Fisheries subsidies are government actions that confer an advantage on consumers or extractors of fish in order to supplement their income or lower their cost. The World Trade Organisation (WTO) seeks a solution within the framework of international trade rules to anomalies involving fisheries subsidies at the 11th Ministerial Conference to be held between 10-13 December 2017 in Buenos Aires, Argentina.
According to the WTO, a subsidy exists if "there is a financial contribution by a government or any public body within the territory of a Member" and this contribution fulfils certain specified conditions, or if "there is any form of income or price support in the sense of Article XVI of GATT 1994". The benefit or exception for LDCs and developing countries is as per the WTO 1994 Agreement on Subsidies and Countervailing Measures, Article 1.
Ministers agreed in the Doha Declaration (2001) to "clarify and improve WTO rules that apply to fisheries subsidies". In 2005, the Hong Kong Ministerial Declaration included, under provision 9 of its Annex D, recognising the "broad agreement that the Group should strengthen disciplines on subsidies in the fisheries sector, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and over-fishing". Provision 9 also stated that the "appropriate and effective special and differential treatment for developing and least-developed Members should be an integral part of the fisheries subsidies negotiations". The declaration has taken into account the "importance of this sector to development priorities, poverty reduction, and livelihood and food security concerns".
By this time, the United Nations' Sustainable Development Goal (SDG) 14.6 states its objective: "By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU fishing, and refrain from introducing new such subsidies, recognising that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation".
Although negotiations did not ultimately progress over the past years, substantial progress has been made within the Negotiating Group on Rules. In particular, releases by the WTO and recent statements published by the WTO members and the paper prepared by Secretariat of the WTO have shown that a core aim of the negotiations shifted towards a conclusion at the next meeting.
The WTO published a document on July 28, 2017 on fisheries subsidies in reference to seven proposals of the Negotiating Group on Rules (NGR) pertaining to an agreement on fisheries subsidies. A series of textual proposals were submitted by WTO members that now serve as the basis for the discussions on the future agreement. The proposals were submitted by New Zealand, Iceland and Pakistan, the EU, Indonesia, the African, Caribbean, Pacific (ACP) Group of States, a Latin American group composed of Argentina, Colombia, Costa Rica, Panama, Peru and Uruguay, least-developed countries (LDC) group and Norway. The members tackled the topics of subsidy prohibitions, a "standstill" provision against new or extended subsidies, special and differential treatment for developing and least-developed country (LDC) members, technical assistance and capacity building and transparency. Members also discussed transitional provisions and institutional arrangements such as the implementation deadline and a periodic review. Members behind the proposals were working together to produce a single text that reflects both convergences and divergences in different proposals.
Prohibitions on subsidies for illegal, unreported and unregulated (IUU) fishing raise confusion with reference to determination of IUU violations. The point of overfished stocks in relation to assessment of stocks in the first place requires further reflection. Members are also in debate if violation has occurred through use of a "negative effects test"(to study a connection between standards and instruction) and whether new rules should incorporate negotiated lists of types of subsidies that would be deemed harmful or benign.
On prohibitions on subsidies that lead to overcapacity, it will be hard to estimate appropriate levels of fishing capacity while determining the prohibition of subsidies that lead to overcapacity and how to treat fishing activity within a member's own exclusive economic zone (EEZ). Enforcement of the agreement on smaller or 'artisanal' fishing operations in national waters, compared to larger-scale companies operating in international waters is a major concern. 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 commitment to refrain from introducing new subsidies, implementation, dispute settlement, institutional arrangements and definition needs a more comprehensive discussion before imposition of subsidy prohibitions and other disciplines.
The SDG 14.6 on fishing subsidies has special and differential treatment. Members debate on what and how much flexibility can be granted to developing and LDC members as exceptions from the subsidy prohibitions and/or allowing longer implementation periods. It is not clarified what conditions, if any, these members have to meet to qualify for flexibilities.
The LDCs and developing countries need technical assistance and capacity building before limited fisheries subsidies do not harm them. Members should know what types of assistance could be provided to developing and LDC members and whether developed countries should be obliged to provide such assistance.
The issue of transparency obligations should be clarified whether the notification commitments should go beyond existing ones under the Agreement on Subsidies and Countervailing Measures and whether provision of certain types of information obligations should be mandatory or voluntary. Special obligation, if any, for developed countries compared to developing countries and LDCs should be mentioned so far as notification obligations are concerned.
Some key terms should be clarified, including illegal, unreported and unregulated (IUU) fishing, as well as the legal definition of subsidies. There is need for determining if the definition of IUU fishing from paragraph 3 of the International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing of the United Nations Food and Agriculture Organisation (UN FAO) shall be adapted in the fishing subsidies agreement. Essentially, under Paragraph 3 of the Plan of Action, IUU fishing refers to fishing that: (1) lacks authorisation, does not comply with conservation and management measures developed by regional fisheries management organisations (RFMOs), or violates national laws or international obligations (i.e., illegal); (2) is not properly reported under international, RFMO or national laws and regulations (i.e., is unreported); and (3) is performed by vessels with no national flag or that jeopardises fish stocks (i.e., is unregulated). Regarding the definition of subsidies, the parties incorporate by reference subsidies within the meaning of Article 1.1 of the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), and that are 'specific' within the meaning of Article 2 of the SCM Agreement. According to Article 1.1 of the SCM Agreement, a subsidy exists if there is a financial contribution by a government or public body, or if there is any form of income or price support, and a benefit is thereby conferred. The compilation matrix notes that the EU also proposes that the agreement does not apply to fuel de-taxation schemes (i.e., fuel subsidies provided through tax exemptions).
The document is intended to assist WTO members in continuing consultations and negotiations of the agreement, which is intended to be finalised by the upcoming WTO Ministerial in Argentina in December 2017.
Any agreement on fisheries subsidies with reported terms and conditions shall harm interests of the LDCs like Bangladesh and there are many terminologies to be clarified before such a declaration is made. Bangladesh does not have the capacity to fulfil the terms and conditions discussed so far; nor can it reduce fishing. This will render the fishing community jobless and reduce intake of protein from fish, risking health of millions of citizens. Fish is a source of 50 per cent of the total protein intake in Bangladesh.
The writer is a legal economist.
