The 2022 WTO Fisheries Subsidies Agreement — the missing piece

This accompanies
UPDATES: the WTO fisheries subsidies talks
‘Fisheries subsidies’ has been agreed by WTO ministers. What’s next?
and
Text: the 2022 WTO Fisheries Subsidies Agreement

The (incomplete) Fisheries Subsidies Agreement reached in June 2022 still has to be ratified. Why it’s incomplete is explained below. This summarises the latest state of ratifications:

IN A NUTSHELL
Ratifications of the June 2022 Fisheries Subsidies Agreement
May 13, 2024

Total ratifications = 75
(= 46% of all members, = 68% of the first target)
First target (two thirds of 164 members) = 110
Additional ratifications needed to reach two thirds = 35

Members that have not ratified = 88
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

Posted by Peter Ungphakorn
NOVEMBER 5, 2022 | UPDATED NOVEMBER 5, 2022

When ministers from World Trade Organization (WTO) members met in June 2022 to agree on a deal to curb harmful fisheries subsidies, they were deadlocked on one key provision. In order to achieve consensus, the proposed Article 5 on “subsidies contributing to overcapacity and overfishing” was removed and replaced with a new, vague Article 5 on “other subsidies”.

As a result, the agreement was not only 18 months late for the deadline set in UN Sustainable Development Goal 14, target 6; it failed completely on the very first objective of the target (emphasis added):

“By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation.”

In return for achieving consensus, some worried members secured what is effectively a self-destruction time-bomb. Article 12 says:

“If comprehensive disciplines are not adopted within four years of the entry into force of this Agreement, and unless otherwise decided by the General Council, this Agreement shall stand immediately terminated.”

The ministers also agreed as part of their decision to try to make “recommendations” on completing the deal by the next Ministerial Conference, at the time scheduled for late 2023.

Why did Article 5 become the main missing piece from the agreement?

Below is the version of Article 5 that was in the June 10, 2022 draft, immediately before the Ministerial Conference. It is presented in two ways:

Draft Article 5 on its own
Draft Article 5 with the chair’s commentary — taken from from the accompanying explanation circulated to members by the then chair, Colombia’s ambassador Santiago Wills.

Like the chair’s earlier versions, this explanation is itself remarkable. It’s long and detailed, providing an insight into the discussion over the months and years, the major differences, and how Wills has responded to previous comments. All that’s missing is identifying the countries taking various positions.

Broadly-speaking it shows that this version of Article 5 was an attempt to strike a balance on two sets of issues.

One is to ban subsidies that cause overcapacity and overfishing — the draft includes eight examples — while allowing subsidies that could be seen to sustain stocks.

The other is to provide leeway for smaller and poorer fishing nations, including transition periods, without creating loopholes for those developing countries that have some of the largest fishing fleets in the world.

One of those issues (special treatment for developing countries) — if not both — seems to have remained deadlocked at the Ministerial Conference, leading to the version of Article 5 that was agreed. That version says almost nothing other than to ban subsidies for fishing on the high seas — outside the jurisdiction of any country or regional arrangement.

Wills’ final report as chair includes a description of what happened in overnight meetings on the final days of the Ministerial Conference. He said delegates focused on what they could agree by consensus and set aside areas of disagreement. He was not more specific than that.

“As you all know, over the course of MC12 [the 12th Ministerial Conference in June] Ministers engaged very intensively on fisheries subsidies, on different issues and in different configurations, aiming to bridge the remaining gaps. Through several meetings on different configurations with most delegations and a couple of overnight sessions with several Ministers, the W/20 text went through a distillation process where provisions that all could accept were starting to be identified. That version of the text was presented in the early hours of 16 June 2022 and then again later in the morning of that same day. Towards the end of the day of 16 June 2022, and after many discussions throughout the day, a group of Heads of Delegation representing the main active Members and groups further distilled the document that became the final text of the Agreement. Again, all this by identifying the provisions in the W/20 text that all could accept, by temporarily setting aside provisions where consensus had not emerged, and introducing a new final Article containing a termination clause. That clause was introduced at the insistence of Members wanting to ensure that the remaining issues would continue to be the subject of further negotiations, and not simply abandoned.”

