishing.
Presently, the WTO is under intense pressure to conclude these negotiations before the end of 2019 in order to show that it is still a relevant negotiations forum for producing new rules. Recall that the WTO kicked off these negotiations in 2002 (i.e., 17 years ago!)
While Members appear to broadly agree on the need to prohibit subsidies contributing to illegal, unreported and unregulated (IUU) fishing and overfished stocks, significant differences of view persist in the Negotiating Group on Rules (RNG), chaired by Mexico’s Ambassador Roberto Zapata Barradas, on addressing subsidies that may contribute to overcapacity and overfishing. This is particularly the case for subsidies for boat building and operating costs, such as for fuel. This is because this is an area where Members of all levels of development see the need for some flexibility in order to operate or maintain programs to support their fishermen, including in small scale and artisanal fisheries.
It is in this context that Australia and the United States submitted recently a communication (TN/RL/GEN/197/Rev.1) to the Negotiating Group on Rules. It is inspired by the Caps Based approach of the Agreement on Agriculture. As we know, the Caps Based give and take concessions made in the context of the Agreement on Agriculture (for both domestic support and agricultural export subsidies) are recorded in national Schedules that form an integral part of the Final Act of the Uruguay Round negotiations.
Dennis C. Shea, U.S. Ambassador to the WTO, summarized the gist of this proposal as follows:
I understand that this group has been focused on the technical details of the new subsidy rules; for example, prohibitions on subsidies for illegal, unreported, and unregulated fishing. The proposal that I am presenting today, on behalf of the United States and Australia, is intended to complement the prohibitions that the RNG is already working on. There are three key elements to our proposal that I want to highlight.
First, as a foundation, all WTO Members would provide – before the summer break – a comprehensive and up to date fisheries subsidy notification. This is the notification under the Subsidies Agreement that our ministers already re-committed to provide at MC-11.
On the basis of these subsidy notifications and FAO marine capture production and export data, major players in the fisheries sector would negotiate caps – or maximum limits – to their fisheries subsidies programs, in addition to reductions over time, as part of a WTO request-offer negotiation with other interested Members. This would involve roughly 25 Members that account for over 86% of marine capture production and exports.
Other Members would negotiate similar caps on their subsidy programs, but would not be required to reduce the subsidy level over time. Or alternatively for those Members that do not currently provide subsidies, or have no plans to do so, they could accept a default subsidy cap of $5 million.
Any Member accounting for 0.05% or less of fishing and seafood exports would be completely exempt from this proposal, other than maintaining up to date fisheries subsidies notifications. These Members combined account for less than 1% of total global marine capture production and exports.
With this proposal, we intend to inject an idea that can supplement the prohibitions already being developed, and move us past some of the entrenched positions and difficulties in dealing with subsidies that can lead to overfishing and overcapacity when they are not properly monitored and restrained.
In order for the proposal – and importantly the outcome – to stand the test of time, we are also including a review mechanism to ensure that the commitments keep pace with the production and export data and reflect current realities, not just today’s. Our goal is to avoid locking in current practice by creating a framework for concrete, measurable subsidy reforms over time.
A request-offer negotiating process would at the same time complement the prohibitions and provide for a flexible, individualized approach. It allows us to customize commitments that are reflective of each Member’s role in the fisheries sector and the level and types of subsidies that the Member provides.
In sum, our proposal offers a practical approach that can produce a balanced outcome in which major producers and traders contribute commensurate with their role in the trading system. It would also create much-needed transparency and constraints on fisheries subsidies.
WTO members in the Negotiating Group on Rules considered four new proposals at meetings held on 10-15 June, 2019, the second to last round of negotiations before the August break. With less than six months left until the December target to agree on disciplines that will limit harmful fisheries subsidies, members aim to prepare simplified texts on key areas of the negotiations by next month to help move talks forward.
Members discussed a draft text, submitted jointly by Argentina, Colombia, Costa Rica, Panama, Peru and Uruguay, Iceland, New Zealand, Canada, and the United States, to prohibit subsidies for illegal, unreported and unregulated (IUU) fishing. Regarding subsidies that contribute to overfishing and the overcapacity of fleets, members considered a proposal from China ( the world’s biggest fishing country by volume) to set spending limits on government support programs for fishing. This is the third capping proposal on the table. As previously mentioned, the United States and Australia have likewise jointly proposed a capping approach, as has the Philippines.
Four facilitators, delegates appointed to be neutral parties on different topics, have been tasked to distill members' submissions and positions into clean texts representing a minimum of options. For topics where negotiations are not as advanced, the facilitator will prepare summary papers of issues that need to be resolved. The documents being prepared are intended to help sharpen the focus of the negotiations after the August break. Members intending to submit more proposals were encouraged to do so as soon as possible.
The facilitators will be holding consultations with members ahead of the next cluster of fisheries subsidies meeting on 8-12 July.
Update:
Roberto Zapata Barradas, who became Mexico’s main envoy to the WTO in 2017, will soon step down as its permanent representative in Geneva, due to a conflict with his government's upcoming domestic legislation that will largely shutter the nation’s economy ministry offices to reallocate government resources for social programs. Zapata’s abrupt departure may delay fisheries subsidies negotiations during the present critical period since a new negotiating chairman will need to be selected quickly to be able to complete the agreement this year.
