From fishing subsidies to agriculture: this is what dominated day three at the WTO

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Faced with severe headwinds and obstacles stacked against the 12th Ministerial Conference of the World Trade Organization (MC12), ending without even a single outcome, the Organization’s Director General, Ngozi Okonjo-Iweala, proposed an extension of the summit decision meeting in Geneva on the third day of the meeting.

This appears to be a desperate move by the WTO chief as member countries stick to their entrenched positions, signaling that a “no solution” scenario is far better than going home with a “solution”. unfavorable”.

This is why the Director-General called on members to make an extra effort to find convergence at MC12 on the various issues on which conflicting positions were held, including a long-awaited agreement on the text of fisheries-related agreements, dealing in particular with the fight against “harmful subsidies”. ” for the sector, as well as texts relating to agriculture.

With less than 24 hours to go until MC12 is scheduled to close, the chief executive told Heads of Delegation (HoD) meeting on Tuesday that the good news is “progress is being made but it takes a bit more work and more time”. . The bad news is that we’re running out of time.

The thematic sessions on fisheries subsidies and agriculture were not marked by even the minor degree of flexibility and restraint expressed by members in the previous day’s thematic sessions on the WTO’s response to the pandemic. , including intellectual property (IP) response, and on trade and food security.

Timur Suleimenov, First Deputy Chief of Staff to the President of Kazakhstan and Chair of MC12, pointed out that “members now know what is feasible, what needs more time for discussion and what is not possible. Any attempt to delay the last 22 hours of this conference only increases the chances that we will all go home empty-handed.

Fishing: India refuses the bait

A total of 67 members spoke at the thematic session on fisheries, which was preceded by a decision to introduce a “bait” in the form of a fisheries funding mechanism to help developing countries developing and less developed.

The text of the draft agreement sets out elements that have caused developing and underdeveloped countries to erupt in protest. The main challenge relates to Article 3 on subsidies contributing to illegal, unreported and unregulated fishing, which states that “no Member shall grant or maintain a subsidy to a vessel or operator engaged in illegal, unreported and unregulated (IUU) fishing or fishing-related activities”. IUU fishing support activities.

Photo courtesy of WTO

The next major dispute relates to Article 5 of the agreement, which deals with subsidies contributing to overcapacity and overfishing, since its sub-clauses provide for a zero subsidy clause for the construction, acquisition, modernization, the renovation or improvement of vessels, the purchase of machinery and equipment for vessels (including fishing gear and engine, fish processing machinery, fish detection technology, refrigerators or machinery for sorting or cleaning fish), purchase/cost of fuel, ice or bait, personnel costs, social charges or Insurance.

Countries such as India have vehemently opposed the entire draft agreement, also due to the presence of sub-clauses prohibiting subsidies in the form of income support to ship operators or the workers they employment, fish price support, maritime support and vessel or fishing losses. Activities.

They argue that subsidies such as income and livelihood support during the fishing-free season for the regeneration of fish stocks and the provision of social safety nets to socially disadvantaged fishing communities do not contribute to overfishing and contribute rather to reducing the vulnerabilities of the poor. fishing communities.

Indian Commerce Minister Piyush Goyal at the meeting, armed with data, attacked the text. He said: “Many countries in both hemispheres have allowed their gigantic industrial fleets to exploit and plunder the riches of the ocean in recent decades, leading to highly unsustainable fishing.”

In a vigorous counter-challenge, he further stressed that “common but differentiated responsibility” and the “polluter pays principle” should be the foundation of any sustainability-related agreement. “India urges that distant water fishing nations be placed under a moratorium on the provision of any kind of subsidies for 25 years for fishing or fishing-related activities beyond their EEZ.”

He pointed out that subsidies to fishermen in India are among the lowest. “India, for each fishing family, barely gives 15 dollars a year. There are countries here that give up to $42,000, $65,000 and $75,000 to 1 fishing family. Some have 1,500 fishers, another 11,000, another 23,000 fishers and another 12,000. The concern for the small number of fishers outweighs the livelihood of 9 million fishers in India. Furthermore, rejecting the draft agreement, he said: “This is completely unacceptable! And that is why India is opposed to the current text.

