In my time working with Gabrielle, a central preoccupation of her work on World Trade Organization (WTO) reform has been to understand the WTO’s evolution in response to modern crises<fnref n="1" /> and the “new roles”<fnref n="2" /> it can and has come to play in this post-pandemic decade. Some new developments, like the WTO’s pivot towards partnering with private sector stakeholders, are in direct response to the COVID-19 pandemic. Some others, like the *Fisheries Subsidies Agreement* (*FSA* or the *Fisheries Agreement*),<fnref n="3" /> have been many years in the making. The *FSA*, although a partial outcome of a two-decade-long negotiation process, is nevertheless a remarkable achievement within the WTO. For the first time, since the preamble of the *Marrakesh Agreement*<fnref n="4" /> recognised the “objective of sustainable development” a concluded WTO multilateral agreement benchmarks the environmental harmfulness of a trade measure as the basis for disciplining it. While trade distortive-ness and competitive concerns have principally occupied the WTO’s agenda for years, the *FSA* prohibits subsidies that are considered environmentally unsustainable. Even the partial success of this agreement,<fnref n="5" /> opens the door to many possibilities and imaginations of the roles that WTO can play in leveraging its institutional framework for climate governance, for the facilitation of climate change mitigation, and for a clean, just energy transition. Undoubtedly, it is a bleak time for multilateralism, particularly in international trade.<fnref n="6" /> However, Gabrielle’s 30 years of service to this institution are a testament to the remarkable sturdiness and adaptability of the trade regime. As an homage to her commitment to ensuring the longevity of the WTO and for keeping the WTO fit-for-purpose, I identify in this essay some key lessons from the *FSA*’s conclusion and examine what they tell us about the role that WTO can play in disciplining fossil fuel subsidies.

Intergovernmental Panel on Climate Change (IPCC)’s Working Group III, in the sixth assessment report of 2022 (sixth *IPCC Report*),<fnref n="7" /> is quite categorical in demanding the reduction and reform of fossil fuel subsidies. The report notes that “[g]lobal fossil fuel subsidies represent more than half of total energy subsidies with predominantly adverse environmental, economic, and social effects […] the [fossil fuel] subsidies have proven to be regressive in most cases, with little benefit reaching the poor.”<fnref n="8" /> The negative environmental externalities of fossil fuel subsidies have been expansively documented—fuel subsidy policies encourage wasteful consumption of fossil fuels, drive up pollution and exacerbate emissions.<fnref n="9" /> The widespread acknowledgment of these problems have resulted in repeated calls for action to discipline these subsidies, in a larger effort to phase out fossil fuel energy altogether.<fnref n="10" /> The sixth *IPCC Report* notes that the removal of fossil fuel subsidies would have a range of impact in reducing emissions across regions—possibly up to 4% reduction of CO2 emissions and up to 10% reduction of greenhouse gases by 2030.<fnref n="11" /> Several independent experts have projected positive estimates for the reduction of CO2 emissions as a direct result of fossil fuel subsidy reform. For instance, the International Institution for Sustainable Development (IISD) projects a reduction of CO2 emissions by an average of 6% below baseline in 2030, based on a modelling exercise conducted for 32 economies.<fnref n="12" /> Similarly, the International Monetary Fund (IMF) projects that removal of explicit fossil fuel subsidies could result in a 5% reduction of CO2 emissions below current baselines.<fnref n="13" /> In recent years, this has spurred governmental action in multilateral, plurilateral and bilateral fora. Of particular note is the Fossil Fuel Subsidy (FFS) reform initiative launched in 2021 at the WTO as a result of a statement signed by 12 members in 2017, which is now co-sponsored by 48 Members (discussed further in Section I.C). The *Agreement on Climate Change, Trade and Sustainability*<fnref n="14" /> marks the first international trade agreement to discipline (and outright prohibit) some fossil fuel subsidies. These developments evidence a growing momentum towards coordinated action for disciplining fossil fuel subsidies. Regulating fossil fuel subsidies has been notoriously difficult in the past for a multitude of reasons. The sheer scale of such subsidies, the technical difficulties in identifying international benchmarks for a public incentive to qualify as a subsidy, the unfeasibility of including fossil fuel subsidies within the scope of the WTO’s *Agreement on Subsidies and Countervailing Measures* (*ASCM*)<fnref n="15" />, and the complex socio-political dynamics of energy security underpinning fossil fuel production are but some of the most well-documented concerns which make FFS reform a herculean task.

Gehring, Young, and Pereira are some of the scholars who have, in the past, drawn parallels between the reform of fisheries subsidies and fossil fuel subsidies (discussed further in the following sections). This comparison is often based on the central premise that both are sectoral subsidy regimes which must be regulated due to their negative environmental externalities (and not [just] trade distortive-ness) and due to the inability of the *ASCM* to regulate both types of subsidies efficiently. While there are significant complications unique to each of these broad types of subsidies, comparing the two can nevertheless offer some lessons on what the future might look like for FFS reform. On this basis, the following section of this chapter (I) first outlines why WTO remains a useful forum for the regulation of fossil fuel subsidies. Then, the chapter outlines some key lessons from the *FSA* and its negotiations applicable to fossil fuel reform (II.A) what the partial conclusion of the *FSA* tells us about phasing-in the reform of fossil fuel subsidies; (II.B) why the inter-regime and multi-agency coordination underpinning the *FSA* is critical for FFS reform; (II.C) how improving notification and transparency of subsidies is a critical pillar for FFS reform; and (II.D) where the *FSA* lacks in transitional and S&D provisions, and how FFS reform would need to remedy this. The paper concludes by reiterating the need for coordinated multilateral action in phasing out fossil fuels to benefit those most impacted by climate change.