This is what was left in the eventual agreement — more or less a hole:

Sea blue square with missing jigsaw shape

Article 5: OTHER subsidies

5.1 No Member shall grant or maintain subsidies provided to fishing or fishing related activities outside of the jurisdiction of a coastal Member or a coastal non-Member and outside the competence of a relevant RFMO/A. (Verbatim from Art.5.3 in the draft below.)

5.2 A Member shall take special care and exercise due restraint when granting subsidies to vessels not flying that Member’s flag. (Verbatim from Art.5.4 in the draft below.)

5.3 A Member shall take special care and exercise due restraint when granting subsidies to fishing or fishing related activities regarding stocks the status of which is unknown. (Added.)

Draft Article 5 on its own

The full June 10, 2022 draft Fisheries Subsidies Agreement is here.
The version of Article 5 agreed a week later at the 2022 Ministerial Conference is here along with the rest of the agreement.

Square brackets [] indicate options or texts that have not been agreed, although the whole draft had not been agreed and was also effectively in square brackets
RFMO/A = regional fisheries management organization or arrangement
SDT = special and differential treatment (for developing countries)

ARTICLE 5: SUBSIDIES CONTRIBUTING TO OVERCAPACITY AND OVERFISHING

5.1¹² No Member shall grant or maintain subsidies to fishing or fishing related activities that contribute to overcapacity or overfishing. For the purpose of this paragraph, subsidies that contribute to overcapacity or overfishing include:

¹² For greater clarity, Article 5.1 does not apply to subsidies to the extent they regard stocks that are overfished

(a) subsidies to construction, acquisition, modernisation, renovation or upgrading of vessels;

(b) subsidies to the purchase of machines and equipment for vessels (including fishing gear and engine, fish-processing machinery, fish-finding technology, refrigerators, or machinery for sorting or cleaning fish);

(d) subsidies to costs of personnel, social charges, or insurance;

(e) income support of vessels or operators or the workers they employ;

(f) price support of fish caught;

(g) subsidies to at-sea support;

(h) subsidies covering operating losses of vessels or fishing or fishing related activities.

5.1.1 A subsidy is not inconsistent with Article 5.1 if the subsidizing Member demonstrates that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.¹¹

¹¹ For the purpose of this paragraph, a biologically sustainable level is the level determined by a coastal Member having jurisdiction over the area where the fishing or fishing related activity is taking place, using reference points such as maximum sustainable yield (MSY) or other reference points, commensurate with the data available for the fishery; or by a relevant RFMO/A in areas and for species under its competence.

5.2 (a) No Member shall grant or maintain subsidies contingent upon, or tied to, actual or anticipated fishing or fishing related activities in areas beyond the subsidizing Member’s jurisdiction (whether solely or as one of several other conditions).¹³

¹³ The mere fact that a subsidy is granted or maintained to vessels or operators that may be engaged in fishing or fishing related activities in areas beyond the subsidizing Member’s jurisdiction (e.g., fishing in a nearby Member’s exclusive economic zone (EEZ) pursuant to traditional or historical practices or arrangements, including relating to migratory stocks) shall not for that reason alone be considered to be contingent upon, or tied to, such fishing or fishing related activities.

(b) Subparagraph (a) shall not apply to the non-collection from operators or vessels of government-to-government payments under agreements and other arrangements with coastal Members for access to the surplus of the total allowable catch of the living resources in waters under their jurisdiction, provided that the requirements under Article 5.1.1 are met.

5.3 No Member shall grant or maintain subsidies provided to fishing or fishing related activities outside of the jurisdiction of a coastal Member or a coastal non-Member and outside the competence of a relevant RFMO/A.

5.4 A Member shall take special care and exercise due restraint when granting subsidies to vessels not flying that Member’s flag.

5.5¹⁴ (a) A developing country Member may grant or maintain the subsidies referred to in Article 5.1 to fishing and fishing related activities within its exclusive economic zone and the area of competence of a relevant RFMO/A [for a maximum of 7 years after the entry into force of this Agreement][up to the year 2030]. Subsidies granted or maintained under this paragraph shall be exempt from actions based on Articles 5.1 and 10 of this Agreement for a period of 2 additional years after the end of the period referred to in the prior sentence. A developing country Member intending to invoke this provision shall inform the Committee in writing within one year of the date of entry into force of this Agreement.

