WTO: INDIA notifies subsidies to the WTO

In the previous post a presented questions from CANADA and the US on the subsidy notification to the WTO by Korea.

I had a look at the WTO website to see whether other WTO Members had made notification recently. India was one of these Members. The document reference is G/SCM/N/186/IND of 18 October 2010. The first paragraph of the 2 page long notification of INDIA reads as follows:

The following notification constitutes the Government of Republic of India's new notification of information on programmes granted or maintained at the central government level in India.  In general, the period to which the following information applies is for the Financial Years 2004-05, 2005-06, 2006-07, 2007-08 and 2008-09.

INDIA notifies only those subsidies "maintained at the central governement level", meaning that if subsidies are granted at state or subfederal level, these are not included in the notification.

Also interesting to note is that India is making the notification for a period covering five fiscal years. My reading of the WTO Agreement on Subsidies and Countervailing Measures, Article 25, is that WTO "Members agree that, without prejudice to the provisions of paragraph 1 of Article XVI of GATT 1994, their notifications of subsidies shall be submitted not later than 30 June of each year and shall conform to the provisions of paragraphs 2 through 6."

Finally, I was struck by the fact that India's notification concerns only one "subsidy programme", i.e. "Preferential tax policies for certain enterprises".  I found nothing in the notification concerning the "subsidy assistance programmes" maintained by India's Marine Products Export Development Authority (MPEDA).

WTO: subsidies notifications - Republic of Korea - (the US puts questions on fish subsidies)

Here are the questions put by the US and the corresponding replies by Korea. The WTO document reference is G/SCM/Q2/KOR/37, of 15 October 2010.

Reading through the replies I was struck by the fact that Korea is planning subsidies for the construction of "long range" fishing vessels.

Question 1

According to publicly available sources, the Korea Fisheries Association said the fuel subsidy provided by the government to the fishing industry is the most important program, accounting for up to 50 per cent of total fisheries subsidies. Please describe the nature and operation of this program, and the amounts provided under the program during the period covered by the new and full notification.

Reply

The following information is without prejudice to whether the program is covered by Article 25.2 of the SCM Agreement. For the nature and operation of the program, Article 106-2 of the Act on the Restriction of Special Tax Treatment provides as follows.

Article 106-2 (Abatement or Exemption of Value-Added Tax, etc. on Petroleum Products for Agriculture, Forestry, Fisheries, and Coastal Passenger Ships)

(1) Among the following petroleum products (referring to the petroleum products under the Petroleum and Petroleum Substitute Fuel Business Act; hereafter referred to as "tax-free petroleum" in this Article), the value-added tax on the supplies delivered on or before June 30, 2012 and the individual consumption tax, the traffic, energy and environment tax, the education tax, and the driving tax on the supplies released from a manufacturing place or a bonded area on or before the afore-stated date shall be reduced or exempted as prescribed by Presidential Decree, while the value-added tax on the supplies delivered during the period between July 1, 2012 and December 31, 2012 and the individual consumption tax, the traffic, energy and environment tax, the education tax, and the driving tax on the supplies released from a manufacturing place or a bonded area during the afore-stated period shall be abated by 75/100 of each tax under the conditions as prescribed by Presidential Decree:

1. Petroleum products required by a farmer, a forestry person, or a fishery person specified by Presidential Decree (hereafter referred to as "farmer, forester, or fisherman" in this Article) for the purposes of agriculture, forestry, or fisheries, which are prescribed by Presidential Decree; and

2. Petroleum products supplied directly to the Korea Shipping Association established pursuant to the Korea Shipping Association Act for the use in passenger ships operating on coastal waters.

(2) In cases where certain petroleum products delivered to a petroleum distributor (hereafter referred to as a "petroleum distributor" in this Article) prescribed by Presidential Decree, including a gas station, with the value-added tax, the individual consumption tax, the traffic, energy and environment tax, the education tax, and the driving tax already levied thereon and supplied to a farmer, forester, or fisher falls under paragraph (1) 1, the petroleum distributor may file an application under the conditions as prescribed by Presidential Decree to have the refund of the tax amount otherwise exempted or have the tax amount payable or collectible reduced by the amount.

(3) A farmer, forester, or fisherman who desires to have tax-free petroleum supplied shall file a report on the current status of agricultural machines, forestry machines, or ships and facilities prescribed by Presidential Decree in possession (hereafter referred to as "agricultural machines, etc." in this Article) and the fact that the person has engaged in agriculture, forestry, or fisheries, under the conditions as prescribed by Presidential Decree, with a cooperative under the Agricultural Cooperatives Act Agricultural Cooperatives Act, a cooperative under the Forestry Cooperatives Act Forestry Cooperatives Act, or a cooperative under the Fisheries Cooperatives Act Fisheries Cooperatives Act(hereafter referred to as a "cooperative acting as an institution responsible for control of tax-free petroleum" in this Article), and shall also file a report on a change within 30 days from the day on which such a change occurs, if any change in the reported matters occurs, such as the acquisition or transfer of an agricultural machine, etc., the death of the farmer, forester, or fisher, and giving up the agricultural, forestry, or fishery business.