<footnote n="1">Gabrielle Marceau, Nicola Bonucci, André-Philippe Ouellet & Rebecca Walker, “IGO’s Initiatives as a Response to Crises and Unforeseen Needs” (2022) 19:2 Intl Org L Rev 423 at 482; Gabrielle Marceau & Henner Gött, eds, *International Organization Initiatives: How and Why Organizations Adapt and Change* (Oxford: Oxford University Press, forthcoming 2025).</footnote>

<footnote n="2">Gabrielle Marceau & Maria George, “Chapter 22 The New Roles of the WTO” in Rich Lawson & Ramses A Wessel, eds, *Unity in Diversity: Perspectives on the Law of International Organizations* (Leiden, The Netherlands: Brill | Nijhoff, 2025), 324 at 338.</footnote>

<footnote n="3">WTO, *Agreement on Fisheries Subsidies*, WTO Doc WT/MIN (22)/33 — WT/L/1144 (17 June 2022).</footnote>

<footnote n="4">WTO, *Marrakesh Agreement Establishing the World Trade Organization*, 1867 UNTS 154 (15 April 1994), Preamble.</footnote>

<footnote n="5">A phase two of the negotiations is ongoing, and the current *FSA* is subject to automatic termination if the phase 2 agreement is not successfully negotiated by 2026; see *FSA*, *supra* note 3, art 12.</footnote>

<footnote n="6">It is impossible to capture the many geopolitical challenges currently facing the WTO within the scope of this essay, and who is to say how many more or fewer challenges will arise in the months between the writing and publication of this. Nevertheless, the intention of my research is to identify what continues to work within the WTO system despite its many public misgivings, and to see how we can utilise whatever is possible of these 30 years of institutional memory, framework and infrastructure that the WTO houses, towards a climate-friendly future.</footnote>

<footnote n="7">Silvia Kreibiehl et al, “2022: Investment and finance”, in Priyadarshi R Shukla et al, eds, *Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change* (Cambridge: Cambridge University Press, 2022) 1547.</footnote>

<footnote n="8">Leon Clarke et al, “2022: Energy Systems” in Priyadarshi R Shukla et al, eds, *Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change* (Cambridge: Cambridge University Press, 2022) 613 at 629, Box 6.3.</footnote>

<footnote n="9">International Monetary Fund, “Fossil Fuel Subsidies”, section ‘Why do we care about fossil fuel subsidies’, online: <imf.org> [perma.cc/R8BG-R55X] [*International Monetary Fund*]; David Hurrach, “The Disastrous Impact of Fossil Fuel Subsidies on Ourt Health, the Planet and the Economy”, *Earth* (30 July 2024), online: <earth.org> [perma.cc/T23V-HP7E]; Mohammad Arzaghi & Jay Squalli, “The environmental impact of fossil fuel subsidy policies” (2023) 126 Energy Econs.</footnote>

<footnote n="10">Some examples include Jakob Skovgaard et al “Revitalizing international fossil fuel subsidy phase-out commitments through roadmaps, closing loopholes, and support” (2024) 3:68 npj climate action, online: <nature.com> [perma.cc/UN37-AS5H]; Climate Action Network Europe, “Civil Society 10-point plan for a fossil gas phase out by 2035”, *CAN* (23 June 2023), online: <caneurope.org> [perma.cc/V5YQ-KGA2]; Civil Society Equity Review, Press Release, “An Equitable Phaseout of Fossil Fuel Extraction: Towards a reference framework for a fair and rapid global phaseout” (December 2023), online: <fossilfueltreaty.org> [perma.cc/6H4R-WPVQ]; International Institute for Sustainable Development, “Fossil-Fuel Subsidy Reform Communiqué” (16 April 2015), online: <iisd.org> [perma.cc/JN79-7W3S].</footnote>

<footnote n="11">Hoesung Lee & José Romero, eds, *Climate Change 2023: Synthesis Report; Contribution of Working Groups I, II and III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change*(Geneva: IPCC, 2023) at 111.</footnote>

<footnote n="12">Jonas Kuehl et al, *Cutting Emissions Through Fossil Fuel Subsidy Reform and Taxation: GSI Report* (Winnipeg: International Institute for Sustainable Development, 2021) at 25, online (pdf): <iisd.org> [perma.cc/NAG9-E9FQ]; see also: Ieva Baršauskaitė*, Background Note on Fossil Fuel Subsidy Reform*, (Winnipeg: International Institute for Sustainable Development, 2022) at 8, online (pdf): <iisd.org> [perma.cc/3AY4-FWKQ].</footnote>

<footnote n="13">International Monetary Fund, *supra* note 9.</footnote>

<footnote n="14">*Agreement on Climate Change, Trade and Sustainability*, 25 September 2019 (New Zealand, Costa Rica, Fiji, Iceland, and Norway), online: <edit.wti.org> [perma.cc/MTF4-NCBU].</footnote>

<footnote n="15">*Agreement on Subsidies and Countervailing Measures*, 15 April 1994, 1869 UNTS 14 [*ASCM*].</footnote>
# I. Is the WTO Fit to Play a Role in FFS Reform?

