By Peter Ungphakorn
POSTED JUNE 28, 2024 | UPDATED JUNE 28, 2024
Seven Latin American countries have declared their support for changes proposed for a fisheries subsidies deal in the final days of the February 25 to March 2, 2024 World Trade Organization Ministerial Conference in Abu Dhabi.
Argentina, Colombia, Costa Rica, Ecuador, Panama, Peru and Uruguay said in a document circulated today (June 28, 2024) that the proposed changes “result in a more balanced, preferable and more viable text”.
The document was circulated in a week when WTO members undertook a global review of aid-for-trade. The Fisheries Subsidies Agreement was part of the review because it includes a Fisheries Funding Mechanism whose purpose is to help developing countries implement the new disciplines.
But since the (incomplete) 2022 agreement has not received enough ratifications, the agreement itself has not taken effect, and the fund’s aid cannot be disbursed.
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Proposed changes | Aid for Trade, negotiations and ratification | See also
RECAP: WHAT THE TALKS ARE ABOUT
These post-2022 negotiations are sometimes called the “second wave” or “Fish 2” after the bulk of the Fisheries Subsidies Agreement was settled at the June 2022 Ministerial Conference (the “first wave” or “Fish 1”).
In 2022, after 21 years of negotiation, members were still unable to agree on disciplines for subsidies contributing to overfishing and overcapacity — the “missing piece”, which is what they are now negotiating. Those disciplines are a key part of the UN Sustainable Development Goal 14, target 6, whose 2020 deadline for the WTO talks have now long been missed.
This is the only WTO agreement on subsidies (so far) whose main purpose is sustainability — the test criterion for disciplining the subsidies — and not to tackle market distortion directly (essentially unfair competition). For fish, market distortion comes under the general Subsidies and Countervailing Measures (SCM) Agreement.
Proposed changes
The changes proposed are for the second-phase talks on the piece missing from the 2022 agreement — disciplines for subsidies contributing to overfishing and overcapacity. They can be found in an explanation circulated a month after the Abu Dhabi Ministerial Conference by Ambassador Einar Gunnarsson of Iceland who chairs the talks in Geneva.
His document accompanies an “Advance Draft” presented to ministers during the conference by the head of Iceland’s delegation, Martin Eyjólfsson, who was the minister-coordinator for the fisheries subsidies talks in Abu Dhabi.
Gunnarsson’s explanation goes beyond that draft. It also covers subsequent work in the meeting’s final hours, particularly sessions organised spontaneously by “sizeable and diverse group of members”.
The result of those consultations became controversial at the close of the Ministerial Conference when Fiji and Vanuatu wanted to share and perhaps discuss them in the final plenary sessions at the conference. This sparked a furious outburst of objections from India’s Commerce Minister Piyush Goyal who blocked the move.
Or as Gunnarsson put it: “the further progress by this group of Members was made too late in the schedule of [the Ministerial Conference] to be on the agenda of the closing session for all Members’ consideration”
Gunnarsson wrote:
“56. As noted in the Introduction section, following Secretary Eyjólfsson’s circulation of the Advanced Draft, and especially following the meeting convened by the MC13 [the Abu Dhabi Ministerial Conference] Chair, work among Members continued. This included, in the last hours of the Conference, work in a sizeable and diverse group of Members, including Members of various interest groups in the negotiations, who spontaneously sat together on their own to discuss the Advanced Draft and to try to reach agreement on the remaining open issues. Through this Member-led process, the participants reached agreement among themselves on some changes to the Advanced Draft. The Members involved shared the results of their work with me at the end of the day, just before the MC13 closing session began. However, by that time it was already clear that MC13 would not achieve consensus on the Additional Provisions on Fisheries Subsidies.”
The spontaneous negotiating group proposed:
- deleting four controversial provisions ((b) to (d), below)
- adding one provision and deleting one (e)
- changing the wording of two ((a) and (f))
- clarifying the length of transition periods (g)
- a possible compromise between the US and China on transparency if forced labour is suspected (a US concern) and whether China should be exempt special treatment as a developing country through a unilateral declaration.
Gunnarsson continued (explanations in italics and hyperlinks have been added):
“57. The changes proposed by that group were as follows:
“a) in footnote 23 to Article B.4 on subsidies to small scale and artisanal fishing, the reference to ‘significantly commercial’ fishing was changed to ‘industrialised’ fishing;
[this is about developing countries being allowed to subsidise fishing except when it is commercial or industrial]
“b) Article C.2(b)(iii), requiring the notification, to the extent possible, of the full text of foreign access agreements or arrangements, was deleted;
“c) Article C.3 on transparency in respect of non-specific fuel subsidies was deleted;
“d) Article C.6, linking notifications under the SCM [Subsidies and Countervailing Measures] Agreement and the AFS [(2022) Fisheries Subsidies Agreement] to the flexibilities in Article A.1.1 and Article B.4, was deleted;
“e) in Article B.5, regarding voluntary binding commitments of Members not to avail themselves of SDT [special and differential treatment for developing countries], a reference to ‘Subsidizing’ developing country Members was added, and the reference to ‘competent fisheries management capabilities’ was deleted;
“f) in the penultimate sentence of Article D.1(a), the phrase ‘shall recommend’ was changed to ‘may recommend’; and
[This is about reviewing the Phase 2 agreement within five years, and action by WTO members meeting as the Fisheries Subsidies Committee, if subsidies have increased. It “shall” or “may recommend quantitative limitations or reductions unless it determines that other modifications are more appropriate.”]