[¹⁴ This provision shall not apply to Members whose annual share of the global volume of marine capture production is at or above [X] per cent as per the most recent published FAO data as circulated by the WTO Secretariat.]

(b) (i) A developing country Member may grant or maintain the subsidies referred to in Article 5.1 to fishing and fishing related activities if its share of the annual global volume of marine capture production does not exceed [0.8] per cent as per the most recent published FAO data as circulated by the WTO Secretariat.

(ii) A Member remains exempted until its share exceeds the threshold in Article 5.5(b)(i) for three consecutive years. It shall be re-included in Article 5.5(b)(i) when its share of the global volume of marine capture production falls back below the threshold for three consecutive years.

(c) A developing country Member may grant or maintain the subsidies referred to in Article 5.1 for low income, resource-poor and livelihood fishing or fishing related activities, up to [12][24] nautical miles measured from the baselines, including archipelagic baselines.

(d) While applying Article 5.5, a Member shall endeavour to ensure that its subsidies do not contribute to overcapacity or overfishing.

Draft Article 5 with the chair’s commentary

Square brackets [] indicate options or texts that have not been agreed, although the whole draft had not been agreed and was also effectively in square brackets

RFMO/A = regional fisheries management organization or arrangement
SDT = special and differential treatment (for developing countries)

Chair’s commentary

52. Article 5 contains the disciplines on subsidies contributing to overcapacity and overfishing. This Article has been amended compared to the previous draft to incorporate several clarifications and changes of approach in different provisions.

ARTICLE 5: SUBSIDIES CONTRIBUTING TO OVERCAPACITY AND OVERFISHING

Article 5.1 and Article 5.1.1

53. The core disciplines in this pillar are based on the compromise, “hybrid”, approach based on a list of presumptively prohibited subsidies qualified by sustainability-based elements. Thus, the prohibition consists of the provisions of Article 5.1 and the qualifications in Article 5.1.1, read together.

54. Article 5.1 consists of a chapeau containing the main prohibition, followed by an illustrative list of subsidies in subparagraphs (a) through (h) that presumptively contribute to overcapacity or overfishing. Article 5.1 then is qualified by Article 5.1.1, which provides that a subsidy is not inconsistent with Article 5.1 if the subsidizing Member demonstrates that measures are implemented to maintain the fish stocks at a biologically sustainable level. To recall, the biologically sustainable level in Article 5 is defined identically to the same term in Article 4, via a single footnote, footnote 11.

55. One important amendment has been made to Article 5.1 based on concerns raised by numerous Members since the two previous drafts were circulated. These concerns had to do with the placement of former Article 5.1(i), referring to subsidies contingent upon or tied to actual or anticipated fishing or fishing related activities in areas beyond the subsidizing Member’s jurisdiction. In earlier versions of the draft disciplines, this had been a separate Article creating a straightforward prohibition on this category of subsidies, the explanation being that these were subsidies explicitly for fishing outside the subsidizer’s jurisdiction and more likely to contribute to overcapacity and overfishing than, for example, the other subsidies listed in Article 5.1. However, it subsequently was moved into Article 5.1(i) to respond to the concerns of other Members that such subsidies did not necessarily contribute to overcapacity and overfishing, as a Member might be able to demonstrate that there were measures to maintain the stock or stocks were being fished at biologically sustainable levels.

56. The concerns over placement remained, and a significant preponderance of Members called strongly for re-establishing the content of former Article 5.1(i) as a standalone prohibition, as in former Article 5.2. This has been done in this draft for the reasons further elaborated in respect of new Article 5.2, to which the previous Article 5.1(i) was moved.

