WU Yingying

I. Introduction

The WTO negotiations on fisheries subsidies started in 2001 as mandated in the Doha Declaration.1The Doha Round negotiations were launched at the WTO’s Fourth Ministerial Conference in Doha, Qatar, in November 2001. The Doha Ministerial Declaration 2001 introduced a mandate for WTO members to negotiate on fisheries subsidies. See Doha WTO Ministerial Declaration, WT/MIN(01)/DEC/1, 14 November 2001, paras. 31～33. [hereinafter “Doha Ministerial Declaration”]The negotiation process has undergone more than a decade, while little progress has been made, especially with respect to special and differential treatment (hereinafter “SDT”) for developing members and least developed members. Despite of that, it seems to have some prospects recently.

The paper compares the issues associated with SDT for fisheries subsidies that were hotly debated in the negotiations before 2011, and those debated currently.In particular, the most controversial issues have shifted from whether developing members have access to subsidies of high seas fishing and fuel under SDT provisions, to whether SDT is indefinite or temporary and the scope of SDT. The paper believes that, with respect to SDT for fisheries subsidies, the discretion and policy space of developing members have reduced to some extent. WTO members are more willing to make commitments to refraining from fisheries subsidies. From this perspective, it seems that promising deliveries may come out.

Part II generally describes the issue of negotiation on fisheries subsidies at the WTO, and SDT for fisheries subsidies discussed in such negotiations. Part III analyzes the major issues of divergence among WTO members with respect to SDT based on the Chair’s Text 2007. Part III starts with the least controversial issue: SDT for least developed members. Then it proceeds with the moderately controversial one: whether developing members are allowed to subsidize noncommercial fishing under SDT provisions. Lastly, Part III focuses on the most controversial issue: whether developing members are allowed to subsidize high seas fishing and fuel under SDT.

Part IV explores new developments in the fisheries subsidies negotiations at the WTO. Issues are displayed in the order of the degree of controversy. The least controversial issues are prohibition of subsidies to illegal, unreported and unregulated fishing (hereinafter “IUU fishing”), and provision of transparency.Then Part IV proceeds with the moderately controversial issues: whether developing members are allowed to subsidize non-commercial fishing activities.Afterwards, it analyzes some most controversial issues, namely, whether SDT is indefinite or temporary and the scope of SDT. Part V predicts promising outcomes for fisheries subsidies negotiations at the WTO based on two dimensions: one is the changed legal positions and focuses of WTO members, and the other is political reasons. Part VI concludes that despite of the setbacks in the negotiations on fisheries subsidies, promising outcomes are possible.

II. WTO Fisheries Subsidies Negotiations and SDT

A. Negotiations on Fisheries Subsidies at the WTO

The necessity of negotiating on fisheries subsidies at the WTO can be elaborated from three dimensions. The first is the concerns arising from the severity of fisheries subsidies, the second is the appropriateness of using the WTO as a forum to address the issue of fisheries subsidies, and the third is that the current WTO rules are not sufficient to address this issue.

First, there are crucial trade, environmental and developmental concerns associated with fisheries subsidies. In the past decades, fisheries subsidies have gained worldwide attention because of their complex relation to trade, ecological sustainability and socioeconomic development.2U. Rashid Sumaila, Vicky Lam, Frederic le Manach, Wilf Swartz and Daniel Pauly,Directorate-General for Internal Policies, Policy Department: Structural and Cohesion Policies, Fisheries, Global Fisheries Subsidies, European Parliament, October 2013, at http://www.europarl.europa.eu/RegData/etudes/note/join/2013/513978/IPOL-PECH_NT(2013)513978_EN.pdf, 9 January 2017.On one hand, fisheries subsidies have potential negative impacts on marine resources and environment. The state of global fisheries resources is alarming and getting worse. Based on the analysis of assessed stocks by Food and Agriculture Organization of the United Nations (FAO),31.4 percent of fish stocks were estimated as fished at a biologically unsustainable level in 2013, i.e., over fished, and 58.1 percent were fully fished in 2013.3Food and Agriculture Organization of the United Nations (FAO), The State of World Fisheries and Aquaculture: Contributing to Food Security and Nutrition for All, Rome,2016, p. 38.“Some 87% of the fish species on the high seas were now over fished or at the point of collapse.”4Suzanne Goldenberg, Fuel Subsidies “Drive Fishing Industry’s Plunder of the High Seas”,The Guardian, at https://www.theguardian.com/environment/2014/jun/24/fuel-subsidiesdrive- fishing-industrys-plunder-of-the-high-seas, 9 January 2017.There is a consensus among most countries that subsidies play a major role in contributing to the abovementioned problems. However, governments across the world continue to provide billions of dollars in subsidies to the fisheries sector.5The World Bank, Agriculture and Rural Development: The Sunken Billions, The Economic Justification for Fisheries Reform, Washington, DC, 2009, pp. 23～24, at http://siteresources.worldbank.org/EXTARD/Resources/336681-1224775570533/SunkenBillionsFinal.pdf, 9 January 2017.Fisheries countries tend to subsidize fisheries by providing subsidies to fishing vessels construction, port infrastructure building and price support, among others, which may consequentially contribute to overfishing and overcapacity.6The World Bank, Agriculture and Rural Development: The Sunken Billions, The Economic Justification for Fisheries Reform, Washington, DC, 2009, pp. 23～24, at http://siteresources.worldbank.org/EXTARD/Resources/336681-1224775570533/SunkenBillionsFinal.pdf, 9 January 2017.The magnitude of fisheries subsidies is noticeable. Apart from environmental and resources problems, fisheries subsidies also give rise to concerns over international trade. Subsidies to the fisheries sector may distort international trade in fish and fish products, because subsidized fisheries may maintain undue advantages over the unsubsidized fisheries in other countries.

Second, the relevant regional and international rules regarding fisheries subsidies, such as regional fisheries management organization rules and the European Union (EU) rules may be not adequate to regulate fisheries subsidies,given that they are either soft laws without binding effects or regional rules without global jurisdictional application. For instance, many regional fisheries management organizations are composed of countries that share an interest in managing and conserving fish stocks in a particular region. However, each only covers a particular geographic area, and each has a particular focus on one or a group of fish species.7For instance, there are International Commission for the Conservation of Atlantic Tunas(ICCAT), India Ocean Tuna Commission (IOTC), Western and Central Pacific Fisheries Commission (WCPFC), Inter-American Tropical Tuna Commission (IATTC), Agreement on the International Dolphin Conservation Programme (AIDCP), Commission for the Conservation of Southern Bluefin Tuna (CCSBT), etc. For more information above the abovementioned RFMOs, see Regional Fisheries Management Organizations (RFMOs), at https://ec.europa.eu/ fisheries/cfp/international/rfmo_en, 9 January 2017; Regional Fisheries Management Organizations, at https://www.state.gov/e/oes/ocns/fish/regionalorganizations/,9 January 2017.Aids granted by Member States of the EU are regulated by the Treaty on European Union and the Treaty on the Functioning of the European Union regarding common rules on competition.8Articles 107～109, Section 2 (Aids Granted by States), Title VII (Common Rules on Competition, Taxation and Approximation of Laws) of the Treaty on European Union and the Treaty on the Functioning of the European Union, 2012/C 326/01, at http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A12012E%2FTXT, 9 January 2017.Nevertheless, subsidization of the fisheries sector is allowed in certain cases.9Guidelines for the Examination of State Aid to Fisheries and Aquaculture, 2008/C 84/06.Especially, the European Fisheries Fund has a budget of €4.3 billion for 2007-2013, which provides funding to the fishing industry and coastal communities mainly for policy purpose.10European Commission, Report from the Commission-Eighth Annual Report on Implementation of the European Fisheries Fund (2014), COM (2015) 662 final; European Commission, The European Fisheries Fund (EFF) (2007-2013), at http://ec.europa.eu/fisheries/cfp/eff/index_en.htm, 9 January 2017.The European Maritime and Fisheries Fund 2014-2020 was set up largely to subsidize small scale fisheries, young fishermen and local fisheries.11Regulation (EU) No. 508/2014 of the European Parliament and of the Council of 15 May 2014 on the European Maritime and Fisheries Fund (EMFF).In a nutshell, EU’s fishing policy sets constraints on fisheries subsidies on the one hand, and on the other hand, it is relatively protective towards the EU members and subsidies are still widespread.