In 2017, Heloise Pereira argued in favour of looking at the then-ongoing fisheries negotiations to learn how to structure outcomes for reform of fossil fuel subsidies. Pereira opens her case by identifying the key reasons for why WTO was the optimal forum for fossil fuel subsidies reform.<fnref n="16" /> In the same year Joel Trachtman also considered a “number of features that may make [WTO] a desirable institutional home for a new agreement on FFS reduction”<fnref n="17" />. In 2018, Marcus Gehring identified the role of WTO and its leadership as a potential “key driver” for the success of fisheries negotiations and thus an important lesson for energy transition negotiations.<fnref n="18" /> Much has changed between then and now, prompting a need for the transformation of WTO’s roles and functions in transnational governance. Most notably, the WTO’s dispute settlement mechanism—oft considered the cornerstone of the WTO agreements’ enforceability—stands radically transformed in the absence of a functioning Appellate Body. The WTO is slowly shifting away from an “adjudication-focused” institution to one centred on transnational governance.<fnref n="19" /> Globally, the pandemic has transformed our understanding of supply chains, protectionism has pushed forward an agenda of de-globalization, and climate change, sustainability, and green transition have become central to the work of economic institutions (multilateral or otherwise). At the same, the WTO concluded its first multilateral binding agreement (the *FSA*) at a time when its negotiation pillar had long been considered stagnant. All these changes have fundamentally impacted what role WTO can play in FFS reform. While some of the reasons for regulating FFS in WTO, as identified in 2017, may no longer seem feasible, there are still at least three crucial rationales which support the negotiation of FFS disciplines in the WTO.

## A. Institutional Framework

The reform of fossil fuel subsidies will need the support of a multilateral inter-governmental institution, with a platform for hearing from private sector and civil society stakeholders, a wide governmental membership and institutional expertise and experience in subsidies. Despite the fact that a large majority of fossil fuel subsidies can be traced to a limited set of economies,<fnref n="20" /> the impacts of such subsidies (and therefore their subsequent reduction) are diffuse and require broad multilateral consensus. Any potential binding disciplines on subsidies must be underpinned by a strong framework for information-sharing and transparency, an infrastructure for periodic review and cooperation, and institutional support for smaller economies, Least Developed Countries (LDC)s, and countries most impacted by climate change. Transparency mechanisms are critical for identifying where and what kind of fossil fuel subsidies are prevalent, and their scale, scope and impacts. These efforts can help address the lack of information that surrounds fossil fuel subsidies domestically.<fnref n="21" /> The WTO has 30 years of experience in collecting notifications, enforcing transparency and building information-sharing databases.<fnref n="22" /> Its committee structure and the Trade Policy Review mechanism offer a platform for periodic reporting and surveillance of members’ measures. A coordinated reduction of fossil fuel subsidies set up through the WTO will avoid distortion of competition, when compared to unilateral or bilateral efforts to reduce fossil fuel subsidies<fnref n="23" />—an important incentive that may bring otherwise-reluctant economies on board. Lastly, the WTO has always been a platform for developing and LDC economies to participate in the negotiation of binding disciplines. Admittedly, on the one hand, the WTO’s consensus principle has in recent years been the cause of much of the logjam in the system.<fnref n="24" /> However, this requirement of “all-on-board” has allowed for a platform that facilitates the participation of all in rule negotiation, despite limitations to financial or technical capabilities of members. As is further argued in section (I.B) cooperation between multiple international organizations will be instrumental in ensuring scientifically and economically sound disciplines on fossil fuel subsidy reform. The WTO can play an important role in facilitating such inter-organizational cooperation.

## B. Legal Expertise and Jurisprudence

As already articulated by multiple scholars, the most evident reason for housing fossil fuel subsidy reform at the WTO is the existence of the *ASCM*. As the only multilateral binding treaty disciplining national (and possibly transnational) subsidies, the *ASCM* provides valuable legal norms, jurisprudence and understanding which can form the foundation of FFS reform. It provides a legal definition of a “subsidy”, principles for prohibiting certain subsidies, the rules for subsidies that can be identified as “actionable” and the mechanism for imposing countervailing duties on such actional subsidies.<fnref n="25" /> The *FSA* builds on these foundations to regulate sector specific subsidies, setting out rules to identify and prohibit illegal, unreported, unregulated (IUU) fisheries subsidies and subsidies for overfished stocks.<fnref n="26" /> Collectively, these legal norms form a basis which can be used and adapted for the regulation of fossil fuel subsidies. There are several reasons why *ASCM* has failed to regulate FFS properly in the past—Article 2’s<fnref n="27" /> specificity requirement is difficult to establish for certain (particularly consumer) FFS; dual-pricing of fossil fuels is not easily captured as a “benefit conferred” under Article 1;<fnref n="28" /> lack of information on FFS granted to producers makes the determination of Article 3<fnref n="29" /> subsidies as well as adverse effects very difficult to establish.<fnref n="30" /> The knowledge and understanding of what has been unsuccessful is critical to crafting disciplines which are well suited to address these challenges. The experience with the *ASCM* and its implementation, and the legal jurisprudence developed by WTO panels and the Appellate Body, will be crucial for the development of sound, practical and feasible norms disciplining FFS.

