Wednesday, December 13, 2017

https://dailyasianage.com/news/99015/fisheries-subsidies-negotiation-at-mc11-of-wto--ii

Fisheries subsidies negotiation at MC11 of WTO II

M S Siddiqui

One of the most perverse subsidies offered are fuel subsidies where fishermen pay less for fuel than
other industries or individuals. The estimated to range between $4.2 billion to $8.5 billion annually
subsidies are offered by governments to fisheries sector throughout the world through lower costs of
fuel, tax rebates on fuel, or other kickback mechanisms.

Researchers have also calculated around $15 billion of non-fuel "bad subsidies" including subsidies
for boat construction and modernization, fishing port construction, marketing/processing and storage
infrastructure, tax exemptions, fishing access agreements, and fishery development projects.
Some members proposed the fisheries management includes the establishment and administration
of management systems (including allocating and monitoring fishing licenses, permits, quota, vessel
numbers and catch returns), adjusting management settings within an existing management system
and developing amendments or additions to the existing management system.

WTO proposed to discipline all significant fisheries subsidies programs, regardless of geographic
scope, whether high seas, EEZs, littoral or inland fisheries. The other measures includes, amongst
others, measures such as a) banning enterprises and vessel operators that have been involved in
IUU from receiving future subsidies, and b) requiring the withdrawal of entire subsidy programs
where a program or a subsidized fishery of committing 'serious infringements'.

WTO advocated more transparency measures that include the identity of enterprise receiving
subsidies, how the subsidies are applied, information about the particular fisheries affected by a
given subsidy program such as fish catch data, stock status, fleet capacity, management measures,
and the subsidy amounts on a per vessel, per fleet, and per fishery basis and notify to WTO.

The notification rules for fisheries subsidies must also be enforceable. There must be real and
significant legal consequences when governments fail to notify their programs. This restriction also
applies to subsidies to fisheries within their exclusive economic zones from prohibitions and inland
fishing by fishermen.

The EU called for any agreement on fisheries subsidies to be "fully subject" to dispute settlement.
China has opposed any proposals that will subject fishery management and territoriality to dispute
settlement at the WTO, while Korea argued that the negotiations were not mature enough to start
debating whether the result should be legally binding. There are concerns about expansive special
and differential provisions and whether the accord should be legally binding and fully subject to
dispute settlement.

The LDCs and developing countries needs special and differential treatment should address the
practical problems in implementing stronger rules while not undermining the objectives of the
negotiations. Working for Sustainable Fishing (WWF) strongly endorses the calls for technical
assistance and cooperation as a vital element to help LDCs and Small Vulnerable Economies
(SVEs) to comply with WTO disciplines on fisheries with regulating fishing, withdrawal of all
subsidies and strict reporting procedure etc.

To further this goal, China, Indonesia and others have called for exemptions for developing country
small-scale fishermen from subsidies disciplines in terms of infrastructure, capital and operating
costs. Interestingly, some developed countries have also requested exemptions for their small-scale
fisheries.

However, implementation of special & differential treatment (SDT) requires some of the issues to be
resolved first: the criteria to be used in identifying eligible fisheries for SDT; territorial limits on the
use of SDT; the need for effective management of subsidized fisheries; how access rights for foreign
fleets should be treated etc.

WTO Members have proposed subsidies broadly of two categories. The 'Top-down approach' is
advocated by the 'Friends of Fish' group, arguing for subsidies for all fisheries subsidies should be
prohibited apart from certain exemptions. This group includes Australia, Chile, Ecuador, Iceland,
New Zealand, Peru, Philippines and the US.

The 'Bottom-up approach' is advocated by another group argues that all subsidies should be
allowed, apart from those that is specifically prohibited. Members of this group include Japan, Korea
and Taiwan. The position of the EU is located in between. Despite the differences in the negotiating
approach within the two groups, there is a general agreement that subsidies that support capital
costs (e.g. the acquisition, modification or construction of fishing vessels) should be prohibited.

With respect to the size of fishing operations, some of the proposals include relevant definitions. The
EU defines 'subsistence fishing' as, inter alia, fishing activities undertaken for consumption by
members of that household, only a part of which can be sold or exchanged commercially. Other
proposals focus on 'artisanal fisheries' or 'small-scale fisheries', and tend to include definitions of
operations within territorial waters and closer to shore, or as defined by national laws and/or
international agreements.

The agreement proposed by WTO have favorable condition for at least in terms of enforcement
against smaller, or 'artisanal' fishing operations in national waters, compared to larger-scale
companies operating in international waters. In particular, the proposals call for flexibilities to be
afforded to subsistence fishing, artisanal and small-scale fishing operations.

In addition, discussions may focus on the obligations of developed countries compared to

developing countries and LDCs, including in particular as they relate to notification obligations.
Developing countries and LDCs including Bangladesh has concern of regulated fishing and
subsidies since fishing is livelihood of few millions of fishermen in coastal area and inland rivers and
about 50 percent of protein intake from fishes.

The records and reporting is almost impossible with existing administrative set up in a transparent
manner. Bangladesh should try to delay any such declaration at 11th Ministerial Conference of WTO
on 10-13 December 2017 in Buenos Aires, Argentina. (Concluded)

The writer is a legal economist. Email: mssiddiqui2035@gmail.com