WORLD TRADE  
ORGANIZATION  TN/RL/GEN/114/Rev.2 
5 June 2007 
 (07-2303) 
Negotiating Group on Rules Original:   English 
  
 
FISHERIES SUBSIDIES:   
FRAMEWORK FOR DISCIPLINES 
 
Communication from Japan;  the Republic of Korea;  and the Separate
 
Customs Territory of Taiwan, Penghu, Kinmen and Matsu  
 
Revision  
  
 The following communication, dated 1 June 2007, is being circulated at the request of the 
Delegations of Japan;  the Republic of Korea;  and the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu.  TN/RL/GEN/114/Rev.2 
Page 2  
 
  FISHERIES SUBSIDIES:  FRAMEWORK FOR DISCIPLINES 
 
 
(The sponsors reserve their rights to 
 further revise the proposal in the future) 
 
EXPLANATORY NOTES 
 
 
BASIC IDEAS 
A possible new discipline for fisheries subsidies is proposed as attached.  In this new proposal, 
attempts were made to incorporate the followi ng considerations in the new discipline.   
 
¾ A practicable and workable discipline is sought.   
¾ Equity among Members, as well as the balance between rights and duties, is sought.   
¾ Opportunities for international collaborati on are provided and, where appropriate, 
opportunities for stakeholder involvement in the process are sought.   
 
MAIN ELEMENTS 
In the proposed new discipline, all relevant elements contained in the WTO Ministerial 
Declarations were fully taken into account.  
 
The Doha Ministerial Declaration  noted that "we agree to negotiations aimed at clarifying 
and improving disciplines under the Agreements on Implementation of Article VI of the GATT 1994 
and on Subsidies and Countervailing Measures, wh ile preserving the basic concepts, principles and 
effectiveness of these Agreements and their inst ruments and objectives, and taking into account the 
needs of developing and least-developed particip ants" and "in the context of these negotiations, 
participants shall also aim to clarify and improve WTO disciplines on fisheries subsidies, taking into 
account the importance of this sector to developing countries".
1   
 
The Hong Kong Ministerial Declaration  noted that there was "broad agreement that the 
Group should strengthen disciplines on subsidies in the fisheries sector, including through the 
prohibition  of certain forms of fisheries subsidies that  contribute to overcapacity and over-fishing".2   
 Clearly, the following specific items are the "required elements":    
¾ To prohibit certain forms of fisheries subsidies that contribute to overcapacity and over-
fishing.   
¾ To take into account the importance of th is sector to developing countries.   
¾ Preserving the basic concepts, principles and effectiveness of the ASCM and its instruments 
and objectives.   
 
The first two items are widely acknowledged in  the negotiating group on rules.  The last 
element should deserve further attention, when we  discuss the issue of "top-down" or "bottom-up" 
approach.  Proposed texts by Brazil
3, NZ4, and USA5 are based on the "top-down" approach, based on 
                                                      
1 WT/MIN(01)/DEC/1, 20 November 2001, para. 28. 
2 WT/MIN(05)/DEC, 22 December 2005, Annex D, para. 9. 
3 TN/RL/GEN/79/Rev.4.   
4 TN/RL/GEN/100.   
5 TN/RL/GEN/145.    TN/RL/GEN/114/Rev.2 
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  the "negative listing" of permitted subsidies under a broad prohibition.  On the other hand, proposals 
from EC6, Norway7, Japan, the Republic of Korea, and the Separate Customs Territory of Taiwan, 
Penghu, Kinmen and Matsu8 support the "positive list" approach.   
 
Creation of simple, enforceable and effective rule  is the objective of this negotiation.  While 
demandeurs of this negotiation request to take th e "top-down" approach in the beginning, Members 
started to reconsider the practicalities of the "top -down" approach.  The situations of resource 
management and ecosystem dynamics vary accord ing to each Member, and there are no uniform 
impacts of fisheries subsidies, especially when combined with management instrument.  The "top-
down" approach seriously underm ines policy flexibilities under these circumstances, denying the 
chance for further policy developmen ts when fisheries environment ch anges and policy needs arise in 
the future.    
In addition, since the existing structure of th e ASCM employs a "positive list" approach, an 
approach taken by the latter group can better accomm odate the requirement related to "preserving the 
basic concepts, principles, and effectiveness" of th e ASCM.  This proposal also takes a "positive list" 
approach from these considerations.    
However, the effectiveness of the new discipline may be more dependent upon the 
effectiveness of the notification and the review proc ess.  In this proposal, a combination of the higher 
level of transparency and peer-review process is proposed.   
 
