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).