TN/RL/GEN/199  
 
4 June 2019 
(19-3840) Page: 1/3 
Negotiating Group on Rules  Original: English  
 
A CAP -BASED APPROACH  TO ADDRESS CERTAIN FISHERIES SUBSIDIES  
THAT CONTRIBUTE TO O VERCAPACITY AND OVER FISHING  
Communication from C hina 
The following communication, dated 3 June 2019, is being circulated at the request of the Delegation 
of China. 
 
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1  INTRODUCTION  
In order to promote the sustainable development of marine fisheries resources, the Ministerial 
Decision of MC11 mandated Members to adopt, by the Ministerial Conference in 2019, an agreement 
on comprehensive and effective dis ciplines that prohibit certain forms of fisheries subsidies that 
contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU -fishing 
recognizing that appropriate and effective special and differential treatment for developing  country 
Members and least developed country Members should be an integral part of the negotiations.  
With the deadline approaching, key issues in the negotiations remain unresolved. Members ' positions 
regarding subsidies that may contribute to overcapacity  and overfishing are still far apart. Compared 
with other approaches, a cap -based approach could be a relatively practical way forward, because 
it accommodates constraints as well as flexibilities of the disciplines, and strikes a balance between 
the need for sustainable fisheries and the need for policy space for sustainable social and economic 
development.  
Considering the multi -faceted role that fisheries play  in environment, trade, food security, livelihood 
and poverty reduction, and the diversity and di fferences of Members ' fisheries situations, reasonable 
policy space should be provided for in making any prohibitive disciplines. As such, a cap -based 
approach that responds to the diversified fisheries situations is needed.  
2  ELEMENTS FOR THE CAP-BASED APPROACH  
2.1  Base for Capping  
For the purpose of this approach, all fisheries subsidies and certain fisheries support measures are 
to be included in the base for capping, including non -specific fuel subsidies for the fishery sector and 
fishery service and mana gement programs, without prejudice to whether or not such programs 
constitute subsidies under the SCM Agreement.  
2.2  Three Approaches for Capping and Reduction  
Considering the diversity and differences of Members ' fisheries situations, Members may choose one 
of the following approaches to achieve capping and reduction for their fisheries subsidies:  
A. A subsidy cap equals to X% of the amount of the average base for capping provided by a 
Member during the base period; or  
B. A subsidy cap equals to Y% of the average la nded value of a Member 's total wild marine 
capture during the base period; or  TN/RL/GEN/199  
 
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  C. A subsidy cap equals to Z% of the amount of global average base for capping per fisherman 
multiplied by the number of fishermen of a Member during the base period.  
Capping and reduction commitments are to be expressed in aggregate monetary terms and be 
incorporated into Members ' WTO Schedules, to be phased in with an implementation period.  
2.3  Compliance with Capping and Reduction Commitments  
A Member shall be considered to be in co mpliance with its capping and reduction commitments in 
any year upon entry into force of this Instrument, in which its total fisheries subsidies, including 
non-specific fuel subsidies for the fishery sector, do not exceed the corresponding commitment level  
specified in that Member 's Schedule.  
2.4  Green Box Measures  
In order to encourage Members to design their fisheries subsidies policies in line with sustainable 
development goals, the following four categories of programs shall not be subject to Member 's 
cappi ng and reduction commitments in any year upon entry into force of this Instrument, without 
prejudice to whether or not such programs constitute subsidies under the SCM Agreement:  
1) Government service and management programs;  
2) Programs to protect fisheries res ources or rebuild stocks;  
3) Programs to reduce fishing efforts or fishing capacity;  and 
4) Programs that are rebuttably presumed not to contribute to overcapacity or overfishing.  
2.5  Review Mechanism  
Within ten years upon entry into force of this Instrument, Member s shall review the operation of the 
cap-based approach, and negotiate further reduction or adjustment, if necessary.  
3  TRANSPARENCY  
Members shall notify all relevant information pertaining to their base for capping and approach for 
capping. Members shall not ify all information pertaining to their green box measures.  
4  SPECIAL AND DIFFEREN TIAL TREATMENT  
Appropriate and effective special and differential treatment shall be accorded to developing country 
Members and least developed country Members. Least developed  country Members shall be 
exempted from capping and reduction.  
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  ILLUSTRATIVE LIST OF  GREEN BOX MEASURES  
1) Government service and management programs, including:  
i) general services, including:  
a) natural protection zone construction program;  
b) disease control, hygiene and quarantine;  
c) quality and safety system;  
d) infrastructural construction service;  
e) fishery management, administration and law enforcement;  
f) statistics, research and development;  
ii) natural disasters relief;  
iii) support to fishermen, includin g: 
a) vocational training for the purpose of quitting wild marine fishing;  
b) compliance training;  
c) insurance for fishermen;  
d) income support not related to production, including wage subsidy, income tax 
concessions, concessional loan, tax returns on investment and  support 
programs during the period of fishing ban or fishing moratorium;  
2) Programs to protect fisheries resources or rebuild stocks, including:  
i) programs to survey and protect fisheries resources and aquatic wild animals;  
ii) releasing aquatic animals and fish fries; 
iii) marine ranch and artificial reef construction;  
3) Programs to reduce fishing efforts and fishing capacity, including:  
i) programs to reduce fishing vessels;  
4) Programs that are rebuttably presumed not to contribute to overfishing, including:  
i) programs to sup port fishing activities subject to the regulation of RFMOs;  
ii) programs to support fishing activities in waters under the jurisdiction of another 
Member, under bilateral access agreement and regulated by that Member;  
iii) programs to support fishing activities und er input control or output control 
management, based on stock assessment;  
5) Programs that are rebuttably presumed not to contribute to overcapacity, including:  
i) programs to support the renovation and modification of fishing vessels, provided that 
the capacity  of the vessel is not enhanced, including the installation of safety related 
equipment on vessels, such as communication, navigation and monitor equipment, 
pollution control equipment and environmental -friendly and energy -efficient gears and 
methods.  
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