(4) A farmer, forester, or fisher who desires to have tax-free petroleum supplied shall obtain a card for purchasing tax-free petroleum or a delivery order prescribed by the Presidential Decree and issued by a cooperative acting as an institution responsible for control of tax-free petroleum (hereafter referred to as "tax-free petroleum purchase cards, etc." in this Article).

The total amount of fuel subsidy provided to the fishing industry was 788 billion won in 2007 and 614 billion won in 2008.

Question 2

The Korean press has reported that Korea plans to allocate 7.09 trillion won (US$6.24 billion) in investment funds and loans to the Korean fisheries industry. The Ministry for Food, Agriculture, Forestry and Fisheries stated that it would also launch 38 new long-range fishing vessels to replace old boats and that up to 1,085 fishing boats will be given light-emitting diodes as fish-luring lights. Please provide further details on these plans and the proposed terms and conditions on the investment funds and loans.

Reply

The following reply contains information for the period not covered by 2009 new and full subsidy notifications which had been circulated in the G/SCM/N/186 … series.

Total amount of funds and loans for the five-year period between 2010 and 2014 was set at 7.12 trillion won including 1.39 trillion won in 2010 (fixed), 1.39 trillion won for 2011, 1.44 trillion won for 2012, 1.44 trillion won for 2013 and 1.46 trillion won for 2014 (estimated and subject to change depending on the final national budget plan of each year).

Under the Old Fishing Vessel Replacement Program, the Korean government provided 16.4 billion won of loan for replacing two vessels in 2010 with condition of 4 per cent interest rate and repayment for seven years after a lapse of three years. The limit of loan was set at 70 per cent of the total construction cost. The other 36 vessels are planned to be replaced during 2011-2014.

"The Program to Support Vessels to Install LED Lights" aims at energy saving and carbon emission reduction. In the program, it is planned to grant 6.5 billion won to 1,085 vessels which will be equipped with LED lights from 2009 to 2013. Each year 1.3 billion is granted to 217 vessels. The government grant is provided to cover 40 per cent of the total installing cost.

WTO: subsidies notifications - Republic of Korea - (Canada puts questions on fish subsidies)

Lack of transparency and opacity are among the biggest problems confronting a number of stakeholders in the current debate on fisheries subsidies.

The very poor record in notifications to the WTO of subsidies to the fisheries sector is one of the issues that a number of governments, NGOs and academia have pointed as main obstacles to have an informed discussion and a clear picture of what are the real effects of subsidies on the fish resources.

Some countries are reporting subsidies to fisheries in the context of WTO Members’ notification obligations under the Agreement on Subsidies and Countervailing measures.

The Republic of Korea is one of them. The last “New and Full Notification” from Korea is dated 7 May 2010 and has the WTO reference G/SCM/N/186/KOR.

The interesting thing about the notification to the WTO is that other countries can asks questions to the notifying Member on the content of the notification.

I copy hereunder the questions that Canada asked to Korea on fisheries subsidies (WTO ref. G/SCM/Q2/KOR/35 of 15 October 2010).

Question re Support for Fishing Activities

The stated purpose of the subsidy is to relieve financial burden and support stable fishing business operations by providing lower rate loans. Canada would like to have more information on the specific types of fishing activities and business operations that this programme supports.

Reply

The loan is given to the fishermen regardless of fishing gear type as long as the fishermen have the rights to fish in accordance with related laws and regulations. This includes fishermen engaged in aquaculture and inland and marine capture fishing activities.

Question re Support for Aquaculture Fishery Development

The policy objective of this programme is to have a stable supply of fishery products by supporting the development of aquaculture fishery under the changing circumstances of domestic and overseas fisheries production environment. Could the Republic of Korea please explain the meaning of "changing circumstances of domestic and overseas fisheries production environment"?

Reply

That may include, for example, changes in demand for fishery products, changes in annual catches in the coastal and off-shore waters, consumers' concern for sanitary condition of fishery products, and environmentally friendly and responsible aquaculture.

Question re Support for Old Fishing Vessel and Equipments Replacement

According to the description of the policy objectives, this programme ensures navigational safety through replacement of old vessels and vessel equipments. Could you provide more details as to what type of vessel equipment is supported by this programme? How many and which types of vessels have benefitted from this programme?

Reply

Under this programme, two old pelagic fishing vessels were replaced during 2007-2008 with imported used fishing vessels.

