Yesterday’s post reviewed the fact that the Chair of the Rules Negotiations had at the December 14 Trade Negotiating Committee and Heads of Delegations meeting indicated that WTO Members would not meet the deadline for finalizing a fisheries subsidies negotiation — the end of 2020. See December 15, 2020, The fisheries subsidies negotiations – failure by WTO Members to deliver an agreement by the end of 2020, https://currentthoughtsontrade.com/2020/12/15/the-fisheries-subsidies-negotiations-failure-by-wto-members-to-deliver-an-agreement-by-the-end-of-2020/.

The TNC and HOD meeting occurred twelve days after the conclusion of the latest round of negotiations on fisheries subsidies on December 2. The WTO press release on those talks described the issues being discussed by Members and the Chair’s intended path forward. See WTO, NEGOTIATIONS ON FISHERIES SUBSIDIES 2 DECEMBER 2020, WTO members conclude cluster of fisheries subsidies meetings, https://www.wto.org/english/news_e/news20_e/fish_02dec20_e.htm.

“On 2 December, at the conclusion of two days of meetings at the level of heads of delegation, the chair of the Negotiating Group on Rules, Ambassador Santiago Wills of Colombia, said he will continue his consultations with WTO members on the next steps in the negotiations.

“During the meetings, delegations responded to questions posed by the chair about determinations of illegal, unreported or unregulated (IUU) fishing; sustainability considerations in the prohibition of subsidies contributing to overcapacity and overfishing; and special and differential treatment for developing and least-developed countries.

“Prior to this meeting, members have been involved in almost continuous “intersessional” discussions after the last cluster of meetings on 2-6 November to discuss many of the key parts of the revised text that the chair introduced on 2 November, including dispute settlement; subsidy disciplines in the areas of IUU fishing, overfished stocks, and overfishing and overcapacity; and special and differential treatment. The ‘Friend of the Chair’, Ambassador Didier Chambovey of Switzerland, also continued his consultations on special and differential treatment and reported back to members.

“The chair noted that much progress has been made this year in spite of the challenges brought on by the COVID-19 crisis, with members conducting intensive negotiations on the basis of a single consolidated draft document, issued in June and now in its second version. The chair said he will continue consultations in the coming days, ahead of the meeting of the General Council on 16-17 December, on how members would like to move negotiations forward.”

U.S. Ambassador Dennis Shea provided comments during the December 2nd session. His comments reflect the substantial distance that remains in reaching agreement. See WTO Fisheries Subsidies Negotiations – HoDs-Level meeting on Article on Overcapacity and Overfishing and Special & Differential Treatment, Statement of U.S. Ambassador Dennis Shea (excerpts), December 2, 2020, https://geneva.usmission.gov/2020/12/03/us-statement-by-ambassador-dennis-shea-wto-fisheries-subsidies-negotiations/. His comments provide insight into just how far away from an agreement Members are, reflecting the lack of “like-mindedness” and the challenge of whether special and differential treatment should be limited to actual need and temporary or is a “right” for any Member declaring themselves a developing country. After nineteen years of negotiations, it is numbing to see how fundamental issues are not agreed to. Below are the excerpts of Ambassador Shea’s comments available from the U.S. Mission in Geneva’s website.

“We have listened carefully to the interventions today, some of which are not encouraging. We continue to see wide divergences in position – including with some Members categorically rejecting objective sustainability criteria in our discipline despite our clear sustainability mandate. This speaks volumes to the need for a capping approach as the solution. In other words, with some unwilling to eliminate obviously harmful subsidies, let’s look at reducing the numbers.

“Capping would provide the flexibility that Members continue to call for, as needed to allow Members to sustainably develop their fisheries sectors, while limiting and reducing the provision of harmful fisheries subsidies. We urge you, Chair, to give appropriate time to discussion of the capping approach, including filling in the placeholder currently in the revised consolidated text.