“g) the figures 3 and 8 were introduced for the transition periods referred to in Article B.1 and Article B.3 respectively.
[B.1 exempts least-developed countries from the disciplines. The proposal would allow them 3 years transition after officially graduating from least-developed status.
B.3 is about developing countries whose fishing is too advanced to be granted exemptions — the proposal is for an 8-year transition to comply fully with the restrictions.]
“Finally, while the provision in Article C.2(a) on transparency in respect of forced labour [a US proposal] was not changed, it was generally understood that it would be further considered before adoption of the Additional Provisions but after an intended statement would have been made by one Member [understood to be China] to commit not to avail itself of SDT [special and differential treatment for developing countries] in accordance with Article B.5.”
Gunnarsson continued:
“58. Of these changes, my impression is that the proposed length and formulation of the transition periods in Article B.1 and Article B.3 would clearly benefit from further engagement and consideration among Members.
“59. Unfortunately, the further progress by this group of Members was made too late in the schedule of MC13 to be on the agenda of the closing session for all Members’ consideration. However, these proposed changes represent the hard compromises that a very diverse group of Members were willing to make to bridge the remaining gaps. As such, it could go a long way toward preparing the Additional Provisions for final adoption by Members. Therefore, I see this progress as significant and worth recording in this Addendum.”
IN A NUTSHELL
Ratifications of the June 2022 Fisheries Subsidies Agreement
June 14, 2024
Total ratifications = 77
(= 47% of all members, = 70% of the first target)
First target (two thirds of 164 members) = 110
Additional ratifications needed to reach two thirds = 33
Members that have not ratified = 86
Eventual target (agreement applies to all members) = 164 members (or 163 ratifications*)
● The agreement takes effect after two thirds of the membership have ratified (“accepted”) it. Even then it only applies to the countries that have ratified
● The WTO’s up-to-date list of ratifications is here
* So long as the EU’s ratifications count as 27 (the number of EU member states) instead of 28 (member states + EU itself, also a WTO member), total ratifications cannot exceed 163
See also: Is it time for WTO members to rethink how ratifications work?
Aid for trade, negotiations and ratification
Meanwhile, The WTO’s 2024 Aid for Trade Global Review (held roughly every two years) provided an opportunity for the Secretariat and some members to push for the “missing piece” talks (“Fish 2”) to conclude quickly and for the (incomplete) 2022 Fisheries Subsidies Agreement (“Fish 1”) to be activated.
This was not because of any signs of progress in the talks. With little public information, we cannot tell what — if anything — is happening behind the scenes.
It was because the 2022 agreement includes an aid-for-trade feature, the Fisheries Funding Mechanism whose purpose is to help developing countries implement the new disciplines.
However, even that aid cannot be given out because the 2022 agreement still has not entered into force, with less than half (77) of WTO members (164) having ratified it (see “in a nutshell” above). So aid under the Fisheries Funding Mechanism is held up.
A group of 34 countries used the opportunity to call for the needed 110 ratifications to be reached by the end of the year (2024), allowing the fund to start disbursing aid, and for the “missing piece” negotiations (“Fish 2”) to conclude before the the summer break, meaning within one month.
The group includes China, the US and a range of developed and developing countries, including several from the Pacific islands, but not the EU or Japan. Nor does it include major fishing nations that have not yet ratified the agreement such as India — which blocked a decision at the Abu Dhabi Ministerial Conference — or Indonesia. Apparently Barbados initiated the move.
Six of the seven Latin American Countries are in the group of 34. The seventh is Uruguay. This Latin American group also aims for agreement in July. It adds:
“We reiterate that, in the ongoing negotiations, it is a priority to bear in mind the environmental protection objectives of the new agreement, the regulation of Members that are the biggest subsidizers, and the principle of special and differential treatment.
“Lastly, our group emphasizes that whatever procedures and time frames are agreed on by Members, they should ensure transparency and inclusiveness in the negotiations and lead to a substantive Agreement.”
See also
- WTO website news, Worldwide push for sustainable fisheries highlighted at Aid for Trade Global Review
- WTO book, Leveraging Global Partnerships to Implement the WTO Agreement on Fisheries Subsidies for a Sustainable and Food-secure Future
- and WTO members are slow to ratify the Fisheries Subsidies Agreement
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