ADDITIONAL ELEMENTS 
The issue of fisheries subsidies have attracted considerable attention from inside and outside 
the WTO community.  The World Summit on Sustai nable Development (WSSD) of United Nations 
held in Johannesburg, South Africa, in 2002, required all levels to "eliminate subsidies that contribute 
to illegal, unreported and unregulated fishing an d to over-capacity, while completing the efforts 
undertaken at the World Trade Organization to clarify and improve its disciplines on fisheries 
subsidies, taking into account the importance of this sector to developing countries".
9   
 Consequently, the following specific element is incorporated in the proposed discipline:   
 
¾ To eliminate subsidies that contribute to ille gal, unreported and unregulated fishing.   
 
SUSTAINABILITY CRITERIA 
 It would be inappropriate to explicitly provide some specific "sustainability criteria" in the 
text of the new discipline as a condition for granting s ubsidies.  First, it is unrealistic to negotiate the 
text on the sustainability criteria judging from the current uncertainties involved in this issue.  
Complete inventory of the fisheries and fish stocks of the world does not exist under the FAO.
10  
Good management practice also cannot be fixed beca use it varies by species or ecosystems, and thus, 
the standards vary according to countries.  The FAO Guidelines for the Ecolabelling of Fish and 
Fishery Products from Marine Capture Fisheries  (FAO 2005) contains some requirements for the 
fishery managements.  But this part of the Guideline , which extends to several pages of the published 
document, is under continuous review at the FAO.  Also, many of the FAO instruments, such as the 
                                                      
6 TN/RL/GEN/134.   
7 TN/RL/GEN/144.   
8 TN/RL/GEN/114/Rev.1.   
9 UN 2002, A/CONF.199/20, p.24 (para.31).   
10 FAO, 2003, Strategy for Improving Information on Status and Trends of Captured Fisheries, p.4 
(para 14). TN/RL/GEN/114/Rev.2 
Page 4  
 
  Code of Conduct for Responsible Fisheries (FAO 1995), are non-binding and may not be a good 
reference for the binding regulations under the WTO rules.     Second, resource sustainability is a snapshot st atus in a given moment.  Vessels constructed 
using subsidy may continue to operate for decades, and there is no guarantee that the resource 
continues to be sustainable during the same period of time. 
  In order to overcome this situation, rath er than explicitly providing some specific 
"sustainability criteria" in the text of the new disci pline, strengthening of the "notification, enquiry 
point and peer-review" are proposed.  The subsid ising Members are requested to notify detailed 
information relating to their fishing vessel capacities and their fishery production.   
 
SMALL-SCALE FISHERIES 
 A definition of small-scale fisheries is yet to be agreed by the FAO.  Rather, the FAO 
Working Group on Small-Scale Fisheries (Bangkok, November 2003) agreed that it would be 
inappropriate to formulate a universally applicab le definition for a sector as dynamic and diverse as 
small-scale fisheries.
11  This sector can be characterised as (i) inshore or near-shore fishing operation, 
(ii) labour intensive, (iii) targeting multiple species using a large range of different fishing techniques, 
and (iv) supplying products to local and domest ic markets while export-oriented production has 
increased for the last one to two decades.  Use of th e size of the vessel (xx gross tons or yy meters and 
less) should be a simple (and less disputable) criterion, taking into account the diverse situations of 
the sector.   
  The provisions for the small-scale fisheri es should apply to all Members.  There are 
commonly observed characteristics of small-scale fish eries across the countries worldwide.  Small-
scale fisheries contribute to household income in re mote coastal areas where ac cess to other capital or 
production factors is limited.  Fi shermen engaged in small-scale fisheries are not early adopters of 
technology due to lack of information and attitudes to ward risk, unlike those of large-scale fisheries in 
the same country.  In other words, they are to some extent "losers" of the domestic competitions, 
rather than international competitions in most cases,  and thus special treatment must be extended to 
all Members.    S&D Treatment 
 
 S&D treatment is an important element of the new discipline.  At the same time, some balance is needed between the ma ndates "to prohibit certain types of subsidies that contribute to 
overcapacity and over-fishing" and those "to take into account the importance of this sector to 
developing countries".   
  Certain flexibilities for developing country Memb ers are provided to allow even more "policy 
room" for the development within their exclusive eco nomic zones and territorial waters.  At the same 
time, developing country Members are expected to share the appropriate bur dens on conservation and 
management of the resource in such waters.  High seas area is regarded as "commons" among 
Members.  The UN Convention on the Law of th e Sea (UNCLOS) does not distinguish between 
developing and developed countries in  terms of rights and obligations  relating to highly migratory 
species and straddling stocks.  Prohibition and other obligation  of certain forms of fisheries subsidies 
applicable to high seas area should be equally applied to Members.  This is especially true of the 
situation where some of the developing country Members have built up more advanced and more 
competitive deep-water fishing fleet than developed country Members.   
                                                     
 
11 FAO, 2005, Increasing the Contribution of Small-Scale Fisheries to Poverty Alleviation and Food 
Security , p.4.    TN/RL/GEN/114/Rev.2 
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 Additional S&D treatment is provided for small-scale fisheries in developing country 
Members.  At the same time, in order to avoi d providing the "blank check", some conditions are 
added.  Notification requirements are also applied.    
 
