ACP COUNTRIES ASK EU TO PROTECT PREFERENCES FOR FISH AT WTO

A resolution adopted by Ministers and delegates at the African, Caribbean and Pacific Countries (ACP) and EU Joint Parliamentary Assembly on 22 June in Vienna, Austria calls on the European Commission to consider carving out canned tuna products from WTO tariff reduction obligations to protect ACP exports to EU markets. The reference to tuna reflects the fear by many ACP country policy-makers that reductions on WTO negotiations on non-agricultural market access (NAMA) will reduce EU tariffs on imports of canned tuna from non-ACP countries. A substantial share of ACP export earnings come from their exports of tuna products to the EU, and especially value-added products like canned tuna, where they are competitive partly because of low, preferential tariff treatment they receive at EU borders under the Cotonou Agreement and the Generalised System of Preferences. The resolution suggests that reduction in tariffs on imports from non-ACP third countries could reduce ACP exports to the EU with the possibility that their "entire tuna canning industry may be devastated with serious socioeconomic consequences". To avoid this eventuality, they suggest taking canned tuna out of coverage of the tariff reduction formula to ensure an "effective level of preference".

The resolution also sets out key principles and guidelines for the EU-ACP relationship on fisheries, including that ACP countries should be allowed to opt-out of fisheries partnership agreements with the EU, under which the latter fishes in ACP waters, if they consider that the agreements are harmful to their social, political, environmental or economic interests; that all EU vessels fishing in ACP waters should be equipped with Vessel Monitoring Systems to monitor position and catches; and notes that ACP-EU cooperation in fisheries has to work towards enhancing ACP capacity to "develop their fishery resources sustainably and to enhance local added value". On social issues, the resolution calls for the preservation of coastal communities' traditional fishing practices and demands that "all agreements should contain measures to protect small-scale indigenous fisheries", including through financial mechanisms.

The resolution is available online at
http://www.europarl.europa.eu/intcoop/acp/60_11/pdf/resolutions/app3847en.pdf

ICTSD Reporting.


WTO TALKS ON FISHERIES INCH TOWARDS MIDDLE GROUND

WTO Members signalled a slight narrowing of their differences on fisheries subsidies during meetings of the Negotiating Group on Rules from 12-16 June. The debate focused on key questions such as which kinds of grants contribute to overcapacity and overfishing and how to provide special and differential treatment for developing countries. While several sources deemed the talks "constructive," broad disagreement remains, particularly over subsidies that directly lower the costs of fishing.

Overfishing vs. overcapacity

Proposals to limit fisheries subsidies are often described as focusing either on overcapacity or overfishing. In the first case, rules would address the subsidisation of fishing capacity, such as the construction or modification of fishing vessels. Disciplines on overfishing would address subsidies for fishing activities, such as provisions of fuel, ice, and bait.

In negotiations, Members agreed that rules should constrain fishing capacity, but Members were unable to decide on how to deal with practices that lead to overfishing. Brazil and New Zealand would like to address subsidies aimed at both problems. A submission by the EU (TN/RL/GEN/134) and a joint one by Japan, Korea, and Taiwan (TN/RL/GEN/114/Rev.1) specifically target overcapacity by addressing fishing vessel construction, modification, and overseas transfers. Sources indicate that these countries believe that addressing overcapacity would inevitably curb problems with overfishing, because fewer boats would translate into less fishing.

However, several delegates commented that the problem is about "more than just boats." A recent report by environmental group WWF suggested that "it is plain nonsense to propose rules that discourage overcapacity while allowing the direct subsidisation of overfishing itself." In the report, which caused a stir in the negotiations, the WWF called for WTO Members to ban the most damaging subsidies, subject the remaining subsidies to effective disciplines and make the rules enforceable.

Another major challenge for the group is how to devise rules on transparency with regard to fisheries subsidies. While several proposals would require countries to notify subsidies to the WTO, Members have not reached consensus on exact provisions. According to one source, "everyone agrees on the need for transparency, but once we start discussing actual language different perspectives emerge."