Many other developing countries also echoed Goyal’s comments that the outcome of the current exercise did not provide developing countries with a level playing field to meet the aspirations of traditional fishers and their livelihoods. They urged developing countries to be wary of such efforts.

Although India has the support of a large number of developing and less developed countries, many are not making their voices heard. And that’s because many are either landlocked or have very small populations and fishing families. Then there is a bait offered to certain countries in the form of the fisheries financing mechanism of the WTO, to support developing and least developed countries by helping them to build their capacities to develop and better manage their fisheries.

Rifts also exist between developing countries. For example, Cheryl Natividad-Caballero, Undersecretary for Agricultural Industrialization and Fisheries of the Philippines, supported the Fund saying, “The Philippines has undertaken initiatives and research on science-based approaches to sustainable fisheries management and will benefit from subsidies.

Fishing by large countries and those with large fleets is a serious problem. The FAO report on the state of world fisheries and aquaculture 2020 suggests that there are around 67,800 fishing vessels of at least 24 meters in length. He further reports that the proportion of such large vessels was highest in Oceania, Europe and North America. A recent study also revealed that large fishing vessels, which represent only 5% of the fleet, accounted for more than 33% of the total engine power.

Moreover, recent studies have shown that deep sea fishing on the current scale is made possible by large government subsidies, without which as much as 54% of current deep sea fishing would not be profitable at the rates of current fishing.

Pressure from major fishing nations to cut subsidies in countries like India now faces a demand for a 25-year transition period as a must.

With that, all eyes will be on the fourth day of the meeting which, over the past three days, has seen no convergence on other key issues, such as agriculture and the travel exemption for vaccines. , medicines and equipment to fight the ongoing pandemic.

Agriculture

On the third day, the other major conflict came over the text for agriculture.

Developing countries say they have been badly affected due to the recent food crisis, both during COVID-19 and the current geopolitical situation. Countries like Egypt and Sri Lanka present at the meeting called for help to improve food availability in their countries and, while disagreeing on the draft declaration on food security, called for a solution. immediate permanent response to the problem of public stockholding.

Photo courtesy of WTO

India on the issue rejected the idea of ​​temporary declarations and demanded a permanent solution to public stockholding, which has been pending for over 9 years.

During the meeting, Trade Minister Goyal said, “India has been through an experience of transition from a food deficient nation to a largely food self-sufficient nation. Our state support in the form of grants and other government interventions has played a very important role in achieving this. sufficiency, therefore, we are fighting on behalf of all developing countries, including LDCs collectively, on the basis of our own course.”

India and many other countries dispute that as early as the Uruguay Round — where, after 8 years of negotiations between 1985-86 and 1994, when the Marrakesh Accord was decided and which led to the creation of the WTO — agriculture has always been bullied and those who have been, distorting markets with huge subsidies have managed to secure their subsidies.

The position of almost 80 odd nations is that the rules of the draft agreement are largely tailored to developed countries with no relation to the current situation in terms of price growth, inflation and changing dynamics, without any calibration system over the years.

Goyal reminded the members: “The Ministerial Conference of 11 December 2013 decided, and I repeat ‘decided’ that the members had agreed to put in place an interim mechanism to negotiate an agreement for a permanent solution to be adopted by the 11th Ministerial Conference. We compromised, we agreed on the developed world trade facilitation agreement and we agreed on a permanent solution for the public.”

A large group of nations believe that the Agreement on Agriculture (AoA) provides considerable flexibility for developed members to provide huge subsidies in the form of Aggregate Measure of Support (AMS) and, furthermore, to concentrate these subsidies on a few products, without limit. , but the same flexibilities are not available to the majority of developing countries, including LDCs.

Countries like India have pointed out that there are large differences in the actual domestic support per farmer provided by different countries, according to information notified to the WTO. This difference in the case of some developed countries, vis-à-vis developing countries, is more than 200 times greater.

India’s proposal for government-to-government or G2G transactions for the supply of food grains to needy countries is facing a daunting challenge from the developed world. Leading sources among WTO members from developing countries say the resistance stems from the fact that G2G deals can hurt big foodgrain companies who feel their access to markets in needy countries could be dismantled. The parent nations thus protect these companies.

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