TN/RL/GEN/198  
 
21 May 2019  
(19-3519) Page: 1/3 
Negotiating Group on Rules  Original: English  
 
DISPUTE SETTLEMENT I N A WTO FISHERIES SU BSIDIES AGREEMENT:  
DISCUSSION PAPER  
Communication from Canada  
The following communication, dated 10 May 2019, is being circulated at the request of the 
Delegation of Canada . 
 
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1  CONTEXT  
To meaningfully deliver on the Decision from MC11, an agreement on fisheries subsidies should be 
enforceable. Members have not so far engaged in detailed discussions on how dispute settlement 
would work in the context of such an agreement. The Dispute Sett lement Understanding (DSU) 
provides a framework for the settlement of trade -related disputes. However, fisheries subsidies 
disciplines raise particular questions around dispute settlement, given that the WTO dispute 
settlement framework is geared towards r uling on and remedying trade effects, while fisheries 
subsidies disciplines also aim to address environmental effects. Moreover, Members have pointed to 
various specific issues that should be taken into account in the dispute settlement disciplines. The 
nature and extent of these challenges will be dependent on the disciplines ultimately adopted by 
Members.  
This paper aims to generate discussion on the issue of dispute settlement, to determine which issues 
would merit further discussion. To that end, it ide ntifies some of the areas where clarifications or 
adaptations to the dispute settlement framework could be considered and provides possible 
examples from WTO agreements that may be relevant, including the assessment of scientific issues, 
potential limits t o the scope of issues that can be reviewed, the role of consultation mechanisms or 
alternative dispute resolution, and the appropriate nature of remedies. The goal of this paper is not 
to develop an exhaustive list of dispute settlement issues that may nee d to be addressed, but to ask 
pertinent questions to determine how Members envision the operation of dispute settlement for 
fisheries subsidies. We invite Members to come forward with additional issues and ideas.  
2  ADDRESSING SCIENTIFI C ISSUES  
Many of the pr oposed disciplines rely on scientific determinations that a panel may not be best 
placed to assess or review. This includes for instance proposed disciplines on subsidies to overfished 
stocks and proposed disciplines on subsidies leading to overfishing and  overcapacity. If dispute 
settlement is to involve questions such as whether a stock is overfished or whether overfishing is 
occurring, then the dispute settlement rules may need to specify how panels, which usually deal 
with trade matters, should address those issues.  
The presence of scientific elements in WTO disputes is not a new phenomenon and several WTO 
agreements offer ideas on how to address this issue. The DSU already provides, in Article  13, that 
panels have the right to seek information and techn ical advice and to request an advisory report 
from an expert review group on scientific and technical matters. Members may wish to consider 
whether this existing mechanism would be sufficient to address scientific issues in the context of a 
fisheries subsi dies agreement.  TN/RL/GEN/198  
 
