WTO Fisheries Update

The chair for the Doha fisheries subsidies negotiations Ambassador Einar Gunnarsson of Iceland issued two documents for members on Friday to mull over some difficult issues on which ministers failed to reach an agreement for prohibiting the subsidies that contribute to overcapacity and overfishing at the World Trade Organization’s 13th ministerial conference in Abu Dhabi, said people familiar with the discussions.

The Abu Dhabi ministerial meeting failed in the two most key areas of agriculture as well as on fisheries subsidies that contribute to overcapacity and overfishing.

The first document – TN/RL/W/278 – issued by the chair refers to the text sent by the Minister Facilitator via email on the morning before MC13 ended.

It contains low-ambition middle-ground provisions replete with flexibilities for tackling subsidies that contribute to overcapacity and overfishing provided by ten large subsidizers, said several people who asked not to be quoted.

The text did not name the top ten large subsidizers. However, it will come to be known within six months after the agreement comes into force, as members are required to notify their subsidies within four months.

Hybrid Approach

For the first time, the draft text clubs developing countries with large subsidizers while subjecting
them to a plethora of transparency and notification requirements based on the so-called hybrid approach, said a capital-based official who asked not to be quoted.

“These provisions appear to balance the specific flexibilities accorded to the large subsidizers on the one side, and the limited exemptions granted to developing countries on the other,” the official said.
Significantly, the chair did not suggest in the addendum whether the Pacific Group of countries proposed a “standstill” agreement on the OC&OF subsidies given the large subsidizers, said people who asked not to be quoted.

The draft final Abu Dhabi text falls well short of fulfilling the goals set out in the mandate of the United Nations Sustainable Development Goal 14.6, said people familiar with the negotiations.
According to the mandate, WTO members are required to “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.”

The five largest subsidizers are China, the United States, Korea, the European Union and Japan, with OC&OF subsidies running into more than $22 billion.

Second Document

According to Ambassador Gunnarsson, the second document – TN/RL/W/278/Add.1 – is an
explanatory addendum that “contains background, context, explanations for the draft additional provisions.”

After explaining the process that was adopted at MC13, the chair said that “despite ambitions of presenting the elements of a package deal in a textual form, by the middle of the night between 29 February and 1 March we were not able to circulate such a document because consultations continued non-stop.”

“At that point, Secretary Eyjólfsson (the minister facilitator from Iceland) decided instead to circulate a complete version of the text incorporating the elements of the package on which he had been consulting with Members,” the chair noted.

The chair, however, did not mention the specific exemptions given to big subsidizers in
Article A.1.1 and A.2.

Although the text does not feature bracketed language, the chair noted it contained "yellow highlight in five places," indicating sections needing resolution before the text could be presented to Members for adoption. These highlighted issues include:

1. The transition period placeholder in Article B.1, which concerns an exemption for least-developed countries regarding subsidies that contribute to overfishing and overcapacity as outlined in Article A.1. Article B.1 specifies that these countries, upon graduation from the Least Developed Countries category by a UN General Assembly decision, may maintain such subsidies for a defined period.
2. The transition period placeholder in Article B.3, addressing provisions for developing country Members not eligible for the special treatment in Articles B.1 or B.2. These Members can maintain certain subsidies within their Exclusive Economic Zones (EEZs) and areas governed by relevant regional fisheries management organizations (RFMOs/A) for a specified period after these Additional Provisions come into force.
3. The placeholder in footnote 25 regarding Member commitments not to utilize special and differential treatment (SDT).
4. Article C.2(a) on transparency concerning forced labor.
5. Article C.3 on transparency concerning non-specific fuel subsidies.

The chair, however, did not address the specific exemptions for major subsidizers in Articles A.1.1 and A.2. Other contentious points might arise during further discussions, particularly relating to agriculture and other sectors.