WORLD TRADE
ORGANIZATIONG/SCM/Q2/USA/27
8 August 2003
(03-4151)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Replies to Questions Posed by the EUROPEAN COMMUNITIES1
Regarding the New and Full Notification of the UNITED STATES2
The following communication, dated 7 August 2003, has been received from the Permanent
Mission of the United States.
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Fisheries Finance programme
Q1. In its notification the US states that: Since 1991, the programme has been barred by
NOAA policy and Congressional directives from financing any project that could be construed
to lead to overcapitalization of any fishery.  In 1994, the programme’s regulations were
amended to reflect this change in policy.
Could the US explain what it is meant by “overcapitalization”?
Reply
It should be noted that the FFP regulatory amendment to which this question refers attempted
no definition of either "overcapitalization" or "overcapacity".  NMFS has defined overcapitalization to
be the same as overcapacity which can be expressed in terms of the level of output a firm can
produce.  Overcapacity is the difference between the level of output at maximum economic yield and
the level of output that could be produced by the fish harvesting industry.  The FFP amendment
simply barred in all national fisheries, regardless of their capacity condition, loans that would result in
increasing harvesting capacity.
Q2. Has the NMFS (National Marine Fisheries Service) developed a method to identify
“overcapitalisation” in a particular fishery?
Reply
Yes.
Q3. If yes, do other US bodies (federal and sub-federal) with responsibility in fisheries
management use the same method as the NMFS?
                                                     
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Reply
Yes, the eight Regional Fisheries Management Councils and the Coastal States Marine
Fishery Resource Departments use the same method.
Various fishing vessel and permit buyback programmes
Q4. In its notification the US states, as regards the trade effects of the buy-back
programmes:  The United States is generally of the opinion that well-managed vessel and permit
buyback programmes can reduce capacity and the pressure on the resource.  Moreover, to the
extent that any government financial contributions under these programmes have not resulted
in a benefit to firms which remain in the industry, it is questionable as to whether a subsidy hasbeen provided that can be attributable to the fi shing industry. In light of these considerations, it
is unlikely that these programmes have resulted in negative trade effects.
Pollock Fishery:  Has the Total Available Ca tch been reduced by the US authorities in
proportion with the reduction of fishing vessels?
Reply
Generally, no.
Q5. If not, are the remaining vessels allowed to  fish the quotas that were allocated to the
vessels that left the fishery  and did the US authorities quantify the additional revenues that the
buy-back programme has generated for those remaining in the fishery? Did the US authorities
quantify whether the possible additional revenu es exceeded the contributions by the relevant
industry sector?
Reply
Yes, the remaining vessels are allowed to fish the quotas that were allocated to the vessels
that left the fishery.  The US did not however quantify the additional revenues that may have been
generated by this action.
“Fisheries Disaster Relief”
Q6. According to publicly available information the National Marine Fisheries Service is the
responsible Agency for the programmes funded under this mechanism.  Could the US give an
overview of the funded programmes during the period 1999-2001, detailing the objectives andmain characteristics of the programmes as well of amounts spent in each individual
programme?
Reply
The information requested is provided below.  Please note that some assistance described
below is also included in our formal subsidy notification (  e.g., certain buybacks).G/SCM/Q2/USA/27
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SUMMARY OF FISHERY DISASTER ASSISTANCE
(updated June 2002)
Year
Dec.Appropriation Disaster
authorityFederal
amountFishery/region Programme description
1999 FY 99
Appropriation andEmergency Suppl.Magnunson
Stevens FisheryConservation
and
ManagementAct ("MSA")
312(a)$50.0M Alaska salmon
fisheries-Bristol Bay,Kuskokwin River, and
Yukon RiverNOAA - $7.0M under sec. 402(d)
of MSA for research into causesof the failure DOC/EDA -
$20.0M-$15.0M for programmes
under Title IX of P.L. 91-304$5.0M for the Trade Adjustment
Programme USDA - $18.0M to
the states for aid to individualswith family incomes below the
poverty level SBA - $5.0M for
the cost of direct loans to eligible
small businesses
1999 FY 99 Appropriation Interjurisdictional
Fishery Act(“IFA”) 308(d)$1.0M Northeast multi-species
fisheryContinuation of grant for  New
England Fisherman’s Health CareProgramme.
1999 FY 00 Emergency
SupplementalMSA 312(a) $4.8M Monroe County,
Florida trap fisheryAward made for $6.4M to
address impacts of Hurricanes
Mitch and Georges by:compensating trap fishermen for
direct storm related losses;
buying back trap certificates;  andretrieving lost traps and trap
related shoreline debris to
mitigate environmental damage.
1999 FY 00 Emergency
SupplementalMSA 312(a) $6.0M North Carolina
fisheries (including
blue crab, white
shrimp, oyster,
scallop, flounder,
snapper, grouper)To address impacts of Hurricanes
Dennis and Floyd.  Award made
for $5,143,398 in federal funds,
as NC unable to secure match for
the full $6M.  Programme
includes direct economic relief;assessment of fish populations;
development of accurate
latitude/longitude coordinateswhere storms destroyed markers;
determination of  female crab
migration and impacts of ghostcrab pots, and remapping
habitats;  analysis of
socieconomic impacts;  andmitigation of oyster mortalities
and habitat loss.