## C. Political Momentum

Transforming WTO’s institutional framework and legal expertise towards supporting negotiation of FFS disciplines require momentum—from members of course (WTO is fundamentally a member-driven organisation) but also from the staff and institution itself. The FFS reform initiative (see introduction above), first launched by twelve WTO members has steadily gained support. At the thirteenth Ministerial Conference of the WTO, the FFS reform initiative put out a statement reaffirming the importance of continuing their work and setting out a workplan for the years 2024 and 2025.<fnref n="31" /> The plan focuses on improving transparency efforts, exchanging information and experience on crisis-support measures and advancing work on identifying the most harmful fossil fuel subsidies.<fnref n="32" /> In just 2024, the initiative has engaged with the Organization for Economic Co-operation and Developement (OECD), World Bank, International Energy Agency and IISD to learn from their expertise on FFS reform. The impact of informal small groupings such as this initiative started by the “friends of FFSR” should not be underestimated. A similar negotiation group “the friends of fish” was a key driving force behind the fisheries subsidies.<fnref n="33" /> The FFS reform initiative is working to improve the transparency of fossil fuel subsidies and has, to this effect, published a series of questions to be incorporated in Trade Policy Reviews of countries.<fnref n="34" /> The aim of these questions is to enhance availability of information on the nature, extent, design, and impact of fossil fuel subsidy measures.<fnref n="35" /> Reportedly, some of the sample questions prepared by this initiative have already been raised in 14 Trade Policy Reviews in 2024.<fnref n="36" />

FFS reform is also being considered by the Trade and Environmental Sustainability Structured Discussions (TESSD). Launched at the WTO in November 2020, TESSD now has 78 co-sponsors and aims to advance discussions on trade and environmental sustainability and supports the work of the Committee on Trade and Environment, where “trade policies, climate change and sustainability intersect.”<fnref n="37" /> The TESSD houses a working group focused on subsidies.<fnref n="38" /> While the current priorities of the subsidies’ working group are primarily agricultural subsidies, the group also studies the experiences of members with subsidies related to a low-carbon transition.<fnref n="39" /> The outcome of this group’s ongoing work could provide an experiential wealth of information on what the transition away from fossil fuel subsidies could look like for the larger membership of the WTO.

These initiatives represent an overall shift in the WTO towards to actively utilising trade policy for environmental good. Given that their membership is small (relative to the full WTO-membership) their progress may seem modest in the face of the urgency of the climate crisis. Nevertheless, these initiatives, together with the support of the WTO Director-General’s office and the leadership of at least some WTO members, could provide a launchpad for formal negotiations on FFS reform in the future.

<footnote n="16">Heloísa Pereira, *How the WTO Can Help Tackle Climate Change Through Fossil Fuel Subsidy Reform: Lessons from the Fisheries Negotiations*(Geneva: ICTSD, 2017) at 1—5, online: <greenpolicyplatform.org> [perma.cc/UT5A-YA2C].</footnote>

<footnote n="17">Joel Trachtman, *Fossil Fuel Subsidies Reduction and the World Trade Organization*(Geneva: ICTSD, 2017) at 18, online (pdf): <greenpolicyplatform.org> [perma.cc/HZX3-N4BN].</footnote>

<footnote n="18">Markus Gehring, *From Fisheries Subsidies to Energy Reform under International Trade Law* (Waterloo: Centre for International Governance Innovation, 2018), at 7, online (pdf): <cigionline.org> [perma.cc/P3P7-BQV3].</footnote>

<footnote n="19">Marceau & George, *supra* note 2 at 324.</footnote>

<footnote n="20">International Monetary Fund, *supra* note 9.</footnote>

<footnote n="21">Harro van Asselt & Tom Moerenhout, *Fit for Purpose? Toward trade rules that support fossil fuel subsidy reform and the clean energy transition* (Copenhagen: Nordic Council of Ministers, 2020), ch 4, s 4.2, online: <pub.norden.org> [perma.cc/V9YE-VC8R].</footnote>

<footnote n="22">Some examples of such databases are the WTO’s Environmental Database, online: <edb.wto.org> and the WTO’s Notifications Portal, online: <notifications.wto.org>. A full list of all the databases of the WTO can be found in this link, online: <wto.org> [perma.cc/3B5T-TA5J].</footnote>

<footnote n="23">Trachtman, *supra* note 17 at 18.</footnote>

<footnote n="24">See for a discussion on this, Americo B Zampetti, Patrick Low & Petros C Mavroidis, “Consensus Decision-Making and Legislative Inertia at the WTO: Can International Law Help?” (2022) 56 J World Trade 1 at 15.</footnote>

<footnote n="25">*ASCM*, *supra* note 15. Article 1 of the *ASCM* provides a definition of subsidy, Part III of the *ASCM* details quantification of adverse effects and Part V sets out the rules for countervailing measures.</footnote>

<footnote n="26">*FSA*, *supra* note 3, art 3, 4.</footnote>

<footnote n="27">*ASCM*, *supra* note 15, art 2.</footnote>

<footnote n="28">*Ibid*, art 1.</footnote>

<footnote n="29">*Ibid*, art 3.</footnote>

<footnote n="30">Climate Strategies organisation has published a useful paper which provides an overview of these challenges by testing 5 case studies related to fossil fuels against *ASCM* provisions; Cleo Verkuijl et al, *Tackling Fossil Fuel Subsidies through International Trade Agreements* (London: Climate Strategies, 2017) 32 at 54, online (pdf): <climatestrategies.org> [perma.cc/8WTJ-F9QG].</footnote>

