USA: fisheries subsidies at the latest WTO Review of US Trade Policy

The tenth Trade Policy Review of the United States was held in Geneva on 29 September and 1 October 2010.

Readers may remember that wrote a post on 21/09/2008 quoting questions and answers related to fisheries issues in the context of the 2008 WTO Review of Trade Policy.

This time again a number of WTO Delegations asked questions to the US on the fisheries sector and on subsidies provided to this industry. The full report of the meeting where the questions/answers is inlcuded in WTO document WT/TPR/M/235/Add.1 of 1 November 2010.

I copy hereunder this year's questions and the answers by the US administration. 


(iv) Subsidies and other government assistance

WTO Secretariat's Report, page 64, Table III.9

Table III.9, concerning federal subsidies programmes notified to the WTO, gives the amounts relating to subsidies in the fisheries sector for fiscal years 2005-2008. The Report does not provide any information on fisheries subsidies beyond 2008.

In the framework the 2009 American Recovery and Reinvestment Act (ARRA) an amount of US$50 million has been earmarked to subsidise aquaculture. Baitfish growers and catfish farmers are eligible if their 2008 feed costs were at least 25 percent of their total operating cost. They also are eligible if their feed costs are 25 percent above the average cost of feed from 2003-2007.

59. Can the U.S. confirm the above information?


60. Are the products farmed by the beneficiaries competing with those products covered by anti-dumping proceedings against catfish products from Vietnam?

RESPONSE: The Farm Service Agency’s 2008 Aquaculture Grant Program will provide block grants to state Departments of Agriculture that agree to provide assistance to eligible aquaculture producers for losses associated with high feed costs during the 2008 calendar year. For more information, see http://www.fsa.usda.gov/Internet/FSA_File/fsa_recovactplans_aag052709.pdf.

61. Did the beneficiaries of the above mentioned subsidies receive funds from collected antidumping duty revenues under the Continued Dumping and Subsidy Offset Act of 2000 ("Byrd Amendment")? If so, could the U.S. provide figures on the amounts disbursed?

RESPONSE: The annual report for CDSOA payments, which lists all the disbursements and recipients in 2009, can be found at: http://www.cbp.gov/xp/cgov/trade/priority_trade/add_cvd/cont_ dump/.

62. Could the U.S. confirm the above information? If so, will the above subsidies be notified to the WTO and when?

RESPONSE: We confirm the information cited in the referenced press release. If appropriate, the measures at issue would be notified by the United States in its next WTO subsidies notification, which is due June 30, 2011.

63. Have the U.S. authorities assessed the impact of the above subsidies on existing fishery resources? If not, how will they ensure that the subsidies granted to New England fishermen do not result in overcapacity and overfishing?

RESPONSE: The new management system being implemented in the Northeast groundfish fishery is intended to reduce overcapacity and encourage ecological sustainability.

64. With regard to the amounts of US$546,000 and US$954,000, which percentage of these amount cover operational costs, such as crew, fuel, gear, insurance etc?

RESPONSE: No portion of that funding will be used for the operational costs of fishermen. The funding will be used entirely for sector management and infrastructure development.

65. Does the US$10 million subsidy package relate to a declared "commercial fisheries disaster"?

RESPONSE: The measures described by the EU do not relate to a declared “commercial fisheries disaster”.

66. If not, have the beneficiaries of the above subsidies separately benefited from commercial fisheries disaster assistance under either § 308 of the Interjurisdictional Fisheries Act, or § 312(a) of the Magnuson-Stevens Fishery Conservation and Management Act? If so, could the U.S. provide information on the amounts disbursed?

RESPONSE: No, the $5 million amount is being provided to the states of Massachusetts, Rhode Island, New Hampshire, and Maine in order to set up permit banks at the state level; it is not for individuals. Also, the funding for fishing sector managers is going to the Gulf of Maine Research Institute for sector management. The referenced beneficiaries have not separately benefited from commercial fisheries disaster assistance under either § 308 of the Interjurisdictional Fisheries Act, or § 312(a) of the Magnuson-Stevens Fishery Conservation and Management Act since 1999.