57. A new footnote, footnote 12, has been added to the start of Article 5.1. The footnote clarifies that Article 5.1 does not apply to subsidies to the extent that they regard stocks that are overfished. This footnote was added to address concerns raised by some Members that a subsidy for fishing a stock that was recognized as being overfished could be permitted under Article 4.3 but, because it is impossible to demonstrate that measures are in place to maintain an overfished stock at a biologically sustainable level, the same subsidy could be prohibited under Article 5.1. Although other Members did not share this concern over the interaction of Articles 4 and 5.1, they were open to this footnote because it ensures that such an interpretation would not arise. It should also be noted that, as set out in the previous Addendum, a fish stock recognized as overfished is in a particularly vulnerable state. Accordingly, the conditions of Article 4.3 are intended to be more stringent than those under Article 5.1.1, given that the object of Article 4.3 is to allow for subsidies or other measures to rebuild the stock to a biologically sustainable level, while that of Article 5.1.1 is to maintain the stock at such a level. At the same time, it was recognized that there could be a subsidy programme under which subsidies were provided both to fishing overfished stocks and to fishing stocks that are at biologically sustainable levels. Under such a programme, the subsidies to fishing overfished stocks would not be prohibited provided the requirements of Article 4.3 were met, and the subsidies to fishing stocks at biologically sustainable levels would not be prohibited provided the requirements of Article 5.1.1 were met. Some Members that had questioned the need for such a footnote indicated that they could accept it on the clear understanding that it did not change the operation of these provisions.

58. In our discussions of the provisions of Article 5.1 and 5.1.1, questions had been raised over the presumption that the listed subsidies contribute to overcapacity and overfishing. One particular concern was that this presumption would mean that no subsidies of the types referred to in Article 5.1 could be provided until after the demonstration referred to in Article 5.1.1 had been completed. Having carefully considered the various suggestions to address this concern by restructuring these provisions, my assessment is that the aim and effect of these suggestions is essentially the same as that of the provisions as they were drafted, albeit using different approaches. In particular, the provisions of Article 5.1.1 contain no requirement to make the referenced demonstration before a listed type of subsidy could be granted, nor any implicit requirement to stop all current subsidization until such a demonstration is made. Instead, the aim and operation of the text is to ensure that sustainability measures factor in as one important consideration in the granting and maintaining of subsidies, and that decisions on subsidization likewise should factor into sustainability considerations. It is this linked set of subsidies and sustainability measures – drafted and implemented as the Member sees fit – that would be the subject of the demonstration. As for the demonstration itself, it would naturally begin with the notifications as required in Article 8 and Committee review of those notifications as provided for in Article 9.

59. In particular, that review process would allow for other Members to pose questions and identify any issues of concern, and this in turn might lead to bilateral discussions. Ultimately, as a last phase, a dispute settlement proceeding could be initiated to address the issue. Thus, while the list in Article 5.1 refers to certain forms of subsidies that have been identified in many proposals and elsewhere as having the greatest potential to contribute to overcapacity and overfishing, the list does not constitute a blanket prohibition of such subsidies. Rather, the provisions of Article 5.1.1 make clear that because the issue is subsidies that contribute to overcapacity and overfishing – relative concepts that can only be understood in the context of a particular fishery – the question of whether a given subsidy is prohibited can only be determined in the context of the fishery in which it is provided. It is exactly that context that is the subject of the demonstration referred to in Article 5.1.1.

60. To elaborate a bit further, from my reading of the current draft text, I would expect that in the majority of cases, simply complying with the notification requirements would be sufficient to “demonstrate” to the satisfaction of other Members that the sustainability elements under Article 5.1.1 have been met. Most of the remaining cases would be clarified through the Committee work and dialogue among Members. A useful example is the experience under the SPS and TBT Agreements. In the more than 25 years of operation of those Agreements there have been tens of thousands of notifications. In respect of these, only several hundred specific trade concerns have been raised, and only a handful of disputes begun. Most of these were resolved before even getting to a ruling by a panel.

61. Seen in this light, demonstration of sustainability under Article 5.1.1 is neither an impossible standard nor a meaningless procedural step. It is rather a step that would begin with and take account of the available data and other information about the subsidy, the fishery or fisheries in question, and specific management measures. And it also would include the various types of multilateral review and other scrutiny provided for in the disciplines.

DRAFT TEXT

¹² For greater clarity, Article 5.1 does not apply to subsidies to the extent they regard stocks that are overfished

(a) subsidies to construction, acquisition, modernisation, renovation or upgrading of vessels;

(d) subsidies to costs of personnel, social charges, or insurance;

(e) income support of vessels or operators or the workers they employ;

(f) price support of fish caught;

(g) subsidies to at-sea support;

(h) subsidies covering operating losses of vessels or fishing or fishing related activities.

