WTO Fisheries Subsidies Negotiations: Slippery as a fish?

The World Trade Organization (“WTO”) Doha Round has long been portrayed as moribund, but that is perhaps not entirely fair. Apart from the successful conclusion of the Trade Facilitation Agreement (“TFA”) last year, June 2018 saw a ray of hope: a draft fisheries subsidies agreement (“Draft FSA1) providing a glimpse of how negotiations in this area have progressed since 2001. The Draft FSA builds on the disciplines of the Agreement on Subsidies and Countervailing Measures (the “ASCM”) and includes a prohibition on certain subsidies, notification and transparency requirements and unusual special and differential treatment provisions for less developed countries. However, it is still a working document, with disagreements between Members over key points and negotiations ongoing. In this blog post, I identify some of the issues raised in the Draft FSA.

One of the major achievements of the ASCM was introducing a detailed definition of subsidies; however, in the context of fisheries, the Draft FSA shows that Members are not yet agreed on how widely to cast the net. The Draft FSA sets out a range of options, including both using or expanding the definition of subsidies in the ASCM and using or abandoning the concept of specificity under the ASCM. One particular issue is whether to adopt the concept of “specificity”: to fall within the scope of the disciplines of the ASCM, a subsidy must be specific (i.e. limited to an enterprise or industry or group of enterprises or industries). However, in the fisheries context, this could notably exclude fuel subsidies (and indeed fuel subsidies/tax measures have been proposed as an explicit exception to the Draft FSA). This could be a major limitation on the effectiveness of a future fisheries subsidies agreement, as fuel subsidies have been cited as a significant fisheries subsidy (Appleton, 2017).

Furthermore, despite a key pillar of the Draft FSA being an agreement not to subsidise illegal, unreported and unregulated (“IUU”) fishing, there is clearly still uncertainty regarding which state or body should define or identify IUU fishing. Flag states, regional fisheries management organisations (“RFMOs”) and the Food and Agriculture Organization are all cited as options by the Draft FSA. Although RFMOs are in some respects obvious candidates for collating IUU vessel lists, their inclusion is problematic given that not all WTO members are members of each RFMO, and there is a nervousness that recognition of RFMO decisions could lead to WTO members becoming effectively members of additional RFMOs inadvertently (Schmidt, 2017).

Another issue that emerges from the Draft FSA is the role of scientific evidence. One suggestion in the Draft FSA is that subsidies of an overfished stock should be prohibited, with a determination of whether fish stocks are in an overfished condition being made on the best scientific evidence available to or recognised by a particular WTO member.  This can be seen as building on the role of science in the WTO Agreement on the Application of Sanitary and Phytosanitary Measures. It is, however, curious that the Draft FSA suggests that a WTO member might not recognise particular scientific evidence. This may render recourse to scientific evidence difficult, as a WTO member could simply refuse to recognise any scientific evidence that negatively impacts its position.

Lastly, the Draft FSA includes provisions on special and differential treatment (“S&D”), starting with its application, which is suggested to be in stages depending on whether the relevant WTO member is a developed, developing or least-developed country (“LDC”). This staged approach marks a break from the “best endeavours” approach to S&D of the earlier WTO agreements, with Members switching tack towards the phased timing for implementation seen in more modern international agreements, such as the TFA. More broadly, the Draft FSA includes numerous proposals regarding exceptions for developing countries and LDCs in relation to subsistence, artisanal or small-scale fishing and also to fishing within the Exclusive Economic Zone of a WTO member. However, commentators have noted the difficulty in defining subsistence fishing for these purposes (Sumalia, 2017) and it is not clear which concepts will prevail in the negotiations.

Despite the various issues mentioned above, it does appear that the negotiations on the Draft FSA are progressing. With a fair breeze, further negotiations this year could see an agreement concluded at the 2019 Ministerial Conference. Then again, as with much of the Doha Round, perhaps this opportunity will slip away.

1.TN/RL/W/274/Rev

Written by Benjamin Shanks-St John

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