WTO: reporting on informal negotiating meeting on fisheries subsidies (7)

A few days ago I wrote a post about a REUTERS « alert » quoting the Chair of the negotiating group as he spoke over the “new tone in the talks”.

The ICTSD has published in its website an article on the negotiating meeting which, according to the ICTSD, took place in the week of 4 October 2010.

An interesting feature of the meeting is that, always according to ICTSD, there was a plenary session (on 4 and 5 October) followed by discussions in smaller groups of delegates.

The article mentions that the latest submissions by the BRICs (Brazil, China, India) and Mexico (doc. TN/RL/GEN/163) and by the US (TN/RL/GEN/165) were discussed.

I discussed the BRICs + Mexico’s submission in my post of 13 February 2010. This submission included a proposal to prohibit to developed countries those « subsidies arising from the further transfer, by a payer Member government, of access rights that it has acquired from another Member government to fisheries within the jurisdiction of such other Member.». I wonder how those WTO Members that are very dependent on access fees paid by developed countries did react to this proposal.

I also discussed the US paper in my post of 24 April 2010. I also wonder whether there was some discussion about the suppression by the US of the exceptions for subsidies for retraining for activities other than fishing, re-education and early retirement.

It would also be interesting to know whether the US had, in relation to exceptions for disaster relief , “further thoughts as to its scope and placement as technical discussions of the text continue.” (see paragraph 8 in page 2 of the US submission). 

I imagine that the oil spill (a man-made disaster) in the Gulf of Mexico is providing enough food for thought to US negotiators on the scope and placement of exceptions for “disaster relief”. One suggestion could be to allow for “privately funded subsidies” (such as those requested by the State of Louisiana) to the fisheries sector.

Here is the link to the article by ICTSD:

http://ictsd.org/i/news/bridgesweekly/86991/

BRAZIL: fisheries subsidies notification to the WTO

The WTO Secretariat published on 1 September 2010 the document "New and Full Notification Pursuant to Article XVI.1 of the GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures" by Brazil. The reference number of this document is G/SCM/N/186/BRA. The document is available at the WTO website.

Under the section "FISHERIES INCENTIVES" only the "PROGRAMME FOR DIESEL OIL SUPPORT" is notified.

I copy here the contents of this section.

III. FISHERIES INCENTIVES
A. PROGRAMME FOR DIESEL OIL SUPPORT
1. Title of programme

Programme for Economic Subvention to the Price of Diesel Oil Used by Fishing Vessels.

2. Period covered by the notification

From January 2007 to December 2008.

3. Policy objective and/or purpose

To equalize the price of diesel oil paid by national fishing vessels with the international market price.

4. Legislation and authority

The programme was established by Law 9445, of 14 March 1997, regulated by Decree 4969, of 30 January 2004, and by the former Secretariat for Aquaculture and Fisheries - SEAP (presently the Ministry for Aquaculture and Fisheries) Normative Instruction 18, of 28 August 2006. The Ministry for Aquaculture and Fisheries is responsible for the administration of the programme.

5. Form of subsidy

The reimbursement of the difference (if below 25 per cent) between the diesel oil price paid by the beneficiary and the international market price.

6. To whom and how the subsidy is provided

Recipients: Fishing vessel owners or charters (natural or legal persons); professional fishermen and fishing industries.

Benefits will be granted when there is a difference of up to 25 per cent between the price of the fuel paid by national vessels and the international market price.

7. Total amount

Fiscal Year 2007: R$ 25.5 million.
Fiscal Year 2008: R$ 20.5 million.

8. Duration

Not defined.

9. Trade effects

N.A.

BRAZIL: subsidies for the construction of four new ocean going vessels

According to the a press release from the Brazilian Ministry for Fisheries and Aquaculture, four new tuna vessels that will operate from the State of Bahia.

The boats will be financed with help from the federally managed PROFROTA programme.

Here is a link to the press release from the Federal government.

http://www.presidencia.gov.br/estrutura_presidencia/seap/noticias/ultimas_noticias/aprovada_construcao_quatro_embarcacoes/

WTO: the BRICs and Mexico make proposals on "small-scale fisheries" and on... fisheries agreements

This week the so called BRICs (Brazil, China, India) and Mexico have made a joint written proposal modifying the Chair’s draft text agreement of November 2007.

