99-3490  MORE PRESS RELEASE 
 
 
 
 
PRESS/TE/029 
30 July 1999 
 
 
WTO COMMITTEE ON TRADE AND ENVIRONMENT INVITES MEA SECRETARIATS 
TO INFORMATION SESSION AND DISCUSSES ITEMS RELATED TO MARKET 
ACCESS, INCLUDING DOMESTICALLY PROHIBITED GOODS,  
ECO-LABELLING, INTELLECTUAL PROPERTY RIGHTS  
AND TRADE LIBERALIZATION IN FISHERIES 
 
 The Committee on Trade and Environment (CTE) met on 29-30 June 1999 under the 
chairmanship of Ambassador István Major of Hungary.  
 The CTE invited Secretariats of several multilateral environmental agreements to an 
information session to update Members on trade-re lated developments in environmental fora. 
Members welcomed the MEA presentations and bac kground papers prepared for this session, which 
had contributed to an understanding of the core environment principles and approaches underlying the 
development of MEAs.  Information sessions we re valuable in enhancing domestic policy 
coordination on trade and environment issues. 
 
 In relation to the linkages between the multila teral environment and trade agendas, Members 
focused on four items of the work programme.  A wide range of views were expressed on the 
relationship between MEAs and the WTO, including  dispute settlement;  the export of domestically 
prohibited goods (DPGs); and the relationship between the relevant provisions of the 
WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and the 
Convention on Biological Diversity (CBD).    Discussions were also held on eco-labelling and the environmental benefits of reducing trade 
distorting subsidies for fisheries.  Previous docum ents on agricultural subsidies were also commented 
upon.  Observer status was extended to the United Nations Framewor k Convention on Climate 
Change and the International Commission fo r the Conservation of Atlantic Tunas. 
  This Bulletin summarizes the debates in the CTE at the June meeting.  Papers referred to in 
this Bulletin can be obtained upon request to the Trade and Environment Division of the WTO Secretariat or accessed through the WTO web site. 
  
TRADE AND ENVIRO NMENT BULLETIN PRESS/TE/029 
Page 2/3 
 
  MORE LINKAGES BETWEEN THE MULTILATERAL ENVIRONMENT AND TRADE AGENDAS 
 Items 1& 5: The relationship between the provisions of the multilateral trading system and 
trade measures for environmental pur poses, including those pursuant to 
multilateral environmental agreements; and the relationship between the 
dispute settlement mechanisms in the multilateral trading system and those 
found in MEAs 
 
 Members welcomed the presentations and background documents prepared for the 
information session with the MEAs, which had b een held in conjunction with this meeting.
1  They 
revealed that trade measures were being used or cont emplated to be applied in several MEAs in order 
to achieve environmental objectives.  The point was made that the WTO - as the guardian of the 
trading system – could not remain unaffected by this development. 
 Discussions on the relationship between MEAs  and the WTO provoked mixed reactions from 
Members.  The summary below tries to capture the main views expressed. 
 
 Canada's approach to clarifying the relati onship between the provisions of the multilateral 
trading system and trade measures in MEAs was b ased on the adoption of a "principles and criteria" 
approach.  Canada suggested a number of criteria th at MEA negotiators might use in determining the 
need for trade provisions in environmental agreem ents, as well as qualifying principles that a WTO 
panel might consider in reviewing the relations hip between trade measures in the MEA and WTO 
rules.  Canada emphasized the very different role  that dispute settlement played in MEAs as opposed 
to WTO Agreements.  In Canada's experience, Pa rties to existing MEAs and countries involved in 
negotiating new MEAs had not placed a great deal  of emphasis on dispute settlement provisions 
largely because there was no history of them ever bei ng used and little expectation that this situation 
would change in the foreseeable futu re.  On this basis, Canada c ontinued to support the development 
of strong and effective compliance regimes in MEAs. 
 
