USA: Congress discussing a bill on subsidies to the fisheries industry

Last week, on 4 November 2009, the House Natural Resources Committee, Subcommittee on Insular Affairs, Oceans and Wildlife, led by Del. Madeleine Z. Bordallo (D-GU), held a legislative hearing on the following bill:

• H.R. 3583 (Faleomavaega): To provide for a subsidy to sellers and buyers of fish directly delivered to American Samoa from vessels with United States fisheries endorsements that manufacture for the United States. "American Samoa Protection of Industry, Resources and Employment Act"

Among other items the bill proposes payments amounting to USD 200 per metric ton to processors buying tuna and to USD 200 per metric ton to US vessels, fishing under the authority of Western Pacific Regional Fishery Management Council or areas covered by the United States South Pacific Tuna Treaty, or which has an American Samoa Longline Limited Access Permit (issued pursuant to the Fishery Management Plan for Pelagic Fisheries of the Western Pacific Region).

The above payments would be financed by a tax of 6.25% on transhipment of tuna to non-US vessels operating in the above mentioned areas or to non-Samoan processors.

Personally I find that this bill could create some problems for the US.

First of all the subsidy could be discriminatory as it would benefit US vessels only. Furthermore the transhipment tax is tantamount to an export tax. Remember that the US has recently launched dispute settlement proceedings against China for putting barriers to exports of raw materials.

Secondly this bill is in stark contrast with the US position in the ongoing negotiations on fisheries subsidies. Indeed the US appears to be supporting the draft negotiating text which includes prohibitions on subsidies to the processing industry and income and price support subsidies (such as the proposed USD 200 essel payment for each ton delivered to the processing industry in American Samoa.

I will come back on this remarkable bill.

Here is the link to the hearing at the U.S. Congress:

http://resourcescommittee.house.gov/index.php?option=com_jcalpro&Itemid=27&extmode=view&extid=305