On June 10, 2022 the package of draft documents to be considered by Ministers at the 12th Ministerial Conference in Geneva from June 12-15, 2022 were released by the WTO. See WTO, MINISTERIAL CONFERENCES: TWELFTH WTO MINISTERIAL CONFERENCE, Documents, https://www.wto.org/english/thewto_e/minist_e/mc12_e/documents_e.htm (viewed June 11, 2022). While there are many documents in the total package of documents available on the WTO webpage, much of the attention will be on the revised draft fisheries subsidies agreement (WT/MIN(22)/W/20), the two documents on the WTO response to the COVID-19 pandemic (WT/MIN(22)/13) and the TRIPS Agreement (WT/MIN(22)/15), the three documents on agriculture (Draft Ministerial Declaration on Trade and Food Security, WT/MIN(22)/17; Draft Ministerial Decision on World Food Programme Food Purchases Exemption from Export Prohibitions or Restrictions, WT/MIN(22)/W/18; and Draft Ministerial Decision on Agriculture, WT/MIN(22)/W/19), competing provisions on a work program on electronic commerce (one including an extension of the moratorium on custom duties on e-commerce), WT/MIN(22)/W/9 and WT/MIN(22)/W/10, and a draft MC12 Outcome Document which includes, inter alia, some discussion of WTO reform.
The full list of documents shown for the 12th Ministerial Conference as of June 11 on the WTO webpage is copied below.
MC12 documents
Agreement on Fisheries subsidies – Draft text
Agreement on Fisheries subsidies – Draft text – Addendum
Draft Ministerial Decision on Agriculture
Draft Ministerial Decision on World Food Programme Food Purchases Exemption from Export Prohibitions or Restrictions
Draft Ministerial Declaration on Trade and Food Security
MC12 outcome document – Draft
Draft Ministerial Decision – Communication from the Chair of the Council for TRIPS
Draft Ministerial Declaration on the WTO response to the COVID-19 pandemic and preparedness for future pandemics
G/SPS/GEN/1758/Rev.13 ; WT/GC/W/835/Rev.4 ; WT/MIN(22)/W/3/Rev.1
Sanitary and Phytosanitary Declaration for the Twelfth WTO Ministerial Conference : responding to modern SPS challenges – Submission by the African Group; ACP Group; Argentina; Australia; Belize; Brazil; Burkina Faso; Cabo Verde; Canada; Chile; China; Colombia; Costa Rica; Côte d’Ivoire; Dominican Republic; Ecuador; El Salvador; The Gambia; Guatemala; Honduras; Hong Kong, China; Japan; Malaysia; Mexico; Mongolia; Morocco; New Zealand; Nicaragua; Norway; Panama; Paraguay; Peru; Philippines; Senegal; Singapore; Switzerland; The Separate Customs Territory of Taiwan, Penghu, Kinmen And Matsu; Tajikistan; Togo; Ukraine; United States; Uruguay and Viet Nam – Revision
Report by Ambassador Zhanar Aitzhanova, Chair of the Special Session of the Council for Trade in Services – Text on services for the MC12 outcome document – 10 June 2022
Ministerial statement on fossil fuel subsidies
Africa and development – Communication from the African Group
Implementation of the trade-related components of cotton – Progress report by the Director-General to the 12th Ministerial Conference
Informal Working Group on MSMES – Coordinator’s report
Draft Ministerial Decision – WTO response to food insecurity in NFIDCs and LDCs
Work programme on electronic commerce – Communication from Albania; Australia; Bahrain, Kingdom of; Brazil; Brunei Darussalam; Canada; Chile; Colombia; Costa Rica; Dominican Republic; Ecuador; El Salvador; European Union; Georgia; Guatemala; Honduras; Hong Kong, China; Iceland; Israel; Japan; Kazakhstan; Korea, Republic of; Kuwait, the State of; Kyrgyz Republic; Liechtenstein; Malaysia; Mexico; Moldova, Republic of; Montenegro; New Zealand; Nigeria; North Macedonia; Norway; Panama; Paraguay; Peru; Philippines; Qatar; Russian Federation; Saudi Arabia, Kingdom of; Singapore; Switzerland; Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Tajikistan; Thailand; Ukraine; United Arab Emirates; United Kingdom; United States; Uruguay and Yemen
