WTO: fisheries subsidies and Hollywood under the same roof

Readers of my blog will have noticed that a number of NGOs are in close competition as regards the visibility that fisheries subsidies negotations can give to their action in ocean's related issues.

This time it was OCEANA the one that stole the show, literally !!

According to a press release by OCEANA, relayed by some media, Hollywood actor Ted Danson, visited Geneva on 29 October 2009 and met diplomats who are involved in the ongoing negotiations on fisheries subsidies.

I was struck by one of the comments that Mr Danson made while being interviewed in Geneva.

"You are subsidizing the boats to do exactly the wrong thing," Danson said at the WTO's Geneva headquarters. "One of the fastest ways to deal with this problem, is to take boats off the water. If you cut subsidies, you are going to cut their ability to do the wrong thing."

So, you could interprete Mr Danson's statement, in particular "One of the fastest ways to deal with this problem [of overfishing], is to take boats off the water" as meaning that the best thing is to stop fishing altogether.

The other interpretation, perhaps closer to Mr Danson's true intentions is that you can give subsidies to fishermen to take boats off the water. I am sure Mr Danson would agree exempting subsidies for the scrapping of fishing vessels.

When looking into Mr Danson's filmography I found that he played in the movie "Saving Private Ryian". Well we could invite him to play in the movie "Saving fisheries subsidies negotia tions". Though in this latter movie the enemy to be defeated is not the German army but a very obscure beast called "anti-dumping negotiations" which is also active in the "Rules" battlefield. Mr Danson could advise embattled negotiators that "zeroing" on the beast, so as to kill it quickly, could be a decisive move in saving fisheries subsidies negotiations.

Here is the link to the press release by OCEANA and the article by the Associated Press with the interview to Mr Danson.

http://na.oceana.org/en/news-media/press-center/press-releases/trade-policy-essential-to-sustainable-seafood-movement

http://www.google.com/hostednews/ap/article/ALeqM5i-h8fo0AE4NbiXYroLPbnnGGF2EAD9BKS8601

WTO: fisheries subsidies and fisheries management

A week ago I was discussing how some NGOs and international bodies had published in their websites information about the informal meetings of the WTO Rules Negotiating Group. According to the information published by FFA the next informal meeting will take place on 29 and 30 October 2009 and will cover Article V (Fisheries Management) of the Chair's Draft negotiating text (document TN/RL/W/213 of 30.11.07)

Readers may remember that the discussions at the recent meetings, as reported by the above organisations, take place on the basis of a "Roadmap" that the Chair of the Group, Ambassador Valles (Uruguay) submitted to WTO Members in December 2008 (document TN/RL/W/236 of 19.12.08).

I copy hereunder the questions that the "Roadmap" addresses to WTO negotiators on this article. At the end of the post the reader will find the full text of Article V.

FISHERIES MANAGEMENT CONDITIONALITIES

17. The discussions in the Negotiating Group indicate that participants generally believe that exceptions – both general and S&D – should not be unconditional, given their potential to undercut the effectiveness of the disciplines on subsidies that contribute to overcapacity and overfishing.

 18. The discussions also have indicated a widely-shared view that the principal conditionalities should pertain to fisheries management, a central component of which would be stock assessments, in part because of the difficulties of directly measuring the effect of particular subsidies on particular wild capture fisheries due to the mobile and undomesticated nature of the resource.

 19. There are, however, differing views as to how much detail WTO fisheries subsidies rules should contain on fisheries management, in respect of both the substantive basis of such conditionalities and the appropriate fora and mechanisms for monitoring and enforcing their implementation. There has been considerable debate on the approach taken to these issues in my first draft text.

 

20. I would ask participants to reflect on the following questions:


(a) Are there other conditionalities that should be applicable to exceptions (general and S&D), either in addition to or instead of fisheries management conditionalities?

 (b) How important is it for the effective operation of the disciplines that all Members' fisheries management systems and measures adhere to a common standard, and how prescriptive should that standard be?