“Turning to your questions for this session, we do believe that you have asked the right question, which was whether there are any Members here who categorically assert the right to subsidize unsustainable fishing. Based on what we heard this morning, it remains unclear. It might be a question of language, or burden of proof. If we have misunderstood, and at least some Members are not opposed to considering sustainability, what is the sustainability test to which those Members are willing to submit?

“At the same time, it seems other Members wish to give themselves wide berth to avoid any sustainability accountability. If this is the case, then your text should clearly show two options for future high-level decision-making on the approach that will garner consensus.

“With respect to the drafting of the general prohibition on subsidies to fishing that contribute to overcapacity and overfishing, we agree with what was expressed by others, in terms of bringing the sustainability test back as an objective threshold for what is meant when we refer to ‘contributing to overcapacity and overfishing.’ We believe this prior approach, which included reference to the rate of fishing and fishing capacity, is an important standard to clearly include as a threshold issue in the text of the general prohibition. We also agree with others that the inclusion of sustainability language presents a good faith effort to strike a balance and give Members policy space.

“As to the list of subsidies in this article, this must be an open, illustrative list, as others have noted. A closed list lends itself to calls for exceptions and exclusions, which will take us even further away from making progress on this discipline.

“Regarding any special and differential treatment when it comes to this overcapacity and overfishing area, Chair, you have again asked the right questions. Members have indicated a need for appropriate and effective SDT. Members have indicated their desire to grow their fisheries in a sustainable manner. We ask those Members what measures do they have, or would they put in place, to ensure that current or future subsidization would be done in a sustainable manner? A close consideration of this issue might help to unlock roadblocks throughout this text.

“Unfortunately what this conversation today has also illustrated, is that we are nowhere near knowing even some basic parameters of what ‘appropriate and effective SDT’ would look like in a negotiation that is predicated on sustainability.

“The number of hours this group has now spent on discussing SDT carve-outs, exceptions and flexibilities has been unparalleled. We doubt that doing this before we even know the disciplines, is a good use of time.
And in the context of focusing only on the most harmful of subsidies for our discipline, we question the need for any SDT. But as we have noted in the past, we are willing to consider it on a needs-based, transition-period approach, for the overfishing and overcapacity area only.

“And one other point I would like to make while I have the floor: I hear Members refer to SDT as a right, an entitlement. Or that we need to account for past subsidies in a future discipline and therefore focus solely on the ‘polluter pays’ concept. How do these assertions hold water when we are talking about the sustainability of a finite, shared natural resource? How can we all secure the livelihoods of our fishing communities, or the resources so greatly needed for food security, if harmful fisheries subsidies are provided which in turn leads to resource collapse and in essence, food insecurity? This is not only counter-intuitive, but runs against the experience of the last fifty years– and certainly nothing we should be supporting through WTO rules.

“Again, we would ask the question of how wholesale carve-outs are in-line with our mandate? Furthermore, to those who are seeking SDT to grow their capacity, we ask those Members to also explain how that is in line with the mandate, particularly if these same Members are resisting any kind of sustainability threshold for such growth? Instead of destroying any possibility of a coherent agreement, why can’t we consider a more tailored approach to addressing policy space of small producers, such as that set out in our cap proposal?”

Comment

The fisheries subsidies negotiations have from the beginning been limited to wild caught fish, thus excluding aquaculture. Also excluded are fish caught in inland lakes and rivers. There has been huge growth in developing countries of aquaculture over the last 20 years much developed for international trade. Countries with lots of small fishing operations have had concerns about protecting such small scale operators who largely fish relatively close to shore. The needs of these fishing populations has been a topic during the negotiations. But the fundamental challenge is stopping the creation of excess capacity and resulting overfishing happening in the oceans and seas of the world.

The challenge for sustainability of wild caught fish was laid out in the WTO Factsheet on the fisheries subsidies negotiations. WTO, Factsheet: Negotiations on fisheries subsidies, https://www.wto.org/english/tratop_e/rulesneg_e/fish_e/fish_intro_e.htm.