Work programme on electronic commerce – Communication from India, Indonesia, and South Africa
OACPS Ministerial Declaration on the Twelfth WTO Ministerial Conference
Proposal by Brazil
Communication from Brazil
Public stockholding for food security purposes – Proposal by the African Group, the ACP, and G33
Communication from the United Arab Emirates
Provisional agenda
Draft Agreement on Fisheries Subsidies
Draft Agreement on Fisheries Subsidies — Addendum
OACPS Ministerial Declaration on the Twelfth WTO Ministerial Conference
LDC Ministerial Declaration for the Twelfth WTO Ministerial Conference 2021
Final draft declaration on micro, small and medium-sized enterprises (MSMEs)
Draft ministerial decisions
On 22-23 November, the General Council agreed to forward the following draft decisions to the Ministerial Conference for adoption:
Work Programme on Small Economies
TRIPS non-violation and situation complaints
Reports by negotiating group chairs
Special Session of the Committee on Agriculture
Special Session of the Committee on Trade and Development
Special Session of the Dispute Settlement Body
Special Session of the Council for TRIPS
Negotiating Group on Market Access
Negotiating Group on Rules
Special Session of the Council for Trade in Services
Special Session of the Committee on Trade and Environment
Annual reports by the General Council and subsidiary bodies
General Council
Dispute Settlement Body
Trade Policy Review Body
Council for Trade in Goods
Council for Trade in Services
Council for Trade-Related Aspects of Intellectual Property Rights
Committee on Sanitary and Phytosanitary Measures
Committee on Technical Barriers to Trade
Committee on Agriculture
Committee on Trade and Development
Committee on Trade and Environment
Committee on Balance-of-Payments Restrictions
Committee on Regional Trade Agreements
Working Group on Trade, Debt and Finance
Working Group on Trade and Transfer of Technology
Committee on Government Procurement
Committee on Trade in Civil Aircraft
This post will take a closer look at the latest Fisheries Subsidies text. As will become obvious, while progress appears to have been made to reduce the number of unresolved issues in the text, there are important issues still unresolved. Moreover, many of the changes made suggest a reduction in level of ambition with little or no differentiation on actual need for special and differential treatment versus the simple use of self-selection by Members as developing countries.
Fisheries Subsidies
The WTO issued a press release on the release of the revised fisheries subsidies draft text which covers the Chair’s explanation of what has been done in the document. See WTO News Release, Revised draft agreement on fisheries subsidies sets stage for pivotal negotiations at MC12, 10 June 2022, https://www.wto.org/english/news_e/news22_e/fish_10jun22_e.htm (“The chair of the fisheries subsidies negotiations, Ambassador Santiago Wills of Colombia, on 10 June submitted to WTO members a revised draft agreement for new global rules to curb harmful fishing subsidies. Released ahead of ministers’ arrival at the 12th Ministerial Conference (MC12) in Geneva, the text for consideration reflects delegates’ collective efforts in recent intensive meetings and suggests landing zones to bring over two decades of negotiations to a successful close.”). The Chair’s explanation of the latest draft and the changes made is contained in AGREEMENT ON FISHERIES SUBSIDIES, DRAFT TEXT, Addendum, WT/MIN(22)/W/20/Add.1 (10 June 2022). The document is embedded below.
W20A1-1In reviewing the text of the current draft and comparing it to the draft from 24 November 2021 (WT/MIN(21)/W/5 the following changes are noted. As reviewed by the Chair, some of the changes reflect not agreement of the Members but rather his effort at finding a possible landing zone that will attract consensus. This includes removing a number of brackets from articles or subsections.