The main thrust of the proposal is to present the other Members of the WTO with a definition of the so called « small scale fisheries ». According to this group of countries « small scale fisheries » have to be defined according to « socio-economic criteria ». Here are two paragraphs of the introductory part of the submission setting out the rationale for such proposal.

Here are extracts of the introductory part:

On the issue of small-scale, artisanal fisheries, the proponents decided to bring forward a definition based on socio-economic criteria, inspired by the current Article 6.2 of the Agreement on Agriculture. We believe that this is the best way for striking a satisfactory balance, in the absence of internationally-agreed definitions on those fisheries activities by other Organizations more directly involved in fisheries issues. Each Member should be able to work on its own definition, insofar as the criteria set forth in the future WTO disciplines are observed.

On the larger scale fisheries, criteria such as the boat size and the area of capture were replaced with provisions structured on the rights Members have under the international law. For those activities the controls in Articles IV and V would fully apply, in order to implement the Hong Kong mandate consistently with its main goal: to bar harmful fisheries subsidies that create over-fishing and produce overcapacity, as well as distort trade or production. Artificial distinctions such as the Exclusive Economic Zone limitation and the 10 meters threshold were thus deleted.

Another important feature of the proposal is that it introduces new language, under Article III, that would prohibit to developed countries those « subsidies arising from the further transfer, by a payer Member government, of access rights that it has acquired from another Member government to fisheries within the jurisdiction of such other Member.» if concluding such agreement with a developing country.

As an example all payments made in the context of the fisheries agreements concluded by the EU with developing countries could come under such prohibition.

Here is the aformentioned language:

III.4 III.3 Subsidies referred to in Article I.1(g) shall not be prohibited where the access rights are acquired by a developing country Member and the fishery in question is within the EEZ of a developing country Member,

 The fact that the words "the access rights are acquired by a developing country Member and" have been added imply that, to benefit from the exemption to the prohibition under Article I.1(g), the fisheries agreement must be concluded exclusively between developing countries. At least this is my interpretation.

Strangely enough the introductory part is silent about such substantial change to the Chair’s draft.

The full text of the submission, with WTO reference TN/RL/GEN/163 can be found at the WTO’s website.

WTO: Director General Pascal Lamy on Fisheries Subsidies (4)

Here is an extract of Director-General Pascal Lamy, keynote address “How can the WTO help harness globalization?” to the WTO Public Forum on 4 October 2007:

"But things are changing in the WTO once again as we speak, thanks to the efforts of civil society. I am referring to the Doha Round negotiations on fisheries subsidies. For the longest time, many viewed the WTO architecture on subsidies as static, as not capable of change. But civil society soon came to knock on our doors, drawing our attention to the perilous state of much of the world's fish stock. Its message was clear, the WTO has a vital role to play in protecting the world's fish stock, in saving it from depletion.

The numbers that think tanks and NGOs put on the table left no room for ambiguity. They required no further explanation. An annual $14-20 billion of fisheries subsidies worldwide has been one of the causes of fish stock depletion, encouraging “too many fishermen to chase after too few fish” as saying now goes. Worldwide, the global fishing fleet, which includes 25,000 large decked-ships and well over 2 million smaller commercial craft, pulls 80 million tons of fish or more from the oceans, or four times the 1950 total! The story was alarming and the WTO Membership once again rose to the challenge.

Today, negotiations on fisheries subsidies in the WTO are in full swing and they are being taken extremely seriously. The Membership realizes the magnitude of what is stake were these negotiations to fail. And just in case it would forget, you have placed banners all over Geneva to remind us all of the need to reach an agreement! But civil society, in this particular case, did not stop at awareness raising, it came forward with technical suggestions on how the WTO could craft new disciplines; and in so doing has certainly made a real contribution. In fact, to a number of civil society actors this particular experience served to demonstrate how close collaboration with WTO Members can sometimes be vital to achieving their goals. "

In the above extract Mr Lamy says : “But civil society, in this particular case, did not stop at awareness raising, it came forward with technical suggestions on how the WTO could craft new disciplines; and in so doing has certainly made a real contribution.”

