World Trade Organization negotiators are returning to the difficult issue of setting rules on subsidies that lead to overcapacity and overfishing in the world’s oceans.
Negotiators are meeting 20 March for the first in an effort to extend last year’s WTO agreement partially limiting harmful fisheries subsidies. Just three nations have thus far ratified the agreement, including the Seychelles on 10 March, with two-thirds of WTO members required to formally accept the protocol before it officially comes into effect.
At a 20 February meeting in advance of the official talks, Iceland WTO Ambassador Einar Gunnarsson, the incoming chair of the negotiations, expressed confidence a deal can be done by the 13th Ministerial Conference (MC13) in February 2024.
Central to the talks will be rules on subsidies contributing to overcapacity and overfishing. Also up for discussion is the difficult issue of special and differential treatment for developing and least-developed country members. Other issues to be addressed in the second wave of talks include rules on subsidies paid for fishing outside a WTO member's jurisdiction, including subsidies to vessels operating under flags of convenience. And The U.S. wants text added to the agreement on transparency in respect of the use of forced labour in fishing. Likewise, several WTO members have called for exemptions in any agreement for subsidies which are not specific to fishing.
According to Oceana Senior Analyst Daniel Skerritt, the exclusion of text on the general prohibition of subsidies that contribute to overcapacity and overfishing in last year’s deal “meant that the deal did not discipline harmful subsidies directly but instead disciplined the act of illegal fishing and fishing on overfished or unregulated stocks,” Skerritt said.
The biggest challenge of the new talks, according to Gunnarsson, will be finding the right balance between the prohibition on overfishing and overcapacity and so-called flexibilities, or opt-outs, particularly for developing countries.
“From my point of view, defining the approach of the prohibition and the level of ambition will be necessary before discussing special and differential treatment,” Pew Charitable Trusts Senior Conservation Support Officer Ernesto Fernández Monge said. It’s not just developing countries that are seeking derogations or special treatment in the new round of talks. European fishing representative body Europêche is calling for derogations for territories with good management practises in place.
“For Europêche, it is fundamental that no member-state grants subsidies to fishing or fishing-related activities that contribute to overcapacity or overfishing,” Europêche CEO Daniel Voces told SeafoodSource. “It is equally important to recognize the management measures implemented by member-states to maintain the stocks at a biologically sustainable level. In these cases, the WTO system should provide for derogations, as was the case in previous versions of the agreement.”
Voces also said Europêche wants the WTO talks to steer clear of banning non-specific fuel subsidies.
“We remind that fuel tax relief schemes cannot be considered as subsidies and, in the case of the E.U., have not contributed to overcapacity nor overfishing. Quite the opposite,” he said.
Europêche wants subsidies to be allowed to territories with fisheries management regimes in place, Voces said, though it’s not clear who would police the sustainability credentials of any such management under a WTO regime.
“I believe that the WTO agreement must uphold the role of fisheries management,” Voces said. “A government should be able to subsidize as long as there is good fisheries management. In fact, the removal of capacity-enhancing subsidies will not reach WTO goals unless accompanied by sustainable fisheries management, transparency, accountability, and enforcement.”
The E.U. fleet has been reduced by 30,000 vessels over the past 25 years, according to Voces.
“The E.U. has set up a system of compulsory maximum fleet capacity ceilings that cannot be exceeded at any time,” he said. “Therefore, with or without subsidies, the E.U cannot exceed its current fishing capacity limits – something that does not happen in many WTO countries.”
Rashid Sumaila, recently named the co-recipient of The Tyler Prize for Environmental Achievement for his research on overfishing, said any secondary WTO deal should not include many exceptions or opt-outs.
“They have to improve the current agreement big time by making it simple to implement and verify,” he said. “They need to remove all subsidies that can lead to overcapacity and overfishing. Don’t wait until fish stock are overfished before subsidies are removed.”
Monge told SeafoodSource carveouts for China and the E.U. will encourage others to follow suit.
“Big subsidizers need to show leadership and show that they can take stronger commitments,” he said. “If they continue to request flexibilities such as the sustainability test, then they are forcing developing countries to request carve-outs and exceptions. Avoiding a race to the bottom will be critical.”
Monge nonetheless cited several reasons why he’s optimistic a deal can be achieved.
“Once again, we have a very energetic chair and he could bring fresh new ideas on how to move the outstanding issues forward. Also, since there is now an agreement, members don’t need to worry about definitions, approaches and issues already agreed and focus on the remaining questions,” Monge said. “We are hearing that there seems to be political will to finish the negotiations by February 2024.This is particularly relevant as many members would like to avoid the risk of getting into the discussion of the sunset clause [article 12 which requires the agreement to be completed within four years or terminated].”
Gunnarsson said his recent consultations with member-states were "uniformly positive in tone.”
“I am optimistic that we will be able to submit a minister-ready draft outcome by the next WTO Ministerial Conference in 2024,” he said.
WTO negotiations will also have to transverse difficult international politics, including unprecedented Sino-U.S. tensions, Monge said.
“In the past, WTO members were able to maneuver through the pandemic and other international conflicts,” Monge said. “Trade ministers demonstrated that they can converge on sustainability issues and there is also persistent and able WTO director-general that has demonstrated that the WTO can still deliver.”
An American participant in the negotiations expressed doubt any progress will be made at the upcoming talks.
"I am very disappointed we couldn’t get it all done at MC12 [June 2022], and I fear we might have missed our chance. I am not terribly optimistic,” the delegate, who requested anonymity, told SeafoodSource. “The negotiations will likely take some time to finish. Everyone is seeking their own exceptions to the rules. The new chair seems energetic. Let’s see how it goes. China can’t get [developing country] treatment but we should be able to finesse that issue at the end of the day.”
The delegate criticized moves from developing countries to push back on language that would require them to take action, including India’s demand for a phase-in time of 25 years for any agreement.
“The [developing countries] – the vast majority of WTO members – can’t be let off forever, that’s ridiculous. We need an overfishing and an overcapacity discipline but it’s going to be hard. I hope we can get some good or decent transparency provisions, if nothing else, but even that has been hard. We will continue to push,” the delegate said. “Others say they want to get it done. We’ll see."
Photo courtesy of Arctic Council
