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  • Writer's pictureDivyashree S. & Ashwin V.

Fishing for Sustainability: Agreement on Fisheries Subsidies

In a move which revives the relevance of multilateral agreements in international trade, especially in light of the sense of urgency with which the world is proceeding to find solution to environmental sustainability, the 12th Ministerial Conference of the World Trade Organisation (“WTO”) adopted a protocol amending the Marrakesh Agreement (“Protocol”) to incorporate the Agreement on Fisheries Subsidies [WT/MIN(22)/W/22, dated June 17, 2022] (“Agreement”).

The Agreement is a landmark insofar as the regulation of fisheries subsidies under WTO law is concerned, and has the potential to control several problems thereof currently plaguing international trade. It also continues the trend of “implementation of international instruments” to tackle problems caused by fisheries subsidies, as noticed by the United Nations’ (“UN”) Economic and Social Council (here, at paragraph 133).

Brief History of the Agreement

What does this Agreement say?

Question: What is a subsidy?

Answer: The Agreement adopts the definition of a 'subsidy' as provided in the under Article 1.1 of the Agreement on Subsidies and Countervailing Measures. Therefore, the main elements of a subsidy under this Agreement are also: (a) financial contribution by (b) a public body resulting in a (c) benefit being conferred. Income or price support would also be regarded as a subsidy. The Agreement has laid emphasis on only the nationality of the subsidy-provider, and not the recipient. Aquaculture and inland fisheries, and government-to-government payments under fisheries access agreements from the scope of the Agreement.

See: Article 1

Question: What is prohibited under the Agreement?

Answer: The Agreement has recognized three forms of fishery subsidies which are prohibited:

1) Subsidies for Illegal, Unreported and Unregulated Fishing

2) Subsidies related to Overfished Stocks

3) Subsidies to fishing/fishing related activities outside its jurisdiction

Illegal, Unreported and Unregulated (IUU) Fishing

Question: What is IUU Fishing?

Answer: The Agreement refers to paragraph 3 of the International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing adopted by the UN Food and Agriculture Organization (FAO) in 2001:

Question: Who can determine IUU fishing?

Answer: Three authorities have been bestowed with responsibility of determining if any vessel or operator is engaged in such activities: (1) a coastal member (if the activities take place within its territorial waters); (2) a flag state Member (if the activities are undertaken by vessels flying its flag); or (3) a relevant Regional Fisheries Management Organization or Arrangement (“RFMO/A”), in accordance with the rules and procedures of the RFMO/A and relevant international law. A determination by one the aforementioned authorities should be an ‘affirmative determination’, in the form of a final finding. However, no Member is obligated to initiate such investigations.

Overfished Stocks

Question: When is a fish stock 'overfished?'

Answer: Whether a fish is overfished need to be recognised by a Member in whose jurisdiction such activities take place, or by a relevant RFMO/A in areas and for species under its competence.

Question: Can subsidies be granted to rebuild the stock to a biologically sustainable level?

Answer: Yes.

Other Subsidies

Question: What are the 'other subsidies' which are prohibited under the Agreement?

Answer: It prohibits granting of subsidies by a Member beyond its maritime jurisdiction, or of a coastal non-Member, or in areas outside the competence of a relevant RFMO/A. This provision also cautions Members to take special care and exercise due restraint when granting subsidies to vessels not flying that Member’s flag, and to activities regarding stocks the status of which is unknown.

Developing Countries and LDCs

Question: What are the exemptions and special provisions for Developing Countries and LDCs?

Answer: First, developing countries and LDCs are exempt from the prohibitions on subsidies pertaining to IUU fishing and overfished stocks for a period of two years. No explicit exemption exists on 'other subsidies'. Article 6 obligates Members to exercise due restraint in raising matters involving a LDC country Member under the Agreement.

WTO-Boutery: Talk Global Trade Comments:

Upon a quick comparison of the Agreement with the draft circulated on June 10 (before the MC12), one notices some nominal differences. These include the removed provisions relating to developing countries being exempted from the prohibition in Article 5 for upto seven years, and other concessions for LDC Members, in the Agreement. The Agreement, in its present form, thus, seems to have adopted the core principles of how WTO wishes to regulated fisheries subsidies for the time being, while leaving certain other issues relating (like subsidies that contribute to overcapacity and overfishing for negotiations) for the 13th Ministerial Conference (as reflected in paragraph 4 of the Protocol).

Therefore, the Agreement, in its present form, cannot be considered final. There is still room for further additions and alterations in the Agreement, which would be finalised perhaps during the 13th Ministerial Conference.

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