<footnote n="31">WTO, “Ministerial Statement on Fossil Fuel Subsidies”, Dec WT/MIN(24)/19 (26 February 2024), online: <docs.wto.org> [perma.cc/9FHM-ZGJU] [WTO].</footnote>

<footnote n="32">*Ibid*, Annex 1.</footnote>

<footnote n="33">Henok Asmelash, “The Regulation of Environmentally Harmful Fossil Fuel Subsidies: From Obscurity to Prominence in the Multilateral Trading System” (2022) 33:3 EJIL 1000; see also Sadeq Z Bigdeli, “Will the ‘Friends of Climate’ Emerge in the WTO? The Prospects of Applying the ‘Fisheries Subsidies’ Model to Energy Subsidies” (2008) 2:1 Carbon Climate L Rev 78 at 88.</footnote>

<footnote n="34">WTO, *supra*note 31, Annex 2.</footnote>

<footnote n="35">*Ibid*.</footnote>

<footnote n="36">WTO, News Release, “Fossil Fuel Subsidy Reform Initiative reviews recent progress at closing meeting of 2024” (26 November 2024) at para 2, online: <wto.org> [perma.cc/6P7T-NERB].</footnote>

<footnote n="37">WTO, “Trade and Environmental sustainability”, online: <wto.org> [perma.cc/ADP6-WWYQ].</footnote>

<footnote n="38">*Ibid*.</footnote>

<footnote n="39">WTO, “Trade and Environmental Sustainability Structured Discussions (TESSD)”, Statement by the TESSD co-convenors, WTO Doc WT/MIN(24)/11/Add.5 (19 February 2024) at 6, online: <docs.wto.org> [perma.cc/NQB9-DFA6].</footnote>
# II. Key Lessons From Fisheries to Fossil Fuels

If WTO indeed is the right forum for negotiating subsidies disciplines, the evident follow-up task is then to identify what past experiences can tell us about addressing the challenges to FFS reform. Being the most recent sectoral subsidies agreement negotiated at the WTO<fnref n="40" />, the *Fisheries Agreement* offers insights into what can and will not work for FFS reform.

The *Fisheries Agreement* as it currently stands can be understood as part one of a two-part agreement. Originally intended as a single agreement, the concluded text includes prohibitions on subsidies for IUU fishing and subsidies for overfished stock. Prohibitions on subsidies for fishing which contribute to overfishing and overcapacity (Organization for the Coordination of the Fight against Fraud [OCOF] subsidies), fishing in high seas, fuel subsidies for fishing activities, and the scope of special and differential treatment (S&DT) for developing members are not included in this agreement. These are a part of a second wave of negotiations, continuing at the WTO. Notably, the *FSA* includes an “automatic termination clause” which requires the conclusion of comprehensive rules on these remaining issues, or else the *FSA* will automatically terminate.<fnref n="41" />

The following sections provide some ways in which the long two-decade process (past and continuing) which has led to the *Fisheries Agreement*, and the disciplines so concluded (or not) can inform how FFS reform discussions are shaped in the future.

## A. Reforming in Phases

Perhaps not strictly intended as such from the beginning, the *FSA* showcases a pathway to phasing out fossil fuel subsidies in a manner that incentives a larger group of members to participate in the negotiations. The decision to drop the disciplines on OCOF subsidies, subsidies for fishing in high seas, fuel subsidies for fishing activities, and the scope of S&DT for developing members came at the last very minute of the negotiations. Drafts leading up to the twelfth Ministerial Conference (MC12) carried an Article 5 on OCOF subsidies.<fnref n="42" /> Due to the lack of a consensus between different members on this issue, green-room discussions running into the late hours of MC12 ultimately led to the provisions being dropped and parked for a second wave of negotiations and linked to an automatic termination clause. Article 12 of the *FSA* states as follows on the automatic termination:

> If comprehensive disciplines are not adopted within four years of the entry into force of this Agreement, and unless otherwise decided by the General Council, this Agreement shall stand immediately terminated.<fnref n="43" />

Given the political, economic and cultural sensitivities surrounding fossil fuel subsidies, it is worthwhile considering such a phased approach from the get-go for FFS reform. While the possible consequences of the *FSA*’s automatic termination have caused some concern,<fnref n="44" /> the benefits of having signed at least a partial deal on fisheries subsidies in 2022 are now evident. The “part one” *FSA* has already allowed for over 12 million CHF to be committed by WTO members as part of the “Fish Fund” set up under Article 7 of the *FSA*.<fnref n="45" /> Just under 90 members of the WTO have already submitted instruments of ratification—bridging the gap to the two thirds of total membership requirement for the *FSA* to come into force.<fnref n="46" /> Identifying, cataloguing and categorising fossil fuel subsidies which are most environmentally harmful and prioritising their phase-out, supported by a standstill on others which are environmentally harmful (but less so) could already allow some progress on FFS reform. Work on identifying such subsidies is already underway at intergovernmental forums, in civil society and in scientific communities.<fnref n="47" /> Members could choose to prioritise disciplining direct subsidies first (as opposed to indirect incentives), or subsidies targeted at specific fuels or specific stages of production or prioritise between production and consumption subsidies. Much like the *ASCM*, some of the options proposed for disciplining FFS include different kinds of obligations for different subsidies—prohibiting some subsidies, categorising some subsidies as actionable, putting a standstill on some subsidies.<fnref n="48" /> Even with such an approach, it is worthwhile examining if some disciplines (such as the prohibition or standstill requirements) get negotiated in a phase one agreement, with a time-bound negotiation deadline for a phase 2 and 3. This could ensure transitional provisions, notification and transparency obligations, and institutional mechanism provisions already come into effect, allowing information collection and capacity-building activities to gain momentum in parallel. With an ultimate ambition of eliminating fossil fuel subsidies—phased agreements with clear obligations and deadlines for continuing negotiations may prove to both generate and continue momentum, as well as gather crucial information and set up infrastructure and funding necessary for fossil fuel phaseout.