 Norway referred to a proposal made in the c ontext of preparations for the 1999 Ministerial 
and said that the most effective way of solvi ng global/transboundary envi ronmental problems is 
through international cooperati on and multilateral rules, especia lly multilateral environmental 
agreements.  Such agreements redu ce the risk of countries taking measures that have effects on other 
countries, without their consent.  WTO rules and e nvironmental agreements must continue to be on 
the same level, without a hierarchical ranking.  The task ahead would then be to ensure that these two 
sets of rules are mutually supportive and legally consistent, and that both contribute to sustainable development.  Norway outlined a number of principles which should apply to trade measures taken under MEAs, including the treatment of non-parties.  
 Chile agreed that there was a need for cons istency and coherence and was open to the views 
put forward by Canada and Norway.  Japan also supported the view that multilateral cooperation was 
indispensable to tackle global environmental probl ems.  A multilateral approach was required to 
prevent a country from applying a trade-related measure without securing understanding from other 
countries concerned.  This should be facilitated by identifying the relationship between trade-related 
                                                      
1The following Secretariats contributed background papers: Commission for the Conservation of 
Atlantic Marine Living Resources (WT/CTE/W/113); International Organization for Standardization 
(WT/CTE/W/114); Secretariat for the Vienna Convention and the Montreal Protocol (WT/CTE/W/115); Convention on Biological Diversity (WT/CTE/W/117) and the Convention on International Trade in 
Endangered Species of Wild Fauna and Flora (WT/CTE/W/119). New Zealand submitted a paper on removing 
trade distorting fisheries subsidie s (WT/CTE/W/121). The WTO Secretar iat prepared papers on: Certain 
Persistent Organic Pollutants (WT/CTE/W/112) and the Transparency of Tr ade Measures used for 
Environmental Purposes (WT/CTE/W/118). PRESS/TE/029 
Page 4  
  MORE measures related to MEAs and the WTO, while be aring in mind that trade was only one of many 
factors causing environmental problems.   The EC remained convinced of the need to  accommodate trade measures taken pursuant to 
MEAs within the WTO.  The Biosafety negotiations  in Cartagena confirmed that because of their 
relative lack of control and enforcement capabilities,  developing countries were especially vulnerable 
to some trade-related environmental risks.  The esta blishment of effective international instruments to 
prevent such risks was therefore particularly impor tant for developing countries.  However, this 
element had not been sufficiently taken into account in the CTE's deliberation on the MEA issue.  In 
fact, there seemed to be a sharp contrast be tween the position expressed in the CTE by many 
developing countries and their stance in multilateral environmental negotiations, notably on biosafety 
and waste. 
  The EC considered that while CTE's discussions  had led to a more systemic consideration of 
WTO rules in environmental negotiations, the introduction of new provisions in MEAs such as "savings clauses" would weaken the legal effectiv eness of MEAs.  Furthermore, they implied that 
MEAs would be subordinated to, or isolated from, other international agreements.  There were other 
solutions available to clarify the relationship be tween MEAs and WTO Agreements.  The notion of 
mutual supportiveness and consistency should be the fundamental guiding principle in this area. 
  The EC welcomed the Appellate Body report on the Shrimp-Turtle case, which demonstrated 
there was broad scope to justify environmental me asures under GATT Article XX.  The references to 
several instruments of international law were enc ouraging; it was desirable to avoid interpreting WTO 
laws in isolation from other branches of internationa l law.  The report had clearly recognized that it 
would not be legitimate to enforce trade restrictions based on an importing country's regulatory policies, while opening the door for such restrictions  if based on a multilateral agreement.  Some of 
the statements found in the report might be interpre ted as implying that it would be possible to adopt 
measures aimed at ensuring that the goods that are actually impor ted comply with requirements, 
including PPM-related requirements, unilaterally decided by the importing country.  It would be 
useful to consider this issue further, taking into  account the potential environmental benefits, as well 
as the potential trade distorting effects.   India did not see a need to accommodate trad e measures taken under MEAs in the WTO rules 
and argued that the debate on MEAs was a non-issue, contrary to an issue su ch as eco-labelling.  The 
presentations made by MEAs in the Information Session had proved that they were all working 
effectively without WTO intervention.  GATT Arti cle XX allowed for MEAs to take measures 
necessary for the protection of the environment and di d not need amendment.  The problem lay in the 
fact that its Chapeau was used to undermine the prin ciples of the Article, and that developed countries 
used MEAs as a disguise for introducing a protect ionist agenda into the WTO.  These views were 
echoed by several Members.  With respect to the Shrimp-Turtle case, developing countries were deeply concerned with the evolutionary theory of in terpretation applied by the Appellate Body;  it was 
for WTO Members to interpret such cases.   Brazil endorsed India's comments and stated that the WTO should focus on addressing 
concrete problems, and not hypothetical ones such as that of MEAs.  Venezuela also argued that 
WTO rules already provided sufficient flexibilit y for environmental protection measures and 
considered the DSU to be effective in tackling th e environmental issues that had come before it.  
Egypt and Costa Rica supported these views.  Gu atemala and Mexico argued that continued 
deliberations on this issue were needed and Guat emala called for greater cooperation between trade 
and environment officials.  Venezuela and Morocco  stressed the importance of providing countries 
with technical and financial assistance to meet the requirements of MEAs.    PRESS/TE/029 
Page 5 
 
