Untangling Fisheries Subsidies and Sustainable Development.

Conference Proceeding

Title: World Trade Organization Public Forum: “Session 8: Untangling Fisheries Subsidies and Sustainable Development."Date: 02 October, 2018, Room B, World Trade Organization, Geneva, Switzerland.

Background

The Pacific Network on Globalization had organized a special session during the World Trade Organization (WTO) Public Forum, on 02 October, 2018 the theme titled “Untangling fisheries subsidies and sustainable development” in the broader context of the WTO 2018 Public Forum on Trade 2030. The discussions on the topic of fisheries subsidies and sustainable development has been timely as members of the WTO, both developed and developing countries are negotiating disciplines in relation to fisheries subsidies in line with SDG 14.6 goals. There are a number of contentious issues in relation to developing the disciplines on fisheries subsidies.  Members are yet to find an agreed solution on balancing disciplines on fisheries subsidies for food security and livelihood of low income and poor resource fisherman and that of environmental sustainability. The topic for discussion which I presented on was “Untangling fisheries subsidies and sustainable development” with a focus on global fisheries governance and some of the contentions in the negotiations including the effect on Pacific Island Countries.

Conference Proceeding

1.      Introduction

The theme of this session titled “Caught in a Net –Untangling fisheries subsidies and sustainable development goals” is interesting. Whilst the commitment to ensure SDGs through sustainable development goals are to be attained, one has to be cognizant that in the context of fisheries subsidies disciplines, members do not “strangle” economic prosperity of developing countries including the Pacific.  As such, the focus of my presentation are as to highlight the following:

1.      Identifying the interlinkages between Fisheries Governance and Fisheries Subsidies;

2.      Discussing how the disciplines of fisheries subsidies in the context of the WTO have extended beyond the initial commitments by members;

3.      Discussing how developing countries including the Pacific region can “untangle economic prosperity with enhanced special and differential treatment provisions”.

We note that the fisheries negotiations have been intensified over the last month (September). Members have formed various clusters and are discussing different issues in tandem. Furthermore, members have proceeding with text- based discussions. However, members have divergent views and positions.

2.      Fisheries Global Governance and Fisheries Subsidies.

As I examined the fisheries subsidies text that is under discussion, subsidies as a trade policy tool, seems to be one of the components under discussions. This is diluted with more emphasis provided explicitly and implicitly to fisheries management issues. For some developed countries, fisheries management disciplines are more dominant then the real concern on fisheries subsidies disciplines.

There is a diverse range of attributions in the fisheries subsidies text by members. Some members are aiming as a benchmark or even going beyond to have enhanced disciplines on fisheries management using the various existing fisheries governance frameworks. Furthermore, some of these instruments are binding, whilst others are non-binding. The latter through the disciplines set, could be given legal status. As such, developing countries including the Pacific region need to exercise discretion and tread carefully. The following are a list of binding and non-binding agreements directly and indirectly related to fisheries management.

·         UNCLOS –United Nations Convention on the Law of the Sea.

·         United Nations Fish Stock Agreement

·         Agreement on Port State Measures to prevent, deter and eliminate IUU fishing

·         Voluntary Guidelines for Flag State Performance

·         Agreement to Promote Compliance with International Conservation and Management by Fishing Vessels on the High Seas

·         FAO Code of Conduct of Responsible fishing

·         Voluntary Guidelines for Securing Sustainable Small-Scale Fisheries- (which involves standards on catch certification requirements for small scale and artisanal fisheries).

·         Guidelines on Fishing Vessel Registry

·         International Plan of Action-IUU

·         International Plan of Action-Capacity

·         Private Standards regarded as “generally accepted standards” have a possibility.

3.       Relationship between the Fisheries Subsidies Negotiating Text and the Fisheries Governance (Management) Instruments.