Article 1: Scope – the latest version deletes former Art. 1.2 and adds a new footnote 3. Article 1.2, which was bracketed in the 24 November 2021 draft, indicated that the agreement applied “to fuel subsidies to fishing and fishing related activities at sea that are not specific within the meaning of Article 2 of the SCM Agreement”. The Chair has removed the paragraph based on his perception that most Members opposed extending disciplines to non-specific fuel subsidies. WT/MIN(22)/W/20/Add.1, page 3.
“3. Article 1.2 in the previous version of the text, which was in brackets, would have extended the scope of the Agreement to fuel subsidies that are not specific. The brackets indicated that no agreement had been reached on including this provision. The text of former Article 1.2 has been omitted from this draft because it is my assessment that, for both practical and systemic reasons, there is strong convergence among Members not to extend the scope of the disciplines to cover nonspecific fuel subsidies. On the other hand, it should be acknowledged that some of those Members that had proposed or supported disciplining all fuel subsidies, specific or not, on the basis that these are particularly harmful subsidies, continue to hold the view that non-specific fuel subsidies should be covered by this Agreement.
“4. There is a shared understanding, however, that fuel subsidies are relevant under SDG target 14.6 and the MC11 mandate from Ministers1. In this regard, it has been noted that Article 1 already covers fuel subsidies that are specific, which is consistent with the current framework of the subsidies disciplines in the SCM Agreement. It also is commonly understood that non-specific fuel subsidies can contribute to excessive and illegal fishing, but the paucity of data and information on such subsidies makes it difficult to assess their extent and impact.”
The new footnote 3 states that “For greater certainty, for the purposes of this Agreement, a subsidy shall be attributable to the Member conferring it, regardless of the flag or registry of any vessel involved or the nationality of the recipient.”
Article 2: Definitions — no changes from previous version.
Article 3: Subsidies Contributing to Illegal, Unreported and Unregulated Fisheries
There are two changes in Article 3. The first is the addition of clarifying language at the end of Article 3.3 (language in bold has been added), “The coastal Member shall notify an affirmative determination to the Committee provided for in Article 9.1 (referred to in this Agreement as ‘the Committee’)”.
The second change is the removal of brackets from Article 3.8 and from the two numbers within the article (2 years and 12 nautical miles). The changes to Article 3.8 are described in paragraphs 41 and 42 of the Chair’s explanation of the text. WT/MIN(22)/W/20/Add.1 at 9.
“41. Article 3.8 provides for special and differential treatment (SDT) for the IUU fishing pillar, in the form of a ‘peace clause’. The peace clause is for two years for developing Members, including least developed country (LDC) Members, in respect of subsidies for low income, resource-poor and livelihood fishing or fishing related activities, up to 12 nautical miles from the baseline. The effect of the peace clause is that the disciplines do apply but are not subject to the dispute settlement procedures during the specified duration. This is in line with the view shared by many Members, including many developing country Members, that subsidies to IUU fishing should be eliminated. At the same time, the unique and vulnerable circumstances of the artisanal fisheries sector have been raised as particularly challenging for developing country Members in implementing the disciplines. The peace clause in Article 3.8 is meant to address both of these concerns, while keeping with the mandate to eliminate subsidies to IUU fishing.
“42. The brackets in the previous draft around the period of two years and the limit of 12 nautical miles have been removed to reflect an emerging convergence around this text. That said, some Members remain firmly of the opinion that there should be no special and differential treatment for subsidies contributing to IUU fishing. Other Members would prefer a peace clause of a longer duration.”
Article 4: Subsidies Regarding Overfished Stocks
Article 4 has one change, to Article 4.4, which similar to Art. 3.8, takes brackets off of the entire article and for the two numbers within the article. The text in the current draft follows.
“4.4 For a period of 2 years from the date of entry into force f this Agreement, subsidies granted or maintained by developing country Members, including LDC Members, for low income, resource-poor and livelihood fishing or fishing related activities, up to 12 nautical miles measured from the baselines shall be exempt from actions based on Articles 4.1 and 10 of this Agreement.” The changes are for the same reason as Art. 3.8. See WT/MIN(22)/W/20/Add.1, page 10, para. 51.