  MORE  Hong Kong, China was willing to reflect upon these issues with an open mind.  However, 
relationships among Members of the WTO were cl early defined by the WTO Agreement.  MEAs 
should not be used as a back door for circumventing any of the WTO commitments.  This should form 
the basis of any guiding principles on the subject.  Secondly, the WTO and MEAs were distinct sets of legal agreements and contract ual obligations.  While there might be some overlap between the 
membership of the institutions, they were not iden tical.  They had different objectives and different 
instruments to achieve their goals. 
  The MFN Principle and the one-tier Dispute Settlement Mechanism formed the cornerstones 
of the WTO.  Any new measures that would creat e uncertainty or a double or multilayered Dispute 
Settlement Mechanism should be avoided.  In th is connection and in response to the Canadian 
proposal for a "Principles and Criteria" approach , Hong Kong, China recalled that the WTO Dispute 
Settlement Mechanism was based so lely on the WTO Agreements.  It did not seem feasible for a 
WTO panel to consider principles and criteria that extended beyond these.  If the issue concerned unjustifiable or arbitrary discrimination, then as Indi a pointed out, this was adequately covered by the 
Chapeau of Article XX.  Korea was also open-mi nded on these issues.  Even though the WTO could 
accommodate trade measures mandated by MEAs, ther e was still a need to eliminate potential 
conflicts, such as unilateral measures outside the ju risdiction of the importing country.  Clearer WTO 
rules could enhance the predictability and be in th e interest of exporting countries, given the period 
required for dispute settlement.     Switzerland welcomed the increasing awareness that MEAs had understandably also to take 
into account trade aspects when pursuing environmenta l goals.  Even if trade relevant provisions of 
MEAs were generally not inconsis tent with WTO rules and principles, this evolution nevertheless 
created a growing risk of conflict.  Therefore, fu rther clarification of th e relationship between WTO 
rules and those established by ME As was necessary and only WTO Members should decide on such 
clarification.  The discussion focussed on th e following possibilities: (i) amend Article XX, 
(ii) introduce a "coherence clause", e.g. in form of an Understanding whic h could be adopted at a 
Ministerial Conference.  Switzerland felt that ame nding Article XX would ope n a debate and entail 
the risk that the whole Article - which was the balanced result of l ong negotiations - would have to be 
reconsidered.  This was a major disadvantage of th is approach.  Furthermore, there was no necessity 
to create a new exception to the application of WTO rules and principles.  Rather what was needed 
was to clarify the relationship between WTO rul es and other, eventually conflicting rules and 
principles.  This could be achieved through the a doption of an interpretative "coherence clause." In 
this connection, Switzerland suggested a number of  principles that should govern the relationship 
between the WTO and MEAs.    The US noted that in order to avoid problems with MEAs, some delegates had proposed to 
negotiate a clear set of rules aimed at ensuring compliance with WTO principles.  The US cautioned 
that this might be too simplistic an approach a nd that there already existed a broad scope under WTO 
rules for measures affecting trade under MEAs.  Th e best way to ensure that the WTO and these 
agreements operated in harmony was to have more interchanges between  WTO and environmental 
officials negotiating these agreements.  There were no easy answers or blueprints.  The US supported 
Hong Kong, China's concern that MEAs should not be used as a back door to circumvent WTO rules.  
This might occur mainly due to a lack of coopera tion between trade and environment officials, as both 
had a different set of priorities.  The "savings clause" was recognized in the Vienna Convention as a way for parties to an agreement to clarify their intentions vis-à-vis  other agreements;  which had been 
used in many agreements and was not a new tool to undercut MEAs.  If all parties to a negotiation 
were clear that no conflict was intended, they could ag ree to reflect this in a savings clause.  This was 
an effective way of preventing countries from changing their intentions and could prevent disputes 
from arising and being brought to the WTO.  The c onflicts that had arisen during the negotiation of 
the Biosafety Protocol clearly highlig hted the need for a savings clause to  clarify the basic parameters.   
 PRESS/TE/029 
Page 6  
  MORE  Australia expressed the view that MEAs and the WTO should be able to constructively co-
exist and countries should seek to ensure that they were able to fully comply with the obligations 
under both sets of agreements.  A great deal still n eeded to be done to improve policy coordination.  
This process had been enhanced by Information Sess ions with MEAs.  Discussions in the CTE helped 
facilitate a greater understanding of the issues and improved information flows between environment 
and trade officials.  There needed to be cont inuing efforts to secure greater coordination and 
cooperation between trade officials at the national leve l and to ensure that delegations participating in 
international negotiations were able to present well considered government positions. 
   New Zealand stressed that prevention was better th an cure.  This referred to the prevention of 
any inconsistencies developing between the work done in the MEA bodies vis-à-vis  the WTO rules.  
There was a need for the principl e of coherence to guide activities in the MEA bodies and the WTO.  
Various devices such as the 'savings clause' were e ffective tools to help achieve this objective by 
creating clarity.  Furthermore, there needed to be a clear set of rules on compliance and dispute 
settlement mechanisms to act as a disincentive to misinterpreting the rules or interpreting them very 
loosely and creating conflicts that could be avoided.   
 
