WTO: new (and tough) submission by the US on new rules on fisheries subsidies

On 21 April 2010 the US made a new submission (document TN/RL/GEN/165 of 23 April 2010) on fisheries subsidies to the WTO’s negotiating group on “Rules”.

The document includes very detailed proposal some of which, as mentioned in the document, “tighten and strengthen” a number of provisions of the draft Chair’s text of November 2007.

In my view, the following are the most salient points of the US submission:

• The Chair’s 2007 draft text is for the US the basis of the negotiation
• According to the US, “[…] there appears to be broad support for some provisions in the text that are important complements to the core prohibition. Among these complementary provisions are Article I.2 (a prohibition on subsidies affecting fish that are "unequivocally overfished"), Article IV (a "general discipline" on fisheries subsidies) and Article V (fisheries management).”

On the nature of the rules that the US is putting on the table I was struck by the by times, but not always, very detailed proposals made as regards the fisheries (biological) parameters that are to be used to in relation to the status of fish stocks. As an example I quote here footnote 3 of the document on what the US understands to be an overfished stock:

“A fish stock is manifestly overfished if the stock is at such a low level of abundance that mortality from fishing needs to be restricted to allow the stock to rebuild to sustainable levels. Manifestly overfished stocks include cases in which: (a) the stock has significantly reduced spawning biomass or reproductive capacity; or (b) the stock is recovering from such a low level of abundance or potential for collapse, but further expansion of exploitation would adversely affect recovery.”

I write "by times" because on capacity the US is saying (in footnote 4) the following:

“For purposes of this Annex, the term "capacity" means the ability to harvest fish, as determined on the basis of widely accepted methods for assessing such ability, including standards and guidance developed by the UN Food and Agriculture Organization (FAO) and relevant international fisheries organizations.”

So, what would happen in case a WTO Member a domestic definition of fishing capacity, different from the FAO or from those used in Regional Fisheries Management Organizations? Or if the FAO definition is different from the definition used in a given RFMO?

As mentioned before, the toughening of the exceptions under Article II of the draft Chair’s text is one of the key features of the paper. The US has removed from the Chair’s draft the provision that allowed WTO Members to, for example, subsidise the replacement of engines on condition that they are less polluting. Here is what the US states in the introductory part of the submission:

We have sought to tighten the drafting of some of the exceptions to the prohibition to prevent their being used to create unintended loopholes. For example, a subsidy to lessen the "environmental impact" of fishing, as in the current text, could be read as covering subsidies for energy-efficient engines, which would enhance fishing capacity; we have therefore limited the exception to subsidies lessening the impact of fishing on "marine habitat."

 The provisions allowing for subsidies for social purposes are also "gone": here is what the US say in an explanatory note:

"Note: We have deleted the language in the Chair's text under Article II(c) (exceptions to Article I.1(c) for subsidies for, e.g., retraining for activities other than fishing, re-education and early retirement) because we believe that these subsidies should not be prohibited in the first place. In our view, they could be clearly excluded through an appropriately targeted definition of which "personnel costs" should be prohibited in Article I.1(c), rather than through an exception in Article II. In this connection, Members should have a fuller discussion as to what other kinds of "social safety net" provisions should not be prohibited."

And the exception to the prohibition for "disaster relief" (which the US provides from time to time) has also disappeared!:

"We note that exceptions for "disaster relief" are now placed in Article I.1 ("Except . . . in the exceptional case of natural disaster relief, the following subsidies . . . shall be prohibited"). While we have not come to a firm view, disaster relief may be covered more appropriately in Article II. We have not addressed the disaster relief exception in this submission, but may have further thoughts as to its scope and placement as technical discussions of the text continue."

A remarkable submission!