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Statement by U.S. Ambassador Dennis Shea – WTO Fisheries Subsidies Negotiations
November 27, 2020

WTO Fisheries Subsidies Negotiations
Rules Negotiating Group

Heads of Delegation Meeting on Overcapacity and Overfishing

Excerpts from Statement delivered by U.S. Ambassador Dennis C. Shea
Deputy U.S. Trade Representative and U.S. Permanent Representative to the World Trade Organization

Achieving a meaningful outcome in this area of “overcapacity and overfishing” disciplines is going to require several combined approaches, including a special prohibition on distant water contingency subsidies and what we believe is doable and will address many of our concerns: a subsidies cap.

At the moment, I understand we are focusing on the drafting of a general prohibition. As I said a few months ago, it will likely be difficult to reach agreement on this kind of approach, but we have worked hard to explore it at a technical level.

My understanding is that the differences in this Article largely break down between, on the one hand, those who want to reasonably limit the prohibition to situations in which overcapacity and overfishing can be clearly demonstrated and, on the other, those who want a broad prohibition but with numerous exceptions, which will render the prohibition meaningless. Rather than continue to debate the matter, these two options should be laid out clearly in any text presented to Ambassadors and eventually ministers, if it comes to that.

Turning to the wording of the general prohibition on overcapacity and overfishing, it contains an element of sustainability that we would broadly support. We would also support restoring some language concerning the rate of fishing and fishing capacity. These are key to a meaningful outcome as objective thresholds related to sustainability.

I have a hard time understanding why language along these lines is taboo for some delegations. It goes to the heart of our mandate, as many repeat regularly, which is focused on sustainability.

The United States also shares the views expressed by other Members regarding the reasoning for why this should be an open list of prohibited subsidies.

With respect to the prohibition on subsidies contingent on distant water fishing: Many academic studies note that distant water fleets, which are highly subsidized, are at the heart of the overfishing and overcapacity problem, having a dire impact on our marine resources. And on a regular basis, we are confronted with news articles reporting on the significant and growing problem of distant water fleets engaging in IUU fishing across our oceans. Here we have the ability to design focused prohibitions that get at the nature of this subsidization.

This prohibition has the effect of targeting industrial, large-scale, distant water fishing fleets. It may be narrower than some would want, and too targeted for others, but from our perspective it would make an important contribution to resolving the problem, and is an essential complement to a broader prohibition on overfishing and overcapacity pegged to sustainability criterion.

Like the prohibition on distant water fleets, the prohibition on reflagging has the effect of targeting industrial, large-scale, distant water fishing fleets. It would prohibit any subsidy to any vessel that is not flying the subsidizing Member’s flag.

The responsibility for subsidized vessels and their fishing activities should be within the full control of the subsidizing Member. This ensures that subsidies do not create an enabling environment for IUU fishing and other harmful fishing activity when vessels are reflagged to countries that have little capacity or ability to exercise adequate control over distant fishing activity.

Regarding “capping”: We fully support a serious capping approach, which can move us past some of the entrenched positions and difficulties in dealing with subsidies that can lead to overfishing and overcapacity. With an effective capping approach we can live without an explicit prohibition on overcapacity and overfishing.

In our view, the capping proposal put forward by the United States, Argentina, Australia, and Uruguay offers a practical approach that can produce a balanced outcome in which major producers and traders contribute commensurate with their roles in the trading system.

Our capping approach accommodates the calls by very small producers for “policy space” while constraining larger players. It would also provide much-needed transparency and accountability on the subsidies being provided. A cap can result in the reduction of the most harmful subsidies provided by the big subsidizers, and would supplement the prohibitions under discussion – if they can be agreed.

A “green box” or list of non-harmful subsidies would be unnecessary in light of the prohibition under consideration. It would also be unnecessary under a cap, given that this would provide the needed policy space for Members to continue to provide what they believe to be non-harmful subsidies, with focused reductions on the harmful subsidies.

Regarding special and differential treatment, it is not appropriate for any Member here representing major fishing areas and marine capture, to seek a blanket carve-out, an outright exclusion from disciplines. As the United States has been saying for almost 20 years, the objective of this negotiation is to preserve the sustainability of fisheries resources, not to provide harmful subsidies to the fishing sector.

If the subsidies contribute to overfishing and overcapacity, why should the WTO exempt these Members’ subsidies – regardless of self-declared development status – from disciplines? There is simply no reasonable argument that any Member should be able to continue harmful subsidies in perpetuity, given that fisheries are a shared natural resource.

While we are open to looking at criteria to guide limited transition periods on a clear needs-basis, it is not appropriate or effective to entertain SDT criteria that bear no relationship to the sustainability of the fish.