Context: WTO’s Chair of the Negotiating Group reported that due to India’s continued objections to the draft text of the WTO Fisheries Subsidy Pact, the year-end deadline for concluding the pact cannot be met.
Relevance of the Topic: Prelims: Key aspects of WTO Agreement on Fisheries Subsidies.
About the WTO Agreement on Fisheries Subsidies:
- The World Trade Organisation's (WTO) agreement was adopted at the 12th Ministerial Conference (MC12) on 17 June 2022.
- It is being considered as a major step towards ocean sustainability by prohibiting harmful fisheries subsidies, a key contributor in the widespread depletion of the world’s fish stocks.
- Key achievements of the Agreement:
- First WTO agreement to focus on the environment.
- First broad, binding, multilateral agreement on ocean sustainability.
- Only the second agreement reached at the WTO since its inception.
- Operationalisation: For the Agreement to become operational, two-thirds of members have to deposit their “instruments of acceptance” with the WTO.
Why is the Agreement needed?
- United Nations Conference on Trade and Development (UNCTAD) Report, 2022:
- Over one-third of global marine fish stocks have fallen to biologically unsustainable levels.
- Overfishing and subsidies result in a loss of about $88.9 billion in forgone net benefits annually.
Key Provisions of the Draft Agreement:
1. Prohibitions:
- IUU Fishing & overfished stocks: It will prohibit subsidies from being provided for Illegal, Unreported and Unregulated (IUU) fishing and overfished stocks.
| **An overfished stock is a population of fish that is too low. A stock that is experiencing overfishing has an annual rate of catch that is too high. Therefore the population cannot support that level of fishing and is below that level is deemed “overfished.” |
- High Sea Fishing: Prohibits providing subsidies for fishing on high seas, which are outside the jurisdiction of coastal countries and Regional Fisheries Management Organisations/ Arrangements.
2. Special and Differential Treatment (S&DT):
- Transition Period: Under S&DT, Developing countries and Least Developed countries (LDCs) will be allowed a transition period of two years from the date of entry into force of this Agreement.
- Capacity Building: Targeted technical assistance and capacity building assistance to developing countries and LDC Members.
3. Exceptions:
- No prohibition has been imposed on a WTO Member regarding granting or maintaining subsidy to its vessel or operator as long as it is not carrying out IUU.
- No prohibition on providing subsidies for overfished stocks as long as such subsidies are implemented to rebuild the stock to a biologically sustainable level.
India’s Stand:
1. Key Arguments of India:
- Low Subsidy levels: India is one of the lowest fisheries subsidisers ($35 per year per fisher compared to some developed countries offering $76,000 per fisher per year).
- Sustainable practices: India’s fisheries sector primarily depends on several millions of small-scale and traditional fishers and does not exploit the resources indiscriminately like other advanced fishing nations.
- Disproportionate conditions: The proposed agreement imposes stringent conditions on small-scale fishers (particularly in developing countries) but did not effectively discipline the large-scale, industrial fishing operations (primarily responsible for overfishing and depletion of marine resources).
- Sustainability Exemption Concerns: Sustainability exemption clause is problematic as it allows advanced fishing countries with better monitoring and notification capabilities to avoid commitments to cut harmful subsidies. This discriminates against poorer countries that lack such capacities, even if they fish sustainably.
2. India’s Demands:
- Polluter pay Principle: WTO Members who have provided huge subsidies in the past, and engaged in large-scale industrial fishing should take more obligations to prohibit subsidies based on the ‘polluter pay principle’ and ‘common but differentiated responsibilities’.
- Equitable transition period: A 25-year transition period for developing countries that are neither covered by the de minimis (a global share of marine catch not greater than 0.8%), nor considered least developed countries (LDCs).
Conclusion:
- India’s fishing communities are grappling with multiple issues like extreme climate events, the adverse economic impacts from the COVID-19 pandemic, large infrastructure projects, and recent policy developments at the domestic and international level such as the push for the blue economy framework.
- The WTO Agreement is grossly unjust and inimical to the interests of the fishers in the developing and less developed countries, especially for small scale fishers. WTO must address concerns of developing nations by emphasising principles of equity, fairness, and common but differentiated responsibilities. It should encourage consensus-based solutions to balance conservation goals with development needs.