Written by Robert Sisilo
Access fees-fees that coastal states charge for those who want to fish in their waters-has always been a critical issue for Pacific Islands Countries (PICs) since 1998; when the issue of fisheries subsidies was first discussed at the Word Trade Organization (WTO).
As a major source of government revenue, PICs have consistently argued not to ban access fees, which environmentalists claim contribute to over-fishing of fish stocks. But it seems PICs have finally got the nod at the WTO.
Footnote 4 of the Chair’s first text that was released on 30 November 2007 explicitly states that “government-to-government payments for access to marine fisheries shall not be deemed to be subsidies within the meaning of this agreement.â€
This assurance has really taken the sting out of one of the most contentious issues the African, Caribbean and Pacific (ACP) Group of states and the Small Vulnerable Economies (SVEs) have always fought for in the Doha Development Round (DDR) negotiations. And they were among the first to welcome this legal clarity.
Major source of government revenue
â€On the issue of access fees, we thank the Chair for taking onboard some of the past concerns expressed by the ACP Group. We strongly support footnote 4, which explicitly excludes government-to-government transfer of funds. This footnote is important for ensuring clarity and legal security and predictability in disciplining access fees,†the ACP spokesperson, Ambassador Gail Mathurin of Jamaica, told an unusually packed meeting of WTO members held on 14 December 2007 for the first reading of the text.
Speaking on behalf of PICs, I also welcomed the treatment of access fees in the Chair’s text as they constitute a very high proportion of GDP for several countries. Along with the ACP and SVEs, we all agreed that the Chair’s text provides a firm basis for further negotiations.
This is particularly on the exemptions given to developing countries on small-scale fisheries, fishing in EEZs and Special and Differential Treatment (SDT). Some concerns abound on some of the provisions of the text in these areas.
No restriction on vessel length and EEZs
On SDT, for example, only subsidies for vessels not greater than 10 meters (34 feet) in length are allowed. PICs and the ACP Group disagreed since this does not provide enough flexibility for existing small-scale commercial
fisheries in their countries.
â€If negotiations are to be based on vessel length, we would like the Chair to note that major small scale fisheries active in the Pacific region have vessels of at least 9-22 meters in length. Hence, the Pacific Islands Countries support the ACP position on vessel length at 25 meters†I told meeting.
Another contentious issue is limiting subsidies just to vessels fishing in a developing country’s Exclusive Economic Zone (EEZ). Such a restriction goes against the interests of small coastal developing states that have long-standing practices of fishing in neighboring EEZs under bilateral arrangements.
I told the meeting why this restriction is not good for PICs. “Limiting subsidies to vessels active within a developing country Member’s EEZ is problematic for vessels targeting highly migratory species. This is due to small EEZs for some Pacific countries, and for all, significant fluctuations in stock abundance due to migratory patterns and oceanographic factors.â€
For example, we do have a regional program in place that provides one country's fishing fleet mutual access to other neighboring Pacific Islands’ EEZs, who are party to the arrangement.
â€One of the characteristics of this regional arrangement is to take account of highly migratory flows of tuna, and thus contribute to ongoing economic viability and the promotion of domestic fisheries development.†I explained. Subsidies relating to port infrastructure are also among those slated to be banned but not for developing countries.
This is a big relief for PICs and most likely for some other developing countries. Government support for building port facilities is imperative, as the private sector simply cannot afford to finance such infrastructure.
Total exemption for LDCs
As for the Least Developed Countries (LDCs), and there are 5 PICs designated as such, they have been exempted from the prohibited list of subsidies to the fishing sector. This exemption is very important given their limited capacities not only to subsidise their fishing sectors but also to implement obligations under the new disciplines. The LDCs are however seeking clarification on how the creation of overcapacity with respect to straddling or migratory fish stocks would be measured and by whom.
No objection to treatment of access fees
So after years of protracted negotiations the WTO Negotiating Group on Rules (including fisheries subsidies) has finally received a boost following the circulation of the Chair’s text. Criticism of the text was not of course absent. But it was heartening to note that during the text’s first reading not one delegation spoke against the treatment of access fees in the text.
The US delegation, speaking towards the end of the debate, actually made this observation. And when I spoke I also recalled the US observation hoping that it will stay that way. And it did; at least after the first reading of the text. I hope it will continue to stay that way in future readings and revisions of the text.
Canned tuna and loins also targeted
But it is not just about access fees and fisheries subsidies that PICs should be concerned about in the DDR negotiations. On the reduction of custom duties on industrial products, processed fish (canned tuna and loins)
have also been targeted.
The proposed formula in the Chair’s text would have serious implications for the competitiveness of PICs on fish and fish products, particularly on tuna.
According to one study the EU’s import duties on canned tuna and tuna loins would be reduced from their current base rate of 24% to 7% in year 7.
And since some PICs export canned tuna and tuna loins duty free to the EU market, this would result in the loss of markets and the subsequent closure of tuna canneries because PICs canneries just cannot compete against
low-cost suppliers like Thailand.
For the fishing industry in PICs to survive, there has to be a carve-out for the tuna sector from the application of the proposed formula. The ACP group is pushing hard for such a carve-out.
Another concern is on some of the sectoral initiatives that are being proposed for the complete elimination of import duties on industrial products. One such proposal is by New Zealand, Canada, Thailand and others, which call for a comprehensive elimination of all import duties on fish and fish products.
This proposal could have a significant impact on erosion of preferences for many, if not all, of the PICs. Like the Chair’s proposed formulae, PICs will again lose out on their current preferential margins as other more efficient competitors will be able to export duty-free to the EU if it signs up to such an agreement.
Challenging times ahead
The Chairs of Agriculture and NAMA (Industrial Products) will issue their revised texts at the end of January 2008 and it will be very interesting to see what the NAMA text has to say on the formulae and sectoral initiatives. Interesting and challenging times lie ahead.
• Robert Sisilo is the Permanent Representative of the Pacific Islands Forum to the WTO, based in Geneva, Switzerland.