Question re Support for R&D of Environmental Technology Development Projects

Could Korea elaborate on the types of "cutting-edge environmental technologies" that have received support?

Reply

There have been 271 R&D programmes (i.e. "cutting-edge environmental technologies") that have received support under Development of and Support for Environmental Technology Act during 2007-2008, and they are categorized into five sectors as following:

• Core post-processing technologies which are the basis for pollution reduction in various environmental factors

• Preventive anti-pollution technologies such as those used for development of sustainable eco-friendly materials, products and manufacturing process

• Environmental technologies to actively cope with international environmental issues

• Original technologies for environmental fusion area

• Technologies used for combining relevant effective environmental technologies

COLOMBIA: Subsidies to aquaculture, contingent on export

Aquaculture seems to be spared (at least from now) from new disciplines on subsidies to fisheries.

Fish farming has become, over the years, an important source of supply of fish products. This is the case in developed countries (e.g. Norway) and in developing economies (e.g. China, Chile, Vietnam, etc). The growth in this industry is such that we could witness very soon aquaculture overtaking capture  fisheries in terms of supply of fish products for human consumption.

Some countries do realize the key importance of this sector and are providing financial help to fish farmers. A few days ago I stumbled upon a Colombian scheme whereby fish farmers involved in the production of shrimp, tilapia and trout receive subsidies for “inputs”, on condition that they export their produce.

According to the information posted in the website of Colombia’s  “Ministerio de Agricultura y Desarrollo Rural” the programme is funded with COP Colombian Peso 5,000 million (USD 2.8 million).

Here is the link to the aforementioned website (in Spanish) announcing the scheme:

http://www.minagricultura.gov.co/07presupuesto/07a_cin_acuicul.aspx

And here the link to the full text of the scheme:

http://www.acuiculturaldia.com/Documentos/reglamento_tecnico_iae_mayo21_2010.pdf

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/

WTO: the new Chair of the negotiating group "goes public"

Here is a link to an article by Reuters (8 October 2010) on the latest (informal?) negotiating meeting in Geneva.

The title of the article is "WTO negotiators sense new tone in fish talks"

http://www.alertnet.org/thenews/newsdesk/LDE6971VG.htm

USA: the State of Louisiana asks BP to fund a large aid package to the fishing industry

In August 2010 Louisiana Governor Bobby Jindal called BP to provide funds for a long-term testing and a marketing campaign to convince consumers seafood from his state is safe. More specifically he asked BP to fund a funding of a USD 173 million plan to ensure the safety of Louisiana seafood and restore consumer confidence.

Governor Jindal made this call after he announced on 19 August 2010 that BP had agreed to fund a three-year, USD 13 million fishery-resource monitoring plan.

In actual fact the total cost of the “Louisiana Seafood Safety Response and Certification Plan”, which could cover a 20 year implementation period, has been estimated at USD 457 million.

According to the plan USD 276,703,354 would be spent in media purchases for the public education campaign. A detailed reading of the yearly budgeted amounts reveals that during the first five years of the plan a yearly amount of USD 20-30 million would be spent in “ad buys”, i.e. media purchases.

If, for the sake of argument, BP would agree to provide this funds to the Louisiana’s budget, or to disburse them as directed by Louisiana’s authorities, would this a subsidy in the sense of the WTO’s Agreement on Subsidies and Countervailing Measures?

I referred to a similar situation where fishermen in Cape Cod where getting “subsidies” from the Pew Group (see my post of 1 November 2009 “USA: "charitable" fisheries subsidies and the WTO”)

Here are links to:

Governor’s Jindal announcement on 19 August 2010:


http://emergency.louisiana.gov/Releases/81910Fishery.html

A letter dated 15 September 2010 from Lousiana’s Department for Wildlife and Fisheries Secretary Robert Barham reiterating the call for BP to fund an Extensive Seafood Testing, Certification and Marketing Plan to Robert Dudley Chief Executive Officer of BP Global.

http://www.wlf.louisiana.gov/news/32931

Lousiana’s Department for Wildlife and Fisheries page, which includes a link to the plan


http://www.wlf.louisiana.gov/louisiana-seafood-safety-response-and-certification-plan

NORWAY: report on aid provided to the cod sector

Some readers may remember that, in late 2009, I wrote various on the aid measures that the Norwegian government took to help companies in the cod sector to withstand the crisis creted by low prices in the consumer market.

Well now NOFIMA, a state controlled, business oriented research group working in research and development for the aquaculture, fisheries and food industry in Norway, has published a report on the crisis.

In the press release by NOFIMA (31 August 2010) one can read:

“In order to help the situation, the authorities implemented a series of measures. These included offering loans and guarantees, funds for marketing and subsidies for the transportation of fish between different regions. The cod quotas were also increased.”