Furthermore, some international rules address fishing directly, rather than addressing the issue of fisheries subsidies.12For instance, the 2009 Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing (PSMA) entered into force on 5 June 2016. It addresses the issue of IUU fishing, rather than subsidies to IUU fishing.For instance, the United Nations Convention on the Law of the Sea generally requires fishing countries to coordinate and to ensure the conservation of fish stocks within and beyond their EEZs. The United Nations Conference on Straddling Fish Stocks and Highly Migratory Fish Stocks adopted an agreement in 1995, providing a framework for cooperation in the conservation and management of those resources, such as establishing concrete minimum international standards in this regard.13The United Nations Agreement for the Implementation of the Provisions of the United Nations Convention on the Law of the Sea of 10 December 1982 relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks.However, they do not directly address the issue of fisheries subsides.

Third, the current WTO rules are insufficient to regulate fisheries subsidies.14No precise definition can be found for fisheries subsidies. Any subsidies that contribute to fishing and fish products can be called fisheries subsidies. The WTO is negotiating on what kind of fisheries subsidies should be disciplined. Every country has the right to subsidize.However, fisheries subsidies have caused the abovementioned problems, and countries,particularly the WTO members, recognize that members should refrain from fisheries subsidies in order to have a sustainable development.Fisheries subsidies, in general, are governed by the Agreement on Subsidies and Countervailing Measures (hereinafter “SCM Agreement”).15“The Agreement on Subsidies and Countervailing Measures (SCM Agreement) addresses two separate but closely related topics: multilateral disciplines regulating the provision of subsidies, and the use of countervailing measures to offset injury caused by subsidized imports.” See WTO, Subsidies and Countervailing Measures: Overview, at https://www.wto.org/english/tratop_e/scm_e/subs_e.htm, 8 January 2017.The SCM Agreement prohibits export subsidies, and makes domestic subsidies actionable if they cause negative effects to the interests of another member, such as injuries. However, it is quite difficult to bring actions under the SCM Agreement to challenge subsidies to fisheries, particularly, for instance, subsidies to shipbuilding and port facilities construction. The difficulty can be shown as below.

Subsidization to shipbuilding does not fall under the category of export subsidies prohibited by the SCM Agreement. Thus, challenging the subsidization to shipbuilding needs the proof of injuries to others. However, it is hard for the complaint party to demonstrate that its fishing industry suffers injuries in competition with fish producers who catch fish by using ships manufactured by subsidized shipbuilders. Essentially, benefits are directly granted to shipbuilders rather than fishermen. There is a long chain that “benefit” may go through from shipbuilders all the way to fishermen, making it hard to conduct a “benefits pass through analysis” under the SCM Agreement. In the case of subsidies to port facilities construction, apart from the problem mentioned above, subsidized port facilities are usually for the general use. Therefore, the complaint party would probably fail to meet the requirement of “specific” articulated in the SCM Agreement that actionable subsidies are those granted to specific enterprises or regions or industries.16Article 1.2 of the SCM Agreement.

Hence, new disciplines on fisheries subsidies were negotiated in the Doha Round negotiations. The Ministerial Declaration on the Doha Round Negotiation in 2001 mandated that negotiations on fisheries subsidies should be conducted under the framework of the Anti-Dumping and SCM Agreements.17Doha Ministerial Declaration, paras. 28, 31.However there was little progress until the Hong Kong Ministerial Conference produced a detailed mandate in 2005. In this conference, WTO members broadly agreed to strengthen disciplines on subsidies in the fisheries sector, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and over fishing.18Annex D, section I, para. 11 of Hong Kong Ministerial Declaration, WT/MIN(05)/DEC,adopted on 22 December 2005.Various ambitious proposals were submitted by WTO members. The Chairman of the Group of Negotiation on Rules came up with Chair’s texts in 2007 and 2011.19Draft Consolidated Chair Texts of the AD and SCM Agreements (hereinafter “Chair’s Text 2007”), TN/RL/W/213, 30 November 2007; Communication from the Chairman(hereinafter “Chair’s Report 2011”), TN/RL/W/254, 21 April 2011. Chair’s Report 2011 was provided by Chairman of the Negotiating Group on Rules on request from Trade Negotiations Committee. Chair’s Report 2011 is actually a summary of proposals from WTO members.The Chair’s Text 2007 became the draft text for further negotiation prior to 2011,and the Chair’s Report 2011 is a report on members’ divergences on issues relating to fisheries subsidies. However, new disciplines have not been concluded to date.Members are still divided on many issues.20Introduction to Fisheries Subsidies in the WTO, at https://www.wto.org/english/tratop_e/rulesneg_e/fish_e/fish_intro_e.htm, 9 January 2017.In 2011, the Doha negotiations stalled,including the negotiations on fisheries subsides.

After 2013 Bali Ministerial Conference, fisheries subsidies started to draw great attention again.21Agenda Item 1- Report by the Chairman of the Trade Negotiations Committee, Director-General’s Report at the Informal Heads of Delegation Meeting on 30 September 2016, JOB/GC/105, 3 October 2016, para. 1.11.Particularly in 2016, the United Nations’ Sustainable Development Goals target 14.6 specifies that “By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies”.22“By 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and over fishing, eliminate subsidies that contribute to illegal, unreported and unregulated fishing and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation”. Target 14.6 of Sustainable Development Goals of United Nations 2016, at http://www.un.org/sustainabledevelopment/oceans/, 9 January 2017.Much progress has been made accordingly in negotiations on fisheries subsidies. New proposals have been put forward by WTO members, such as the EU proposal,23WTO Negotiating Group on Rules, Advancing Toward a Multilateral Outcome on Fisheries Subsidies in the WTO, Submission by European Union, TN/RL/GEN/181, 20 October 2016.the submission by the Africa, Caribbean and Pacific Group (hereinafter “ACP Group”),24WTO Negotiating Group on Rules, Principles and Elements for Concluding Negotiations on Fisheries Subsidies Rules in the WTO, Submission by Rwanda on Behalf of the ACP Group (Africa, Caribbean and Pacific Group), TN/RL/GEN/182, 16 November 2016.the submission by Argentina,Colombia, Costa Rica, Panama, Peru and Uruguay,25WTO Negotiating Group on Rules, WTO Fisheries Subsidies: A Framework to Guide the Multilateral Negotiations to Eliminate Harmful Fisheries Subsidies, Communication at the Request of the Delegations of Argentina, Colombia, Costa Rica, Panama, Peru and Uruguay,TN/RL/GEN/183, 29 November 2016, para. 2.3.and the submission by the least developed countries (LDCs).26WTO Negotiating Group on Rules, LDC Group Submission on Elements for WTO Fisheries Subsidies Disciplines, Submission by Benin on Behalf of the LDC Group, TN/RL/GEN/184, 22 December 2016.The focus and the divergence have changed accordingly in the context of SDT, which will be analyzed in the following pages.