As members are negotiating the disciplines on fisheries subsidies, some of the attributions in the text has linked the disciplines on fisheries subsidies to that of management measures. Without explicitly mentioning “fisheries management” there has been several articulations in the text on different fisheries governance instruments. One therefore needs to understand the synergy between the fisheries governance instruments, in order to ascertain the degree of commitments which developing countries including the Pacific region will be burdened with.  To begin with, the International Plan of Action Against illegal, unreported and unregulated (IPOA-IUU) fishing is a voluntary instrument that aims to implement the Code of Conduct for Responsible Fishing. The code of conduct for responsible fishing is voluntary. It has “obligatory provisions that may give binding effect by means of other obligatory instruments such as the Agreement to Promote Compliance with International Conservation and Management Measures by fishing vessels in High Seas.The code of conduct for responsible fisheries also provides responsibilities of flag states and port states. The code of conduct for responsible fishing thus implements the Guidelines for Flag State Responsibilities and the Agreement on Port State Measures to prevent deter and eliminate IUU measures. In other words to implement the IPOA-IUU, developing countries including the Pacific will be required to implement the related agreements after which it will be allowed to provide subsidies.  There are two major issues in this regard, firstly, the developing countries including the Pacific do not have technical and financial capacity to implement these and secondly, the developing countries are resource abundant in fisheries. For the Pacific region, the Parties to the Nauru Agreement, hold more than 50% of the global tuna supply. A prohibition of fisheries subsidies with stringent conditions would curtail economic growth, sustainability and livelihood of the low income and poor resource fisherman.

The fisheries text therefore has expanded and moved beyond the initial agenda of disciplines on fisheries subsidies to that of implementing the IPOA-IUU and thus imposing further disciplines on management for coastal states, flag states and port states.  In other words, the WTO is moving from its own initial mandate for fisheries subsidies to that of fisheries management. For fisheries management, the WTO does not have the technical competence. These competencies are with the relevant regional fisheries management organizations and to some extent the Food and Agriculture Organization. (FAO).

4.       Untangling Fisheries Subsidies Negotiations

Further to the issue of infiltration of current existing fisheries governance issue into the WTO disciplines on fisheries subsidies, some of the developed countries are demanding for commitments that are beyond the existing management frameworks on fisheries which members have agreed to in other forums. In other words, the fisheries subsidies is “caught in the net” as some members seem to regard the fisheries subsidies to be the panacea to the implementation of the management measures in other forums. Moreso, some members are moving beyond the existing fisheries management frameworks moving beyond the current existing international fisheries agreements. Some of the issues that the developing countries including the Pacific need to be vigilant about are as follows:

•       On the issue of Sovereign rights: To begin with the UNCLOS states that members have the right over its exclusive economic zone (EEZ). This is an issue of sovereign rights of members. The Voluntary Code for Responsible flag state responsibility clearly states that “In exercise of effective flag state responsibility, the flag state should: “Respect national sovereignty and the coastal states rights”. These guidelines apply to fishing and fishing related activities in maritime areas beyond national jurisdiction, they might apply to fishing and fishing related activities within the national jurisdiction of the flag state, or a coastal state, upon their respective consent. However, in the context of the fisheries disciplines, some developed countries proposals are aiming at dictating the rights of members in its EEZ and imposing rules on Management Measures. Article 56 of the UNCLOS states that in the exclusive economic zones, the coastal states “has the sovereign rights for the purpose of exploring, exploiting and conserving its natural resources, whether living or non-living.” This also covers fisheries.

•       On the Treatment of Trade Measure and Fisheries:  The fisheries subsidies discussions has been of major discourse, however, Article 66 of the IPOA-IUU states that on. “Trade related measures should be only used in exceptional circumstances, where other measures have proven unsuccessful to prevent, deter, and eliminate IUU fishing, only after prior consultation with interested states.” As such members need to assess whether the existing measures are effective or ineffective prior to stringent disciplines on fisheries subsidies.

•       On the Issue of Conservation and Management Measures: In practice in the different Regional Fisheries Management Organizations (RFMOs) that determine the rules governing fisheries conservation and management measures in which it has rights over in the high seas.These rules are formed by members through negotiations of the conservation and management measures. In the current text, some attributions by members are aiming to create a uniform application of the conservation and management measures. However, for the developing countries and the Pacific region, it has to be cognizant that the Conservation and management decisions for fisheries takes into account of traditional knowledge and resources and their habitat, as well as relevant environmental, economic and social factors. As such, it must not bind itself into uniform application of management measures. Furthermore, the conservation and management measures can become a non -tariff measure for fish resource extraction.

