POSSIBLE APPROACHES TO IMPROVED DISCIPLINES
ON FISHERIES SUBSIDIES
Communication from the United States
The following communication, dated 19 March 2003, has been
received from the Permanent
Mission of the United States.
1. Since the WTO Ministerial Meeting at Doha, the Negotiating
Group on Rules has taken the opportunity to lay the necessary foundation for the Group’s work
on fisheries subsidies by reviewing some of the special features of the fisheries sector and by
identifying relevant work on fisheries subsidies done in other fora. It is now time to begin a
constructive dialogue on concrete ideas for carrying out the mandate of paragraph 28 of the Doha Declaration,
to "clarify and improve WTO disciplines on fisheries subsidies, taking into account the
importance of this sector to developing countries." The United States intends this submission to
contribute toward the development of clarified and improved disciplines by identifying some key issues
and offering some ideas for initial discussion.
2. This paper reflects preliminary ideas only and is submitted
without prejudice to consideration of alternative approaches as the negotiations proceed.
3. As an initial matter, it should be emphasized that the goal of
clarified and improved rules is to provide better disciplines on government programmes that promote
overcapacity and overfishing, or have other trade-distorting effects.1 As
provided for in Article 1 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement), such subsidies have
harmful effects because they reduce the costs of inputs (money, goods, or services) below what would
otherwise be the case under normal market conditions, or enhance revenues and income beyond what
would otherwise be earned. Better disciplines on fisheries subsidies that promote overcapacity and
overfishing should also contribute to reductions in illegal, unreported, and unregulated (IUU) fishing,
a charge given by world leaders in the Johannesburg Plan of Implementation of the World Summit on
Sustainable Development. Furthermore, by addressing fisheries subsidies, significant
environmental and developmental benefits are likely to be realized.
1. Other government
programmes may help to reduce overcapacity and overfishing, and contribute
to fisheries sustainability. These latter programmes are not the
focus of the negotiations. Programmes for artisanal fisheries in developing countries are likewise not a
address harmful subsidies in the fisheries sector. As described in
a previous submission by eight Members (TN/RL/W/3), the existing SCM rules are primarily designed
to address certain types of market distortions associated with subsidized products (such as
effects on price and market share in competing markets). A distinctive feature of fisheries subsidies,
however, is that such subsidiesoperate to limit non-subsidized participants’ access to shared
(e.g. catches are limited to lower levels than would otherwise be the case, or there
is even a loss of the resource altogether). It may, however, be difficult to demonstrate the
effects of these production distortions (e.g. price effects and loss of market share in a particular
market) in a manner contemplated by the current rules. Clarifications and improvements in the rules are
therefore needed to make disciplines on fisheries subsidies more effective.
4. It may be useful to review the reasons why existing SCM
disciplines do not adequately
Expanded category of prohibited ("red light") fisheries
5. One useful starting point for a discussion on clarified and
improved disciplines would be to consider the possibility of expanding the category of prohibited
("red light") subsidies (see
SCM Agreement, Article 3) expressly to cover those fisheries subsidies
that directly promote overcapacity and overfishing, or have other direct trade-distorting effects.
Such subsidies could be categorized either by the type of programme (e.g. programmes that are deemed
to result in overcapacity or overfishing), and/or by the fishery that they benefit (e.g.
subsidies that contribute to overcapacity and overfishing in fisheries that are already overfished). An
agreement to eliminate these most harmful fisheries subsidies could be an effective approach to addressing
the problems of the sector.
Serious prejudice and a presumptively harmful ("dark amber") category
6. Another approach, that could either supplement or be
independent of the "red light" approach, would be to consider a "dark amber" category of subsidies. These
subsidies would be presumed
to beharmful unless the subsidizing government could affirmatively
demonstrate that no overcapacity/overfishing or other adverse trade effects have
resulted from the subsidy. If the presumption were not rebutted, such subsidies would be actionable.
A "dark amber" category could be modelled on the now expired Article 6.1 of the SCM Agreement.
For example, subsidies that exceed a certain value of production could be presumed to cause
"serious prejudice," but the presumption could be rebutted if certain criteria were met, such
as by an affirmative showing that the subsidy was not being used to fish in a fishery that is
overfished, or that effective restrictions were placed on the operation of the programme so that it does not
result in overcapacity or overfishing. In addition to considering a dark amber category of fisheries
subsidies, the Rules Group should also explore ways of making the existing provisions of the SCM
Agreement that pertain to serious prejudice fully operational and effective in disciplining
Improved notification of subsidy programmes
7. To make better data available for Members to assess and
categorize subsidies, the Rules Group should also consider ways to improve the quality of
fisheries subsidies notifications under the SCM Agreement. This could include provision for more detailed
fishery-specific information, including information about relevant management regimes, so as to
make notifications of fisheries subsidies under the SCM Agreement more complementary of existing
fishery-related notifications in other fora (e.g. on capacity). Members could also discuss ways to
make the fisheries subsidy notification requirement more effective.
Institutional aspects and public outreach
8. In considering the possible structure of these improved
disciplines, the Rules Group should explore ways to draw upon information about the state of fisheries
stocks and similar expertise in other organizations, including development of relationships with
the UN Food and Agriculture Organization and regional fisheries management organizations. The
Group could also find ways to obtain the views of non-governmental groups and individuals with
expertise, including the fisheries industry and environmental conservation groups.
9. The United States invites discussion of the ideas set forth
above and encourages Members to put forth additional ideas for discussion.