B. SDT in the Context of Fisheries Subsidies Negotiations at the WTO

SDT for developing members and least developed members can be found widespread throughout WTO rules. The WTO recognizes the need for positive efforts to ensure that the developing members, especially those that are least developed, have a share in the growth of international trade so as to facilitate their economic development.27Preamble to the WTO Agreement (The Agreement Establishing the World Trade Organization), para. 3.Such efforts can be found in some provisions of the General Agreement on Tariffs and Trade (GATT), General Agreement on Trade and Service (GATS), Agreement on Trade-related Aspects of Intellectual Property Right (TRIPS), and other agreements.28Article XVIII of GATT gives developing members the right to restrict imports. Article IV of GATS aims at increasing the participation of developing members in world trade.Article XII of GATS allows developing members and members in transition to restrict trade in services for reasons of balance-of-payment difficulties. At http://www.wto.org/english/tratop_e/devel_e/dev_special_differential_provisions_e.htm, 1 May 2014. Article 66 of the TRIPS provides LDCs with a longer time frame to implement all the provisions of the TRIPS Agreement and encourages technology transfer. At http://www.wto.org/english/tratop_e/devel_e/dev_special_differential_provisions_e.htm, 1 May 2014.The need for giving SDT to the developing and the least developed members in the context of fisheries subsidies is addressed in the Doha Declaration, which requires taking into account the importance of the fisheries sector to the developing members.29Doha Ministerial Declaration, para. 28.It is also addressed in the Hong Kong Declaration, which requires taking into account the importance of the fisheries sector to development priorities, poverty reduction, livelihood and food security concerns.30WTO Hong Kong Ministerial Declaration, WT/MIN(05)/DEC, 22 December 2005, Annex D, para. 9.Some Members have submitted proposals in detail in this regard.31Proposal for a Framework Agreement on Special and Differential Treatment, WT/GC/W/442, adopted on 19 September 2001.In 2016, Target 14.6 of the United Nations’ Sustainable Development Goals specifies that “recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the World Trade Organization fisheries subsidies negotiation”.32See Target 14.6 of Sustainable Development Goals of United Nations 2016, at http://www.un.org/sustainabledevelopment/oceans/, 9 January 2017.

Although it is agreed that developing members should be granted SDT at the WTO negotiations and other forums, deep divergences still exist among WTO members on how to provide SDT for developing and least developed members in fisheries subsidies. Several concrete issues are associated with SDT, which will be analyzed in line with their controversial degree. The controversy over SDT switched greatly after 2013. The changed controversial issues are to be elaborated and analyzed further in Parts III and IV.

III. Previous Divergence Regarding SDT in Fisheries Subsidies Negotiations

A. The Less Controversial Issue

As compared to other issues, the treatment for the LDCs is less controversial.It is generally agreed that the LDCs should have the greatest degree of flexibility under new disciplines. Some even proposed that the LDCs should be allowed an exception to all prohibitions as well as fisheries management provisions,33Chair’s Report 2011, para. 49.since it is consistent with the purpose of SDT considering the severe poverty of such countries. Apart from that, the unarguable list of LDCs in the United Nations makes it easy to figure out who is eligible as LDCs.34An updated list of LDCs prepared by the UN, at http://www.un.org/en/development/desa/policy/cdp/ldc_info.shtml, 9 January 2017. “The WTO recognizes as least-developed countries (LDCs) those countries which have been designated as such by the United Nations. There are currently 48 least-developed countries on the UN list, 36 of which to date have become WTO members.” See WTO, Understanding the WTO: The Organization,at https://www.wto.org/english/thewto_e/whatis_e/tif_e/org7_e.htm, 9 January 2017.

However, a group of WTO members, the so-called “Friends of Fish”35The “Friends of Fish” refers to a group of States including Australia, Iceland, New Zealand,Norway, Peru, Chile, the Philippines and the United States, and is formed to work on the inclusion of fisheries subsidies in the multilateral trade round. See WTO Negotiating Group on Rules, Fisheries Subsidies, Communication from Argentina, Australia, Chile, Colombia,the United States, New Zealand, Norway, Iceland, Peru and Pakistan, TN/RL/W/243, 7 October 2009, para. 2.held that LDCs should also be subject to disciplines relating to prohibited subsidies to IUU fishing and to rules concerning over fished fisheries.36WTO Negotiating Group on Rules, Fisheries Subsidies, Communication from Argentina,Australia, Chile, Colombia, the United States, New Zealand, Norway, Iceland, Peru and Pakistan, TN/RL/W/243, 7 October 2009, para. 18.And some members also raised a concern over the potential circumvention if a non-LDC member works through an LDC member to take advantage of the latter’s exemption from disciplines on fisheries subsidies.

B. The Moderately Controversial Issues

A group of members self-identified as Small and Vulnerable Economies(hereinafter “SVEs”) asked for flexibilities in policy options available to them.They proposed some new categories of subsidies, such as those to subsistence fishing, small-scale fishing or artisanal fishing. LDCs is small in numbers. The countries that cannot fall into the category of LDCs also want to pursue beneficial treatments under SDT provisions. Their arguments are mainly based on that (i)their development stage is a little above poverty but far from advanced wealth, or(ii) their fishing activities are small in terms of volume, scale, capture and boat size.

Although opposition was raised toward the introduction of new terms, such as setting the number of catches or boat size as parameters for receiving SDT, it is still promising that an agreement may be reached in this regard. That is because,first of all, all the above issues concern “small-scale fishing”; secondly, the impact of subsidies to such “small-scale fishing” is relatively small; lastly, these kinds of fishing activities are closely related to poverty reduction, local development and livelihood.

1. The Proposal for Additional Flexibilities for SVEs

This proposal seeks for some additional flexibility for SVEs37The proposed list of SVEs includes 28 members, such as Barbuda, Cuba, Dominica,Ecuador, Kenya, Jordon, Nicaragua, Panama, Uruguay, etc. See TN/RL/GEN/162, Annex 1.with respect to the proposed exemptions to the prohibited subsidies.38WTO Negotiating Group on Rules, Textual Proposal for Additional Flexibilities for Small and Vulnerable Economies under Article III of the Proposed Draft Chair’s Text on Fisheries Subsidies, Communication from the Small and Vulnerable Economies, TN/RL/GEN/162, 8 January 2010.It proposed that SVEs should be allowed to use subsidies to vessel and operation costs, since their percentage share in world non-agricultural market access products (NAMA products)39NAMA products refer to all products not covered by the Agreement of Agriculture. See A Simple Guide - NAMA Negotiations, at https://www.wto.org/english/tratop_e/markacc_e/nama_negotiations_e.htm, 9 January 2017.trade is not more than 0.1% and their percentage share of global marine wild capture is less than 1%.40Article I.1(a) and Article I.1(c) of the Chair’s Text 2007.Specifically speaking, first, the SVEs have a small share of global marine wild capture. Second, SVEs are not able to provide large amount of subsidies at this stage of their development. Third, the magnitude and impact of subsidies typically provided by SVEs is small and cannot have contributed in the past to the global problems of over fishing.41TN/RL/GEN/162, para. 3 of Part I.