- A Text Proposal – 
  
ANNEX [VIII] TO THE AGREEMENT  
ON SUBSIDIES AND COUNTERVAILING MEASURES 
  
 This Annex provides specific provisions regard ing fisheries subsidies and forms an integral 
part of this Agreement.   Article 1 - Prohibition 
 
 The following subsidies
12, granted for enterprises engaged in harvesting of marine13 wild fish , 
shall be prohibited, except as otherwise provided in this Annex:   
 
(a) subsidies for the acquisition, and construction of fishing vessels, unless: 
 
(i) they are granted for the replacement of fishing capacity following a natural 
and environmental disaster where fleet capacity has been reduced so that a 
capacity is restored to the proper level not exceeding its pre-disaster state;  or 
 
(ii) they are granted as incentives14 for reducing existing fishing capacity, where 
the gross tonnage of the new vessel is reduced by at least 50 per cent of the 
sum of the gross tonnage of the w ithdrawn vessels in the same fishery 
category15;  and there are in place fisheries management control measures, 
including enforcement mechanisms, de signed to prevent over-fishing in the 
targeted fishery, such as limited entry systems, catch quotas, limits on fishing effort or allocation of exclusive quotas to  vessels, individuals and/or groups.   
 
(b) subsidies for the vessel modification, unless:   
 
(i) there is no increase in gross tonnage, volume of fish hold, and engine power 
of the fishing vessel;  or 
 
(ii) the modification is undertaken for the improvement of crew safety or on-
board accommodation to comply with national or international standards, without increasing volume of fish hold a nd engine power of the fishing vessel.   
 
                                                     
 
12 A subsidy subject to this Annex must be specific w ithin the meaning of Article 2 of this Agreement.  
13 The term "marine" includes both anadromous (e.g.,  salmon) and catadromous (e.g., eels) species that 
spend a significant part of their life cycle in saltwater. 
14 Governmental support for vessel re placement, including construction or  purchase of new vessels, is 
assumed as a form of such incentives. 
15 The term "same fishery category" means a group of fishing operations  targeting for the same species. TN/RL/GEN/114/Rev.2 
Page 6  
 
  (c) subsidies granted for shipbuilding yards contingent upon the construction of fishing 
vessels;   
 
(d) subsidies for promoting a permanent transfer of fishing vessels to non-participants
16 of 
regional fisheries management organizations17 as an attempt to avoid international 
rules and regulations of fishery operations;  and 
 
(e) subsidies granted for a vessel engaged in  illegal, unreported and unregulated fishing.18   
 
Article 2 - Identification of Non-Actionable Subsidies 
 
Notwithstanding the provisions of Article 1 of this Annex and Parts III and V of this 
Agreement, the following subsidies shall be unde rstood as having no, or at most minimal, trade 
distorting effects or negative effects on fisher ies resources management, and thus considered non-
actionable:   
 
 (a) government-to-government payments to obtain access for a Member's distant water 
fishing fleet to fisheries resources within the exclusive economic zone of another country under the following conditions:   
 
(i)  the terms and conditions of access, including the compensation paid by the 
fishing fleet, are published;  and 
 
(ii)  the access arrangement provides for a science-based assessment and 
monitoring of the status of the fisheries resources in question and for compliance with applicable fishery management systems;   
 
 (b) subsidies for vessel decommissioning pr ogrammes under the following conditions:   
   (i)  the vessels subject to such decommissions are scrapped or otherwise 
permanently and effectively prevented fr om being used for fishing anywhere 
in the world;   
 
  (ii)  the fish harvesting rights, or their sub-allocations, associated with such 
decommissioned vessels are permanen tly revoked and shall not be 
reassigned;  and 
 
  (iii)  there are in place fisheries management control measures, including 
enforcement mechanisms, designed to prevent over-fishing in the targeted 
fishery, such as limited entry systems, catch quotas, limits on fishing effort or allocation of exclusive quotas to vessels, individuals and/or groups.   
 