Article 5: Subsidies Contributing to Overcapacity and Overfishing
The current draft of Article 5 contains the largest number of changes from the prior text. Article 5.1 adds a footnote (12) and deletes one group of subsidies (former category “(i)”). A new Article 5.2 has been added with two subarticles (5.2(a) and (5.2(b)). Article 5.3 is the old 5.2. Footnote 11 in the old draft (under Art. 5.1(i)) is now footnote 13 (under Article 5.2(a) with an added clause in a parenthetical). Article 5.4 is a modified version of the prior Art. 5.3 although there are not alternatives as previously and Members are not prohibited from granting subsidies to vessels not flying that Member’s flag. Article 5.5 in 5.5(a) modifies prior Art. 5.4(a) by providing alternative time periods for developing countries to provide subsidies (previously a bracketed “X” years; now either 7 years or until 2030) and adds a sentence with additional exceptions.). Old footnote 12 (now 14) changes the figure of 10 percent to an bracketed “x” percent. Article 5(b)(i) (former Article 5.4(b)(i) increases the percent of global marine capture a Member may have and still provide subsidies (old figure [0.7]; new figure [0.8], moves old footnote 13 into a new Article 5(b)(ii) and 5(b)(iii) (formerly 5(b)(ii)) changes the braketed figure for nautical miles from [12] to alternative figures of [12] and [24}.
Because of the large number and potential importance of the changes to Article 5, I copy below the Chair’s explanation of the Chapter and changes made. See WT/MIN(22)/W/20/Add.1, pages 10-16.
“ARTICLE 5: SUBSIDIES CONTRIBUTING TO OVERCAPACITY AND OVERFISHING
“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 5.1 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.
“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.
“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 Member’s 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.
“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.
“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.
“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.
“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’.
“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.
“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.
“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.
“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.
“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.”
Article 6: Specific Provisions for LDC Members
Articles 6.1 – 6.3 remain unchanged except for the removal of the brackets around 6.2 and 6.3.
Article 7: Technical Assistance and Capacity Building
Article 7, like Article 6 is identical to the prior version with the exception of the removal of brackets around the article.
Article 8: Notification and Transparency
Article 8.1 remains unchanged from the November 2021 draft although footnote 16 of the new draft (15 of the old draft) includes modifications on the percentage of global marine capture and FAO data circulated by the WTO Secretariat similar to changes in Article 5. Article 8.1bis (and footnote 18) from the earlier draft has been deleted with a new Article 8.2 added. Article 8.7 (former Article 8.6) has a new footnote added (19). There is a new Article 8.9 added. While there is no change to the prior 8.2(b) (now 8.3(b)), this provision which requires notification of “any vessels and operators for which the member has information that reasonably indicates the use of forced labour, along with relevant information to the extent possible” is of importance to the United States. That 8.3(b) remains bracketed in the Chair’s draft indicates lack of movement to consensus (politely described as “discussions continuing”).
The Chair’s discussion of new Article 8.2, footnote 19 and Article 8.9 are copied below. See WT/MIN(22)/W/20/Add.1 at pages 17 and 19.
“Article 8.2
“102. Article 8.2 requires annual notification “to the extent possible” of fuel subsidies to fishing and fishing related activities that are not specific. As noted above, the language was developed by a group of interested Members with different and somewhat opposed views on this issue as a formulation around which all of them could converge.
“103. Article 8.2 has some changes compared to the previous formulation of the same provision, Article 8.1bis in the previous draft (WT/MIN(21)/W/5). First, concerning the placement, the discussion of new proposed Article 8.2 led to the conclusion that this separate provision should not be mixed with what is covered by Article 8.1, which refers to the SCM Agreement, given that nonspecific subsidies are outside the scope of the SCM Agreement. The suggestion was that, logically, this provision should immediately follow Article 8.1. Second, the old footnote 18 to Article 8.1bis in the Draft Agreement (WT/MIN(21)/W/5) clarified that this provision is without prejudice to Article 25 of the SCM Agreement. However, with the inclusion of the new Article 8.9, which is more general and clarifies that notifying a measure does not prejudge its legal status under the SCM Agreement, its effects or its nature, in Members’ view the old footnote 18 became redundant and it was deleted.