## B. Inter-Regime Rulemaking and Institutional Coordination

The *FSA* is an agreement which merges multiple international rules-regimes and scientific disciplines. Reforming fisheries subsidies required the support of an institution with expertise in subsidies, but also in the scientific capabilities necessary for determining how and when fish stocks are overfished, and when fishing activities are illegal, unreported or unregulated. Several provisions in the *FSA*, as well as the process of developing these disciplines during the negotiations, involved multi-agency cooperation. Reflecting this intersection of multiple governance regimes, there are two key definitional components in the *Fisheries Agreement*—the definition of the term “subsidy” and how the agreement defines and categorizes the environmental harms of these subsidies. Article 1 of the *FSA* sets out its scope:

> This Agreement applies to subsidies, within the meaning of Article 1.1 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) that are specific within the meaning of Article 2 of that Agreement, to marine wild capture fishing and fishing related activities at sea.<fnref n="49" />

The *FSA* thus adopts both the definition of subsidy in Article 1.1 of the *ASCM<fnref n="50" />* and the specificity requirement as is set out in Article 2 of the *ASCM*.<fnref n="51" /> This takes advantage of the long jurisprudential history under the *ASCM* on the determination of whether an incentive or an action is a specific subsidy under Articles 1.1 and 2. Then the *FSA* categorizes two types of prohibited subsidies—subsidies for IUU fishing and subsidies for fishing of overfished stock.<fnref n="52" /> The determination of what constitutes IUU fishing and overfished stock is to be made, case-by-case on a scientific basis by the relevant coastal state or relevant Regional Fisheries Management Organization or Arrangement (or also the flag state of the fishing vessel in the case of IUU fishing).<fnref n="53" /> This arrangement takes advantage of the expertise of Regional Fisheries Management Organizations while also strengthening the practical implementation of the agreement by allowing flag and coastal states to have the capacity to make such determinations. This two-part scope finds a way to bring together two parallel governance regimes for efficiently curbing environmentally harmful subsidies and could form a useful template for FFS reform.

Article 7 of the *FSA*, which sets out the voluntary funding mechanism for LDC countries is another example of interagency cooperation.

> Targeted technical assistance and capacity-building assistance to developing country Members, including LDC Members, shall be provided for the purpose of implementation of the disciplines under this Agreement. In support of this assistance, a voluntary WTO funding mechanism shall be established in cooperation with relevant international organizations such as the Food and Agriculture Organization of the United Nations (FAO) and International Fund for Agricultural Development. The contributions of WTO Members to the mechanism shall be exclusively on a voluntary basis and shall not utilize regular budget resources.<fnref n="54" />

This multi-agency approach to the governance of fisheries subsidies represents an important and positive shift in the governance of environmentally motivated economic measures—allowing the integration of environmentally sound scientific expertise and principles in the rulemaking applicable to trade measures. Such an approach is crucial for accelerating climate action and may become the norm for future rulemaking on economic measures with environmental impacts. Work on FFS reform is already underway in many intergovernmental organizations like the OECD and International Energy Agency, which have already begun cataloguing fossil fuel subsidies.<fnref n="55" /> Harmonizing the goals of international organizations in this respect, sharing data and information, and developing informal, institutional and normative linkages will be crucial to the development of meaningful reform.<fnref n="56" />

## C. Improving Transparency and Notification

Improving the notification and reporting of subsidies and surveillance of their implementation is a concern that grips both the fisheries sector and the fossil fuel sector. Historically, the *ASCM* notification requirements have not been suitable for capturing the full extent of complexity of the subsidies in either sector.<fnref n="57" /> To remedy this, Article 8 and 9 of the *Fisheries Agreement* set out a detailed mechanism for notification, transparency and institutional governance. Article 8 builds on the notification requirement in Article 25 of the *ASCM*<fnref n="58" /> by requiring additional information specific to fisheries in the notifications to “strengthen and enhance notifications of fisheries subsidies, and to enable more effective surveillance of the implementation of fisheries subsidies commitments.”<fnref n="59" /> Members are also required to submit, within a year of the *FSA* coming into force, a description of their fisheries regime.<fnref n="60" /> Article 9 further sets up a committee tasked with the periodic review and surveillance of the implementation of the *FSA* by members.<fnref n="61" />

This model of transparency by notification and governance through committees is a staple feature of the WTO model and will have to be a central pillar of any negotiations on FFS reform. As already discussed, efforts have been made in this regard by the FFS reform initiative to prepare targeted questions for FFS which have been utilised in Trade Policy Reviews. The effectiveness of these formats in the coming years will offer insights into what form such a provision could take in a future FFS reform agreement.