Article 5.2

62. As noted above, this new draft of the Agreement once again contains a standalone prohibition of subsidies contingent on fishing outside a Member’s jurisdiction, in Article 5.2. As I mentioned above, there was a significant preponderance of Members sharing the view that this provision should be moved back to a standalone prohibition to ensure its effectiveness. Some Members preference was to retain the provision as Article 5.1(i), but indicated that they could accept the move back to Article 5.2 so long as the prohibition was accompanied by former Article 5.2(b). That provision exempted from this prohibition the non-collection from operators or vessels of government-to-government payments, subject to the sustainability elements in Article 5.1.1. That provision has been restored. Thus, new Article 5.2 has the same structure as and is very similar to former Article 5.2 found, for example, in the draft in TN/RL/W/276/Rev.1.

63. The footnote to Article 5.2(a), now footnote 13, has been amended compared to the previous draft by adding clarifying language regarding fishing in a nearby Member’s exclusive economic zone pursuant to traditional or historical practices or arrangements, including relating to migratory stocks, an issue of relevance to some Members.

DRAFT TEXT

Article 5.3

64. As just noted, Article 5.3 is intended to complement the main prohibition in Article 5.1 on subsidies that contribute to overcapacity and overfishing. It provides for a prohibition of all subsidies to fishing or fishing related activities in the high seas – that is, outside of any coastal Members or coastal non-Member’s jurisdiction and outside the competence of any RFMO/A.

65. Although it has been stated that the sustainability conditionality under 5.1.1 to grant otherwise prohibited subsidies under Article 5.1 de facto prohibits subsidies in areas where such demonstration cannot occur, including the high seas, Article 5.2 reinforces this prohibition by providing clarity that subsidies to fishing or fishing related activities in the unregulated high seas are prohibited not only in fact, but also in law.

DRAFT TEXT

Article 5.4

66. Along with footnote 3, Article 5.4 is part of a new approach to address the differences among Members concerning the two alternatives to this provision that appeared in the previous draft concerning subsidies to vessels not flying the flag of the subsidizing Member. As I stated above, footnote 3 clarifies that a subsidy is attributable to the Member conferring it, regardless of the flag or registry of any vessel involved or the nationality of the recipient. In addition, Article 5.3 requires the subsidizing Member to take special care and exercise due restraint when granting subsidies to vessels not flying its flag. This text is the result of compromise among the Members holding views on the opposite sides of the spectrum.

DRAFT TEXT

5.4 A Member shall take special care and exercise due restraint when granting subsidies to vessels not flying that Member’s flag.

Article 5.5

67. Article 5.5 concerns special and differential treatment for subsidies contributing to overcapacity and overfishing, which has been an issue of particular concern for many Members in these negotiations. This is not surprising as this is a key element in the overall discussion on balance and ambition in the Agreement on Fisheries Subsidies.

68. For a long time, Members held diverging views on both the structure and content of SDT provisions in this pillar of the disciplines. For this reason, I, as the Chair of the negotiations, was asked to try my hand at putting together different elements in the form of a new clean text on SDT for Article 5. This first try was circulated in an earlier version of this text in TN/RL/W/276/Rev.2 on 8 November 2021.

69. On the basis of the discussions in the NGR, proposals, and textual suggestions from Members, I drafted Article 5.4 of TN/RL/W/276/Rev.2 as my best and honest attempt to reflect where I considered a landing zone could lie among different views at that time. The whole of the Article was in brackets in that draft, to reflect that the provisions remained under discussion. Three weeks later, on 24 November 2021, when I circulated the first Draft Agreement on Fisheries Subsidies in WT/MIN(21)/W/5, the structure of Article 5.4, including the language in it and brackets around it remained virtually unchanged. One addition was a footnote at the start of the Article, which provided that it would not apply to Members whose annual share of the global volume of marine capture production is at or above 10 per cent as per the most recent published FAO data. This was in response to a widespread call during discussions on the previous versions of the text that developing country Members with a relatively large share of global fishing should not be in the position to avail of the SDT provisions.