Notably, the basis for the creation of the sub-category of SVEs in this proposal is disputed. The proposal based its categorization on a WTO Work Program on Small Economies, which came from the Doha Ministerial Declaration and the Hong Kong Ministerial Declaration.42Doha Ministerial Declaration, para. 35; Hong Kong Ministerial Declaration, para. 41.Nevertheless, the two declarations clearly state that the objective of the Work Program on Small Economies is not to create a subcategory of WTO Members. In this connection, the work program cannot provide a sufficient basis for creating a new categorization of SVEs in the fisheries subsidies negotiations.

The initial rationale for permitting SVEs to use subsidization will be undermined if these economies grow gradually. The members listed as SVEs will not remain small forever. It is also their proposition that they do not want to remain small forever, but currently they need to use subsidization to help increase the scale of their fisheries sectors and make them more commercial. Additionally, risk remains if the global capture is taken into account. If all of the developing members that are currently below the threshold were to increase their shares of global capture up to the threshold (1%), the members involved would cumulatively account for a very large share of total global capture, approximately 28%.43It can be estimated that they may account for 28% of the global capture if each accounts for 1% of the global capture, given that there are 28 members in the proposed list of SVEs. See TN/RL/GEN/162, Annex 1.

2. The Proposal Concerning Subsidies to Subsistence Fishing

The Chair’s Text 2007 provides that subsidies are allowed to be given to subsistence-type activities.44Subsistence-type activities refer inshore activities using simple gear, whose catch is consumed principally by the fishers and their families, and there is no major employeremployee relationships involved in such activities. See Chair’s Report 2011, para. 58, and Chair’s Text 2007, p. 89, Article III.2(a).Under that text, governments would be able to provide all forms of prohibited subsidies listed in the SCM Agreement to subsistence-type activities, which are essentially not subject to fisheries management.

One argument against subsidization to subsistence fishing is that subsidies to subsistence fishing would “incentivize backwardness”. This argument believes that poor populations should not lose access to certain subsidies just because their fishing activities have move slightly beyond subsistence level. Otherwise there will be no incentive for them to move ahead.

3. Proposal with Respect to Subsidies to Small-Scale or Artisanal Fishing

The Chair’s Text 2007 only mentions subsistence fishing; it fails to cover some types of fishing activities beyond subsistence level.45Chair’s Text 2007, p. 89.Some members were not content to use subsistence fishing as the bottom tier. They wanted to expand this bottom tier to encompass activities beyond the subsistence level, such as “artisanal”or “small-scale commercial” fisheries. However, the definitions of such activities are unclear and debated by negotiators.

Ecuador and Peru specifically asked for including artisanal fisheries under SDT.46WTO Negotiating Group on Rules, Proposal on Fisheries Subsidies Special and Differential Treatment Artisanal Fisheries-Article III.2(A), Communication from Ecuador and Peru, TN/RL/GEN/172, 19 January 2011.They proposed that “artisanal fishing” should meet all the following conditions:

(1) activities are carried out on their own behalf by fish workers, on an individual basis, which may include family members, or organized in associations,micro-enterprises or other forms of small producer organizations; (2) the fishery product does not go beyond a small-scale trade and is mainly destined for direct human consumption; (3) the vessels are not greater than 15 metres in length overall; (4) the operations are carried out using simple fishing gear,tools and techniques and involve predominantly manual labour; and (5) nodestructive fishing practices are used.47TN/RL/GEN/172, Article III.2(a) of its proposed text.

It can be seen that the proposed definition of “artisanal fisheries” includes the following elements: (a) the type of organizations that are engaged in fishing;48Apart from “associations”, they also added “micro-enterprises”, meaning a form of business organization with a limited number of workers, and “other forms of small producer organizations”, which would cover non-traditional types of organization. See TN/RL/W/243.(b)the purpose of artisanal fishing;49Artisanal fishery products are “mainly destined for direct human consumption”, which means for direct feeding of the population, as opposed to those used to manufacture fishmeal and oil. See TN/RL/W/243.(c) the size and physical state of vessels;50They suggested that the size of a vessel should be “15 meters in length”, and fishing operations be “carried out using simple fishing gear, tools and techniques and involve predominantly manual labor”. See TN/RL/W/243.and (d)non-existence of destructive fishing.51“Destructive fishing practices” refer to those practices recognized as such in Article 8.4.2 of the Code of Conduct for Responsible Fisheries, FAO. At http://www.fao.org/docrep/005/v9878e/v9878e00.htm, 9 January 2017.

Ecuador and Peru, invoking the United Nations Environment Program(UNEP) report, highlighted the importance of artisanal fishing to food security, the development of local communities and poverty reduction.52Artisanal fishing provides direct and indirect employment for tens of millions of people and accounts for 90 percent of all fishing jobs worldwide, even though it represents barely a quarter of the world catch. See Anjavon Moltke ed., Fisheries Subsidies, Sustainable Development and the WTO, London: Earthscan Publisher, 2010, p. 213.Small-scale or artisanal fishing activities, as opposed to highly industrialized fleets fishing,53According to the UNEP report, the highly mechanized industrialized fleets shall bear the main responsibility and be the focus of ban. See Anjavon Moltke ed., Fisheries Subsidies,Sustainable Development and the WTO, London: Earthscan Publisher, 2010, pp. 213～215.deserve exemptions in their views.

Specifically, Ecuador and Peru wanted to be allowed to grant subsidies to activities, such as the provision and maintenance of basic infrastructure, the improvement of fishing vessels, and training for fishermen, as well as programs aimed at enhancing the management of such fisheries. They therefore requested flexible treatment in this regard, which also implies that they may flexibly lay down criteria or conditions governing the eligibility for a permitted subsidy. In addition,permitted subsidies shall have no impact or no more than a minimal impact on trade, and be consistent with the goal of sustainable development. The subsidies that have undesirable effects, such as depleting the fisheries resources, should be excluded. With regard to the geographical scope of fishing activities, they proposed that artisanal fishing should be operated within “waters under the national jurisdiction of the Member States”, including exclusive economic zones (EEZs).

However, Argentina, Chile, Costa Rica, Egypt and Uruguay were against the use of concepts of artisanal fisheries and small-scale fisheries, due to the fact that Members had not reached agreement as regards to their definitions.54WTO Negotiating Group on Rules, Special and Differential Treatment, Communication from Argentina, Chile, Costa Rica, Egypt, and Uruguay, TN/RL/GEN/173/Rev.2, 4 March 2011.Instead,they agreed on giving a special consideration to subsistence activities, which were essential for a great number of people in developing countries.

In contrast, Brazil, China, Ecuador, Mexico, and Venezuela asked for the exception for small-scale and artisanal fisheries, perceiving that it was feasible to define these fisheries.55WTO Negotiating Group on Rules, Fisheries Subsidies, Communication from China, Brazil,Mexico, Ecuador, and Venezuela, TN/RL/W/241/Rev.1, 16 October 2009.They favored small-scale activities, while opposing the building of exceptions based on static parameters such as boat size or the area of capture.