(c) subsidies for small-scale fisheries, if su ch fisheries meet the following conditions:   
 
                                                     
 
16 The term "non-participants" means the countries who are neither contracting parties nor cooperating 
non-contracting parties, en tities or fishing entities.   
17 The term "regional fisheries management organizations" mean regional or sub-regional fisheries 
management organizations or arrangements.   
18 The term "illegal, unreported and unregulated fi shing" shall be interpre ted in accordance with the 
definition set out in paragraph 3 of the International Pl an of Action to Prevent, Deter and Eliminate Illegal, 
Unreported and Unregulated Fishing of the United Nations Food and Agricultural Organization (FAO).    TN/RL/GEN/114/Rev.2 
 Page 7 
 
 
  (i) the size of fishing vessels is less than (XX) meters in length or (YY) gross 
tons;   
 (ii) the area of the authorized fishing op eration is within the territorial waters 
and/or the exclusive economic zones;   
 
(iii) there exist registration systems of fishing vessel;  and  (iv) there are in place fisheries manageme nt control measures, designed to prevent 
over-fishing in the targeted fishery, which include limited entry systems, 
catch quotas, limits on fishing effort or allocation of exclusive quotas to 
vessels, individuals and/or groups;   
  (d) government expenditures for the c onstruction and maintenance of general 
infrastructure for fishing communities, such  as the provision of housing, roadways, 
water and sanitary waste systems, and fishing port facilities;   
  (e) government expenditures for social safety net for fishermen, including unemployment 
relief, early retirement, worker training or  education, fishery insurance covering life 
and injury for workers and damage for boats and gears, payment for relief from 
natural disaster or similar environmen tal/economic changes, support for the 
temporary suspension of fishing activities,  and alternative employment assistance for 
fishermen;   
  (f) government expenditures for research on fisheries management, including data 
collection, surveys, data analysis, stock monitoring, sampling and assessment;  and 
 
 (g) government expenditures for measures th at enhance marine resources rather than 
capacity to harvest those resources, such as fisheries stock enhancement, marine 
conservation and marine protection, incl uding marine environment restoration, 
hatcheries for breeding, artificial reefs and by-catch mitigation devices.   
 
Article 3 – Notifications, Enquiry Point and Peer-Review 
 
3.1 Members shall notify the following informati on.  Such information will be made publicly 
available
19 by the Secretariat:   
 
 (a) information on the vessels which have been improved, constr ucted, purchased, or 
withdrawn under the subsidy programs listed in Article 1, and paragraphs (a), (b) and 
(c) of Article 2 of this Annex, such as:   
 
(i) the name of the vessel;   (ii) flag state;   
(iii) gross tonnage;   
(iv) length;   (v) construction year;   (vi) name of vessel owner;   (vii) main fishing areas, fishery methods, main target species;  and,  
                                                     
 
19 The purpose of the information disclosure is to inform RFMOs or other relevant fishery management 
authorities with the data on vessels wh ich have received subsidies, so that these fishery management bodies can 
take proper actions based on such information, if necessary.  Information may be disclosed using the website of 
the WTO.   TN/RL/GEN/114/Rev.2 
Page 8  
 
  (viii) in the case of vessel improvement, vess el’s gross tonnage before and after it, 
as well as the year of the vessel improvement.   
 
 (b) an assessment of how any conditions set fort h in Article 1, paragraphs (a), (b) and (c) 
of Article 2 of this Annex have been fulfilled;  and 
 
 (c) the total vessel capacity (i.e., the number of vessels by the vessel size) registered in 
the Member, and export and import of vessels, and annual volume of fishery catch
20 
by the Member with a breakdown of fish species.   
 
3.2 Each Member shall maintain an enquiry poi nt to answer all reasonable enquiries from other 
Members and interested parties in other Members concerning its subsidy programs and fisheries management systems, including measures in place to  address fishing capacity and fishing effort, the 
biological status of managed stocks, and a status  of its MCS (monitoring, control and surveillance) 
measures in the water where subsidized vessels potentially operate.   
 