Here is the link to the English version of the press release:

http://www.nofima.no/marked/en/nyhet/2010/09/that-s-why-the-cod-had-trouble

And here the link to the report (in Norwegian):

http://www.nofima.no/filearchive/Rapport%2023-2010.pdf

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.

PHILIPPINES: Subsidies for fish workers affected by tuna a fishing ban

Here is a press release by the Philippines' Department of Labor and Employment (DOLE) on the above subject:

Press Releases

DOLE launches action program to workers affected by the tuna fishing ban

The Department of Labor and Employment (DOLE) in Region 12 launched Friday, February 26, 2010 the DOLE Action Program for workers displaced due to the tuna fishing ban in General Santos City.

DOLE 12 Regional Director Atty. Ma. Gloria Tango said that initially, the DOLE provided emergency employment assistance to workers displaced due to the ban by adopting the 60-40 mode of payment to workers for a period of 30 days. Sixty percent of the prevailing minimum wage in the region will come from DOLE while the remaining 40 percent will be shouldered by the participating affected company.

Tango said that the Damalerio Fishing Corporation (DFC), a group of companies composed of Celebes Tuna Fishing Corporation, Tuna Venture Corporation and Damalerio Fishing Enterprise availed of the said package of assistance that will benefit a total of 207 displaced workers.

Tango turned over the 1st tranche amounting to P456,435.00 representing the 60 percent of the workers minimum wage to Aurea Damalerio, President of the Damalerio Group of Companies held at the fishport compound last February 26, 2010.

The displaced workers of the companies will do maintenance work such as painting, welding, carpentry, electrical/mechanical repair, net-mending, refrigeration and hardware stock inventory.

Tango also said that NH Agro Industrial, Inc., another tuna fishing company affected by the closure of the 2 pockets in the Western and Central Pacific shall avail of DOLE’s Kabuhayan Starter Kits for its displaced workers or their beneficiaries.

She also said that youth beneficiaries/dependents of said workers will be prioritized in the Special Program for the Employment of Students (SPES) or the Kabataan Information Technology Opportunities (K-ITo) as mentors if they qualify.

Other affected companies may also avail of the Workers’ Income Augmentation Program (WINAP) of DOLE.

http://ro12.dole.gov.ph/default.php?retsamlakygee=93&resource=cfe6055d2e0503be378bb63449ec7ba6

CANADA: subsidies for the fish processing industry

I copy here under a press release by the Provincial Government of New Brunswick.

As you can see this Canadian Provincial Government is "providing a $3-million forgivable loan as part of a $12-million project that will help maintain more than 1,000 jobs in southwestern New Brunswick."

According to an online article of the Canadian Broadcasting Corporation, if Connors maintains the 1.000 jobs in Blacks Harbour, the loan will not have to pay back the loan.

News Release

Business New Brunswick

Province supports efficiency upgrades at Blacks Harbour fish processor

24 June 2010 Media Contact(s)

Ashley Bursey, communications, Business New Brunswick, 506-461-0942, ashley.bursey@gnb.ca; Mike Randall, communications, Connors Bros., 506-878-3025.

BLACKS HARBOUR (CNB) - The provincial government is making an investment to help Connors Bros. complete efficiency upgrades to its processing plant. Premier Shawn Graham made the announcement today.

Graham made the announcement during a tour of the plant with Fisheries Minister Rick Doucet; Nabil Salib, plant general manager and company vice-president; Tony Hooper, company vice-president; and Ron Schindler, company executive vice-president.

"This company has been a vital part of our provincial economy since the 1890s," said Graham. "As we move toward a self-sufficient future, our plan for lower taxes and our strategic investments in key industries are helping companies to jump into new markets and diversify their products. Connors Bros. is an important example of how the revitalization of a traditional industry can carry a company successfully into the future."

The provincial government is providing a $3-million forgivable loan as part of a $12-million project that will help maintain more than 1,000 jobs in southwestern New Brunswick.

Connors Bros. is one of Canada's oldest food producers and the largest producer of canned sardines worldwide. In 2004, the operations of Connors Bros. merged with those of Bumble Bee Seafoods LLC and Clover Leaf Seafoods Co.

"We are proud to call Blacks Harbour the Sardine Capital of the World," said Schindler. "The assistance from the province means we can continue to produce a variety of high-quality canned seafood to compete in a global market. This modernization initiative will improve plant efficiencies and working conditions while helping us become more energy-efficient. These changes will be good for business, for our employees and for our future."

The Blacks Harbour plant is the only sardine cannery in North America. Its various companies produce canned tuna, salmon, sardines, clams, oysters, other specialty seafood products and canned meat products to a global market.

"In New Brunswick, our people are our greatest resource," said Doucet. "Our government is pleased to support one of our province's oldest and most significant employers as it continues to improve this facility for its workers and to find innovative solutions to stay competitive in a dynamic world marketplace."

