WORLD TRADE
ORGANIZATIONTN/RL/W/58
10 February 2003
(03-0860)
Negotiating Group on Rules Original:  English
SUBSIDIES IN THE FISHERIES SE CTOR:  POSSIBLE CATEGORIZATIONS
Submission from Argentina, Chile, Icel and, New Zealand, Norway, and Peru
The following communication, dated 7 February 2003, has been received from the Permanent
Missions of Argentina, Chile, Iceland, New Zealand, Norway, and Peru.
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I. SUMMARY
Some sort of breakdown of subsidy programmes by type is likely to be needed as a basis for
future work on clarification and improvement of WTO disciplines affecting the fisheries sector.  This
paper outlines different approaches to classification of fisheries programmes that have been suggestedby other organizations in recent years.
II. IDENTIFICATION AND CATEGORIZATION
At the November meeting of the Negotiating Group on Rules it was suggested that different
positions had now been well aired and that it was time to start looking in more detail at the actual
subsidies that were the focus of the mandate.  Proposals would ultimately need to take account of thedifferent types of subsidy in the fisheries sector.  It was noted that work on identification and
categorization has already been undertaken elsewhere and it was suggested that it would be useful for
the Group to start looking at that material before turning its attention to WTO rules.
As a first step this paper surveys previous proposals for classification of fisheries subsidies.
There is one important caveat.  There are different views on the merits of various types of government
programmes in the fisheries sector.  And there are divergent views on whether or how particular
programmes should be disciplined under WTO rule s.  It should therefore be emphasised that a
reference in these lists to a particular type of programme does not signal a view on our part as to the
status of that programme under current WTO rules, or whether and how the rules need to beimproved.  These issues are among those yet to be debated.  Nor should the inclusion of these various
classifications be taken as indicating our view on the approach taken.
There is another basic caveat: it should also be noted that the schemes listed below may take
quite different approaches to the term “fisheries subsidies”.
III. PREVIOUS CATEGORIZATIONS
In recent years several organizations have suggested schemes for categorizing subsidies in the
fisheries sector.TN/RL/W/58
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APEC
In 2000 APEC undertook a Study into the Nature and Extent of Subsidies in the Fisheries
Sector of APEC Member Economies.1 Among the requirements for the study were development of a
comprehensive inventory of generic types of subsidisation employed globally in the fisheries sector,including multi-sectoral subsidies applying also to fisheries.  On the basis of the inventory the report
identified financial transfers in six categories or “modalities”:
• Direct assistance to fishers and fisheries workers
• Lending support programmes
• Tax preferences and insurance support programmes
• Capital and infrastructure support programmes
• Marketing and price support programmes
• Fisheries management and conservation programmes
The authors also suggested a further categorization of these programmes according to whether
they would have the effect of increasing or decreasing fish stocks, and expanding or constraining
fishing efforts.
OECD
A recent study of government financial transfers in the fisheries sector in OECD countries
used the following categorization as a basis for its analysis2:
Fisheries infrastructure
Management, research, enforcement and enhancementAccess to other countries’ watersDecommissioning of vessels and licence retirementInvestment and modernisationIncome support and employment insuranceTaxation exemptions
United States
A paper submitted to the Committee on Trade and Environment by the United States in 20003
suggested categorising subsidies according to their economic/commercial impact.  The two broad
categories proposed were (a) cost-reducing subsidies and (b) subsidies that supported incomes and
prices.
Under the two broad headings the paper list ed 10 specific categories as follows:
                                                     
1 The study is available at www.apecsec.org.sg.
2 See Transition to Responsible Fisheries: Economic and Policy Implications, Paris, OECD 2000.
3 WT/CTE/W/154TN/RL/W/58
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COST-REDUCING SUBSIDIES:
Commercially applicable research funding
Capital cost-reducing subsidiesReduction of income and sales taxesRisk mitigationGovernment ownership and State trading if inconsistent with market terms
Assistance to shipbuilding specifically for fishing vessels
Foreign access payments and assistance to foreign fishing ventures
SUBSIDIES THAT SUPPORT INCOMES AND PRICES:
Price support programmes
Trade-promoting subsidiesSector-specific social assistance programmes
The paper specifically excluded from the list government programmes for fisheries
management, science, enforcement, and most publicly financed port and landings facilities, as well as
government-funded programmes that facilitate the transition to sustainable fisheries.
FAO
The FAO held an Expert Consultation on Economic Incentives and Responsible Fisheries in
Rome in 2000.4  The experts outlined four “sets of subsidies”:
• Set 1 Subsidies are government financial transfers that reduce costs and/or increase
revenues of producers in the short term.
• Set 2 Subsidies are any government interventions, regardless of whether they involve
financial transfers, that reduce costs and/ or increase revenues of producers in the
short term.
• Set 3 Subsidies are Set 2 Subsidies plus the short-term benefits to producers that
result from the absence or lack of interventions by governments to correct
distortions (imperfections) in production and markets that can potentially affect
fisheries resources and trade.
• Set 4 Subsidies are government interventions, or the absence of correcting
interventions, that affect the costs and/or  revenues of producing and marketing fish
and fish products in the short, medium or long term.
In addition to the “sets of subsidies” the experts defined “categories of subsidies” which are
grouped under two broad headings:  cost-reducing and revenue-enhancing subsidies.  They suggested a
further break-down under “trade” and “sustainability” headings.5
                                                     
4 See WT/CTE/W/167/Add.1
5 For details of this break-down see: Report of the Expert Consultation on Economic Incentives and
Responsible Fisheries, Rome: FAO Fisheries Report No, 638, 2000 as reported in WT/CTE/W/167/Add.1.TN/RL/W/58
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UNEP
A paper commissioned by the United Nations Environment Programme and published in
20026 suggested a synthesis of the above approaches.  The simplified categorization proposed in the
UNEP paper comprised the following:
• Fisheries management services
• Subsidies to capital costs including infrastructure
• Decommissioning and licence retirement
• Subsidies to access to foreign fisheries
• Subsidies to incomes
The paper went on to suggest an elaboration of this classification in matrix form by including,
for each category, reference to management condi tions (eg conditions of access to the fishery,
property rights to the resource, strength of output or capacity controls).  That matrix is not reproducedhere.
IV. CATEGORIZATION FOR THE PURPOSES OF THE NEGOTIATIONS
It is difficult to see how specific proposals for clarification and improvement of fisheries
subsidies disciplines can simply address “fisheries subsidies” in an undifferentiated way (i.e. based on
an aggregation of all support programmes in the fisheries sector).  We should anticipate a need to look
specifically at different categories of subsidy, their nature and impacts as well as their situation under
existing WTO disciplines.
It is likely that some form of categorization will be needed for that purpose.  The
categorization schemes listed above may serve as a starting point for such a discussion.  Note that in
this paper we have reproduced only the classification schemes themselves.  We have not included
explanations of the objectives of the work and the basis for the categorization.  These are available in
the original papers listed in the footnotes.
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6Fisheries subsidies and overfishing: towards a structured discussion, by Gareth Porter,
UNEP/ETU/2001/6 (Vol. I).