The group of “Friends of Fish” viewed that flexibility provided to LDCs or some developing countries should not open a door to circumvention of the general prohibition of subsidies.56WTO Negotiating Group on Rules, Fisheries Subsidies, Communication from Argentina,Australia, Chile, Colombia, the United States, New Zealand, Norway, Iceland, Peru and Pakistan, TN/RL/W/243, 7 October 2009.Some developed members suggested addressing subsidization of small-scale activities via general exceptions and/or deminimis provisions with a higher threshold for developing members, making it permissible for all Members, rather than exclusively for developing members to subsidize such activities. However, it remains controversial about the need to subsidize small-scale fisheries for developed members.

4. Summary

Why did the delegates suggest different types of subdivisions among WTO Members? Is there any substantial distinction among them, i.e., the subdivision of SVEs, the subdivision of subsistence fishing, and the subdivision of smallscale or artisanal fishing? The essential distinction is the different coverage of each subdivision depending on their definitions or parameters chosen. It makes a difference given that a WTO member may or may not have access to the beneficial treatment according to a particular subdivision, depending on the definitions of the subdivision. A wide range of parameters for building exceptions was proposed during the negotiations.57Chair’s Report 2011.SVEs proposed to use the percentage share of world NAMA trade and percentage share of global marine wild capture as parameters.The Chair’s Text 2007 mentioned the use of the size of boat (additional exceptions are given to boats not greater than 10 meters in length) as a parameter.58Article III.2(b)(2) of Chair’s Text 2007.However,China, Brazil, Ecuador, Mexico and Venezuela opposed to the use of boat size or area of capture as parameters for building exceptions since boat size or any other physical aspect were static parameters which did not reveal much about the capability of the vessel.59TN/RL/W/241/Rev.1.They argued instead that parameters such as catch per capita, or catch per fisher could show that developing members made less impact on global resources than developed members did. In addition, they held that some larger-scale fisheries were still in a sustainable manner, which should not be precluded by disciplines. Generally, small fishing members with low percentages of the total global catch favour static parameters such as catch or size of boat since their catch is small. In contrast, large fishing members prefer dynamic parameters such as capture per capita due to the large number of their catch.

It can be seen that the entire negotiation is fraught with pursuit of national interests by different groups of countries, which proposed different levels of tiers for fishing activities. The countries that cannot fall into category of LDCs sought for the sub-category of SVEs. Those discontent with subsistence fishing and with interests mainly lying in the tier beyond this type of fishing, asked for exemptions for small-scale and artisanal fisheries. Those with interests predominately in high seas fishing proposed to maintain subsidies to high seas fishing and fuels under SDT, presenting the most controversial issues as discussed below.

C. The Most Controversial Issues

1. Subsidies to High Seas Fishing

The Chair’s Report 2011 states that one of the most difficult issues in the SDT discussion is whether developing members should be allowed to subsidize fishing activities on the high seas. The Chair’s Text 2007 provides that no subsidization on high seas fishing is allowed, which means that developing members cannot subsidize high seas fishing under SDT either. However, Brazil, China, Ecuador,Mexico, and Venezuela proposed that developing members should be allowed to grant subsidies to high seas fishing.60TN/RL/W/241/Rev.1.

The countries above raised the following arguments primarily out of their significant interests in high seas fishing. First, they perceived that fish stocks in EEZs were facing risk of depletion. As a result, countries were expanding fishing activities to the high seas to reduce the pressure on their EEZs.61Chair’s Report 2011, para. 76.Allowing subsidies to activities only within a Member’s own EEZ would put undue pressure on the vulnerable resources there, particularly spawning stocks and juveniles.

Second, these countries held that migratory stocks could leave and enter the high seas. In reality, the distinction between EEZs and the high seas was artificial.It is not realistic to expect fisher-folk to stop expanding their activities into international waters just because they had received a subsidy for fishing within the EEZ. Straddling and highly migratory stocks fished in a given member’s EEZ are subject to quotas set by Regional Fisheries Management Organization (hereinafter“RFMOs”), and those quotas cover the stocks both inside and outside the EEZs.62Chair’s Report 2011, para. 77.Thus, the quota-holder should have the right to fish a stock when it was on the high seas. This raises the issues concerning the interpretation and implementation of quota rules laid down by the RFMOs and the cooperation between the RFMOs and the WTO.

Third, these countries argued that the high seas were open to all States.

However, many delegations opposed to subsidization to high seas fishing,considering that the high seas were beyond the limits of national jurisdiction, where the ecosystem was vulnerable. Opponents asserted that each country’s fisheries management was responsible for the conservation of the fish stocks within its EEZs. Expanding subsidies to fishing on the high seas was not a sound measure to release pressures within EEZs. Otherwise, the high seas would experience a “tragedy of the commons”.63The Tragedy of the High Seas, The Economist, 22 February 2014, at http://www.economist.com/news/leaders/21596942-new-management-needed-planets-most-important-commonresource-tragedy-high, 9 January 2017.

It gives rise to an equity-based argument, which demands that the latecomers should be allowed to use whatever means to catch up with the developed members, which have exploited the fisheries resources before the latecomers arrive. Latecomers allege that all countries have the right to fishery resources in the high seas under international law.64Chair’s Report 2011, paras. 76 and 79. This argument can find its foundations from Grotius,who argued four centuries ago, that the seas were res communis and all States were entitled to sovereign equality within the high seas. See Anastasia Telesetsky, Going Once, Going Twice – Sold to the Highest Bidder: Restoring Equity on the High Seas through Centralized High Seas Fish Auctions, LOSI Conference Papers, Seoul, Korea, May 2012, p. 9, footnote 27, at https://www.law.berkeley.edu/files/Telesetsky-final.pdf, 16 March 2017.Developing members are latecomers to high seas fisheries, and should have the right to employ every means to catch up with the developed members. It is impossible for the fishing fleet of developing members without subsidies to overcome the cost advantages of the fishing fleets of developed members. In this context, it is unfair to deny developing members the right to use subsidies, since developed members have incentivized the development of their high seas fishing through subsidization in the past decades, which also contributed to overfishing of high seas stocks. There is a dilemma here, because both developing and developed members are reluctant to make a compromise.

Under the WTO mechanisms, it is up to a country to declare its own developing status, which is another mechanism causing the controversy above.Brazil, China, Korea, Mexico, Russia, Indonesia, Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and Thailand announced that they were developing members.65Within the WTO, there are no clear definitions for “developed” and “developing” members.Members self-announce whether they are “developed” or “developing” members. However,other members may challenge the decision of a member to make use of provisions available to developing members. See WTO Definition: Who Are the Developing Countries in the WTO?, at https://www.wto.org/english/tratop_e/devel_e/d1who_e.htm, 9 January 2017;WTO General Council, Formation of Asian Group of Developing Members, Communication from Pakistan, WT/GC/COM/6, 27 March 2012, footnote 1 of this communication lists a group of members self-declared as developing members, including Singapore.However, several members among them are top fishing countries.66Global Comparison, at http://www. fisheries.is/economy/ fisheries-impacts/global-compariso n/, 9 January 2017.Data show that EU ranks top one followed by Japan, China, USA,Russia and Indonesia in terms of fisheries subsidies. Specifically, the subsidies granted by EU, Japan and China account for 26%, 21% and 20.7% of the total global fisheries subsidies, respectively.67U. Rashid Sumaila, Vicky Lam, Frederic le Manach, Wilf Swartz and Daniel Pauly,Directorate-General for Internal Policies, Policy Department: Structural and Cohesion Policies, Fisheries, Global Fisheries Subsidies, European Parliament, October 2013, p. 32,figure 9, at http://www.europarl.europa.eu/RegData/etudes/note/join/2013/513978/IPOLPECH_NT(2013)513978_EN.pdf, 9 January 2017.Large developing members, which are also top fishing countries, can continue to subsidize high seas fishing activities under SDT. Giving preferential treatment for large members with mass fishing capacity will gives rise to concerns that it may undermine the purpose of SDT. Quite interestingly, China was categorized as a developed country in the governmental and research reports prepared by some nations and international organizations.68U. Rashid Sumaila, Vicky Lam, Frederic le Manach, Wilf Swartz and Daniel Pauly,Directorate-General for Internal Policies, Policy Department: Structural and Cohesion Policies, Fisheries, Global Fisheries Subsidies, European Parliament, October 2013, p. 32,figure 8, at http://www.europarl.europa.eu/RegData/etudes/note/join/2013/513978/IPOLPECH_NT(2013)513978_EN.pdf, 9 January 2017.