24-06-10

Here are the links to the Provincial press release and to the story published by CBC:

http://www2.gnb.ca/content/gnb/en/news/news_release.2010.06.1072.html

http://www.cbc.ca/canada/new-brunswick/story/2010/06/25/nb-sardines-conners-bros-jobs-607.html

WTO: fisheries subsidies negotiation and developmental aspects of the Doha Round

The WTO Secretariat published on 19 August 2010 a revision (nr. 4) of a document titled “DEVELOPMENTAL ASPECTS OF THE DOHA ROUND OF NEGOTIATIONS”

(WT/COMTD/W/143/Rev.4).

This Report (or note) was established by the WTO Secretariat following a request by WTO Members for a background paper for the 54th Session of the CTD of the Committee on Trade and Development (CTD), held on 5 October 2005, at which this Group undertook a preliminary review of the "developmental aspects" of the Doha Round of negotiations.

In this latest revision of the note the Secretariat writes the following on fisheries subsidies negotiations (numbers refer to paragraphs):

107. Finally, in the area of fisheries subsidies, developing Members point in general to the important role that fisheries can have for poverty alleviation, livelihoods and food security. Concerning possible new disciplines on fisheries subsidies, some developing Members favour very strict disciplines with few exceptions and limited S&D, while others seek broad exemptions from any new disciplines.

108. In November 2007, on the basis of the mandate from Ministers at Hong Kong, the Chairman of the Negotiating Group on Rules (NGR) tabled his first draft texts covering anti-dumping, subsidies and countervailing measures, and fisheries subsidies. These were consolidated texts that addressed a wide range of issues in all of these areas, based on the proposals and discussions that had preceded them. The texts contained specific proposed language from the Chairman on the issues addressed, with no brackets or alternatives. On fisheries subsidies, the Chairman's text took the form of an entirely new annex to the SCM Agreement, proposing a comprehensive set of new disciplines in this area. These texts, which were discussed in detail during 2008, all proved to be very controversial, and the gaps on the most politically sensitive issues were not narrowed through the discussions. In December 2008, therefore, the Chairman circulated new, "bottom-up", texts on anti-dumping and on subsidies and countervailing measures, proposing specific language where in his view there was the greatest possibility for convergence, and for the most sensitive issues replacing his former proposed language with square brackets summarizing the range of positions of delegations. For fisheries subsidies, such an approach was not possible as there is no pre-existing set of disciplines in this area. The Chairman thus circulated a roadmap for discussion, containing a set of detailed questions on the major issues needing resolution. The Group completed its discussion of these texts in early 2010, and has begun considering new proposals that have been tabled in various areas of its mandate.

112 112. Concerning fisheries subsidies, the main proponents of new, sector-specific disciplines comprise a group called "Friends of Fish", which includes a number of developing country Members. For the developing country proponents, the main concern is the artificial competitive advantage created by subsidies, which affect access to fish and contribute to the depletion of the resource. Most Members (developed as well as developing) have stressed the need for effective S&D as part of any fisheries subsidies package. Of particular concern in this regard are small-scale, artisanal fisheries and any subsidies thereto, as well as payments that some developing Members receive from foreign governments for access to the fisheries in their waters. Aquaculture is another area of considerable interest to many developing country Members, which seek to ensure that any new disciplines would not interfere with these activities. The 2007 Chairman's text on fisheries subsidies proposed S&D provisions to address developing Members' subsidies to different scales of fishing operations, and to address access payments. In addition, the scope of the text was limited to subsidies to marine capture fisheries (i.e., it did not extend to aquaculture). The Chairman's 2008 roadmap pursued these and other issues, which the Group discussed in detail during 2009. Since then, new proposals have been tabled, inter alia, by several groups of developing Members seeking to redefine the S&D provisions in different ways.

(d) Possible gains to developing countries

113. An eventual clarification and improvement of any of the rules under negotiation will increase the predictability of the trading system to the benefit of all Members. Moreover, an appropriate balance of rights and obligations will permit developing countries to pursue their development objectives and at the same time guard against practices that have a negative impact on their trade. In this regard, effective disciplines on the fisheries subsidies of the major subsidizing Members will benefit developing Members in terms of access to fisheries resources and in terms of reduced distortion of trade in fisheries products. Another area where balance is crucial concerns trade-offs between the costs and administrative burdens of the contingency protection system and its capacity to ensure fairness and transparency.

WTO: fish starring in the latest WTO's "World Trade Report" (2010)

Readers monitoring developments at the WTO would have noticed that the 2010 issue of the "World Trade Report.

There is a lot of talk on "fish" in the document.