Moving forward by simplifying, clarifying, elaborating

Nevertheless, forward movement was apparent on several fronts. A new version of draft text from Brazil (TN/RL/GEN/79/Rev.3), which was revised based on comments from several Members, attempts to simplify the debate by replacing certain labels and categories of subsidies with more explicit language based on the aim of the subsidy (see Bridges Trade BioRes, 19 May 2006, http://www.ictsd.org/biores/06-05-19/story1.htm). For example, the proposal distills the traditional three categories of subsidies (permitted, actionable which could be legally challenged, and prohibited) into two categories -- prohibited ones and those that would "be exempted from the prohibition." In addition, the proposal replaces references to 'artisanal' and 'small-scale' fishing with more descriptive language, such as "fishing activities related to the subsistence of the fishermen and their families."

Another change in Brazil's proposal addresses the issue of whether a payment from one government for the right to fish in another government's jurisdiction (so-called 'access rights') constitutes a subsidy. Several small and vulnerable coastal economies have called for fees from selling access rights to be exempt from disciplines because they constitute an important source of government revenue. The revised proposal specifies that a subsidy would be deemed to exist in cases where a government purchases access rights and transfers them to its domestic fishing industry free-of-charge, as opposed to selling or auctioning them off.

New Zealand's submission (TN/RL/GEN/141) added several items to the list of exceptions to a broad ban on fisheries subsidies that it had proposed in an earlier submission (TN/RL/GEN/100). Financial transfers would, according to the additions, be allowed for vessel decommissioning programmes; conservation activities; infrastructure; social programmes for fishermen; and disaster relief. The proposal also includes new provisions for 'artisanal' fishing -- defined as traditional fishing activity related to the subsistence of fishermen and their families -- and vessel and crew safety. One delegate argued that the expansion of the list would move the negotiations towards a more meaningful discussion about what specific payments would be prohibited.

S&D charts new course

The discussion on special and differential treatment (S&D) also advanced slightly. S&D has posed a particular challenge for WTO members since some developing countries are major fish harvesters, and extending S&D to them on equal terms as other developing countries could undermine the effectiveness of any new fisheries rules.

One approach, proposed by Japan, Taiwan and Korea, has been to apply S&D only to those developing countries that account for less than a minimum percentage of the world market share of fish, or which have catches that fall below a certain weight threshold. In contrast, the EU would exempt developing countries from rules on subsidies providing they do not increase fishing capacity "to the extent that it is an impediment to the sustainable exploitation of fishery resources worldwide." Brazil would allow S&D for all developing countries on the condition that, among others, subsidies are forbidden for fisheries that are overexploited, depleted, or recovering according to the UN Food and Agriculture Organisation (FAO).

Argentina submitted an alternative proposal for the treatment of developing countries (TN/RL/GEN/138). Asserting that S&D should be "responsible," "selective," "limited" and "transparent," the proposal would allow developing countries to use subsidies for fishing vessel construction, repair, and gear acquisition or improvement; fishing efforts that do not cause 'serious prejudice' to another WTO Member's interests; and 'artisanal' fisheries (defined as fishing activities relating to the subsistence of fishers and their families). Eligibility for S&D would be subject to certain conditions, such as compliance with notification and transparency provisions and the presence of a national fisheries management system. One source called the Argentine proposal "a good basis for moving forward".

EU subsidy package raises concerns

The Rules Group adjourned only days before a crucial decision by EU fisheries ministers. On 19 June, the European Commission announced that it had approved a new European Fisheries Fund that would provide EUR 3.8 billion in subsidies over seven years as part of the reform of the common fisheries policy (CFP). The agreement established certain categories of eligible subsidies, such as grants for the modernisation of fishing vessels. Some EU member states had opposed the plan on the grounds that it would promote overfishing (see Bridges Trade BioRes, 2 June 2006, http://www.ictsd.org/biores/06-06-02/story2.htm). Organisations including WWF have expressed concern that the policy could threaten the marine environment, strongly affect the positions Brussels takes in WTO negotiations and could even compromise the competitiveness of the fishing industry by undermining profitability, innovation and enhancing dependency on state aid.

WWF's "The Best of Texts, the Worst of Texts" is available at
http://www.panda.org/news_facts/publications/index.cfm?uNewsID=72220

ICTSD reporting; "Friends of Fish Denounce EU Aid Package," FINANCIAL TIMES, 17 June 2006; "WWF Statement On The Adoption Of The European Fisheries Fund," WWF, 19 June 2006; "The Best Of Texts, The Worst Of Texts," WWF, June 2006.