It is not surprising that Brazil, China, Mexico and Venezuela are proponents of subsidization to high seas fishing under SDT, given that their main interests lie in high seas activities, and they also have the ability to give large amount of subsidies to such activities. However, it is a little surprising that Ecuador, which perceives itself as an SVE, also supported subsidization to high seas fishing. Notably,although Brazil, China, Mexico and Venezuela’s main interests lie in high seas activities, they are actively supporting the proposal of SVEs. This phenomenon can be explained, partially, by the WTO’s consensus mechanism, which requires that no decision should be made unless a consensus is reached among all the members. In this context, there is potential room for a WTO member to trade off its votes to gain support for its proposals. In other words, members are trying to take advantage of the WTO decision making system for their own interests. From a normative standpoint, it, on the one hand, makes negotiations more likely to conclude agreements; one the other hand, it inevitably allows compromises, which may undermine the purpose of new disciplines on fisheries subsidies.

2. Fuel Subsidies

Fuel subsidies were debated most fiercely among all types of fisheries subsidies, since this type of subsidies related not only to SDT, but also to general prohibition.69Chair’s Report 2011, para. 73.Given that high seas activities are highly contingent on the supply of fuel, fuel subsidies account for a large percent of the total subsidies to high seas fishing.70Suzanne Goldenberg, Fuel Subsidies “Drive Fishing Industry’s Plunder of the High Seas”,The Guardian, 24 June 2014, at https://www.theguardian.com/environment/2014/jun/24/fuel-subsidies-drive- fishing-industrys-plunder-of-the-high-seas, 9 January 2017.If subsidies to high seas fishing are allowed under SDT but subsidies to fuel are prohibited, benefits arising from subsidization to high seas fishing would be greatly reduced. In contrast, if subsidies to high seas fishing are prohibited but subsidies to fuel are allowed, the effect of conserving fish stock would be tremendously mitigated. In other word, these two types of subsidies are closely related to one another. Additionally, many delegations did not see any convincing developmental rationale for allowing fuel subsidies under SDT.71Chair’s Report 2011, para. 73.

IV. Current Divergence Regarding SDT in Fisheries Subsidies Negotiations

A. The Less Controversial Issues

Progress has been made in WTO negotiations on fisheries subsidies since 2013. The focuses of these negotiations have also changed. Members recognize that the following issues should be included and covered in negotiations: subsidies linked to IUU fishing, transparency issue, and SDT. Hence, the less controversial issues primarily include prohibition of IUU fishing, provision of transparency, and provision of treatment accorded to LDCs.

1. Prohibition of Subsidies to IUU fishing

The EU proposed to eliminate subsidies that contribute to IUU fishing, and to refrain from introducing new such subsidies. For instance, the EU proposal, in its Article 2.1, proposes a prohibition of subsidies that contribute to IUU fishing,which would apply to operators whose vessels are included in the subsidizing country’s IUU-vessel list and/or that of a RFMO.72WTO Negotiating Group on Rules, Advancing Toward a Multilateral Outcome on Fisheries Subsidies in the WTO, Submission by European Union, TN/RL/GEN/181, 20 October 2016, p. 2 and Article 2.1.This prohibition of subsidies to IUU fishing is applicable to all members with no exceptions under SDT.

The submission by the Africa, Caribbean and Pacific Group (also called the“ACP Paper”) proposes to prohibit subsidies to IUU fishing, saying that “prohibited subsidies [included] subsidies provided to vessels or operators engaged in illegal,unreported and unregulated (IUU) fishing.”73WTO Negotiating Group on Rules, Principles and Elements for Concluding Negotiations on Fisheries Subsidies Rules in the WTO, Submission by Rwanda on Behalf of the ACP Group (Africa, Caribbean and Pacific Group), TN/RL/GEN/182, 16 November 2016, p. 3,para. 5.1.This prohibition is also applicable to all members without exceptions under SDT. The Joint Paper from Argentina,Colombia, Costa Rica, Panama, Peru and Uruguay also proposes to prohibit subsidies to IUU fishing subject to a transition period for developing members under SDT, i.e., to eliminate subsidies to IUU fishing by 2020, and cancel SDT in this regard after 2020.74WTO Negotiating Group on Rules, WTO Fisheries Subsidies: A Framework to Guide the Multilateral Negotiations to Eliminate Harmful Fisheries Subsidies, Communication at the Request of the Delegations of Argentina, Colombia, Costa Rica, Panama, Peru and Uruguay,TN/RL/GEN/183, 29 November 2016, para. 2.3.The LDC Group proposes to prohibit subsidies to IUU fishing, which should have the same meaning as provided by FAO.75WTO Negotiating Group on Rules, LDC Group Submission on Elements for WTO Fisheries Subsidies Disciplines, Submission by Benin on Behalf of the LDC Group, TN/RL/GEN/184, 22 December 2016, para. 3.1.b, and footnote 3.

2. Transparency Issue

The abovementioned proposals all recognize that transparency should be a component of the new disciplines on fisheries subsidies.76TN/RL/GEN/181, p. 1 and Article 3; TN/RL/GEN/182, para. 5.3; TN/RL/GEN/183, para.2.3; TN/RL/GEN/184, para. 4.1.However, some members argued that transparency requirement should be proportionate to the capacity of developing members, and should not be burdensome for developing members,especially LDCs.77TN/RL/GEN/182, para. 5.3; TN/RL/GEN/184, para. 4.1.

B. The Moderately Controversial Issue: Subsidies to Subsistence Fishing and Artisanal Fishing and the Definitions Thereof

The EU proposal gave an explainable definition of the term “subsistence fishing” in footnote 5: “the term ‘subsistence fishing’ refers to fishing activities undertaken by an individual household for consumption by the members… as opposed to fishing activities undertaken for commercial purposes. Nevertheless,part of the fish caught can be sold or exchanged for other goods or services.”78TN/RL/GEN/181, footnote 5.That is to say, EU views subsistence fishing as non-commercial activities. The EU further proposed that the provision concerning prohibition of certain subsidies contributing to overcapacity should not apply to subsidies granted or maintained by developing and least developed countries for fishing vessels of less than 10 meters which were used for subsistence fishing.79TN/RL/GEN/181, Article 4.1.