 Morocco noted there were measures in MEAs th at were adopted by consensus and ratified by 
all parties, as in the case of the Basel Convention.  Some WTO Members found certain provisions such as one concerning waste, to be discriminator y.  Others saw this as a positive step as it 
contributed towards sustainable development.  In th is light, a global approach was needed to resolve 
these issues.  Certain provisions in MEAs such as CITES used quotas to penalize countries.  
Strategies to compensate these countries needed to be  developed, along with technical assistance to 
help them conform to the standards set by MEAs su ch as the Montreal Protocol.  This could only be 
achieved through a global and balanced approach, taking into account the needs and priorities of 
developed and developing countries. 
 
Item 7:  The issue of the export of domestically prohibited goods  
 
 Morocco recalled the notification procedure for domestically prohibited goods which had 
been operational from 1983 until 1990, after which no further notifications had been received.  The 
notifications had provided useful information on laws and domestic regulations, for example on 
pharmaceutical products that were out of date, fertiliz ers, and dangerous chemicals used to make toys 
or radioactive substances.  This complemented th e overall WTO transparency requirements. It would 
also enable developing countries to prepare legi slation and domestic re gulations and strengthen 
human and institutional capacity.      After a brief exchange of views, The Chairm an reminded Members of their obligations to 
provide regular information on their national pol icies relating to DPGs, through the notification 
obligations which remained in force.    
Item 8:  The relevant provisions of the Agreement on Trade-Related Aspects of 
Intellectual Property Rights 
  Following a proposal by Malaysia, on behalf of ASEAN, it was agreed that the Secretariat 
would prepare a factual paper on the relationship between the CBD and the TRIPS Agreement, in 
particular Article 27.3(b) for the next CTE meeting in October. PRESS/TE/029 
Page 7 
 