The document also deals with measures by countries restricting exports of natural resources. The Report underlines the fact that these measures can have the effects of subsidies as they lower domestic price of the products concerned, which in turn makes the domestic (processing) industry using these products more competitive.

I found that recent post in the "International Economic Law and Policy Blog" (one of the blogs appearing in "My blog list") highlighted this issue when commenting on the WTO's Report.

Here is the link to the post:

http://worldtradelaw.typepad.com/ielpblog/2010/08/export-quotas-and-production-quotas.html

And here the links to the WTO document and to an article by the ICTSD on Report.

http://www.wto.org/english/res_e/publications_e/wtr10_e.htm

http://ictsd.org/i/news/bridgesweekly/81818/

USA: subsidies for the tuna processing industry

One million USD for the tuna cannery of Chicken of the Sea in Giorgia.

Here are the news releases on this:


EDGE Fund – Toombs County Development Authority and Chicken of the Sea

Lyons, GA – A $1 million EDGE grant from the OneGeorgia Authority to the Toombs County Development Authority provided assistance with building improvements to benefit the location to Georgia of a manufacturing and distribution facility for Tri-Union Seafoods, LLC d.b.a. Chicken of the Sea International, one of the top producers of canned/pouched tuna capturing 25 percent of the US market share.

Chicken of the Sea located into an existing 212,000 SF industrial building previously occupied by Simonton Building Products, Inc. In addition, COS constructed a 13,968 square-foot freezer facility connected to the existing building needed for its tuna canning operation. The facility is situated on a 27.02-acre site in the Toombs Corporate Center on US Hwy 1 north of Lyons.

Tri-Union Seafoods, LLC (TUS) is a subsidiary of Thai Union International, Inc. (TUI) which is based in San Diego. This processing and canning operation for TUS is the first in Georgia. Chicken of the Sea will invest $20, 000,000 in the facility and create 310 new jobs within four years. The raw tuna is shipped straight from the Port of Savannah to process into shelf stable canned tuna, and then shipped throughout the United States.

The EDGE Fund, a specialized incentive tool, is used to enhance Georgia’s competitiveness in attracting significant economic development projects. It is a program providing “deal-closing” funds when one rural Georgia community competes for a business location or expansion with another state or country.
• Required elements: a recommendation for funding from a state agency; private investment commitment and job creation commitment from the beneficiary business.
• Benefits must exceed costs.
• Clawback provisions require partial repayment in the event job-creation or private-investment commitments are not met.

Who can apply?
Eligible applicants for EDGE funding are general-purpose local governments, local-government authorities, joint or multi-county development authorities in any of the directly eligible counties or conditionally eligible counties. Eligible sub-recipients are legally established business entities.

How much money is available?
EDGE Funds are not limited in amount. Grant and/or Loan amounts are recommended by the Georgia Department of Economic Development and are based on economic impact and demonstrated need.

How can the funding be utilized?
EDGE funds may be used for the purchase of publicly owned assets such as land and site development; infrastructure improvements; and publicly owned/ privately leased assets, such as land, buildings & machinery and equipment. Demonstration that relocation or expansion will enhance the overall economic security of the county is an important consideration. Applicants are encouraged to seek the advice of the Authority prior to submitting an application.

Here’s how it works:
Applications are online at www.onegeorgia.org and are accepted on an ongoing basis. Funding is used only when the industry is actively considering a location in another state.

http://www.onegeorgia.org/projects/17/EDGE-Fund---Chicken-of-the-Sea

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Toombs County Development Authority / Tri-Union Seafoods, LLC d.b.a. Chicken of the Sea International

EDGE grant funds of $1 million are awarded 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 (COS). Chicken of the Sea is one of the top producers of canned/pouched tuna capturing 25 percent of the US market share. The company, located in an existing industrial building, constructed a 14,000 square-foot freezer facility that is connected to the existing building. The facility is situated on a 27 acre site in the Toombs Corporate Center on US Hwy 1 north of Lyons. Tri-Union Seafoods, LLC (TUS) is a subsidiary of Thai Union International, Inc. (TUI) which is based in San Diego. The parent company is the second largest processor of tuna in the world and with the opening of the Georgia plant; Thai Union Frozen Products anticipates that it will become the largest tuna processor in the world. The Toombs County canning operation is the first in Georgia for TUI and its’ many subsidiaries.

* EDGE Award: $1 million / Total Project Cost: $21.5 million
* 310 new jobs in four years / Interstate competition: South Carolina

http://gov.georgia.gov/00/press/detail/0,2668,78006749_78013037_160994537,00.html

WTO: Director-General Pascal Lamy on fisheries subsidies on World Environment Day (5 June 2010)

Mr Pascal Lamy made a statement on World Environment Day and referred to fisheries subsidies negotations as an area where the WTO is helping to protect world oceans. On the issue on reaching a deal on this negotiating subject Mr Lamy said:

"A deal in the WTO would mean richer oceans for future generations and would constitute a triple-win for trade, environment and development".