The ACP paper mentions “artisanal, small scale, subsistence fishing” in the context of SDT in a sense that developing countries should be allowed to subsidize “coastal fishing activities related exclusively to the artisanal, small scale, subsistence and livelihood of the fishermen and their families within the Member’s territorial waters”.80TN/RL/GEN/182, para. 4.2.However, the ACP Paper doesn’t give any definition of the terms “artisanal, small scale, subsistence fishing.” The undefined terms will probably encounter demands for clarification. The Joint Paper also mentions the term “artisanal fisheries” in the context of SDT, and views that there is a need to define the term.81TN/RL/GEN/183 para. 2.3.

Several observations and predictions can be made here. First, some members will ask for clear definition of the term “artisanal fishing”, and some will doubt this concept, asserting that it may undermine the purpose of SDT. Proponents for allowing developing members to subsidize artisanal fishing are crucial for some developing members. Second, members will probably either negotiate on the definition of artisanal fishing and other concepts, or leave them undefined purposely for the sake of reaching agreement in the end. In other words, some members may be willing to conclude an agreement in the end if the definitions of some terms are left undefined with vagueness, since vagueness provides discretion for interpretation. Therefore, the definitions of terms, such as “artisanal fishing”,are not the crucial controversial issues, but the moderately controversial ones.

C. The Most Controversial Issue

It is recognized that SDT is an integral part of new fisheries subsidies disciplines. However, it remains unclear how to provide SDT exactly, which is the most controversial issue in current negotiations on fisheries subsidies. Two sub-issues will be explored here. One is whether developing members are allowed to some exceptions under SDT indefinitely, or SDT is merely temporary and all members should be subject to the same disciplines in the end. The other is about the scope of SDT.

1. Whether SDT Is Indefinite or Temporary

The EU proposal, the ACP Paper, and the LDC Group Submission provide that some exceptions under SDT are indefinite. In contrast, the Joint Paper, relying on the approach adopted by the Trade Facilitation Agreement, makes exceptions available under SDT temporary, and all members will be subject to the same rules in the end after the expiration of SDT.82TN/RL/GEN/181, p. 3, Article 4; TN/RL/GEN/182, p. 3, para. 5.3; TN/RL/GEN/183, pp.2～3; TN/RL/GEN/184, p. 2, para. 5.The Joint Paper, taking the approach resembling the one adopted by the Trade Facilitation Agreement, categorizes legal provisions in an agreement into category A, B and C. Legal provisions in Category A are “to be implemented by the time the Agreement enters into force”,legal provisions in Category B are “to be implemented after a transitional period following the entry into force of the Agreement”, and legal provisions in Category C are concerning a scheme of cooperation aiming “to help Members to acquire capacity building in the form of technical assistance.”83TN/RL/GEN/183, p. 3, para. 2.3.It means that developing members do not enjoy indefinite exceptions under SDT, but would be subject to the same rules as developed members after the expiration of the transitional period or upon the receipt of technical assistance. The approach of categorizing legal provisions into different types, which are subject to different conditions regarding implementation, makes the Trade Facilitation Agreement successful to some degree, given that this agreement is the only agreement concluded as a result of Doha Negotiation to date.84For more information about the Trade Facilitation Agreement, see the WTO website, at https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm, 9 January 2017.

However, the approach proposed in the negotiations on fisheries subsidies would probably face strong opposition from developing members, especially LDCs and Africa countries. They may argue that, first, such a temporary application of SDT is not compatible with the spirit of SDT. Second, a transitional period is not enough for LDCs. Third, subsidies to subsistence fishing and artisanal fishing should be allowed indefinitely for LDCs, given that developing members have legitimate needs for food security and poverty reduction under SDT. Additionally,the method of the Trade Facilitation Agreement allows each member to determine the specific provisions under category A, B or C itself, which would probably raise controversies. For instance, separate negotiations on transitional periods may complicate and delay the whole negotiation process, since such negotiations are time consuming.

2. The Scope of SDT

Theoretically, SDT can be provided based on the types of fishing activities.For instance, subsidies to artisanal fishing are proposed to be allowed under SDT.SDT can also be provided based on jurisdiction. For instance, the ACP Paper and LDC Group Submission propose that under SDT, disciplines should not apply to subsidies to fishing activities, which exclusively exploit domestic fish stocks whose ranges are confined to the members’ EEZs.85TN/RL/GEN/182, para. 4.2; TN/RL/GEN/184, para. 2.2.b.In other words, it proposes that developing members should be allowed under SDT to subsidize fishing activities which occur in the member’s EEZs. However, questions may arise regarding the distinction between fishing within EEZs and high seas fishing.86See Section III.C.1 of this paper.Also, some members may concern that allowing large developing members to subsidize their large-scale or industrial fleets in their EEZs would undermine the spirit of SDT.

V. Predictions of Promising Outcomes Based on Changed Legal Focuses and Political Reasons

It is predicted that to conclude a new agreement on fisheries subsidies is promising. This prediction is made from two dimensions: the changed legal positions, and some political reasons.

A. Changed Legal Focuses

Observations can be made from the analysis of issues above. Firstly, WTO members reached much more agreement, and the policy space proposed for all members was reduced greatly. Members gradually came to agree to the disciplines on fisheries subsidies that contribute to overcapacity or overfishing, to prohibit subsidies to IUU vessels/ fishing, and to provide transparency and SDT. Apart from that, members are solely negotiating on exceptions for developing members under SDT, rather than general exceptions for all members, which were raised at the very beginning of the negotiations on fisheries subsidies.87Chair’s Report 2011, p. 46, para. 4; “General exceptions” are also written into the Chair’s Text 2007, see Chair’s Text 2007, pp. 88～89, Article II.Hence, policy space proposed for all members was reduced to a large extent.

Secondly, the overall discretion and policy space under proposed SDT for developing members is also reduced, which can be perceived in the shift of the most controversial issues. There is not so much discussion over prohibiting subsidies to high sea fishing or fuel subsidies, or whether such subsidies should be allowed under SDT. Rather, the most controversial issues become whether SDT is indefinite or only temporary with transitional periods, and whether developing members should be allowed under SDT to subsidize fishing activities carried out in their EEZs. The fact that the proposal for allowing developing members to subsidize high seas fishing under SDT is no longer on the negotiation table indicates that, stricter rules will be developed concerning SDT for developing members.

Thirdly, the traditional assertion that developed members have already exploited and benefited from subsidization to fisheries, hence developing members should not be deprived of the right to do the same, is neither of many merits, nor frequently quoted. The reason might be that members share a common goal to preserve fisheries stocks and protect the environment. Meanwhile, no member should be forced to do what beyond its capacity, therefore technical assistance should be given to developing members for building their capacities. Most importantly, SDT is not designed to undermine the common goal of preserving fisheries resources and protecting environment, which, however, would be derogated by allowing developing members to subsidize high seas fishing. Actually,SDT is intended to allow developing members, for the purpose of poverty reduction and development, to receive technical assistance and be exempted from certain prohibition of fisheries subsidies.

The mechanism of self-identification as developing members causes controversies over the application of SDT in the early stage of negotiations. However,such controversies greatly diminished recently. This is partially due to the reduced discretion and policy space provided under SDT. When the discussion on SDT focused on whether developing members were allowed to subsidize high seas fishing and fuel, it raised remarkable concern, given the disputable status of some members like Brazil, China, Mexico and Russia, which were self-identified as developing members but were also large fishing countries with big subsidizing capability. Due to changes of the most controversial issues, discretion and policy space provided for developing members under SDT is reduced. Hence, developed members do not have much concern about the self-declaration with respect to the developmental status.