  MORE Other Items 
 Item 3b: The relationship between the provisions of the multilateral trading system and the 
requirements for environmental purposes rela ting to products including standards 
and technical regulations, packaging, labelling and recycling.  
 The EC welcomed the ISO paper on internati onal standards for environmental labelling and 
the fact that ISO 14024 had moved forward in ISO by  applying a lifecycle approach to eco-labelling 
schemes;  which was also a pplied within the Community.
2  Labelling was one of the priorities the EC 
had highlighted in its agenda for the Seattle Ministerial.   The observer from the ISO stated that the sta ndardization work on ISO/TC 207 was generally 
progressing well, even if there was not yet a consen sus emerging from the definition of ISO Type III 
Environmental Labelling: Labels and Declarations .  Among the resolutions of interest to the CTE 
was Resolution ISO/TC 207 23/1999 concerning the pa rticipation of developing countries.  The 
Chairperson of ISO/TC 207 was requested to en sure that Members not having the possibility of 
participating in the various meeti ngs were consulted so that they could provide written comments with 
justification/explanation to be re ported at the appropriate time.   
  As far as cooperation with de veloping countries was concerned, since the beginning of the 
year, ISO had organized seven regional workshops (two in Africa; one in the Middle East; one in Asia, in cooperation with WTO and ITC; one in La tin America and two in the Baltic countries).  Last 
but not least, a meeting in Seoul (31 May to 6 June  1999) had established that the main elements of 
compatibility between ISO 14001 a nd ISO 9001 had been achieved. 
 
Item 4: The provisions of the multilateral trading system with respect to the 
transparency of trade measures used for environmental purposes and 
environmental measures and requirements which have significant trade effects 
 The Chairman recalled the Secretariat's document on the environmental database.
3  A l l  
notifications that were environmentally related or included environmental refe rences had been listed.  
As the document was only recently distributed, Members might need more time and could comment at a later stage.  
Item 6: The effect of environmental measures  on market access, esp ecially in relation to 
developing countries, in particular to  the least developed among them, and 
environmental benefits of removing trade restrictions and distortions 
 The discussion focussed on the benefits of eliminating trade distorting and environmentally 
damaging subsidies in the fisheries sector.  New Zealand and Iceland had presented papers that examined strategies to achieve this end, wh ich received support from several Members.   
 
 New Zealand's paper stressed that world fisher ies continued to face a significant crisis as a 
result of overfishing.  The immediate cause of this  situation was fishing far in excess of what the 
resource could sustain.  The underlying factors were a combination of excess capacity and government transfers, which encouraged excessive inv estment and effort, together with the absence of 
effective management regimes.  The sheer scale of the subsidies invested into fishing industries was 
immense and explained why pressures on fish stocks had become so acute.  A recent World Bank 
study estimated that a total of US$14-20 billion of  subsidies were granted each year to the fisheries 
                                                      