What strcuk me is that Mr Lamy did not say a deal in the context of the Doha Round but rather... a deal in the WTO...(outside the Doha Round?).

http://www.wto.org/english/news_e/news10_e/dgpl_05jun10_e.htm

WTO: fisheries subsidies should be part of the single undertaking...according to Barbados and New Zealand

Mining in the internet n the issue of fisheries subsidies negotiations I found an interesting interview that “Subsidy Watch” an electronic newsletter that provides news, commentary and analysis related to subsidies and sustainable development published in May 2009, in its issue 39.

The interviewed were Matthew A. Wilson, First Secretary, Permanent Mission of Barbados to the United Nations and other International Organisations at Geneva and Alice Tipping, Second Secretary to the WTO for the New Zealand Permanent Mission in Geneva. According to Subsidy Watch “Japan and the European Commission were also asked to respond, but did not do so before our publishing deadline.” I wonder whether the US were also asked to respond to the questions.

The last question is about whether the WTO should stick to the single undertaking when it comes to fisheries subsidies negotiations. I copy hereunder the full question and the answers, highlighting the passages with references to fisheries subsidies staying in the single undertaking.

SW: What are the odds that the fisheries subsidies negotiations move to another venue if the WTO talks remain stalled for too long? In a related question, if the round as a whole does not progress in the near future, would you endorse having the fisheries negotiations ‘carved out’ so that they could proceed separately?

Barbados: I am confident that the Round will be completed. The talks are not stalled. We are still having meetings and negotiations and there is still much to discuss and agree to in the area of fisheries, so it is too early to begin looking at shifting the venue or carving out any negotiations for early harvest. The DDA is clear on the issue of the single undertaking, so all issues will have to be adopted by Ministers simultaneously. I do believe that, even in the unlikely event that we were not to finalise the negotiations on fisheries, the issue of sustainability, fisheries management and the developmental aspects of fisheries have been sufficiently ventilated over the past few years, especially by important NGOs such as the WWF, the ICTSD and OCEANA, that engagement on this issue would be continue. The key is for the FAO and Regional Fisheries Management Organizations to follow through on some of the issues being discussed at the WTO, even in the event that there is no formal agreement.

New Zealand: The WTO is the appropriate venue for multilateral negotiations on fisheries subsidies for two key reasons. First, the problem is as much economic and trade-related as it is environmental. Over a third of global fish production is traded internationally, making fish one of the most traded ‘agricultural’ commodities. Fish and fish products account for around 13 percent of global ‘agricultural’ trade. The World Bank and the FAO, in their 2008 report entitled “Sunken Billions”, estimate that the potential benefits of this trade are far less than they should be; the economic losses in the global marine fisheries industry, resulting from inefficiencies (including subsidies) and overfishing add up to US$50 billion per year— that’s US$1.5 trillion over the last 30 years.

Second, disciplines around fisheries subsidies should be derived from, and consistent with, existing disciplines around general subsidies. The WTO Agreement on Subsidies and Countervailing Measures’ existing disciplines set a solid, multilaterally agreed legal framework for these trade measures, and the terminology and concepts involved have been interpreted and clarified by the dispute-settlement process over many years. It is the logical institutional and legal base from which to build a new set of disciplines on fisheries subsidies.

These negotiations provide a unique opportunity to create effective disciplines on fisheries subsidies that deplete fish stocks on which the livelihoods of vulnerable communities depend. The negotiations are an integral element of the Doha Development Agenda, and New Zealand believes the final disciplines should form part of the outcome of the Doha round as a whole.

Here is the link to the full text of the interview:

http://www.globalsubsidies.org/en/subsidy-watch/analysis/the-wto-fisheries-negotiations-interviews-with-barbados-and-new-zealand

WTO: current stalemate in the Doha Round - "Two issues need to be resolved".

Last May the IISS (International Institute for Strategic Studies) held the Bahrain Global Forum in Manama, on the subject “Rebalancing Global Geo-economic Strategies for Security, Growth and Development”.

One of the key speeches (a special address) was delivered by Pascal Lamy on Sunday 16 May 2010. The title of this special address was “Reshuffling the Deck of Global Economic Cards". By the way, I did not find this speech in the WTO’s website (Speeches of the Director General).

While in his speech Mr Lamy did not explicitly refer to the negotiations on “Rules” nor to fisheries subsidies, there was talk about fisheries in the ensuing Q&A session.

A number of media echoed the contents of this Q&A session. One of the statements these media quoted was the following:

"Two issues need to be resolved: one is a technical negotiation over fishery subsidies, and the other is that the Obama administration needs the political will to take a Doha Round bill to Congress and get it passed," Lamy said.

