Fisheries Subsidies and Developing Countries

1. Fisheries Subsidies and Developing Countries Sebastian Mathew International Collective in Support of Fishworkers (ICSF)

2. Importance of fisheries to developing countries • An important source of employment, income, food security and foreign exchange • 36 million workers in the fisheries and aquaculture sector (ILO), worldwide, of which 95% are in developing countries • Over 60% of global fish production and more than 50% of global fish exports originate from developing countries (FAO)

3. Doha Declaration, November 2001 • “Clarify and improve WTO disciplines on fisheries subsidies taking into account the importance of this sector to developing countries.”

4. Ongoing debate at the WTO Negotiating Group on Rules • What should be the scope of fisheries subsidies to be negotiated at the WTO? Should SCM Rules address negative trade, environment and development impacts of fisheries subsidies in addition to market distortions?

5. Fisheries Subsidies in Developing Countries • Welfare of fishing community (housing, sanitation, electricity, drinking water); • Income support to fishers (allowance for lean season/closed season/training period, insurance premia); • Tax preferences (rebates on fuel and other inputs into fishing); • Subsidization of capital costs (e.g. Mechanization/acquisition of fishing craft, gear, engine and other inputs);

6. Fisheries Subsidies in Developing Countries 2 • Subsidies to fisheries infrastructure (fishing harbours; quality control, etc) • Subsidies to fisheries conservation and management (resource assessment, resource enhancement, habitat protection, protection of endangered species, MCS, etc)

7. Potential capacity/effort-enhancing Subsidies • Tax preferences (often recurring) • Subsidies to capital costs • Subsidies to fisheries infrastructure

8. Disciplining capacity/effort-enhancing subsidies at WTO • Amending existing notification procedure in SCM Agreement to report on all fisheries subsidies • Linkage between potential capacity/effort-enhancing subsidies, fishing capacity, fishing effort and overfishing: • Burden of proof on Complaining Member vis-à-vis LDCs and designated developing countries • Burden of proof on Subsidizing Member vis-à-vis other countries (developed and advanced developing countries)

9. Disciplining capacity/effort-enhancing subsidies at WTO-2 • De minimis for capacity-enhancing subsidies for LDCs and designated developing countries at a level higher than the de minimis for other countries • Negotiate different time-frames to phase out fisheries subsidies that are proved to be capacity-enhancing for the above two categories of countries

10. Reintroducing non-actionable subsidies • Non-actionable subsidies could include: retraining fishers; fleet diversification; improving safety and working conditions; switching over to more selective fishing gear and practices; assistance during natural calamities; scrapping of vessels and withdrawal of capacity; improving product quality (EU proposal); assistance during stock decline due to natural factors; fisheries conservation and management; energy-efficient propulsion techniques; etc.

11. Proposed scope of disciplining fisheries subsidies at WTO • Should be confined only to production and trade distorting subsidies • Financial contribution that does not lead to production and trade distortions and where the benefits accrue to human development or the well-being of fishers and fishing communities could be removed from the scope of fisheries subsidies

12. A caveat for consideration • Disciplining production distorting subsidies would broaden the scope of SCM Agreement to look not only at ‘fish and fish products’ but also at ‘fishing methods’ with several implications including link up with MEAs in fisheries

13. In conclusion • Given the complexity of marine fisheries, a “red box” category of fisheries subsidies may not be advised • “Amber box”-- both “dark amber” and “light amber”– and “Green box” categories should be considered in fisheries • Financial contribution to human development of fishers and fishing communities, especially in developing countries, even if it is specific, should not be regarded as subsidies

14. Thank you