2WT/CTE/W/114. 
3WT/CTE/W/118. PRESS/TE/029 
Page 8  
  MORE sector, with at least half of that amount provided by OECD countries alone.
4  These subsidies 
represented 20-25 per cent of fisheries revenues.     New Zealand stated that the fact that fish were a heavily traded commodity meant that the 
nature and scale of subsidies in this sector presen ted a number of important issues for the multilateral 
trading system, given the significant trade distortive e ffects arising from fish subsidies.  Of the annual 
value of the fisheries trade (US$50 billion), developi ng countries accounted for half of this trade, and 
in 1996 had derived a net surplus in the order of  US$17 billion.  Subsidized fishing by wealthier 
nations limited the ability of developing countries to develop their own sustainable fishing industries 
with the benefit of full access to markets and true market prices.  
 It also explained that the problem of overfish ing had attracted close scrutiny in a range of 
other international fora, including the FAO, CSD, OECD, UNEP, UNCTAD and APEC.  In this regard, the FAO had adopted an International Plan of Action for Management of Fishing Capacity.  
This plan provided an agreed framework for measur es at national, regional and multilateral levels to 
balance fishing capacity with resource sustainability  objectives.  Given the trade, development and 
environment impacts of fish subsidies, there was am ple scope for the WTO to play a constructive role 
in addressing this issue and complement the wo rk undertaken in FAO and other bodies.   
  The WTO, in cooperation with the expertise th at might be provided by other relevant bodies, 
was the appropriate forum for addressing trade-distor tive measures that had also been shown to have 
adverse environmental effects.  New Zealand suggest ed that recommendations for further work in the 
WTO subsidies could include the following: (i) The CTE could invite the FAO to provide information 
on the implementation of the FAO Plan of Action an d any other actions taken to address the problem 
of overcapacity in the fisheries sector.  The FAO ha d been tasked under the Plan of Action to prepare 
information in this regard.  Members could also directly provide information to the Committee on the 
specific steps they were taking in this regard; (ii) Further analysis and study of the implementation of 
existing WTO disciplines as they apply to subsidies affecting the fish sector could be undertaken.  
Questions had been raised on transparency and ad equacy of notifications under Article 25 of the 
SCM Agreement.  Members could consider the exte nt to which these obligations were being met and 
whether they were sufficient to en sure transparent reporting of fish subsidies that are contributing to 
the overcapacity and overfishing problem.  (iii) C onsideration should also be given more broadly to 
the adequacy of existing WTO disciplines.  This work should be aimed at determining if current 
provisions were effectively implemented by Member s and whether they required supplementation in 
order to secure progressive reduction and elimina tion of fish subsidies that contributed to 
overcapacity.   The FAO addressed the spreading phenome non of excessive fishing inputs and over-
capitalization in world fisheries.  The issue was essentially one of having too many vessels or 
excessive harvesting power in a growing number of fisheries.  The existence of excessive fishing capacity was largely responsible for the degradation of fishery resources, for the dissipation of food 
production potential and for significant economic waste.   The origin of excess fishing capacity dated 
back to the widespread tendency of overinvest ment and overfishing under open-access conditions.  
Over-capitalization in world fisheries also came a bout progressively as a result of broader and related 
factors, such as the resilient profitability of fi shing activities whereby technical progress and relative 
price inelasticity largely compensated for dimini shing yields in overfished fisheries.   
  In 1997, the FAO Committee on Fisheries (COFI) had recommended that a technical consultation be organized by FAO to clarify issu es related to excess fishing capacity and to prepare 
guidelines.  Work undertaken by FAO on this basis had led to the preparation of the FAO 
International Plan of Action for the Management of  Fishing Capacity, adopted by COFI in February 
                                                      
4Earlier studies by the FAO concluded that subsidy levels were probably higher than this. PRESS/TE/029 
Page 9 
 