Ms. Jane LUBCHENCO, Undersecretary for Oceans and Atmosphere and NOAA Administrator, in her written statement, when presenting the NOAA 2011 budget request before the U.S. Senate Committee on Commerce at a hearing on 3 March 2010, stated the following: "NOAA recently released a draft catch share policy to encourage the consideration and adoption of catch shares wherever appropriate in fishery management and ecosystem plans and amendments, and will support the design, implementation, and monitoring of catch share programs. Catch share programs give fishermen a stake in the benefits of well-managed fisheries, and therefore greater incentive to ensure effective management. To support NOAA’s policy, this budget includes an increase of $36.6 million, for a total request of $54 million, to establish a National Catch Share Program. This program will provide a national framework to develop, manage, and improve catch share programs in fisheries across the Nation. This increase will also continue the transition of the Northeast ground fish (multispecies) fishery to sector management as well as support new voluntary catch share programs in the Mid-Atlantic, Gulf of Mexico, and Pacific Coast regions."

67. Could the U.S. provide more information about these "catch share" programmes? Will the beneficiaries of these funds have to purchase their "catch shares" or will they get them at no cost? Can catch shares be traded among participants in the fishery? Could these catch shares be used as collateral when entering into credit arrangements with lenders (e.g. banks)?

RESPONSE: The shares are determined based on the catch history of participants in that fishery. The shares are not free, are not owned by the participants, and cannot be used as collateral.

68. Could the U.S. elaborate on the use of the requested funds (US$54 million) for "…the transition of the Northeast ground fish (multispecies) fishery to sector management…"?

RESPONSE: The $54 million was requested by NOAA for development and implementation of catch share programs on a national scale. A portion of that funding will support the development, implementation and management of the Northeast groundfish fishery. Other fisheries around the nation will use the funding to develop and manage their own catch share programs. These actions will promote ecological sustainability. This is a request to Congress, which has not yet been acted upon.

On 24 May 2010 Commerce Secretary Gary Locke announced a "Fishery Failure Determination" in Gulf of Mexico under Section 312(a) of the Magnuson-Stevens Act. According to the press release, Secretary Locke stated that “Commercial and recreational fishing provides vital jobs to the region and is essential to the Gulf Coast’s unique culture and heritage.” With regard to the assistance requested under this "Fisheries Failure", the press release mentions that "The administration has requested US$15 million of supplemental funding as a backstop to address this disaster, as well as US$5 million of economic development assistance through the Economic Development Administration. In addition, the administration is requesting unemployment coverage for this disaster, and the Small Business Administration is offering economic injury disaster loans, which can help fishermen and other affected businesses."

69. Have the requested US$15 million of supplemental funding as a backstop to address this disaster, as well as US$5 million of economic development assistance through the Economic Development Administration, been granted?

RESPONSE: The requested $15 million and $5 million amounts in supplemental funding was appropriated on July 29, 2010, when President Obama signed H.R. 4899, the “Supplemental Appropriations Act, 2010” into law. On September 23, 2010, the Economic Development Administration published a notice of the Gulf Oil Spill Supplemental Funding Opportunity in the Federal Register (75 FR 57900). The notice describes the general policies and application procedures for the supplemental funding opportunity.

70. With regard to the unemployment coverage specifically requested for this disaster, can the U.S. provide figures about the amounts paid to the beneficiaries?

RESPONSE: The estimated benefit outlays for unemployment insurance claims that were filed due to unemployment caused by the oil spill have been approximately $1.9 million.

71. With regard to the injury disaster loans, could the U.S. provide details about the terms under which such loans are granted?

RESPONSE: Economic Injury Disaster Loans (EIDL) are working capital loans to help small businesses, small agricultural cooperatives and most private, non-profit organizations meet necessary financial obligations that cannot be met as a direct result of the oil spill disaster. The loans are limited to entities that cannot provide for their own recovery. An applicant must have an acceptable credit history, show the ability to repay the loan and provide collateral, if available. The interest rate is 4.00% for businesses and agricultural cooperatives without credit available elsewhere. The term of the loan may be up to 30 years, based on the borrower’s ability to repay. The law limits EIDLs to $2 million for alleviating economic injury caused by the disaster.

According to information published by Georgia's state authorities, a grant of US$1 million was awarded in May 2010 to assist with building improvements at the location of a manufacturing and distribution facility for Tri-Union Seafoods, LLC d.b.a. Chicken of the Sea International, under Georgia's Economic Development, Growth and Expansion Fund. The total estimated cost of the project is $21.5 million and the jobs to be created amount to 310 new jobs in four years.

72. Are the U.S. authorities aware of similar subsidies (grants) to the fish processing industry allocated to companies in this sector? If yes, could information about such subsidy programmes be provided?

RESPONSE: It should be noted that the Georgia assistance was provided under a job creation program available to all industries. For the latest information on other programs, please see the U.S. subsidies notification (G/SCM/N/186/USA).

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