(c) If a common standard is not necessary or not acceptable, how could the effectiveness of different Members' systems in controlling overcapacity and overfishing be monitored and enforced?

• - What would prevent one Member with ineffective management from overfishing stocks that were safeguarded/replenished by another Member's effective management measures?

d) Given that an international consensus already exists in respect of a substantial number of international fisheries management instruments, and those instruments themselves take account of the capacity constraints of developing countries, does it make sense to draw inspiration from those instruments for the substantive content of management conditionalities for using exceptions from the prohibition?

• (i) If not, why not?
• (ii) If so, how could the typically non-binding nature and relatively general and flexible wording of those instruments be reconciled with a binding prohibition of subsidies that contribute to overcapacity or overfishing, and binding conditionalities concerning fisheries management where exceptions are used?

(e) What role should stock assessments play in any management conditionalities?

• (i) If stock assessments are considered unnecessary, why, and how could overfishing and overcapacity be monitored in the absence of stock assessments?
• (ii) If stock assessments are considered to be a necessary element, how could the rules take into account Members' different capabilities while ensuring that the assessments are as reliable and robust as possible?
• (iii) To what extent if at all should the results of stock assessments form part of any conditionalities?

(f) Is it logical to require a stock assessment before a capacity-enhancing subsidy is provided?

• (i) If not, why not?
• (ii) If so, what practical problems would need to be resolved?
• (iii) What timing and review mechanism for such stock assessments could best reconcile a Member's need to implement a given subsidy on the one hand, and other Members' need for multilateral surveillance/transparency in respect of the fisheries resources that would be affected by it on the other hand?

(g) Given the existing role of the FAO in discussing FAO members' substantive implementation of various international fisheries instruments, what specific problems/concerns would there be if that role were enhanced in respect of stock assessments and/or fisheries management systems?

• - Would the problems be the same if the review at the FAO were similar to reviews of notifications by WTO bodies (i.e., multilateral review among members, for transparency, rather than a mechanism for approval, whether by a panel of experts or a multilateral body)?

(h) Why, if at all, would the WTO be better-positioned to perform such reviews of fisheries-related information?

• - How could the necessary expertise be built into any WTO-based review of fisheries management, without the WTO becoming a fisheries management organization?

Article V Fisheries Management

Any Member granting or maintaining any subsidy as referred to in Article II or Article III.2(b) shall operate a fisheries management system regulating marine wild capture fishing within its jurisdiction, designed to prevent overfishing. Such management system shall be based on internationally-recognized best practices for fisheries management and conservation as reflected in the relevant provisions of international instruments aimed at ensuring the sustainable use and conservation of marine species, such as, inter alia, the Fish Stocks Agreement, the Code of Conduct, the Compliance Agreement, technical guidelines and plans of action (including criteria and precautionary reference points) for the implementation of these instruments, or other related or successor instruments. The system shall include regular science-based stock assessment, as well as capacity and effort management measures, including harvesting licences or fees; vessel registries; establishment and allocation of fishing rights, or allocation of exclusive quotas to vessels, individuals and/or groups, and related enforcement mechanisms; species-specific quotas, seasons and other stock management measures; vessel monitoring which could include electronic tracking and on-board observers; systems for reporting in a timely and reliable manner to the competent national authorities and relevant international organizations data on effort, catch and discards in sufficient detail to allow sound analysis; and research and other measures related to conservation and stock maintenance and replenishment. To this end, the Member shall adopt and implement pertinent domestic legislation and administrative or judicial enforcement mechanisms. It is desirable that such fisheries management systems be based on limited access privileges . Information as to the nature and operation of these systems, including the results of the stock assessments performed, shall be notified to the relevant body of the FAO, where it shall be subject to peer review prior to the granting of the subsidy . References for such legislation and mechanism, including for any modifications thereto, shall be notified to the Committee on Subsidies and Countervailing Measures ("the Committee") pursuant to the provisions of Article VI.4.