  MORE 1999.5  The immediate objective of the IPA was for "S tates and regional fishery organizations, in the 
framework of their respective competencies and cons istent with international law, to achieve world-
wide preferably by 2003 but no later than 2005, an e fficient, equitable and transparent management of 
fishing capacity." The IPA was voluntary and based on a number of major principles of the Code of 
Conduct as well as on complementary principles.  
 Concerning major international fisheries requiri ng urgent attention, the IPA called for States 
to take immediate steps to address the management of  fishing capacity applied to these fisheries, with 
priority being given to transboundary, straddling a nd highly migratory stocks that were significantly 
overfished.  It urged States to act individually or multilaterally to reduce substantially the fleet capacity applied to these resources as part of management strategies to restore overfished stocks to 
sustainable levels.  The IPA also called for appropr iate support to be provide d to developing countries 
on issues related to the management of their fish ing capacity.  It further urged FAO to provide 
technical support for a range of activities identif ied as essential for the implementation of this 
instrument.  Steps were being taken by FAO to pr ovide support to the implementation of the IPA.  
A technical consultation would be organized from 29 November to 3 December 1999 in Mexico to 
address issues pertaining to the measurement of fishing capacity.  Technical guidelines for the 
management of fishing capacity was being finalized.   Iceland referred to the link New Zealand's pa per made with sustainable development and the 
situation of the developing countries.  Iceland ha d submitted a paper in the last CTE meeting that 
demonstrated why and how fisheries subsidies had le d to increased fishing efforts and to the depletion 
of fish stocks.
6  It was important to reiterate the fact that fisheries subsidies were practiced primarily 
in the industrialized countries and that the negative trade-distorting effects of these subsidies affected 
first and foremost the fish-exporting developed count ries.  Thus the removal of these subsidies would 
benefit the developing countries most and their pr ospects for sustainable development.  Iceland 
welcomed the submission's recommendation on a work programme to assist in advancing the 
Committee's work on fisheries subsidies.  It was cl ear that the issue of removing fisheries subsidies 
was a strong candidate in building the WTO "win-win" strategy with respect to trade, environment and sustainable development.     Peru endorsed the proposals made by Icela nd and New Zealand to promote sustainable 
development through the elimination of fisheries su bsidies.  Efforts had been taken domestically to 
ensure that these resources were being utilized more sustainably, without the use of subsidies.  The 
preservation of the environment should be a responsibilit y shared by all countries on an equal footing.  
Countries that had shown particular concern fo r the environment should show leadership by 
eliminating subsidies that contributed to overcapac ity in fisheries.  The Philippines also supported 
New Zealand's initiative and suggested an examina tion of present relevant WTO provisions, including 
the SCM Agreement, on which New Zealand's twin a pproach could be pursued:  the first being to 
assess the transparency aspects of fish subsidies.  In this regard, Members could probably ask the 
Secretariat to compile the notifications concerning such  subsidies, in order to evaluate whether or not 
they provided adequate transparency.  The second appr oach would be to look into how notified fish 
subsidies fared against the SCM Ag reement, particularly in respect of the disciplines on prohibited, 
actionable and non-actionable disciplines.   
 
 The US referred to a recent FAO report that revealed that 69 per cent of the world's fish 
stocks was in a dire condition and said there were too many boats chasing too few fish.  The increased 
capacity was an unfortunate by-product of governme nt programmes intended to bolster this sector but 
had resulted in unintended consequences of diminishi ng its viability.  The subsidies that had led to 
overcapacity in the fisheries sector had been hi ghly trade distortive; they led to overproduction, 
                                                      