## D. Learning From Failures: S&DT

The principle of a special and differential treatment (S&DT) for developing countries and LDC members of the WTO has a complex history in negotiations across disciplines, with some success and some failures. In the *FSA*, for instance, S&DT provisions have been included in Articles 6 (restraint in raising action against LDC members)<fnref n="62" /> and 7 (setting up a fund for technical assistance and capacity building for developing country members).<fnref n="63" /> At the same time, some other core provisions on S&DT (providing developing and LDC members below a de-minimise threshold, exemptions from the obligations to curb subsidies for OCOF) remain unresolved in the second wave negotiations of fisheries agreement. The latest available Chair’s text on the fisheries negotiations sets out Article B which outlines how the principle of special and differential treatment will be incorporated into a second *Fisheries Agreement*.<fnref n="64" /> In response to this text, in July 2024, the Indian delegation circulated a communication to the fisheries negotiating group, highlighting their concerns with the lack of policy space in the way that S&DT is applied.<fnref n="65" /> This communication outlines one side of the big divide between certain developed and developing country groups in the fisheries negotiations (but also across several issues in the WTO) on how the principle of S&DT must be incorporated.<fnref n="66" /> The repeated failure to arrive at a consensus on the negotiations of new disciplines incorporating S&DT prompts a need to conceptualize newer solutions to this issue. In the negotiation of FFS reform disciplines, it will be even more imperative to do so, considering the many energy security sensitivities around phasing out fossil fuels. A large share of global fossil fuel subsidies are consumer subsidies, targeted towards poor and vulnerable communities (however inefficient and ineffective they may be, in practice).<fnref n="67" /> Transitioning away from fossil fuels is crucial for the health of the planet, as is a just and socially conscious transition which is imperative to avoid disenfranchising vulnerable communities further.

If the fisheries negotiations continue to fail on account of the differences arising from how to practically implement S&DT disciplines, alternatives must be considered to how the interests of economies at different levels of development can be incorporated without putting a standstill on progressive climate action. Members could learn from these failures and look to alternative conceptions of differential action and obligations for FFS disciplines. The principle of common but differentiated responsibilities and respective capabilities (CBDRRC)<fnref n="68" />, based on similar rationales but construed and applied differently than S&DT,<fnref n="69" /> could be considered as one such option for re-imagining this issue in the WTO. While CDBRRC is not explicitly mentioned in the WTO, echoes of this principle can arguably be found in WTO obligations.<fnref n="70" /> Other options include considering transitional exceptions granted, not simply on the basis of the development status of a member, but also the vulnerable populations affected by the lack of such subsidies, and the kinds of fossil fuels subsidized. Ultimately, the S&DT negotiations in the *FSA* may need to be considered as a litmus test to see if the time is nigh for alternatives to how the principle is understood and applied in the WTO, and how it must be considered in the context for FFS reform.

<footnote n="40">The other major WTO sectoral subsidies agreement—Agreement on Agriculture—may also offer many lessons for FFS reform. The historic negotiations on agricultural trade policy reform and their many wins and failures have long sought to address food security and environmental concerns. Although outside the scope of this chapter, discussions on balancing FFS reform with energy security could find many cues to take from the food security developments in agricultural negotiations.</footnote>

<footnote n="41">*FSA*, *supra*note 3, art 12.</footnote>

<footnote n="42">WTO, *Negotiating Group on Rules—Fisheries Subsidies*, WTO Doc TN/RL/W/276/Rev.2 (8 November 2021) at 5, online: <docs.wto.org> [perma.cc/Q66Q-DXLC].</footnote>

<footnote n="43">*FSA*, *supra*note 3, art 12.</footnote>

<footnote n="44">Given the failure to conclude the second wave of negotiations at MC13, there has been some concern that in the absence of a new comprehensive agreement by 2026 even the signed FSA will collapse. However, scholarship is already developing on the implications of this clause and ways to sustain the FSA in its current form. See for example, Jaemin Lee, “The automatic termination clause in the Fisheries Subsidies Agreement—brinkmanship for future negotiation or a time bomb for self-destruction?” (2024) 27:3 JIEL 480 at 499.</footnote>

<footnote n="45">WTO, News Release, “Worldwide push for sustainable fisheries highlighted at Aid for Trade Global Review” (27 June 2024) at para 5, online: <wto.org> [perma.cc/F44H-9X33].</footnote>

<footnote n="46">WTO, New Release, “DDG Ellard: Accepting fish subsidies agreement can give boos to global trading system” (19 February 2025) at para 5, online: <wto.org> [perma.cc/2M4S-6295].</footnote>

<footnote n="47">See for example, Ieva Baršauskaitė et al, *Options for International Agreements on Fossil Fuel Subsidies*(Winnipeg: International Institute for Sustainable Development, 2025) online (pdf): <iisd.org> [perma.cc/XSQ2-DMSH]; Margaret A Young, “Energy transitions and trade law: Lessons from the reform of fisheries subsidies” (2017) 17:3 Int Envtl Agreements 317 at 390; Baršauskaitė, *supra* note 12.</footnote>

<footnote n="48">The Agreement on Climate Change Trade and Sustainability, for instance, prohibits coal subsidies and has a standstill on certain gas subsidies that are listed by parties. See *Agreement on Climate Change, Trade and Sustainability*, 15 November 2024 at ch 4, art 4.5, online: <mfat.govt.nz> [perma.cc/5UZJ-RMT4] [*ACCTS*].</footnote>

