Fisheries subsidies chair floats new text 15 days before ministers meet

Ministers challenged to drive talks forward politically as an advanced text on curbing harmful subsidies is now unlikely by July 15

Ministers challenged to drive talks forward politically

By Peter Ungphakorn
POSTED JUNE 30, 2021 | UPDATED JULY 15, 2021

Two weeks before ministers from World Trade Organization (WTO) members meet to discuss the latest in the negotiations to curb harmful fisheries subsidies, the chair circulated a revised draft text on June 30, showing a wide range of differences among members.

One of the most difficult subjects is still special treatment for developing countries, where the chair, Ambassador Santiago Wills of Colombia, is now proposing a “peace clause” — agreement that for a limited time, subsidies would not be challenged legally if they were for subsistence, artisanal and small-scale fishers in developing and least-developed countries.

This would apply to all three “pillars” in the proposed curbs on subsidies: for illegal, unreported and unregulated fishing; overfished stocks; and overcapacity of vessels and their overfishing. It would be modelled on a similar provision in the Agriculture Agreement.

Here are links to the 8-page new text (TN/RL/W/276/Rev.1) and 17-page explanation from the chair (TN/RL/W/276/Rev.1/Add.1). See also the WTO news story

this Twitter thread on the July 15 meeting

Wills’ 8-page draft and a comprehensive accompanying explanation show just how much still needs to be settled on a wide range of issues, not only special treatment for developing countries.

WTO Director-General Ngozi Okonjo-Iweala had wanted the July 15 meeting of ministers to “review a very advanced, hopefully final, text”, which would then be agreed at the WTO Ministerial Conference, November 30 to December 3 this year.

The hope now seems to be to secure some political impetus from the ministers on July 15, so that compromises can be made on the technical details.

Okonjo-Iweala also told ambassadors on June 30, that she was proposing a WTO funding mechanism in conjunction with other international organisations to help developing countries implement the new disciplines in the agreement.

Wills’ latest draft does not include new proposals from negotiators, such as one from the US on forced labour.

“We have received many other proposals and suggestions but they cannot all be just copied and pasted into the revised text as we have yet to complete our discussions or crystallize our thinking on these. We will need to continue these discussions as we move forward,” he told journalists after the June 30 meeting with WTO ambassadors.

His previous draft was presented on May 11.

Much will depend on how major players and their allies respond in the next few weeks, including the US, EU, Japan, India and China. Trade sources say China has announced it will not be seeking special treatment as a developing country, although it’s unclear whether that covers all possible provisions.

According to the UN Food and Agriculture Organization, China is the world’s largest sea-fishing country with 15% of total “marine capture production”, followed by Peru (8% almost entirely anchovies), Indonesia (8%), Russia (6%), the US (6%), India (4%), Vietnam (4%), Japan (4%) and Norway (3%).

More links on the fisheries subsidies negotiations.

Below is a statement released at a press briefing on June 30, 2021, summarising what the chair told ambassadors earlier the same day:

Chair’s statement

Summary of the statement of Ambassador Santiago Wills of Colombia, Negotiating Group on Rules chair, at the meeting on fisheries subsidies on 30 June 2021

Good day, everyone. I appreciate your joining us in our continued push to conclude the WTO fisheries subsidies negotiations.

My briefing to you will focus on the revised draft text which members received today in advance of the ministerial meeting on 15 July, just two weeks from now.

This revision was made possible by WTO members’ flexibility and dedication during almost non-stop meetings since May, when I had circulated the previous draft text. Following the marathon discussions, this revised draft text is meant to be a genuine reflection of where the convergences could lie and where further work remains. Provisions relating to special and differential treatment for developing country members including least developed country members, in particular benefited from intensified discussions, and the proposed changes intend to help members make progress on this important issue. The hope is that the revised text will enable ministers to engage in a way where they can effectively provide the political guidance we need at this point in the negotiations.

I will go with you through the key parts of the text that have been changed as well as those where we still find some gaps in members’ positions and where we have to still crystallize our thinking. I will then conclude with a quick mention of the next steps.