70. Over the past few weeks, intensive and useful discussions with and among Members have given me the impression that views on SDT in Article 5 may not be as far apart as they had appeared. First, many delegations indicated that they could work on the basis of the approach that was in Article 5.4 of WT/MIN(21)/W/5, subject to some restructuring and rewording to make it more clear that the three elements of SDT in that provision are separate; and second, many Members showed some flexibility in respect of the length of the transition period, the de minimis threshold, and the geographical exemption for artisanal fishing.

71. On the basis of this work, I have made certain changes to the previous formulations on SDT in the overcapacity and overfishing pillar, with the aim of making these provisions more broadly acceptable to Members. One important change was to separate and renumber the subparagraphs of the Article to make it more clear that the three elements of SDT are separate although they work in parallel during the transition period. This restructuring has been well-received by delegations, allowing us to focus on the specific elements themselves.

Article 5.5 (a)

74. Article 5.5(a) provides for a transition period available to all developing country Members not falling under the scope of footnote 14 and that choose to use this provision. During this period a developing country Member would be exempt from the prohibition in Article 5.1. That is, it could grant or maintain the subsidies in Article 5.1 without having to meet the sustainability requirements in Article 5.1.1, in its EEZ and in the area of competence of an RFMO.

75. Members’ views on the duration of this transition period continue to range from no, or at best a very short transition period, to the proposal for a transition period of 25 years. However, these represent views at the opposite ends of the spectrum, while it appears that most Members now see the likely outcome within a narrower range. I have incorporated two alternative formulations of the transition period, based on Members’ discussions on this issue. The first alternative is 7 years, which represent a mid-point among the gradually narrowing range of numbers that Members have been discussing. The second alternative is based on the suggestion from numerous Members to refer to a specific end-date for the transition period, namely year 2030. This is the target date for implementation of the Sustainable Development Goals and Target 14.6 which, along with the MC11 Ministerial Decision on Fisheries Subsidies, is our mandate for negotiating this Agreement.

76. The numbers associated with the transition period, 7 years or up to the year 2030, have been included in brackets, because this is an area where views have not converged enough for me to present a single suggested outcome.

77. Another new element to the transition period is some further period of flexibility through a two-year peace clause, which would apply after the transition period ended. During this two-year period, a developing country Member using Article 5.1 would still have the obligation to implement that provision but would be exempt from dispute settlement under Articles 5.1 and 10 of this Agreement. A proposal with a similar objective has also been distributed, which would give developing country Members a set number of years after the transition period when they would not have to notify information about stock status.

78. Finally, questions have been raised about the appropriateness and practicability of the final clause of Article 5.4(b) in the previous draft, that Members intending to invoke this provision should inform the Committee in writing before the date of entry into force of the Agreement. To address this concern, the drafting has been changed to mirror that in Articles 8.4 and 8.5, by referring to “within one year of the date of entry into force”.

DRAFT TEXT

Footnote 14

72. Footnote 14, which was footnote 12 in the previous draft, has been revised, and the figure of 10 per cent has been replaced with an “X”. The entire footnote is in brackets to indicate that some Members are concerned that this is not the appropriate way to indicate that any developing country Member should not avail from SDT. Others consider, however, that those developing country Members with a large share of global marine capture should not be able to avail of SDT for subsidies contributing to overcapacity and overfishing.

73. The other amendment concerns the reference to the most recent published FAO and adds the phrase “as circulated by the WTO Secretariat”. The intention of this amendment is to account for potential differences in nomenclature between the UN system and the WTO.

DRAFT TEXT

Article 5.5 (b)(i)

79. Article 5.5(b)(i) is intended to provide flexibility for developing country Members with relatively small individual shares of marine global capture production. This provision would apply separately and in parallel to Article 5.5(a), that is during and after the transition period. Under Article 5.5(b)(i), a Member with no more than the specified de minimis share of global marine capture would be exempt from Article 5.1, including Article 5.1.1, for as long as its share of catch was below the de minimis limit for three consecutive years.

80. The previous draft of the Agreement had proposed a 0.7 per cent share of global marine capture as the threshold. The number was in brackets to indicate that views varied on the threshold percentage, ranging from 0.3 up to 5 per cent. Once again, however, these represented the far ends of the spectrum. Some Members that had indicated a willingness to accept 0.7 per cent stated that this was their compromise position, noting that a Member with 1 per cent share of global catch would be among the top 20 fishing nations in the world with over 800,000 tonnes of fish caught a year. It also was noted that the vast majority of Members currently below a 0.7 per cent share of global catch well below this figure, giving them considerable policy space to increase catch before reaching this threshold. Others pointed out that some developing country Members might reach 0.7 per cent relatively soon, and therefore sought additional policy space.

