. /.WORLD TRADE
ORGANIZATIONTN/RL/W/97
5 May 2003
(03-2399)
Negotiating Group on Rules Original:  English
KOREA'S COMMENTS ON THE SUBMISSION FROM
THE UNITED STATES (TN/RL/W/77)
Submission from Korea
The following communication, dated 4 May 2003, has been received from the Permanent
Mission of Korea.
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1. At the last session (March 2003) of the Negotiating Group on Rules, the United States made a
submission on the possible categorization and strengthened disciplines on fisheries subsidies.  Korea
wishes to make some comments in relation to this from the reflection on the status of the negotiation
on fisheries subsidies.
2. With regard to the objective of the negotiation, the United States emphasized that it should be
“to provide better disciplines on government prog rammes that promote overcapacity and overfishing,
or have other  trade-distorting effects.” [emphasis added]   As a caveat, Korea is not convinced that the
mandate from the Doha ministerial – the clarification and improvement of WTO rules - has developed
to warrant such goal.  Aside from that, we would like to take note that the United States is correct in
that this group should deal with trade-distorting effects, whatever the sub-topics are, be it
overcapacity or overfishing.
3. The main thrust in the US paper, Korea perceive s, is the introduction of a traffic light system,
similar to that of the current SCM Agreement.
(a) First, we would like to point out that this kind of suggestion is bypassing several
important preliminary steps.  Korea has raised a number of basic questions that are
pre-requisites for advancing the negotiations, among others, whether fisheries
subsidies cause resource depletion, whether it is particularly difficult to address the
trade-distorting effects of fisheries subsidies by the current SCM Agreement, and
whether and why we need a special classification scheme for fisheries subsidiesonly.
1  We do not believe that the answers to these questions were satisfactorily
                                                     
1 Other relevant questions include:
- Did Doha Ministerial Declaration mandate a sectoral approach for fisheries subsidies?
- Is the heterogeneous nature unique to fisheries?- Is it difficult to identify "like products" for fisheries?
- Does the "economic structure" of fisheries industry make price effects of subsidies difficult to
estimate?
- Is it difficult to estimate the "reference price" for fisheries products?- Is it proper to discuss the environmental aspects of fisheries subsidies in the rules negotiation
group?
- Are fisheries resources shared resources?
- Do fisheries subsidies limit non-subsidized par ticipants’ access to shared fisheries resources?TN/RL/W/97
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provided during the discussions thus far.  The US approach is based on the unproven
assumption that all these issues were resolved.  Looking ahead without clearing these
basic issues is as dangerous as building a structure on flawed foundation.
(b) Second, the US classification method takes an odd approach that is deviated from the
usual rule-making practice in the international trade area.  Apparently, the
United States borrowed the idea of traffic light system from the current SCM
Agreement or the Agriculture Agreement.  Members should note that the WTO
Agreements are, after all, nothing but trade agreements.  The criteria of the traffic
light system of the WTO Agreements are trade-distorting effects of subsidies.
Although the classification scheme envisaged by the United States appears to
conform to the existing system, it has a mixed use of trade effects and environmentaleffects in the criteria of the classification.  We reckon that this confusion has arisen
from the problem that the negotiations on fisheries subsidies lack proper principles
and definitions, which Korea has been arguing for the need to establish.
4. Lastly, Korea agrees with the United States that this negotiating group should explore ways to
draw upon information from other organizations incl uding FAO.  Although the United States did not
elaborate why, we believe it is due to the fact that this negotiating group is not equipped with
necessary expertise in fisheries and accumulation of relevant researches.  Therefore, we further view
that discussion on resource depletion in an environmental aspect, in particular, is out of the scope of
this group’s work.  The WTO is simply not the place to lay the ground work for the environmentaleffect of subsidies, nor can it responsibly create and enforce adequate disciplines on the subject.
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