<footnote n="49">*FSA*, *supra*note 3, art 1.</footnote>

<footnote n="50">*ASCM*, *supra* note 15, art 1.1.</footnote>

<footnote n="51">*Ibid*, art 2.</footnote>

<footnote n="52">*FSA*, *supra*note 3, art 2, 3.</footnote>

<footnote n="53">*Ibid*.</footnote>

<footnote n="54">*Ibid*, art 7.</footnote>

<footnote n="55">See for example, Organisation for Economic Co-operation and Development (OECD), Inventory of Support Measures for Fossil Fuels 2024 (Paris: OECD, 2024), online (pdf): <oecd.org> [perma.cc/4VVY-5Q5N]; International Energy Agency (IEA), “Fossil Fuel Subsidies Database”, (October 2024) online: <iea.org> [perma.cc/H5QR-RS5P].</footnote>

<footnote n="56">Gehring, *supra* note 18 at 8.</footnote>

<footnote n="57">Joachim Monkelbaan & Ronald Steenblik, Fossil Fuel Subsidy Reform: What Role for the World Trade Organization? (Geneva: Friedrich-Ebert-Stiftung, 2022) at 11, online (pdf): <geneva.fes.de> [perma.cc/6THJ-RQQT]; Trachtman, *supra* note 17 at 7, 14.</footnote>

<footnote n="58">*ASCM*, *supra* note 15, art 25.</footnote>

<footnote n="59">*FSA*, *supra*note 3, art 8.</footnote>

<footnote n="60">*Ibid*.</footnote>

<footnote n="61">*Ibid*, art 9.</footnote>

<footnote n="62">*FSA*, *supra*note 3, art 6.</footnote>

<footnote n="63">*Ibid*, art 7.</footnote>

<footnote n="64">WTO, Negotiating Group on Rules, *Additional Provisions on Fisheries Subsidies: Draft Text*, WTO Doc TN/RL/W/278, (12 April 2024) at 4, online: <docs.wto.org> [perma.cc/U3J8-7KQC].</footnote>

<footnote n="65">WTO, Communication by India, *Implementing Appropriate and Effective Special and Differential Treatment under the Additional Provisions on Fisheries Subsidies*, WTO Doc WT/GC/W/947, TN/RL/W/284 (11 July 2024), online: <docs.wto.org> [perma.cc/BMH2-EFHT].</footnote>

<footnote n="66">One of the central divides in this debate arises because the WTO allows for self-declaration of the development status of a country. Over the years this has meant that many developed countries have taken issues with economies like India and China receiving benefits under S&DT principles. Conversely, these developing countries have repeatedly argued that historic actions by developed countries need to be levelled and any obligations on developing countries today must account for this difference.</footnote>

<footnote n="67">See generally, IEA, *Fossil Fuels Consumption Subsidies 2022*(Paris: IEA, 2023), online: <iea.org> [perma.cc/U83D-CTZC].</footnote>

<footnote n="68">Outlined in Article 3.1 of the *United Nations Framework Convention on Climate Change*, 9 May 1992, 1771 UNTS 107. A brief explainer of the principle is found here, Malek Romdhane, “What is the Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) Principle?”, *Climatalk* (12 July 2021), online: <climatalk.org> [perma.cc/P4TL-GBGF].</footnote>

<footnote n="69">For instance, while UNFCCC maintains a list of developing and LDC countries, the WTO allows for self-declaration of development status.</footnote>

<footnote n="70">Kartikeya Garg, “The ‘Common but Differentiated Responsibilities’—WTO Conundrum”, *OpinioJuris* (9 September 2022), online (blog): <opiniojuris.org> [perma.cc/DR4G-LBYB].</footnote>
# —

This essay has highlighted some possible lessons for FFS reform to be gained from similar multilateral action in the reform of fisheries subsidies. There is a long way to go to achieve consensus on disciplines to curb harmful fossil fuel subsidies. But perhaps, in looking to past successes and failures, we can accelerate the process and avoid negotiations that span over two decades. Although WTO as an institution evokes much scepticism in the public imagination today, with the right momentum, and institutional and political leadership, there is possibility in transforming the collective action capabilities of such an organization towards common good. As political backlash threatens protectionism and inward-looking policies, it is all the more imperative that international governance overcomes the fragmentation of international law rules. The WTO has an important new role in bringing together environmental motivations and economic expertise, as it has in fisheries reform, towards the progressive and ambitious phaseout of fossil-fuel subsidies.<fnref n="71" />

According to the IPCC “the most documented policy misalignment [in the context of energy] relates to the remaining very large scale of public direct and indirect financial support for fossil fuel-related production and consumption in many parts of the world.”<fnref n="72" /> Coordinated multilateral action is a crucial vehicle to curb fossil fuel subsidies and redirect public finances towards accelerating green and renewable energy technology and production. A binding treaty supporting FFS reform can serve to provide the necessary foundation for governments to curb harmful practices in the fossil fuel industry and support a clean and just transition for vulnerable economies.

<footnote n="71">In a recently published paper, Catherine Gascoigne echoes a similar view, highlighting “important benefits that the WTO offers as a forum for sustainability negotiations”. See Catherine E Gascoigne, “Regulatory momentum for an energy subsidies agreement in the wake of the fisheries subsidies agreement” (2025) 25 Int’l Env Agreements: Politics, Law and Econ 381 at 397.</footnote>

<footnote n="72">Silvia Kreibiehl et al, *supra* note 7 at 1567.</footnote>