81. As a compromise solution, and based on discussion and negotiations among Members, in this new draft, I am suggesting that the de minimis threshold for the exemption from Article 5.1 be set at 0.8 per cent share of global volume of marine capture production as per the most recent published FAO data. This number is in square brackets since this is an area where views have not fully converged. In this provision the phrase “as circulated by the WTO Secretariat” has been added for the same reasons as I outlined for footnote 14.

DRAFT TEXT

Article 5.5(b)(ii)

82. Article 5.5(b) now contains two subparagraphs because footnote 13 of the previous draft has been moved into Article 5.5(b) as subparagraph (ii). Apart from editorial changes, the text of this provision remains the same. That is, it provides that a developing country Member would remain exempt from Article 5.1 until its share of global marine capture production exceeded the de minimis threshold for three consecutive years. Conversely, Article 5.5(b)(i) would apply again to a Member whose share of global marine capture production fell back below this threshold for three consecutive years.

DRAFT TEXT

Article 5.5 (c)

83. Article 5.5(c) is often referred to as the exemption for subsidies to artisanal fishing. This provision also works separately and in parallel to the transition period in Article 5.4(a). Article 5.5(c) would exempt from Article 5.1, including Article 5.1.1, for all developing country Members not falling under the scope of footnote 14, subsidies to low income, resource-poor and livelihood fishing within a geographic limit. Again, this is a stand-alone provision that operates in parallel with the transition period in Article 5.5(a), and would be relevant after the transition period for those Members with a greater than de minimis share of world catch.

84. The previous draft Agreement set a geographic limit of 12 nautical miles (in brackets). Similar to the discussions on the length of the transition period and the de minimis threshold, Members’ views on what the limit should be are diverse. Some have noted that they see even having such an exemption as a compromise from their earlier opposition to an artisanal fishing exemption, or their view that it should be limited to de minimis Members. These Members generally oppose any expansion of the 12 nautical mile limit because it is a permanent exemption. On the other hand, some developing country Members argue that this exemption should apply to the entire EEZ or 200 nautical miles. From recent discussions among Members, I sense that the preponderance of Members are considering numbers in the 12 to 24 nautical mile range. This is the reason that these two figures appear in the text, as alternatives, and in brackets.

85. Those in favour of 12 nautical miles have noted that this is the limit of the territorial sea in UNCLOS where the coastal Member has full sovereignty. Some Members in favour of a limit of more than 12 nautical miles argue, however, that artisanal fishers may fish somewhat beyond 12 miles and that such fishers should not be subject to any conditions or artificial boundaries for any subsidies they may receive. Some Members have suggested 24 nautical miles as an alternative, noting that this is the limit of the contiguous zone as set out in UNCLOS.

86. One technical clarification has been introduced at the end of this provision, to reflect that the baselines from which the geographic scope of the exemptions is measured includes archipelagic baselines, as referred to in Article 47 of UNCLOS, that is from the outermost points of the outermost islands and drying reefs of the archipelago. This means in practice that the exemption for artisanal fishing would apply to all of the waters inside the archipelagic baselines.

DRAFT TEXT

Article 5.5 (d)

87. From our extensive discussions on this issue to date, it has been suggested that Members availing themselves of the SDT provisions nevertheless should aim to provide subsidies in a sustainable manner, with a view to avoiding contributing to overcapacity and overfishing. This has been a shared view of both developed and developing country Members. This is reflected in Article 5.5(d), which was Article 5.4(c) in the previous draft text. Some Members consider that the mandatory “shall” in this best endeavours clause is too strong and have suggested “should” or “may” instead. I have not changed the drafting here, noting the views of many Members that “shall endeavour” merely implies a need to be cognizant of potential impacts of subsidies when granting them rather than requiring any specific action.

DRAFT TEXT

(d) While applying Article 5.5, a Member shall endeavour to ensure that its subsidies do not contribute to overcapacity or overfishing.

