WTO: U.S. accuses China of not notifying (4 billion USD?) fisheries subsidies

Many stakeholders in the fisheries subsidies debate have complained about the lack of transparency, especially by countries that are Members to the WTO. In actual fact the WTO has rules that oblige its Members to notify all the subsidies they provide and the fisheries (and aquaculture) industry are no exception to this rule.

The U.S. seems to have embarked in a "transparency" crusade, fighting those WTO countries (and there are many!) that do not fulfil their notifications obligations.

So, at the rencently concluded "Trade Policy Review" of China, Michael Punke, U.S. Ambassador to the WTO, said the following when delivering his statement on the review:

In addition, China has failed to notify large fisheries subsidies, even though China is the world’s greatest fishing power and the Secretariat’s Report cites a study indicating that the Chinese Government’s support of this industry has exceeded $4 billion per year.  The United States expects China, commensurate with its fishing status, to notify all of its fisheries subsidies promptly and to make a significant contribution in the WTO’s ongoing work toward ambitious and effective disciplines on fisheries subsidies.

Readers will find the full text of Ambassador's Punke here:

http://geneva.usmission.gov/2012/06/12/u-s-statement-on-the-trade-policy-review-of-china/

WTO: reporting on informal negotiating meeting on fisheries subsidies (5)

Trawling is a typical way of catching fish. It is also something you can do, with modern technology, to catch news on items that are of interest for individuals. And the interesting thing about trawling for news is that your “gear” can be very selective, taking very little “by-catch”.

Lastly I have been trawling for reports on informal meetings of the WTO negotiating group dealing with fisheries subsidies. The result was rather disappointing: only “by-catch”.

Apparently the above mentioned negotiating group, also called the “Rules” group, met at the beginning of March 2010. According to the “Business Standard”, an Indian newspaper, the group discussed the (thorny) issue of the “zeroing” methodology (used by the US) in anti-dumping.

As it is the case with other negotiating subjects groups of countries are formed to push (or counter) standpoints and proposals. In this case, i.e. negotiations on WTO rules on antidumping, a coalition has been formed that calling itself the “Friends of Anti-dumping” (or FANs). The members of the FANs are: Japan, Korea, Mexico, Brazil, Chile, Colombia, Costa Rica, Hong Kong, Israel, Norway, Singapore, Switzerland, Taipei, Thailand and Turkey.

These countries are seeking to tighten the rules of anti-dumping by, among other things, prohibiting the use of zeroing.

It is interesting to see how alliances can differ depending on the issue. In the anti-dumping negotiations one finds countries that are siding “against” the US (e.g. Chile, Thailand, Mexico, Colombia and Norway) while in they are supporting the US positions in the fisheries subsidies negotiations, especially in calling a broad ban on most subsidies to fisheries. 

I will close this post by referring to another article, this time from the “Third World Network”, in which it is mentioned that he “Rules” group also met during the first week of February 2010, though no word about fisheries subsidies’ negotiations.

Here are the links to the above mentioned articles:

http://www.business-standard.com/india/news/india-seeks-banzeroing-methodology/387604/

http://www.twnside.org.sg/title2/wto.info/2009/twninfo20090206.htm

US: could a USD 100 million anti-dumping settlement become a fisheries subsidy?

Recently US media reported that the Southern Shrimp Alliance (SSA) had sought to end anti-dumping tariffs on Thai shrimp in exchange for a cash payment estimated at $100 million or more to be distributed among U.S shrimp producers.

Actually it seems that the initiative for such settlement came from Thailand, eventhough it is not clear whether the initiative came from the Thai authorities, from the Thai exporters or from both.

The SSA maintains that said that eliminating the anti-dumping duties in exchange for the settlement is the best option for the industry as the punitive import duties will be subject in to the so-called “sunset review”, i.e. a re-examination of the anti-dumping duties before they come to an end.

Should the outcome of the review be that there is no need for further anti-dumping duties then US shrimp harvesters will be fully exposed (again) to foreign competition.

But perhaps more interest is the fact that, even if anti-dumping duties would be extended after the sunset review, U.S. shrimpers would not be able to get the proceedings of moneys collected through such duties.

A document posted in the SSA’s website explains at length how the subsidy previously received by US shrimp harvesters will be terminated soon because the Continued Dumping and Subsidy Offset Act or CDSOA program (remember the so-called “Byrd-amendment”) will be phased out and the proceeding of antidumping duties remain with the US Treasury.