Lastly, the role played by the strategy of linkage has changed over time. The Doha Declaration organizes work on the negotiations and provides the principle of “single undertaking”.88Doha Declaration, para. 47.“Single undertaking” means that “every item of the negotiation is part of a whole and indivisible package and cannot be agreed separately.”89How the Negotiations Are Organized?, at https://www.wto.org/english/tratop_e/dda_e/work_organi_e.htm, 9 January 2017.In other words, “nothing is agreed until everything is agreed.”90How the Negotiations Are Organized?, at https://www.wto.org/english/tratop_e/dda_e/work_organi_e.htm, 9 January 2017.In addition, one procedure of lawmaking and negotiations at the WTO is that a new agreement cannot be concluded unless each WTO member gives its consent. It implies that the minority may also block rule making by exercising the holdout power. Considering the “single undertaking” and “consensus” rules in the WTO negotiations, including the negotiations on fisheries subsidies, the strategy of linkage is possible. This strategy could partially explain the slow pace of negotiations on fisheries subsidies. Specifically, in negotiations, there are many issues to be discussed and negotiated. A member may accept one provision which is not favorable to it in exchange for another provision that is favorable to it. To that end, trade-offs are possible. On the one hand, such trade-offs and holdout power make the negotiation more complex. On the other hand, such holdout power and trade-offs can, to some extent, facilitate the bargaining, making it more likely to conclude new agreements.

However, linkage is less likely to occur nowadays due to fewer issues on the table for negotiations. The absence of linkage creates a political friendly environment for negotiations, and makes it easy to conclude an agreement on fisheries subsidies stand-alone. Some members oppose to link the negotiations on fisheries subsidies to other negotiations, such as those on the trade remedy rules regarding countervailing and anti-dumping duties.91WTO Members Engage on New Fisheries Subsidies Proposals, at https://www.wto.org/english/news_e/news16_e/fish_09dec16_e.htm, 9 January 2017.Despite of that, some members still insist on linking negotiations on fisheries subsidies with negotiations on trade remedy rules.92Chair Cites Broad Support for Outcome on Fisheries Subsidies at 2017 Ministerial Conference, at https://www.wto.org/english/news_e/news16_e/rule_17nov16_e.htm, 9 January 2017.

B. Political Reasons

First, the United Nations and its decisions play a significant role in the negotiations on fisheries subsidies at the WTO. Target 14.6 of the United Nations’Sustainable Development Goals requires to prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to IUU fishing and refrain from introducing new such subsidies by 2020.93Target 14.6 of Sustainable Development Goals of United Nations 2016, at http://www.un.org/sustainabledevelopment/oceans/, 9 January 2017.This target has been mentioned in all the latest submissions, including the EU proposal, the ACP Paper, the Joint Paper, and the LDC Group Submission.94TN/RL/GEN/181, p. 1; TN/RL/GEN/182, p. 2, para. 3.1; TN/RL/GEN/183, p. 1, para. 1.1;TN/RL/GEN/184, p. 1, para. 1.4.This is a good example of positive interaction among different international organizations. The recognition and awareness of the United Nations is transformed into the WTO’s. Although some members may question the connection between the United Nations mandate and the WTO mandate, almost all members welcome the reference to the United Nations’ Sustainable Development Goals in the WTO negotiations.95Chair Cites Broad Support for Outcome on Fisheries Subsidies at 2017 Ministerial Conference, at https://www.wto.org/english/news_e/news16_e/rule_17nov16_e.htm, 9 January 2017.Hence, the political willingness expressed in the United Nations is more likely to play a significant role in the negotiations at the WTO.

Second, there is political pressure from Ministerial Conferences of the WTO.The Ministerial Conference of the WTO meets every other year. The coming 11th Ministerial Conference is to be held in December, 2017. The 11th Conference intends to have some positive or prospective deliveries. The chair of the WTO Negotiating Group on Rules “asked delegations to engage on all issues with open minds and a problem-solving attitude in order to reach substantive outcomes at MC11.”96Chair Cites Broad Support for Outcome on Fisheries Subsidies at 2017 Ministerial Conference, at https://www.wto.org/english/news_e/news16_e/rule_17nov16_e.htm, 9 January 2017.Hence, members all hope that the 11th Ministerial Conference may have deliveries with respect to fisheries subsidies.

Third, running in parallel with the negotiations on fisheries subsidies at the WTO, several members also initiated plurilateral negotiations on fisheries subsidies, including Argentina, Australia, Canada, China, Colombia, New Zealand,Norway, Papua New Guinea, Peru, Singapore, Switzerland, Uruguay, and the U.S.97Joint Statement Regarding Fisheries Subsidies, in Washington, D.C., at https://ustr.gov/sites/default/ files/09142016_STATEMENT_joint_statement_ fisheries_partners_FINAL.pdf,9 January 2017; WTO Members Engage on New Fisheries Subsidies Proposals, at https://www.wto.org/english/news_e/news16_e/fish_09dec16_e.htm, 9 January 2017.The members initiating such plurilateral negotiations also invite other interested members to participate in their negotiations, which put pressure on the negotiations on fisheries subsidies at the WTO. The likelihood of concluding a plurilateral agreement on fisheries subsidies is low, due to the free rider problem associated with disciplines on fisheries subsidies. The purpose of conserving fish resources and protecting environment will be tremendously compromised, if the number of countries which made their commitments in this regard is small. Anyway, the pressure from such plurilateral negotiations plays a positive role in pushing the WTO negotiations to reach an agreement.

VI. Conclusion

The negotiations on fisheries subsidies at the WTO have been underway for more than a decade. Although the process is slow and even was stalled at some moment, promising outcomes are possible. The paper made the following predictions based on the analysis of the changed focuses of controversial issues:

First, the members gradually reached a consensus over the treatment of LDCs,along with the provision of transparency and prohibition of subsidies to IUU fishing.

Second, although whether to allow developing members to subsidize their artisanal or small-scale fishing, and how to define artisanal or small-scale fishing remain moderately controversial issues, it is possible to have new rules developed in this regard, purposely leaving the definitions of some terms vague. Besides, the moderately controversial issues are about the demand of “small scale fishing”,no matter in the form of subsistence fishing or artisanal fishing. It all concerns reducing poverty and providing a basic livelihood for local communities. In this connection, it would not be strongly opposed by developed members.

Third, the most controversial issues have shifted from whether developing members should be allowed to subsidize high seas fishing and fuel, to whether such members should be allowed to enjoy exceptions under SDT indefinitely,and whether they can subsidize fishing activities carried out within their EEZs.Such shift indicates that much stricter rules on fisheries subsidies are likely to be developed and members are willing to make more commitments in the context of SDT.

Apart from the legal analysis mentioned above, three political reasons make the author believe that a promising outcome for the negotiations on fisheries subsidies is possible. One is about the United Nations’ Sustainable Development Goals that set deadlines for making some commitments. The second one is the political pressure from the WTO Ministerial Conferences, which intend to yield better outcomes in the negotiation on fisheries subsidies. The third one is the plurilateral negotiation on fisheries subsidies, which puts some pressure on the multilateral negotiations on fisheries subsidies at the WTO.

Nevertheless, it has to be admitted that it is hard to make precise predictions concerning the outcomes of the negotiations, given that the openness of the WTO negotiations to the public is limited. Each member is pursuing its own interests.Progress cannot be made if members are not willing to make compromises.