5The following reports provide additional information:  Report of the Technical Working Group on the 
Management of Fishing Capacity.  La Jolla, U.S.A., 15-18 April 1998.  FAO Fisheries Report No. 586.  
6WT/CTE/W/111. PRESS/TE/029 
Page 10  
  MORE encouraged inefficient producers to  remain in the market, shifted the burden of adjustment in 
overcapacity situations to foreign suppliers and ma de it difficult for developing countries to take full 
economic advantage of the fish in their Exclusive Economic Zones (EEZ).  In fact these subsidies had 
been a "lose-lose-lose" proposition, since they repr esented a losing proposition for trade, environment, 
and particularly for development.  The US, along with Norway, recognized that the solution to this 
problem must not be over-broad – it must focus on t hose subsidies that contributed to overcapacity.  
In addition, there were governme nt subsidy programmes that had beneficial effects in addressing 
capacity, which needed to be considered in further deliberations on fisheries. 
  Japan fully supported the sustainable utilizati on of fisheries products and had to this end 
scrapped 132 long line fishing vessels earlier in the year .  It stressed the need to look beyond subsidies 
at the other negative factors that were responsible for the over exploitation of fisheries resources, such 
as illegal fishing.  This was very technical work th at required expertise in fisheries management and, 
therefore, Japan felt that the WTO was not the most  appropriate place to tackle the issue.  As the 
SCM Agreement defined the WTO's mandate to deal  with fisheries subsidies, he requested the 
Secretariat to prepare a paper on the implementati on of the agreement.  Korea supported the Japanese 
view that subsidies were one of many causes of  over fishing capacity and a broader approach was 
needed to take into consideration all these fact ors.  Members should distinguish positive subsidies 
from negative ones that were detrimental to the su stainable use of fisheries resources.  The positive 
ones could be utilized to restructure the fisheries sect or and strengthen training and technical capacity.   
  Argentina, Chile and Australia welcomed New Ze aland's paper as a timely contribution to the 
Committee's consideration of the issues raised by those subsidies which encouraged overcapacity and 
adversely affected sustainability in the world's fisheries.  Given the urgency and significance of the problems facing global fisheries, Australia believe d that there was a clear role for the WTO in 
complementing efforts under way in other fora  to address these problems.  There was a need to 
identify how the WTO could support these efforts through full implementation of existing WTO 
disciplines as well as considering the need and scope for building on them.   
  Canada supported the FAO's Plan of Ac tion and had implemented several measures 
domestically to reduce the use of subsidies that ha d led to overcapacity.  The WTO needed to clarify 
the exact kinds of subsidies that were detrimen tal to the environment in order to contemplate 
disciplines on certain government practices.  Cana da supported the use of positive subsidies and the 
strategies outlined by New Zealand's paper to promote a sustainable and self reliant fisheries sector.   
  The EC was committed to sustainable fisheri es and subscribed to a number of the views 
expressed earlier and supported a comprehensive ap proach that addressed the economic and social 
dimensions of the problem.  This could serve as an  example of how environm ental and sustainability 
objectives could be brought to bear on specific policy areas to yield positive results.  The EC was 
open to discussions, provided conclusi ons were not reached in advance.  Some subsidies had helped 
reduce capacity by addressing certain social con cerns related to fisheries and these should be 
encouraged.     Morocco shared the concerns of other Me mbers and suggested the WTO should carry out 
some investigative and analytical work within the framework of the SCM Agreement to establish 
certain disciplines that would regulate the fisheries s ector.  To achieve this end, Egypt and Venezuela 
called for support for capacity building, financial,  technical and other assistance to developing 
countries.PRESS/TE/029 
Page 11 
 
  END  
  Costa Rica recalled a document submitted by Urugu ay on behalf of 14 countries at the last 
meeting, which emphasized that the CTE should ex amine the environmental benefits of removing 
trade restrictions and distortions, partic ularly export subsidies in agriculture.
7  The document had 
urged the WTO to give prior consideration to  the elimination of export subsidies.   
 
 Norway commented on papers submitted by Australia and Brazil at the last meeting.8  The 
environmentally-damaging activities outlined by Brazil,  such as the use of pesticides, were echoed in 
the preliminary findings of Norway's paper.9  The empirical findings from that paper had suggested 
there was no clear relationship between environmen tal degradation and the level of support provided 
by different countries.  With reference to non-trad e concerns, Brazil's paper had rightly pointed out 
that the concept of multi-functionality of agriculture in relation to environment had to be considered 
in a universal perspective.  As agriculture contri buted to food security and th e viability of rural areas 
in developing countries, Norway supported such a broad based approach;  these aspects were of such 
a nature that might require special government interv ention.  In that context, one major challenge was 
to ensure that policy measures were designe d in the least trade distortive manner.   
  Norway agreed with the view  expressed in the Australian paper that poorer communities were 
worst affected by environmental degradation.  Tr ade policy reforms did not necessarily contribute to 
changing this pattern.  The question of equity was another important issue, as liberalization in itself 
did not automatically lead to poverty reduction, but would have to be accompanied by policies geared 
towards reducing inequities.  Norway fully supp orted the need for preferential and differential 
treatment, including preferential market access opportunities for least developed countries.  Trade-related technical assistance measures were of major im portance to the integration of the LDCs into the 
trading system.  Policies related to trade, envir onment and poverty reduction ha d to take into account 
a wide range of factors, within the WTO and beyo nd, at the national and international level.   
  
 The Chairman invited the FAO to keep the CTE informed on the progress of its activities in 
the fisheries sector and requested the Secretariat to present an updated paper on the fishing subsidies 
under Article XXV of the SCM agreement.    
                                                      
7WT/CTE/W/106 
8WT/CTE/W/109 and WT/CTE/W/105. 
9WT/CTE/W/100.