3.3 Upon request by all Members, the Comm ittee on Subsidies and Countervailing Measures 
shall set up an ad hoc group of experts on fishery,  provided in paragraph 2 of Article 24 of this 
Agreement, to peer-review the notifications a nd reports from the enquiry points as provided in 
paragraph 2.  Such peer-review shall be conducted together with all participating Members under the 
Committee, upon request by any Member.  The ad hoc group of experts on fishery shall be composed 
of three to five independent pers ons, highly qualified in the fields of  fishery management and fishery 
economics.  The experts will be elected by the Comm ittee.  Any report of the ad hoc expert group, 
along with the opinions of Members concerned on the report, if any, will be made publicly available 
by the Secretariat.  
3.4 Upon request, the ad-hoc group of experts, if  established, may provide technical assistance to 
developing country Members so that such Memb ers may fulfil the notification requirements under 
paragraphs 1 and 2 of this Article.    
Explanatory notes (not forming part of a legal text):   
 
z Strengthening of notification provisions and k eeping high level of transparency would be 
desirable to deter subsidies for overcapacity a nd IUU fishing, in addition to the prohibition on 
"subsidies relating to illegal, unrepor ted and unregulated fishing."   
z Paragraph 3.3 is to accommodate a need for the third-party review on no tification and comments 
expressed by the Members.  Any opinion expressed  by the ad hoc group of experts is non-
binding, as the Committee does not have a direct co mpetence for fishery resource management.   
However, the opinion, along with the opinions of concerned Members, shall be disclosed, so that 
the relevant international fisheries manage ment bodies, such as RFMOs, may take some 
decisions using such information.   
 
 
Article 4 - Consultations and Dispute Settlement  
 
4.1 In a dispute under this Annex involving scientific or technical questions related to fisheries, a 
panel may seek advice from fisheries experts chosen by  the panel, in consultation with the parties to 
the dispute, in accordance with the procedures set forth in Article 13 of the DSU.   
 
                                                      
20 The term "fishery catch" exclude the production from fisheries or aquaculture which is not covered 
by this Annex.    TN/RL/GEN/114/Rev.2 
 Page 9 
 
 
  4.2 To this end, the panel may, when it deems a ppropriate, establish a technical advisory group of 
fisheries experts, or seek the assi stance of the United Nations Food and Agriculture Organization or 
other relevant inter-governmental or ganizations in identifying appropriate fisheries experts, at the 
request of either party to the dispute or on its own initiative.    
4.3 In the case of dispute relating to the small-scale fisheries in developing country Members, 
representative(s) from local stakeholder groups, such as community fishery management groups, may be invited as member(s) of the group referred to in pa ragraph 2 of this Article, in consultation with the 
parties to the dispute, in accordance with the pr ocedures set forth in Article 13 of the DSU.   
 
Article 5 – Developing Country Members  
 For purposes of this Annex, in addition to the provisions of Articles 27 of this Agreement and 
paragraph 4 of Article 3 and para graph 3 of Article 4 of this A nnex, developing country Members 
may employ the following treatment:   
 
5.1 The vessel reduction requirement in paragraph (a )(ii) of Article 1, which provide that "the 
gross tonnage of the new vessel is reduced by at l east 50 per cent of the sum of the gross tonnage of 
the withdrawn vessels in the same fishery category" shall not apply to developing country Members if 
such a developing country Member possesses monito ring, controlling, and surveillance measures to 
ensure that the areas of fishing operations of such vessel, newly acquired or constructed under the 
subsidy program, are within its territorial waters or exclusive economic zones.   
 5.2 The requirements for fisheries management control measures for small-scale fisheries, provided in paragraph (c)(iv) of Article 2, shall not apply to developing country Members during the 
period of (_) years after the date of entry into force of this Annex.   
 
[Provisions for a developing country Member, which possesses export competitiveness defined in Article 27.6 of the ASCM, relating to products originated 
from marine capture fisheries, will be further developed.] 
Explanatory notes (not forming part of a legal text) 
 
The package for items, which takes into account th e needs for developing country Members, is as 
follows:   
 
¾ Subsidies for access fees are regarded "non-actionable" (Article 2).   
¾ Provisions for small-scale fisheries should be estab lished (Article 2) and flexible treatment is 
applied to small-scale fisheries in developing country Members.   
¾ Less strict provisions should be applied to ot her fisheries solely operating in the EEZ of 
developing country Members, taking into account the policy room for the development in such 
waters.  However, vessel capacity  should be notified using the prov isions set forth in Article 3, 
since larger vessels in EEZ may sp ill over to the high seas area.   
¾ As for subsidies by developing country Member s granted for the high seas fishery, the same 
treatment shall be applied as de veloped country Members.   
¾ Technical assistance for notification by developing country Members can be sought (Article 4.3).   
¾ Opportunities for stakeholder involvement from small-scale fishery communities from 
developing country Members are available in the case of dispute (Article 4.3).   
 TN/RL/GEN/114/Rev.2 
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  Article 6 – Miscellaneous Provisions 
 
 Nothing in this Annex shall be construed to  prevent a Member from adopting a trade measure, 
consistent with the relevant provision s of the GATT 1994, where appropriate.   
 
 
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