V.2 Each Member shall maintain an enquiry point to answer all reasonable enquiries from other Members and from interested parties in other Members concerning its fisheries management system, including measures in place to address fishing capacity and fishing effort, and the biological status of the fisheries in question. Each Member shall notify to the Committee contact information for this enquiry point.

WTO: more on "farmland agreements"

Doing some desk research on this issue of "farmland agreeemnts" I fell upon a webpage at the Wilson Institute, Woodrow Wilson International Center for Scholars (Washington, USA)  reporting on a panel discussion on the subject of  "Land Grab: The Race for the World's Farmland".

Here is the link to the aforementioned web page:

http://www.wilsoncenter.org/index.cfm?fuseaction=news.item&news_id=532332#

WTO: after fisheries agreements, "farmland agreements"?

In my post of 26/08/2009 I referred to fisheries agreements as one of the "hot issues" at the WTO DDA negotiations on fisheries subsidies.

Now it seems that governments are negotiating bilateral agreements with a view to secure farmland to the farmers of one of the Parties or to guarantee food supplies to the population of one of the countries.

An example of the first type of farmland agreements is the one recently concluded between South Africa and the Republic of Congo whereby Congo will give South African farmers access to up to 10 million hectares of farmland.

Here is a link to an article on this:

http://www.iol.co.za/index.php?set_id=1&click_id=6&art_id=nw20091020221302711C267231

And here the link to a website covering this type of agreements:

http://farmlandgrab.org/

Should this types of agreements be covered by new WTO subsidy disciplines?

NORWAY: fisheries subsidies in political parties' manifestos. Part II the Christian Democratic Party

I started a few posts ago with a series on the manifestos of the Norwegian political parties as posted in their websites, in the run-up to the elections in mid-September of this year.

Today I will discuss the manifesto of the Kristelike Folkeparti (Krf).

This party was not in office in the previous government and will continue in the opposition for the next four years. Interesting to note is that the Prime Minister of the government in power from 2001 to 2005, Mr Bondevik, was the leader of this party.

Here are some of the promises made by Krf prior the election:

- keep ownership Norway's fisheries and aquaculture industries in Norwegian hands.

- give increased weight to local employment when allocating fishing quota.

- maintain the obligation to supply (leveringsplikt) to encourage local processing. The non-respect of the supply obligation should have consequences for the subsequent allocation of fishing quota.

- increase the harvest of pinnipeds (seals) and work towards international acceptance of of this harvest, within ecological sustainability.

With regard to the regulatory framework Krf wants to maintain the main pillars upon which rests the Norwegian fishing industry, the Participants law (Deltakerlov) and the Raw fish law (Råfisklov).

On pinnipeds (seals) the Krf considers that, because a large population of pinnipeds is tantamount to a large consumption of fish, a higher harvest of seals and pinnipeds is necessary.

Here is the link to the manifesto (section on fisheries and aquaculture):

http://www.krf.no/ikbViewer/page/krf/politikk/politisk-program/artikkel?p_document_id=23039

CHINA: strategic importance of fisheries (and subsidies?)

In my previous posts I have been citing China as one of those WTO members that would like to have a broad margin of manoeuvre to grant subsidies to its fishing (and aquaculture industry). Actually China’s very first written submission to a WTO Negotiating Group was about fisheries subsidies (TN/RL/W/9 of 20 June 2002).

During summer time of this year I read an article published by the Jamestown Foundation and titled “Strategic Implications of Chinese Fisheries Development”.