Here are the links to the “Special Address” and to the Q&A question:

http://www.iiss.org/conferences/bahrain-global-forum/speeches/special-address/special-address-pascal-lamy/

http://www.iiss.org/conferences/bahrain-global-forum/speeches/special-address/qa-session/

And here the links to media discussing Mr Lamy’s statements:

http://www.business-standard.com/india/storypage.php?autono=395351

http://www.dynamicexport.com.au/news/world-trade-to-rise-up-to-10-percent-wto01042/

http://www.google.com/hostednews/afp/article/ALeqM5jArswzvUuxWL8K9i3m3MfiLsi8rw

http://www.truthabouttrade.org/news/latest-news/16017-free-trade-resilient-during-world-crisis

USA: USD 18 million federal subsidies underway for American Samoa (and its tuna cannery)

American Samoa is getting a USD 18 million money transfer as part of the efforts of the local government to keep alive StarKist Samoa.

I copy here under the passage of the bill H.R. 4213 “The American Jobs and Closing Tax Loopholes Act of 2010” explaining the rationale for the transfer:

"American Samoa economic development support. Existing possessions credit corporations with active business operations in American Samoa were allowed an economic development tax credit to offset their U.S. tax liability on income earned in American Samoa from active business operations. This credit was based on the corporation’s employment and capital investment in American Samoa. As a result of the economic downturn, those domestic corporations have been unable to utilize the economic development credit. The bill would provide a payment to the American Samoa Government for stimulating economic development in American Samoa in an amount equal to the cost of the economic development credit. This proposal is estimated to cost $18 million over 10 years."

Here is the link to the document:

http://www.rules.house.gov/111/LegText/111_hr4213_summary.pdf

And here is an extract of the press realease of 20 May 2010 by Congressman Faleomavaega in which he clearly states his views on how the money should be used.

“Because StarKist would have been entitled to 30A tax credits worth up to $18M if it had been operating at a profit, the money we have now been able to set aside as a direct payment to ASG is intended to be used to put our tuna cannery workers back to work at StarKist Samoa. This is why I will be entering in to discussions with the U.S. Department of Treasury, ASG and the Fono to make sure the funds are used for their intended purposes.”

“Also, to be clear, the entire $18M will be available in FY2010, if H.R. 4213 is signed into law. If signed into law, this will be the good news we have been waiting for as it will provide ASG with the means it needs to help StarKist until we can put a more long-term solution in place.”

“Again, I thank my colleagues in the House and Senate for their strong show of support, and I look forward to working hand-in-hand with Governor Togiola and our Fono leaders and members as we do all we can do to save our tuna industry which is our largest private sector employer,” Faleomavaega concluded.

This is the link to the press release by Congress Faleomavaega:

http://www.house.gov/apps/list/press/as00_faleomavaega/Housewaysandmeansandsenatefinancetaxcredit.html

USA: fishermen in the Gulf of Mexico asking for USD 100 million subsidies

Here is a link to the website of the "Gulf og Mexico Reef Fish Shareholders' Alliance" with the text of a "Joint Letter to Congress for Gulf Disaster Funding" filed on 21 May 2010.

http://shareholdersalliance.org/joomla/index.php/newsandupdates/46-gulf-disaster-funding-letter-to-congress

The closing paragraph of the letter reads as follows:

"In closing, we urge you to approve a minimum of $100 million in funding for direct assistance to adversely affected commercial and recreational fishermen and fishing communities, to improve fisheries science, and to make fisheries more resilient to harm caused by human activities. These funds should be provided to and managed by the National Oceanic and Atmospheric Administration in a manner that is consistent with the conservation and management objectives of the Magnuson-Stevens Fishery Conservation and Management Act, as well as the goals of the agency."

USA: subsidies for fishermen in the Gulf of Mexico

"Commerce Secretary Gary Locke Announces Fishery Failure Determination in Gulf of Mexico". This is the title of the announcement by the Department of Commerce for financial help (or subsidies) to fishermen affected by the oil disaster in the Gulf of Mexico.

Here are the figures (at least the preliminary ones):

"The administration has requested $15 million of supplemental funding as a backstop to address this disaster, as well as $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."

When reading the text of the release I was thinking of the latest submission by the US to the WTO on fisheries subsidy rules. Readers of this blog may remember that in my post of 26/04/2010 I was quoting a paragraph of the US document where the US indicated the following:

"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."

My guess is that the US has made up its mind on this issue, i.e. that man made fisheries "failures" or "disasters" (such as an oil spill) is a good reason to provide subsidies to fishermen.

Here is the press release announcing the good news for US fishermen affected by the "fisheries failure":

http://www.commerce.gov/news/press-releases/2010/05/24/commerce-secretary-gary-locke-announces-fishery-failure-determination