As an illustration of the subsidy paid the SSA document mentions the figure of USD 106 million made available to the US shrimp industry in the year 2006.

Here is a link to the web site of the Southern Shrimp Alliance where the aforementioned document (“Domestic Industry and Thai Frozen Foods Association Submit Joint Request for Revocation of Antidumping Order on Shrimp from Thailand - Questions & Answers – 27 December 2009) can be found.

http://www.shrimpalliance.com/

And here a link to an article from “The Daily Comet” (Lafourche Parish, Louisiana) on this issue:

http://www.dailycomet.com/article/20100128/ARTICLES/100129256/1026?p=all&tc=pgall#

USA: Congress discussing a bill on subsidies to the fisheries industry (2)

In this post I will comment on some of the written statements presented by witnesses at the hearing.

I will start with the statement by Mr. Nikolao Pula, Director, Office of Insular Affairs, Department of the Interior. When reading Mr. Pula’s statement I thought that, when touching WTO issues, his intervention could be summarized as follows: “Coordination between U.S. agencies works!” and “How to avoid the (ugly?) word subsidies”.

I copy here the relevant passages of his statement:

In the introduction Mr Pula said:

“Also, the United States is working to eliminate practices in ongoing World Trade Organization (WTO) negotiations that have for decades let to over-capacity and over-fishing, particularly with regard to the build-up of foreign fishing fleets. This legislation could have implications for that important effort.”

And here is what he stated in the conclusion:

“The Administration is supportive of efforts to strengthen the economy of American Samoa, but has several concerns regarding the implementation of H.R. 3583. First, the Administration is actively working in the WTO to strengthen the rules regarding fisheries, and the proposed legislation may have implications for that effort.“

So, the Department of the Interior seems to have coordinated this statement with the Office of the US Trade Represenative (and with NOAA and NMFS?).

This statement appears to have been carefully, and cleverly, drafted avoiding the ignominious and embarrassing (so it seems for the Obama Administration) word “subsidies”, especially in combination with the word “fisheries”.

Notice how Mr Pula referred to WTO negotiations on fisheries subsidies:

“…the United States the United States is working to eliminate practices in ongoing World Trade Organization (WTO) negotiations that have for decades let to over-capacity and over-fishing, particularly with regard to the build-up of foreign fishing fleets. “

Subsidies have become “practices” !

And:

“First, the Administration is actively working in the WTO to strengthen the rules regarding fisheries, and the proposed legislation may have implications for that effort. “

The WTO is strengthening the rules regarding…fisheries! Mr. Pula stopped short of adding the awkward and distressing word “subsidies”.

I do not think this was an oversight. Reflecting on this way of putting things to the Committee I thought that perhaps Mr. Fula was right. As negotiations seem to develop I would not be surprised if the WTO, perhaps unwillingly, would contribute to an strengthening of fisheries management of WTO Members willing to subsidise their fishing industry (see my post of 24/10/09).

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

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.

USA: Ron KIRK (new USTR) on fisheries subsidies

Here are the written answers provided by Ron Kirk, the new US Trade Representative, to the "FINANCE COMMITTEE QUESTIONS FOR THE RECORD" put at the confirmation hearing held on 9 March 2009:

Questions from Chairman Baucus:

Question 23:

Global fisheries are being rapidly depleted, and environmentally harmful subsidies in many countries contribute to their decline. The United States has been a leader in the WTO negotiations aimed at ending harmful fishing subsidies. Will you continue to take a leadership role in these negotiations?

Answer: Yes

Questions from Senator Grassley :

Question 14(ii):

The President’s Trade Policy Agenda also states that we need to ask how trade policycan address the depletion of fisheries. The World Trade Organization is already addressing the issue of fisheries subsidies in theDoha Development Round trade negotiations, and the United States has been an activeparticipant in those negotiations for many years. Do you have additional ideas for how the Administration could address the fisheries issue?

Answer: My understanding is that WTO negotiations have made some progress on this issue. I will be reviewing the fisheries aspects of those negotiations and will look forward to working with you to consider other approaches as well.

When reading these replies I was struck by two things: the first is the "laconic" reply to the question by Senator Baucus. The second is the very intriguing end of the second sentence to Senator Grassley's question. What does Mr Kirk mean by "[...] and will look forward to working with you to consider other approaches as well."?

Here is the link to the document with the written answers:

http://finance.senate.gov/hearings/testimony/2009test/031109QFRs%20for%20SubmissionRK.pdf