Fisheries Subsidies What is it all about The good reason and the real reason

1
Fisheries Subsidies What is it all about?The
good reason and the real reason

• Commonwealth Secretariat

2
Fisheries Statistics

• Total world trade in fish and fish products 58.2
  billion in 2002
  
• Share in world imports EU (36 percent) Japan
  (22 percent) US (16 percent)
  
• Share in world exports EU (34 percent) Japan (1
  percent) US (6 percent)
  
• Fisheries is by far the largest agricultural
  commodity in the global trading system

3
Arguments underlying the demandeurs proposals

• Fisheries subsidies cause overcapacity and
  overfishing resulting in depletion of fish
  stocks
  
• Fisheries subsidies have trade -distorting
  effects through production/export market
  distortions.
  
• Harmful Subsidies for prohibition
• Subsidy measures for capacity enhancement that
  lead to overcapacity and overfishing
  
• Subsidy measures relating to illegal, unreported
  and unregulated fishing can be particularly
  destructive
  
• Counterfactual- would stock depletion occur
  without subsidies? Answer- definitely but slower.
  So what is the real reason for these
  negotiations- market share the price of fish

4
Whats the commercial reason behind the need for
Regulation of Trade in Fish and Fish Products?

• Friends of the Fish Group - Countries with
  aggressive market interests
  
• Developed Countries Australia, Iceland, New
  Zealand and United States
  
• Developing Countries Chile, Ecuador, Peru,
  Philippines.and Brazil?
  
• Until the EU made up its mind on CFP in 2004, it
  was silent- now supportive of FF group
  
• Japan, Korea and Taiwan ( Bottom-up group) joined
  in when the outcome became clear ie when EU
  joined the fray
  

5
EUs Commercial Fisheries Policies

• The EU Fisheries Policy results in the EU
  exporting 34 per cent of total fish exports-
  about 20 bn
  
• Is the EU really such an efficient processor of
  fisheries products? Not really this mimics
  agriculture
  
• WHY IS THIS HAPPENING ?
• Three pillars of EU fisheries Policy
• Subsidies to its own fleets and shore based
  activities
  
• High Tariffs for processed fish ( eg 24 for
  canned tuna)
  
• Rules of Origin as opaque instruments of subsidy
  to the EU fleets
  
• Undermine these 3 pillars and you can capture
  20 b in fish exports

6
Traffic Light Approach to Fisheries Subsidies
Architecture

• Green-Box Non - actionable subsidies
• Red-Box Prohibited Subsidies
• Amber-Box Subsidies subject to disciplines if
  specific adverse affects are demonstrated
  
• Two alternative approaches
• Top-Down Approach General Prohibition with
  specific exemptions. Proponents Friends of Fish
  Group
  
• Bottom-Up Approach Identification of prohibited
  subsidies on a case-by case basis. Proponents
  Japan, Korea and Taiwan
  

7
Arguments behind the Position of Small Vulnerable
Coastal Economies

• Some SVE have no resource base and are completely
  dependent upon fisheries. Kiribati and Tuvalu
  LDCs in the Pacific-42 of GDP comes from access
  fees- most comes from state subvention.
• Fish stock depletion is largely a result of bad
  fisheries management- would occur in any case in
  open access fisheries
  
• The direction of causal link between fisheries
  subsidies and overcapacity and overfishing and
  subsequently fish stock depletion is difficult to
  ascertain
• SVE have demanded
• Access fees and development assistance carved
  out
  
• Artisanal fisheries carved out
• De minimis threshold
• Will block creation of disciplines that bring
  environment per se under WTO

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Brazils proposal (TN/RL/GEN/79/Rev.1).

• Green Box FS which dont have
  trade-distorting or production-distorting effects
  through enhancing capacity and over-fishing
  
• Red Box Art.3 ASCM those falling outside
  green box. Exceptions SDT
  
• Amber Box SDT only for Dvping countries. List
  subject to Actionable Subsidies Provision of ASCM
  i.e reactivation of Article 6.1 including 5 de
  minimis criteria
• Notification All fishery subsidies notified
  failing which Red Box presumed.

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NZs Proposal(TN/RL/GEN/100)

• Red Box ASCM Art.3 subsidies which confer
  benefit directly or indirectly on any natural or
  legal person engaged in harvesting, processing,
  transport, marketing or sale of fish and fish
  products in Annex IX
• Non-Prohibited non-exhaustive list
• SDT FS provided by developing country not
  exceeding de minimis level for that member.
  
• FS existing prior to new framework notified. 3
  years after new framework, notified FS brought
  into conformity.
  

10
Hong Kong Ministerial Declaration on Fisheries
Subsidies

• Para 9 of Annex D on Rules notes
• note that there is broad agreement that the Group
  should strengthen disciplines on subsidies in the
  fisheries sector, including through the
  prohibition of certain forms of fisheries
  subsidies that contribute to overcapacity and
  over-fishing
• This language is the greatest risk to the WTO
  from Hong Kong. If fisheries subsidies are
  prohibited then sanctions may be imposed on
  countries using them, not for their trade effect
  but for the environmental effect, per se. If this
  language appears in the chapeau to the new
  chapter then we face the transformation of the
  WTO into an environmental court.