I will quote two paragraphs of this article, which I found very informative:

“To mollify angry fishermen, the Chinese authorities have offered substantial subsidies to displaced fishermen and also supported aquaculture as a viable economic alternative to marine fisheries. Indeed, the aquaculture sector has witnessed enormous growth in China during the last decade.“

 “Yet, Chinese fishing fleets’ activities are much more than a regional issue.  Although China’s distant water fishing (DWF) fleet was only created in the mid-1980s, by 2006 it has grown to nearly 2,000 vessels operating on the high seas and in the EEZs of 35 countries [12].  The Chinese DWF fleet is actually supported by subsidies from the central government as part of an effort to divert Chinese fishermen out of local waters that have been fished out.  For instance, according to an authoritative source, the number of Chinese fishing vessels in West African waters at any one time could be close to 300 vessels at any given time [13].”

12. Guifang (Julia) Xue, “China’s Distant Water Fisheries and Its Response to Flag State Responsibilities,” Marine Policy 30 (2006), p. 653.

13. Wang Ning (ed.), Handbook on Long-Distance Fishing Technology and Economy (Beijing:  Ocean Press, 2002), p. 74.

The full reference of the article is the following:

Lyle Goldstein , “Strategic Implications of Chinese Fisheries Development” China Brief, Volume: 9 Issue: 16 (August 2009)  The Jamestown Foundation, Washington.

http://www.jamestown.org/single/?no_cache=1&tx_ttnews[tt_news]=35372

WTO: developing countries divided over the issue of exemptions to subsidy disciplines

In my previous post I was referring to the discussions, as reported by ICSTD and FFA, on the "Roadmap" issued by the Chair in December 2008. Apparently, the main subject discussed was Special and Differential Treatment (S&DT) for Developing Members (Article III of the Chair's 2007 draft text) and General Disciplines (Article IV).

Readers familiar with the ongoing WTO DDA (Doha Development Agenda) negotiations will have noticed that S&DT is a very difficult subject of negotiation. Among the main reasons why it is so difficult to debate S&DT we find the exceptions from the general rules that can be granted to developing countries. Fisheries subsidies negotiations are no exception to such difficulties, the more that benefiting from S&DT provisions could mean exemptions from certain rules, in particular from the prohibition to provide some subsidies.

If you have followed my posts on the WTO negotiations you would have noticed that developing countries can be divided into two coalitions, I will call them Group A and Group B:

- Group A: gravitates around the so called "Friends of fish" group. These developing countries are of the view that S&DT should be limited and subject to to very specific conditions (e.g. measurable parameters such as boat length, area of fishing operations, etc.). A key issue for these countries is to have a definition of artisanal fisheries. Among the countries that belong to this coalition we can cite: Chile, Peru, Pakistan, Colombia and Argentina.

- Group B: would like to obtain the broadest possible exemptions from a ban on fisheries subsidies. This group opposes the use of "rigid parameters" to limit the possibility of benefiting from such exemptions. Developing WTO members of that can be included in this coalition are: India, China, Indonesia. They have been joined lately by Mexico, Ecuador and Brazil.

If we look a little bit closer into the membership of the above coalitions we will notice that in Group A we find, broadly speaking, two types of developing countries. "Type 1" are characterised by the fact that they have the means to provide support to their fishing industry, yet because of "policy" reasons they do not want to be seen as "subsidisers". A clear example of this type of developing country is Chile. "Type 2" are countries that have limited means to support their industry and that are very keen to avoid that other developing countries (competitors) start massively subsidising their fishing industry. Argentina could and Peru could be counted as corresponding to "Type 2" of countries.

Both types (1 and 2) of countries in Group A have though one thing in common and that is that they want to keep in check their fellow (competing) developing countries from opening the money tap in a way that could affect their own competitiveness.

The membership of Group B is a more homogeneous one. To start with they are countries that have the financial muscle to assist their fishing industry and, perhaps more important, their policies are geared towards an expansion of their industrial base in many sectors, including fisheries. Another characteristic, although not common to all of the countries in Group B is the existence of a very large group of small scale fishermen (India, China and Indonesia).

 I found also fascinating how that this latest split in the developing countries, i.e. Brazil, Mexico and Ecuador joining China (or Group B) has resulted in neighbouring countries going apart: Peru in Group A, Ecuador in Group B, Argentina in Group A, Brazil in Group B. I do not think that this is a coincidence. These "pairs" of countries are fishing nations and,for some fish especies,direct competitors in world markets.