“Fish stocks and subsidies

“According to the latest data from the UN Food and Agriculture Organization, fish stocks are at risk of collapsing in many parts of the world due to overexploitation. It is estimated that 34% of global stocks
are overfished compared with 10% in 1974, meaning they are being exploited at a pace where the fish population cannot replenish itself. Declining fish stocks threaten to worsen poverty and endanger coastal
communities that rely on fishing. Roughly 39 million people depend on capture fisheries for their livelihood. Healthy seas are also important for food security, with fish providing 20% of animal protein needs on
average for 3.3 billion people.

“In theory, fishing should be held in check by its very environment: low fish stocks should mean fishing takes more time and costs more money. The problem, however, is that very often state funding keeps unprofitable fishing fleets at sea. Global fisheries subsidies are estimated to range from USD 14 billion to USD 54 billion per year.”

The problem of overfishing is a global problem, and it has been getting worse over time. Addressing the serious problem of overfishing has been one of the goals articulated by nations as part of the UN’s Sustainable Development Goals. The UN Food and Agriculture Organization monitors the challenges faces the world from overfishing. A report in June from the FAO noted that the problem of overfishing is particularly acute in developing countries which don’t have good management systems in place to prevent/reduce overfishing. See, e.g., Reuters, June 8, 2020, Overfishing on the rise as global consumption climbs: U.N. agency, https://www.reuters.com/article/us-food-fao-fish/overfishing-on-the-rise-as-global-consumption-climbs-u-n-agency-idUSKBN23F1CD (“The FAO said in a biennial report that tackling the issue would require several
measures including stronger political will and improved monitoring as fish stocks in areas with less-developed management were in poor shape. ‘While developed countries are improving the way they manage their fisheries, developing countries face a worsening situation,’ the FAO said.); Food and Agriculture Organization of the United Nations, 2020, The State of World Fisheries ad Aquaculture, Sustainability in Action, http://www.fao.org/3/ca9229en/CA9229EN.pdf (“The 2020 edition of The State of World Fisheries
and Aquaculture continues to demonstrate the significant and growing role of fisheries and aquaculture in providing food, nutrition and employment. It also shows the major challenges ahead despite the progress made on a number of fronts. For example, there is growing evidence that when fisheries are properly managed, stocks are consistently above target levels or rebuilding, giving credibility to the fishery managers and governments around the world that are willing to take strong action. However, the report also
demonstrates that the successes achieved in some countries and regions have not been sufficient to reverse the global trend of overfished stocks, indicating that in places where fisheries management is not in place, or is ineffective, the status of fish stocks is poor and deteriorating. This unequal progress highlights the urgent need to replicate and re-adapt successful policies and measures in the light of the realities and needs of
specific fisheries. It calls for new mechanisms to support the effective implementation of policy and management regulations for sustainable fisheries and ecosystems, as the only solution to ensure fisheries around the world are sustainable.” (page vi))

Subsidies to fishing fleets and other parts of the fisheries system are major contributors to overcapacity in the fishing fleets of the world and to overfishing around the world. The WTO’s role in the SDG 14.6 is to get multilateral rules that will reduce the excess capacity and permit sustainable fishing practices. Sustainable development in the handling of the oceans will mean greater long-term opportunities for people engaged in fishing for generations to come and ensure a stable supply of protein from the seas.

The inability of WTO Members to reach a meaningful agreement on fisheries subsidies after nineteen years of effort is a sharp reminder that the WTO’s relevance has substantially eroded because of an inability of the Membership to achieve agreement on even self-evident areas of critical importance to global commerce. While many Members are pursuing advancement on other issues (e.g., digital trade/e-commerce) through plurilateral negotiations, some topics — including fisheries subsidies — require multilateral agreements to effectively address the underlying problem. Will 2021 be the charm for finalizing a fisheries subsidies agreement? Hopefully. But the continued wide divergence in views on the needs of Members in the negotiations reflect not a lack of trust but rather, as Amb. Shea stated on December 14, a lack of like-mindedness amongst Members on the purpose and objectives.

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