This reminds me that the WWF issued in 2004 a document titled “Healthy Fisheries, Sustainable Trade: Crafting New Rules On Fishing Subsidies in the World Trade Organization” setting out an outline of future fisheries subsidies rules. Some of the elements of this outline can be found in Brazil’s early submissions (see WTO docs TN/RL/W/176 of 31 March 2005, TN/RL/GEN/56 4 July 2005 and TN/RL/GEN/79 of 16 November 2005).

WWF and Oceana have also been in close touch with the U.S. government to provide advice on how to deal with this negotiating subject.

BRAZIL: questions on fisheries subsidies at Brazil's WTO's Trade Policy Review (2)

Here is a question by Norway, and Brazil's answer, at the 2009 Trade Policy Review. It concerns fuel subsidies:

(4) MEASURES AFFECTING PRODUCTION AND TRADE
(iv) Incentives and other government assistance

Para. 270 states that; “Brazil has been notifying periodically to the WTO its subsidies programmes under Article XVI.1 of the GATT 1994 and Article 25 of the Agreement on Subsidies and Countervailing Measures (SCMA). In its October 2007 notification, for fiscal years 2005 and 2006, Brazil included the SUDAM/ADA and SUDENE/ADENE regional programmes; the FINAM/FINOR/FUNRES programmes for the development of the Amazon and north-east regions and the state of Espírito Santo; the programme of constitutional funds for the financing of the north-east, the north and the mid-west regions; the programme for capacity building and competitiveness, enhancement in information technology; fisheries incentives; and the industrial technology development programme (PDTI) and agriculture/cattle breeding technology development programme (PDTA).”

Could Brazil elaborate on the specific content of the program for “fisheries incentives”? The footnote in para 270 refers to Brazil’s subsidy notification of 2007 where a program for diesel oil support is notified. Is this program still in existence? If so, could Brazil provide any details of it?

ANSWER:

"Fisheries incentives notified and granted by the Brazilian Government encompass the "National Program for Financing the Improvement and Modernization of the National Fishing Fleet – PROFROTA Pesqueira", the "Program for the Support of Infrastructure" and the "Program for Economic Subvention to the Price of Diesel Oil Used by Fishing Vessels".

As to the second question, the "Program for Economic Subvention to the Price of Diesel Oil Used by Fishing Vessels" is still in force in Brazil. Fishing vessel owners or charterees (natural persons or companies); professional fishermen and fishing industries are entitled to this program. Its main objective is to match the price of diesel oil paid by national fishing vessels (after the rebate granted by Federal States in ICMS) to the one paid by foreign vessels.

The benefit takes the form of a reimbursement of the difference between the diesel oil price paid by the beneficiary in the domestic market and the price paid by fishing vessels in the international market. The reimbursement is only made if this difference is below 25%."

BRAZIL: questions on fisheries subsidies at Brazil's WTO's Trade Policy Review

I will include in my blog some of the questions (with the corresponding answers) put by WTO Members to Brzail on fisheries subsidies:

The WTO document with all the questions and answers can be found at the WTO's website (see "Trade Policy Review" under Trade Topics).

Here is one question from the EC:

(4) MEASURES AFFECTING PRODUCTION AND TRADE
(iv) Incentives and other government assistance
WTO Secretariat’s Report, page 76, para. 270

In addition to the data provided by the Government's and the Secretariat's reports, publicly available information indicates that Brazil launched in 2008 the "Mais Pesca e Aqüicultura" initiative with a view to promoting fish production in Brazil and setting explicit targets to be reached by 2011. Among the targets, the initiative identifies the increase of fish production by 40%, i.e. from 1 million tonnes in 2008 to 1.4 million tonnes in 2001. Concerning fisheries infrastructure the plan includes the constructions of up to 20 landing facilities for fishermen.

The EC notes that, among other subsidies, the following aid has been provided to the fisheries sector in the framework of the "Mais Pesca e Aqüicultura" initiative: i) a fuel subsidy programme amounting 18 million Reales and benefiting 2.230 vessels; ii) subsidies, including those provided by the Ministry of Transport, for the construction of fish landing terminals; and iii) subsidies for the purchase of 103 ice machines, 85 refrigerated trucks,

The EC also notes that a number of programmes ("linhas de crédito") such as the "FUNDO CONSTITUCIONAL DE FINANCIAMENTO DO NORTE – (FNO)" or the "FUNDO CONSTITUCIONAL DO NORDESTE – (AQÜIPESCA)" will be coordinated and will give the possibility to fishermen to obtain subsidies, inter alia, for the construction and modernisation of fishing vessels.