•       On the issue of artisanal small-scale fisheries, the codes explicitly recognizes the important contributions of artisanal and small-scale fisheries to employment, income and food security. It further states that members must appropriately protect the rights of fishers and fish workers, particularly those engaged in subsistence, small scale and artisanal fisheries to secure just livelihood as well as preferential access. Small scale and artisanal fisheries are important for the developing countries and the Pacific region too. Members need to ensure policy space is retained in order for the small island states to develop the sector for social sustainability.

•       In relation to aquaculture, some members have carved out the sector whilst the least developed countries have attributed this on fulfilment of voluntary certification. The least developed countries need to reflect on such a proposal, as this will be more burdensome on its industry. Furthermore, certification issues will further create problems of mutual recognition of aquaculture standards. The developing countries including the Pacific region are challenged with standards and certification, therefore agreeing to transform a voluntary guideline into a legal agreement would have further plausible consequences.

•       In relation to illegal, unreported and unregulated fishing (IUU). Members need to define each term separately as per the IPOA-IUU. For unregulated and unreported fishing, developing countries including the Pacific region require technical and financial capacity to improve regulations and report accurately.  Furthermore, the IPOA-IUU states that  “ Notwithstanding para 3.3, certain unregulated fishing may take place in a manner which is not in violation of applicable international law, and may not require application of measures envisaged under IPOA.”

•       On Overcapacity Disciplines: The Code of Conduct for Responsible Fishing States that: “Where excess capacity exists, mechanisms should be established to reduce capacity to levels commensurate with sustainable use of fisheries resources as to ensure that fishers operate under economic conditions that promote responsible fisheries.  Such mechanism should include monitoring the capacity of fishing fleets“.  In the fisheries text the issue of overcapacity is applied on all members, without consideration for those members with excess capacity to reduce fishing capacity. Developing Countries including the Pacific region need to build capacity to utilize their fisheries sector. Reducing Capacity further will only increase policy space for the already major players in the market that have major fishing capacity.

5.       Options for Developing Countries including the Pacific Region.

The developing countries including the Pacific, needs to ensure that the WTO has a subsidy focus discipline only. There could be several options explored, perhaps the adoption of methods similar to agricultural subsidy, with further expansion on disciplines to non-specific subsidies could be a way. Members need to understand that transition period is not sufficient. There has to be a carve out for low income and poor resource fisherman for livelihood and food security purposes. Members can explore phased out subsidy reductions on the proviso of no linkage to disciplines on fisheries management issues.

Given that the current fisheries text includes a plethora of issues spilling into explicit and implicit Management, the REALITY OF SDT also needs to be revisited.

Note: Longer Transition Period for Implementation is in the fisheries text. This is not sufficient. Given the complexities to what would be the outcomes, i.e. Subsidies, IUU are linked to Flag State, Port State and Coastal State Responsibilities, further specificity on SDT are required to ensure implementation is successful and the developing countries are not disproportionately burdened from the fisheries agreement.

Also the SDT provisions are crafted in relation to IUU, overcapacity and overfishing at the moment.  To simplify this SDT could be demanded by members as there rights as flag state, coastal state and port state.

On the Slide I have a list of areas within each criteria the SDT that Developing countries need to RETHINK ABOUT SHOULD  THERE BE PERSISTENT DEMAND ON MANAGEMENT .

Pacific Small Island States are in the LDC and SVE group of countries.

•      Holders of more than 50% of the global Tuna Supply.

•      Some are in the process of Domesticating Fishing Vessels.

•      Need to develop its small scale, artisanal fisheries and have policy space for future commercial development of fisheries.

•      Fish is an input material for production of other products such as fish oil and thus affecting generic pharmaceuticals too.

•      Regional Mechanism- WCPFC , FFA and SPC

•      Recognizes SDG 14.6 and sustainability of fisheries resources but BE REALISTIC in terms of balancing these with ECONOMIC GROWTH. WE DO NOT WANT TO STRANGLE ECONOMIC PROSPERITY.

•      WTO IS NOT THE PANACEA TO THE ENTIRE SOLUTION ON FISHERIES MANAGEMENT. IT MUST FOCUS ON TRADE INSTRUMENT OF FISHERIES SUBSIDIES.