To conclude this post i will copy hereunder how the ICTSD and the FFA pictured the split among developing countries:

FFA:

"Interestingly, in the past, Brazil has been a "friend" of the 'Friends of Fish', but appears to have broken away from the group on the issue of S&DT, delivering a separate joint statement with China, Ecuador and Mexico."

ICTSD:

"Despite the differences among the statements, at least one official was struck by the similarities across the countries and groupings. All of those present agreed on the dual importance of curtailing overfishing and ensuring that developing countries have access to adequate flexibilities, the delegate said."

Personally I think that the ICTSD assessment is perhaps somewhat optimistic.

According to FFA the next meeting is scheduled for 29-30 October and will cover Fisheries Management (Article V).

WTO: reporting on informal negotiating meetings at the WTO

According to two organisations (ICTSD and Fisheries Forum Agency) the WTO Negotiating Group on Rules met on 24 and 25 September 2009 in the so called "informal mode".

The ICTSD reported in its "Bridges Weekly Trade News Digest" (Vol. 13,  Number 33 of 30/09/2009) that the Group met to continue the discussion on what the Chairman of the negotiating group had labelled the "Roadmap". This "Roadmap" is in fact a rather long questionnaire which, according to the Chair, "[...] identifies the key questions that we need to address in order to reconcile the approaches and advance our work in this area. [...]" (WTO document TN/RL/W/236, p. 2). I wrote a post on 21/12/2008 following the publication of the "Roadmap".

Before commenting (I will do it in a separate post) on what the ICTSD and the Fisheries Forum Agency reported about the discussions at the meeting, I would like to ask readers whether they have found somewhere written records of these so called "informal meetings" on fisheries subsidies negotiations. Personally I tried to find these meetings in the "Official programme of meetings" that is published in the WTO's official website but with no result.

So, these two organisations, ICTSD and the Fisheries Forum Agency appear to have sources that provide them with information on the above meetings, including the contents of the discussions.

Here is the link to the reports by ICTSD:
 
http://ictsd.net/i/news/bridgesweekly/56315/
 
And here the link to the FFA FISHERIES TRADE NEWS : Volume 2: Issue 9 of September 2009 with a report on the same meeting:
 
http://www.ffa.int/node/273

WTO: fisheries subsidies negotiations, a model for WTO "energy subsidies" disciplines?

A search on the Internet with the words "fisheries subsidies" can yield most interesting results.

A few days ago I stumbled upon the following article:

Bigdeli, S. Z. (2008). Will the «Friends of Climate» emerge in the WTO? The prospects of applying the «fisheries subsidies» model to energy subsidies. CCLR The Carbon and Climate Law Review, pages 78–88.

I will also copy hereunder the abstract of this article, so that readers can have an idea of what the author is suggesting:

Notwithstanding the potential virtues of subsidies in certain circumstances, this form of government intervention in markets mainly through financial or fiscal means may have huge negative impacts in addition to the effects on efficiency and trade. Fish stock depletion and man-made global warming are two examples of cases in which a subsidy could have detrimental effects on the environment. The fisheries subsidies case has found its way to the WTO in a constructive and promising manner. Following similar approaches to address the issue of energy subsidies, however, may pose challenges of the highest magnitude, as will be discussed in this paper.

So, an interesting subject for further research. I think it is worthwile to read the full article. I have put it on my priority list. When read I will share with you my thoughts on the content.

CHILE: subsidies for the salmon farming sector

Even if the titled of this blog is fisheries subsidies the readers will have noticed that, from time to time, posts appear on subsidies granted to the aquaculture sector.