Further, the initiative seems to include the possibility for fishermen to make use of the subsidies of the "MODERAGRO" programme (CUSTEIO PECUÁRIO TRADICIONAL) covering, inter alia, aid in the form for: i) purchase of fuel, lubricants, ice, bait, and other operational costs; ii) nets, hooks, labour-costs, insurance, taxes, freight, and iii) maintenance and modernisation of vessels.

Information published by the Brazilian authorities on the "MODERAGRO" programme indicate that beneficiaries could receive up to 300.000 Reales aid to finance the above mentioned types of costs. Concerning canning and processing of fish products the aforementioned information mentions that funds from the "MODERAGRO" programme are also available for these activities. Could Brazil confirm the existence of such subsidies to its fisheries sector?

ANSWER:

Unlike most of the countries currently with high fishing capabilities, which have started public investments and developed support programmes for the fishing sector since a long time ago, Brazil is a late-entrant in the international fishing market.

Brazil had the opportunity to draw lessons from the questionable public policies of today`s fishing powers in terms of overexploitation or even depletion of many of the world most important fish stocks. Such fishing support programmes have been criticized by specialized international organizations. In order to prevent the environmentally adverse results from those policies, the basic characteristic of all Brazilian programmes to support the fishing sector is a direct link to sustainability benchmarks.

First of all, regarding the programme “Mais Pesca e Aqüicultura”, we note that it is still not operational. So far it has only been publicly announced by the Brazilian government, and its timeframe refers to the period 2008-2011. We are at the disposal of the EC for further technical information once the programme is fully operational.

The programmes related to FNO, AQUIPESCA and MODERAGRO are not related to fish catching activities. They are aimed at enhancing the quality of the fish chain structure.

BRAZIL: more subsidies to fisheries and aquaculture

This is how you could translate into English the new programme “Mais Pesca e Aquicultura” ("More fisheries and launched last year by President Lula da Silva. The objective is to boost fish production in Brazil. The initiative integrates explicit targets to be reached by 2011, such as the increase of fish production by 40%, i.e. from 1 million tonnes in 2008 to 1.4 million tonnes in 2011, or the construction of up to 20 landing facilities for fishermen.

This initiave is a framework that includes, or will include, a number of subsidy programmes to help the Brazilian fisheries and aquculture industries. Examples are: fuel subsidies for 18 million Reales (USD 7.8 million) for 2.230 vessels or financing, in cooperation with the Ministry of Transport for the construction of fish landing terminals.

Other instruments that the Brazilian governement will use to channel the funds to fishermen are:

• the "MODERAGRO" programme (CUSTEIO PECUÁRIO TRADICIONAL) providing funds for purchase of fuel, lubricants, ice, bait, nets, hooks, labour-costs, insurance, taxes, freight, or maintenance and modernisation of vessels. Through this programme beneficiaries could receive up to 300.000 Reales (USD 131,000) aid.
• the "FUNDO CONSTITUCIONAL DE FINANCIAMENTO DO NORTE – (FNO)"
• the "FUNDO CONSTITUCIONAL DO NORDESTE – (AQÜIPESCA)"

More information on the above initiative and programmes can be obtained at:

http://tuna.seap.gov.br/seap/html/Plano%20de%20Desenvolvimento/plano_desenvolvimento.html

BRAZIL: article on public policy on fisheries subsidies

Browsing scientific literature on the subject of this blog I came across an interesting article titled "An historical account of Brazilian public policy on fisheries subsidies" written by Patrízia R. Abdallaha and Ussif R. Sumailab and published in Marine Policy Volume 31, Issue 4, July 2007, Pages 444-450.

Brazilian government providing subsidies for projects in aquaculture and fisheries

Like Mexico, Brazil has launched a new programme called “Mais Pesca e Aqüicultura” - Plano de Desenvolvimento Sustentável. This programme, in English "More Fisheries and Aquaculture - Plan for sustainable development, was officially announced by President Lula da Silva on July 29, 2008 in Salvador (State of Bahia).

According to the official press release the purpose of the programme is to increase the production of fish in Brazil and to set specific targets to be reached by 2011.