A key change is the approach to special and differential treatment in the three core pillars of disciplines:

  • For subsidies to illegal, unreported and unregulated (IUU) fishing and subsidies concerning overfished stocks, one idea that was suggested was to convert what previously was a time-limited exemption to a “peace clause” on dispute settlement in respect of subsidies to the most vulnerable fisheries of developing and least-developed countries. These fisheries are described in the text as low income, resource-poor and livelihood fisheries.Pursuant to the peace clause, which is similar to one in the Agriculture Agreement, there would be a period during which disputes could not be brought in respect of the subsidies to these fisheries of developing country members, including least developed country members. The peace clause provisions appear in Articles 3.8 and 4.4 of the text. This change of approach aims to address the objection of many members, including a number of developing country Members, to any exemptions at all in the pillars for IUU fishing and stocks that are already in an overfished state, counterbalanced with the concerns of some developing members on how implementation of the provisions could affect their subsistence, artisanal and small-scale fishers.
  • For subsidies contributing to overcapacity and overfishing, Article 5.5 on special and differential treatment in this pillar is by far the most commonly identified area of concern for many delegations. It has become increasingly clear that the area of subsistence, artisanal and small-scale fisheries is a top priority for many developing members and where many major concerns lie. Based on recent discussions, I have made changes to the exemptions for subsistence, artisanal and small-scale fisheries (again referred to in the text as low income, resource-poor and livelihood fisheries) to make the provisions more flexible. You will find this in Article 5.5(b). Specifically, the previous time limitation on the provision has been removed, such that the provision now provides an indefinite exemption for subsidies granted or maintained by developing country members for these sorts of fishing and fishing related activities up to 12 nautical miles measured from the baselines. To address the concerns that have been expressed over the openness of the description of the fisheries concerned, the text now refers to low income, resource-poor and livelihood fishing (so “or” was changed to “and”), to make these characteristics cumulative and not alternative. The twelve-mile limit has been retained, with the replacement of “within” by “up to”. Thus, while the duration of the exemption is indefinite, the scope has been kept narrow.  The changes to Article 5.5(b) are intended to see if, by addressing a deep concern expressed by many developing Members about their artisanal fisheries sectors, this can help members to engage in a more convergence-oriented way on the rest of the text, including on the remaining SDT provisions.
  • Director-General Ngozi Okonjo-Iweala presented, furthermore, the change made to Article 7, the portion of the text on technical assistance and capacity building for developing and least-developed country members. In particular, this provision introduces the idea of establishing a WTO funding mechanism, which would be implemented in cooperation with other relevant international organizations such as the UN Food and Agriculture Organization (FAO) and the UN International Fund for Agricultural Development (IFAD). Dr Ngozi has been reaching out members and organizations to explore this idea, which remains work in progress. As the work continues on this issue, the text of Article 7 may evolve.

As for areas that have not been substantially changed, these include provisions on non-specific fuel subsidies, the sustainability flexibility in Article 5.1.1, fishing outside a member’s jurisdiction in Articles 5.2 and 5.3, and dispute settlement in Article 10. Members’ views continue to diverge on these issues. Based on my consultations with Members it has become clear to me that making any revisions to the sustainability qualifier in Article 5.1.1 in particular, at this time could risk disturbing the balance of the entire text, due to linkages of this provision to other provisions of the disciplines.

It is important to note that what is not reflected in the draft text has not been disregarded or put aside. We have received many other proposals and suggestions but they cannot all be just copied and pasted into the revised text as we have yet to complete our discussions or crystallize our thinking on these. We will need to continue these discussions as we move forward.

Of course, this revised text is without prejudice to any member’s positions or views. This means that like all earlier texts, the entire document should be treated as being in square brackets–nothing is agreed until everything is.

Regarding next steps, at the end of this week the Director-General and I will be sending ministers specific discussion questions for the meeting on 15 July. And between now and 15 July, the Director-General and I will continue to reach out to delegations in different configurations, again with a view to preparing the ground for that Ministerial-level meeting.

Dr Ngozi and I have strong confidence that WTO members will successfully conclude these negotiations. The aim of this revised text and the upcoming meeting of ministers is to help bring us closer to that goal. It is my sincere hope that delegations and Ministers read and approach this text from a common perspective; that is, from the perspective of finding in it a possible compromise.

July 15, 2021—adding link to Twitter thread on the ministerial meeting

Image credits:
Fishing boat, Malaysia | Sam Lim, Pexels, CCO
Santiago Wills | WTO

Author: Peter Ungphakorn

I used to work at the WTO Secretariat (1996–2015), and am now an occasional freelance journalist, focusing mainly on international trade rules, agreements and institutions. (Previously, analysis for AgraEurope.) Trade β Blog is for trialling ideas on trade and any other subject, hence “β”. You can respond by using the contact form on the blog or tweeting @CoppetainPU

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