Needless to say that fisheries and aquaculture have cross-linkages. These linkages may be weaker or stronger depending on a number of factors, e.g. the famed species. The nature of the linkages may also differ, in some cases it is through the environment that the linkage exists (e.g. fishing down the food chain to produce fish feed, escapes of farmed fish, etc.) in other cases the linkages might be of through the market (e.g. famed species competing with wild catch species).

Now, after with this introduction, let’s have a look at the subsidies provided by the Chilean government to the salmon farming industry, the second world’s largest producer of salmon after Norway. This industry suffered a major set-back in 2009 because of the outbreak of Infectious Salmon Anemia (ISA).

To help companies survive the crisis the Chilean government is providing through an agency called CORFO (Corporación de Fomento de la Producción), the Chilean Economic Development Agency, government backed guarantees to banks so that they can loan funds to companies in the salmon farming industry.

According to the information published in CORFO’s website the government is providing guarantees up to USD 8 million per company (producers or suppliers). The trade press has mentioned that around USD 400 million in guarantees will be available.

Here is the link to COFO’s website with the information (in Spanish) on the above guarantees:

http://www.corfo.cl/lineas_de_apoyo/programas/cobertura_para_el_cluster_del_salmon

Here is an article of the Diario Financiero on the subject:

http://www.df.cl/portal2/content/df/ediciones/20090805/cont_118516.html

NORWAY: millions of krona available for fishermen in North Norway (Finmark)

The Finmark County Authority announced last month (8 September 2009) that it had already granted NOK 18.1 million (USD 3.2 million) loans to fishermen from the Finmark’s County Authority Recruitment Fund for Fishermen. The Fund was created in October 2008 with a capital of NOK 38.4 million (USD 6.8 million). It has already handled 34 requests in 2009.

According to the information published in the County Council’s website, the funds are intended for fishermen who are betting on new recruitment and will invest in fishing vessels and quotas.

The loans are granted for an amount ranging from NOK 200,000 to NOK 1.5 million (USD 36,000 to USD 266,000), though it can not be higher than 25 percent of the investment in a single company. The loans are granted with a up to five-year interest-only period and an interest rate that is a percentage of Norges Bank's key rate.

Here is the link to the webpage with the announcement:

http://www.ffk.no/21136.aspx

NORWAY: extension of state backed credit guarantee to buyers and processors of fish

In my posts of 2 February 2009 and 10 May 2009 I was referring to the fund that the Norwegian government had set-up through "Innovasjon Norge" to guarantee "first hand" sales of fish.

Now the outgoing fisheries minister Ms Helga Pedersen has proposed to the Norwegian Parliament (Stortinget) to amend the previous legislation to provide a up to NOK 250 million (USD 43 million) government backed loans to the fishing industry in 2009.

It is also proposed to expand the scope of the of the existing credit guarantee scheme with an amount of NOK 97.5 million (USD 16.8 million) so that the loans can be now granted to fish buyers, without an obligation to replenish stocks of raw material.

The government is concerned that parts of the fishing industry, in particular the processing sector, will not have sufficient liquidity to buy raw materials (cod) as the 2010 cod fishing starts. According to the Norwegian government “This could provide unacceptable consequences for the fishermen and some coastal communities that depend on the cod fishery”.

Here is the link to the government’s announcement (in Norwegian):

http://www.regjeringen.no/nb/dep/fkd/pressesenter/pressemeldinger/2009/forslag-om-ny-likviditetslaneordning-for.html?id=578180

NORWAY: subsidies for "extermination" fishing of king crab

The outgoing minister for Fisheries and Coastal Affairs, Ms Helga Pedersen has decided to set aside NOK 5 million for "extermination" fishing of king crab. The fishing will be organized by chartering vessels that will carry out a targeted fishing of this species.

According the the official press release the measure is intended to limit the spread of this alien species and the chartered vessels will be fishing for crabs with little commercial value.

Here is the link to the official press release (in Norwegian):

http://www.regjeringen.no/nb/dep/fkd/pressesenter/pressemeldinger/2009/utrydningsfiske-av-kongekrabbe.html?id=578754