88. As stated earlier, while the drafting of Article 5.5 is my best and honest attempt at presenting a possible landing zone, divergences remain with regard to specific figures, and I believe Ministers’ attention will be particularly warranted in resolving these issues. It must be noted, additionally, that the numbers in brackets are suggested as a compromise between long held positions on this issue.

Top 25 sea-fishing nations

Developing countries dominate the top 25 major producers. Annual marine capture production in million tonnes, live weight. (The table might display better here.)

(These are the UN Food and Agriculture Organization’s figures for annual catch sizes.
Subsidy figures are more difficult to obtain. One set of estimates is here, with data here. See also the WTO Secretariat’s more up-to-date and more comprehensive compilation circulated in November 2023, also based on FAO data.)

Updated December 8, 2023

Country or territory	1980s ave.	1990s ave.	2000s ave.	2010s ave.	2017	2018	2019	2020	2020 %
China	3.82	9.96	12.43	13.24	13.19	12.68	12.15	11.77	15
Indonesia	1.74	3.03	4.37	5.98	6.56	6.71	6.56	6.43	8
Peru (total)	4.14	8.10	8.07	5.13	4.13	7.15	4.80	5.61	7
Peru (excluding anchoveta)	2.50	2.54	0.95	1.01	0.83	0.96	1.29	1.22	—
Russia	1.51	4.72	3.20	4.28	4.59	4.84	4.72	4.79	6
US	4.53	5.15	4.75	4.89	5.01	4.77	4.81	4.23	5
India	1.69	2.60	2.95	3.55	3.94	3.62	3.67	3.71	5
Viet Nam	0.53	0.94	1.72	2.70	3.15	3.19	3.29	3.27	4
Japan	10.59	6.72	4.41	3.48	3.19	3.26	3.16	3.13	4
Norway	2.21	2.43	2.52	2.30	2.39	2.49	2.31	2.45	3
Chile (total)	4.52	5.95	4.02	2.16	1.92	2.12	1.98	1.77	2
Chile (excluding anchoveta)	4.00	4.45	2.75	1.40	1.29	1.27	1.23	1.27	—
Philippines	1.32	1.68	2.10	1.92	1.72	1.65	1.67	1.76	2
Thailand	2.08	2.70	2.38	1.46	1.30	1.39	1.41	1.52	2
Malaysia	0.76	1.08	1.31	1.46	1.47	1.45	1.46	1.38	2
Rep. Korea	2.18	2.25	1.78	1.56	1.35	1.39	1.41	1.36	2
Morocco	0.46	0.68	0.97	1.28	1.36	1.36	1.44	1.36	2
Mexico	1.21	1.18	1.31	1.42	1.46	1.47	1.42	1.35	2
Iceland	1.43	1.67	1.66	1.20	1.18	1.26	1.04	1.02	1
Myanmar	0.50	0.61	1.10	1.15	1.27	1.15	1.06	1.01	1
Argentina	0.41	0.99	0.94	0.79	0.81	0.82	0.80	0.82	1
Spain	1.21	1.13	0.92	0.96	0.94	0.93	0.88	0.80	1
Oman	0.11	0.12	0.15	0.29	0.35	0.55	0.58	0.79	1
Denmark	1.86	1.71	1.05	0.73	0.90	0.79	0.63	0.73	1
Canada	1.41	1.09	1.01	0.83	0.81	0.81	0.75	0.71	1
Iran	0.11	0.23	0.31	0.55	0.69	0.72	0.73	0.70	1
Bangladesh	0.18	0.28	0.46	0.61	0.64	0.65	0.66	0.67	1
Total: 25 major producers	50.49	66.99	65.87	63.90	64.32	67.23	63.41	63.17	80
Total: all other producers	21.61	14.86	15.72	15.89	17.16	17.27	16.69	15.62	20
World total	72.10	81.86	81.59	79.79	81.48	84.51	80.09	78.79	100

NOTE: Excluding aquatic mammals, crocodiles, alligators, caimans and algae.
SOURCE: FAO, The State of World Fisheries and Aquaculture 2022: pdf, Table 2, page 14 of Part 1 or html, Table 2

Updates: none so far

Image credits:
● Fishing boat in India (original photo used in main image) | Nirmal Rajendharkumar, Unspalsh licence

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