“104. In the discussion of this provision, it has been noted that the information that would be collected could be informative in the reviews of the substantive operation of the Agreement under Article 9.4. This element of discussion was an important consideration to many Members in finding the transparency elements in 8.2 to be a compromise approach to the overall treatment of nonspecific fuel subsidies in this Agreement.
“105. This provision is related to Article 1 and deletion of the former Article 1.2 on non-specific fuel
subsidies. As a reminder, Members’ views on how to deal with this sensitive issue covered a spectrum
from the simple deletion of the brackets around Article 1.2 at one end, to the deletion of Article 1.2
itself and any transparency provision on these subsidies at the other end.
“106. As mentioned above, the compromise solution arising from the long process we had on this issue that most Members could live with was to add language on transparency in respect of nonspecific fuel subsidies, currently reflected in Article 8.2, and to delete Article 1.2.”
“118. New footnote 19 has been added to Article 8.7 to clarify that there is no requirement to notify subsidy programmes before they are implemented, or prior to what is required under the regular notification process. This is a broadly shared understanding among Members, which is reflected in this footnote for clarity and does not change the substance of Article 8.7. This footnote also contains a cross-reference to footnote 16, pertaining to the periodicity of notifications by developing country Members below the de minimis threshold in Article 5.5(b)(i).”
“Article 8.9
“120. Article 8.9 is a new provision which repeats verbatim the text of Article 25.7 of the SCM
Agreement. In particular, it provides that notifying a measure under the Agreement does not
prejudge its legal status, effects or nature.”
Article 9: Institutional Arrangements
There are no changes to Article 9 in the current draft text.
Article 10: Dispute Settlement
There are no changes to Article 10 in the current draft text.
Article 11: Final Provisions
Article 11.3(b) deletes a clause at the end of provision (“that is contested by a party or a third party”) and adds a footnote 24 (“this limitation shall also apply to an arbitrator established pursuant to Article 25 of the Dispute Settlement Understanding.”).
A few thoughts
Since the fisheries subsidies negotiations have been ongoing for more than 20 years, an important test of whether the WTO can address important issues of today will be whether ministers are able to cobble together a final agreement. As important as completing the deal will be, equally important will be achieving a meaningful level of ambition. As is clear from the Chair’s write-up of the current state of negotiations, the number of brackets have been reduced, but getting to a final agreement will be up to the flexibilities of the Ministers attending.
The level of ambition in the current draft will be better gaged by others, but the impression of the changes in Article 5 are of large numbers of WTO Members essentially escaping many of the obligations of the draft agreement. For example, the exclusion for WTO developing country Members who each account for less than 0.8% of global marine capture from the disciplines of Article 5.1, means that very few developing countries will be subject to the disciplines of Article 5.1. See Art. 5.5(b)(1). Similar questions arise with regard to the nautical mile exception for subsidies from developing countries to “low income, resource-poor and livelihood fishing or fishing related activities” (Art. 5.5(c), Transition periods also seem very long (Art. 5.5(a)).
Data from the FAO on global marine capture shows data for 2018 on marine capture production the top 25 producers (accounted for 80% of capture) and the rest of the world (20%). See Food and Agriculture Organization of the United Nations, The State of World Fisheries and Aquaculture, 2020, at page 13, Table 2 (copied below). Most WTO Members are self-declared developing countries (or are LDCs). The vast majority of WTO developing countries are in the 20% all other grouping, virtually none of whom will be limited by Article 5.
The hope is that the 12th Ministerial Conference will provide a meaningful outcome. But the cards on the table look less than encouraging to Members being able to achieve a truly meaningful agreement.
When one looks at the other areas where Ministers will be trying to reach agreement, prospects are similarly guarded.
The show starts tomorrow in Geneva. We are just days away from knowing how relevant the WTO can be for the issues before it today and what that says for the organization’s future relevance.