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  If Members decide that enhanced or additional mechanisms are needed, other WTO agreements 
offer examples of what these mechanisms could be. One example, found in Article  11.2 of the 
Agreement on the Application of Sanitary and Phytosanitary  Measures (SPS Agreement), would be 
to direct panels to seek advice from experts on scientific and technical issues, for instance by 
consulting relevant international organizations or establishing an advisory technical experts group. 
There are many example s in practice where panels resorted to experts on technical and scientific 
issues in disputes under the SPS Agreement .1 Another possibility would be to direct panels to rely 
on the expertise of specific international organizations with a fisheries mandate when looking at 
fisheries issues. Alternatively, disputing Members could be required to agree on an expert (or list of 
experts) on whom the panel could rely, on a case -by-case basis.  
3  POTENTIAL LIMITS TO THE SCOPE OF ISSUES TO BE REVIEWED  
Members may want t o consider what elements of the agreement should be subject to dispute 
settlement and whether there are issues that panels can or cannot review. More specifically, many 
potential disciplines involve fisheries management issues such as the status of a stock  and whether 
a vessel committed IUU fishing. If Members want to limit dispute settlement to subsidies issues, or 
to only certain aspects of the disciplines (e.g. whether necessary procedural steps were followed), 
it may be appropriate to be clear about the  scope of what panels can review. This may be appropriate 
to ensure that decisions made under the DSU do not contradict or undermine decisions made by 
fisheries management organizations.  
There is no provision in the DSU addressing this. Members could consi der drafting supplemental 
provisions on what is reviewable (for instance, a provision akin to Article  17.6 of the Anti -dumping 
Agreement) or spelling out in each discipline what is reviewable in that discipline (for instance, the 
IUU discipline could stipu late explicitly whether a determination of IUU fishing by a Member is 
reviewable or is not).  
4  CONSULTATION MECHANI SMS/ALTERNATIVE DISP UTE RESOLUTION  
Several Members have suggested that a robust consultation mechanism would allow Members to 
exchange informat ion on fisheries subsidies and voluntarily rectify any harmful effect, thus 
minimizing reliance on litigation processes.  
In addition to the consultations required before filing a panel request, Article  5 of the DSU already 
provides for the possibility for Members to use good offices, consultation and mediation procedures. 
These mechanisms could be used to allow for consultations on fisheries subsidies and their potential 
harmful effects.  
Members could consider whether these existing optional mechanisms shou ld be made mandatory 
for certain fisheries subsidies disputes. Members could also consider creating additional mechanisms 
for fisheries subsidies disputes. Those mechanisms could be in the context of dispute settlement 
(like Article  5 of the DSU) or establ ished as a separate consultation process, outside the dispute 
settlement framework (as has been done under Article  13 of the Agreement on Subsidies and 
Countervailing Measures (SCM Agreement)). A related question is whether any additional 
mechanism should be optional or whether Members should be required to use them before resorting 
to dispute settlement. In doing so, Members may also wish to consider whether accelerated 
timeframes would be appropriate for fisheries subsidies disputes, given the different n ature of the 
impacts involved.  
Members may also wish to examine whether there are other dispute settlement approaches, 
including in the context of other free trade agreements or in fisheries agreements or arrangements 
that may provide further insight into appropriate mechanisms for resolving disputes.  
5  REMEDIES  
The environmental nature of the disciplines envisioned is likely to create a need for Members to 
consider specific provisions on the remedies available in case of violation, while at the same time 
                                                
1 See for instance "EC – Approval and Marketing of Biotech Products ", "Australia – Salmon ", "Japan – 
Apples " and "EC – Hormones ". TN/RL/GEN/198  
 
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  ensuring that such remedies are consistent with the broader mandate of the WTO. It is not clear 
whether the usual ways to enter into compliance under the SCM Agreement (withdrawing a subsidy 
or removing its adverse effects) would be adequate in the case of su bsidies that are environmentally 
harmful. There may be a need to consider alternative or additional remedies that would mitigate the 
harmful effects already generated by the subsidy. This could include consideration of whether 
remedies should be retrospect ive, rather than only prospective.  
Similarly, there may be a need to consider additional or alternative rules on recourse in case a 
Member does not implement the recommendations and rulings of a panel or the Appellate Body 
within a reasonable period of time. Article  22 of the DSU provides that, in such case, if no mutual 
compensation is agreed, the other party can request to the DSB to suspend the application to the 
Member concerned of concessions or other obligations. Resorting to Article  22 in the cont ext of 
fisheries subsidies disputes may present certain challenges. First, the suspension of concessions 
would not address the environmental impacts of the non -compliance (although it may create an 
incentive to do so). Second, it is not clear how the level  of the suspension of concessions would be 
determined, as there may not be a quantifiable nullification or impairment of the rights of the 
Member as a result from the violation. It may be worth exploring whether other forms of enforcement 
may be appropriat e. 
A related issue that Members may want to consider is whether countervailing duties should be 
available as a remedy to address prohibited fisheries subsidies. This mechanism may not be 
appropriate in the specific context of fisheries subsidies since it w ould not directly address the 
environmental effects of the subsidies.  
 
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