2000 FY 00 Emergency
SupplementalMSA 312(a) $13.9M Long Island Sound
lobster fisheries inConnecticut and
New York$6.6M provided to the affected
states, Sea Grant, and NMFS forcooperative research into the
causes of lobster mortalities.
$4.87 awarded to Connecticut to:compensate individuals for
reductions in lobster catch due to
the resource disaster;  buy backactive and latent trap tags ($1M);
and provide job retraining and
business development assistance
to lobstermen.  $4.8M awarded to
New York to:  compensatelobstermen for reductions in
catch;  buy back lobster trap tags
($1M);  subsidize interest costsG/SCM/Q2/USA/27
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on existing debt for affected
fishermen;  and provide job
retraining and technical assistanceconsulting.
2000 FY 00 Emergency
SupplementalMSA 312(a) $5.0M Pacific Coast Groundfish Funds divided among California,
Oregon, and Washington (35, 35,
and 30%, respectively) to:
compensate individuals who have
suffered direct negative impact;provide direct sustaining aid to
fishermen; and assist communities
that have suffered from the disaster.Oregon and California each awarded
$2.33 M; Washington awarded
$2.0M.
2000 FY 00 Emergency
SupplementalMSA 312(a) $10.0M Bering Sea Snow Crab Award for $7M for disaster
assistance; award for $1M plus
match to ADF&G for cooperative
research to restore the fishery; $2Mbeing used by NMFS-AFSC for
Bering Sea ecosystem research.
2000 FY 00 USDA Approp.
(available in FY 01)MSA 312(a) $15M Norton Sound salmon $10M for EDA and $5M for NMFS
to provide assistance.  NMFS portion
to be awarded to ADF&G for
research.  To date, ADF&G has onlyapplied for $400K;  grant of $413K
awarded.
2000 FY 01 Appropriation MSA 312(a) $7.5M Norton Sound salmon Direct payments for food, energy,
fuel, etc. went to:  Tanana Chiefs
Conference-$3.5M;  Assoc. o f
Village Council Presidents - $3.5M;
Kawarek - $0.5M.
Bering Sea and Aleutian crab fleet buyback programme (Consolidated Appropriations Act of
2001 - BSAI Crab Vessel Buy-Back Programme)
Q7. According to publicly available information the above statute authorised $100 million
for the buyback programme, $50 million of which would come from an industry-financed loan
and another $50 million of which was authorised to be appropriated by Congress.
Could the US provide information on the status of the federal funds that are to be
appropriated for this programme?
Reply
There is no longer any possibility of a $50 million appropriation.  Congress amended the crab
buyback law to provide for a $100 million buyback loan under the Fisheries Finance Programme
funding 100 per cent of the buyback's cost.
Recovery of Salmon Stocks in Southeast Alaska
Q8. According to publicly available information, in September 2000, “the state [Alaska]
received final approval from the National Ocea n and Atmospheric Association (NOAA) to use
$14 million in congressional funds designated to recover and assist salmon stocks shared by thePacific Salmon Treaty particpants.”  (see Press Release of the Alaska Dept. for Fish and Game
of 13 September 2000 available at  http://www.state.ak.us/adfg/geninfo/press/2000/9-13-00.htm
Could the US confirm this information?G/SCM/Q2/USA/27
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Reply
Yes.
Q9. If yes, could the US provide details on this programme?
Reply
On 29 August 2000, NOAA approved a grant with the Alaska Department of Fish & Game
(NA06FP0387) titled: Pacific Coastal Salmon Recovery Initiative, covering the period 1 August 2000
–31 July 2005.
This was the State of Alaska's allocation of a four state, $58M appropriation under Pacific
Coastal Salmon Recovery directed at research, habi tat restoration, stock enhancement, and coastwide
conservation and recovery of Pacific salmon.  This programme is ongoing, and consists of
22 sub-projects covering a range of Pacific Salmon Treaty implementation initiatives, broken down
into the four major programmatic themes of: (1) Southeast Alaska Wild Salmon Research &
Monitoring, (2) Habitat Stewardship & Restoration, (3) Economic Improvements, and 4) Cooperative
Projects (including work with Canada & Native Indian Tribes).
Directed Economic Assistance Programme; Establishment (Swordfish and Tuna in Hawaii)
Q10. According to publicly available informatio n “The Consolidated Appropriations Act of
2001 makes $3,000,000 available to the Secretary of Commerce to provide economic assistance
to fishermen and fishing communities affected by Federal closures and fishing restrictions in the
Hawaii long line fishery.” [see Federal Register:  21 November 2001 (Volume 66, Number
225)][Notices] [Page 58440-58442] From the Federal Register Online via GPO Access[wais.access.gpo.gov] [DOCID:fr21n o01-45]  Also available in:
http://www.epa.gov/fedrgstr/EPA-IM PACT/2001/November/Day-21/i29159.htm
Could the US confirm this information?
Reply:
Yes
Q11. If yes, could the US provi de details on this programme?
Reply
NOAA-Fisheries provided approximately $2.8 million directly to Hawaii-based pelagic
longline vessels operating under Hawaii-limited entry permits as a result of a judicial decision relating
to the conservation of sea turtles in 2000.  A total of 121 Hawaii-based longline vessels received
either $32,000 or $16,000 depending on their predominate target species.  Target speciesdeterminations were made by NOAA Fisheries based on federal catch and effort logbooks.  For those
vessel targeting tunas - $16,000 was provided, while those that targeted swordfish received $32,000.
The programme has been terminated with the final payments being made in June 2002.
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