WORLD TRADE  
ORGANIZATION  TN/RL/GEN/165 
22 April 2010 
 (10-2098) 
Negotiating Group on Rules Original:   English 
   
FISHERIES SUBSIDIES—ARTICLES I.2, II, IV AND V 
 
Communication from the United States  
   The following communication, dated 21 April 2010, is being circulated at the request of the Delegation of the United States.   
 
_______________ 
 
 
Introduction 
 
1. The United States strongly supports the overall st ructure and level of ambition in the Chair's 
November 2007 text, including a broad prohibition as the core discipline, together with narrowly tailored exceptions and appropriate and effective special and differe ntial treatment for developing 
Members.  For most of the past year, the Negotiating Group on Rules has had a constructive 
discussion of questions in the Chair's "roadmap," based on that text.   
 
2. While many differences on fundamental questi ons remain, the discussions have revealed 
broad support for the overall framework and architecture of the Chair's text.
1  In addition, there 
appears to be broad support for some provisions in the text that are important complements to the core 
prohibition.  Among these complementary provisions  are Article I.2 (a prohibition on subsidies 
affecting fish that are "unequivocally overfished"), Article IV (a "general discipline" on fisheries 
subsidies) and Article V (fisheries management).  Consistent with the Chair's encouragement to 
provide textual proposals, the United States offers the following suggestions to clarify and expand on 
how these complementary provisions would work, with an aim of ensuring that they could be effectively implemented.  We also provide some suggestions on ways to tighten and streamline the 
"general exceptions" in Article II. 
 3. Our consideration of these provisions has under scored, once again, the landmark nature of the 
Group's work.  This is true on a technical as well as on a policy level.  We are se eking to integrate, for 
the first time and in an entirely new agreement, terminology and concepts from two very different 
worlds:  the complex world of global fisheries and th e WTO rules system.  This effort is inherently 
challenging, and these provisions will undoubtedly re quire additional technical work.  All Members, 
however, agree that for an agreement to be effectiv e, its provisions must be sufficiently clear for 
Members to implement and for a panel to apply if a dispute arises.  This contribution is intended as a 
first step toward stimulating discussion on how to advance that goal.  
4. The premise of this proposal is that the Chair' s text retains its current level of ambition and its 
architecture.  
                                                     
 
 1 See, e.g., TN/RL/W/245 (submission on framework from the Republic of Korea). TN/RL/GEN/165 
Page 2  
 
  Explanation of the proposal 
 
5. Article I.2
:  The Group's discussions so far have re vealed broad agreement that a subsidy 
should not contribute to further pressure on fish stocks  that are already in poor condition, even if the 
subsidy is not among those specifically prohibited in  Article I.1.  The attached proposal provides 
some clarifications to the text that in our view would make it easier to implement effectively.  The 
clarifications include:  (1) elaborating on the biolog ical conditions of the fish stock in question that 
would trigger application of the prohibition; (b) removal of the implication (in the term 
"unequivocally" overfished) that there can be no el ement of scientific ambiguity concerning the stock 
conditions; and (3) definitions of certain ke y terms ("fishing activity," "fish stocks"). 
 
6. Article II  (General Exceptions ):  We have sought to tighten the drafting of some of the 
exceptions to the prohibition to prevent their being used to create unintended loopholes.  For example, 
a subsidy to lessen the "environmental impact" of fi shing, as in the current text, could be read as 
covering subsidies for energy-efficient engines, which would enhance fishing capacity; we have 
therefore limited the exception to subsidies lesseni ng the impact of fishing on "marine habitat."  We 
have also proposed to replace the references in the current text that  emphasize vessel characteristics as 
the measure of capacity ("gross tonnage, volume of fi sh hold, engine power, or any other basis") with 
a less limited definition more in line with the understanding of capacity among fisheries expert, as 
reflected in continuing work in the UN Food and Agriculture Organization (FAO) and other international fisheries bodies. 
 
7. As noted in the attachment, we have de leted the language in the Chair's text under 
Article II(c) (exceptions to Artic le I.1(c) for subsidies for, e.g., retraining, re-education and early 
retirement) because we believe that  these subsidies should not be prohibited in the first place.  In our 
view, as a drafting matter they would be better addr essed through an appropriately targeted definition 
of the kinds of "personnel costs" that should be pr ohibited in Article I.1(c), rather than through an 
exception in Article II.  In this context, Member s should also have a fuller discussion concerning what 
other types of "social safety net" pr ovisions should not be prohibited. 
 8. We note that exceptions for "disaster relief" ar e now placed in Article I.1 ("Except . . . in the 
exceptional case of natural disaster relief, the following subsidies . . . shall be prohibited").  While we 
have not come to a firm view, disaster relief may be  covered more appropriately in Article II.  We 
have not addressed the disaster relief exception in th is submission, but may have further thoughts as to 
its scope and placement as technical discussions of the text continue. 
 9. Article IV
 (General Discipline) :  We have sought to provide further elaboration concerning 
how the general discipline in the Chair's text should operate.  Subsidies that are covered by Articles II 
(General Exceptions) and III (Special and Differen tial Treatment of Developing Country Members) 
would be actionable under Article IV, as well as under the provisions of the existing Agreement on 
Subsidies and Countervailing Measures (ASCM).  10. In our proposal, Article IV.1 sets out the basi c discipline.  Similar to the Chair's text, no 
Member shall "cause harm" through the use of any subsidy to the relevant fish stocks, including 
overfishing and overcapacity with respect to those stocks.  We have, however, modified the Chair's text in several respects.
2   
 11. First
, the Chair's text appears to limit the "interest" of a complaining Member to an interest in 
stocks that are shared with another Member, eith er because they are straddling or highly migratory 
                                                      
 2 We note that the structure of our proposal is very similar to the structure of the proposal on "fisheries 
adverse effects" proposed by Brazil, China, India and Mexico (TN/RL/GEN/163), although the understanding of 
what is necessary to show "harm" may differ.  TN/RL/GEN/165 
 Page 3 
 
 
  stocks with a range extending in to another Member's Exclusive Economic Zone (EEZs), or because 
the Member has an identifiable "f ishing interest" through quota allocations or other fishing rights.  
While this provision could cover many commercially  significant stocks, we are concerned that it 
could be too restrictive, given the limitation in the de finition of "fish stock" to particular geographical 
or other management units.  There appear to be many situations in which a Member that was not 
actually engaged in fishing for a particular stock w ould nevertheless have an interest in ensuring that 
subsidies were not contributing to overfishing or over capacity with regard to the stock.  For example, 
a Member's overfishing of one stock could result in its fleet going elsewhere to put pressure on other stocks that are shared by another Member, resulting in a spiral of overfishing and overcapacity.  A Member could also have a demonstrable interest if it has a substantial trade interest, i.e., it imports or 
produces fish or fish products from the stock that is  subject to overfishing or overcapacity, or fish or 
fish products that are directly competitive or substitutable and do not benefit from subsidies.
3 At the 
same time, we agree that the provision should not be completely open-ended.  We have therefore 
required that a Member have a "demonstrable" ( i.e., more than abstract) interest and given some 
guidance as to the kind of interest that would be "demonstrable." 
 
12. Second , in Article IV.2, we have sought to give more guidance as to what situations would 
constitute evidence of "harm," such  as evidence that overcapacity or overfishing is developing.  We 
also provide examples of factors that are commonly recognized in fisheries literature as being indicators of overcapacity or overfishing.
4  Under this scenario, the complaining Member has the 
burden of demonstrating that harm has occurre d and that the subsidy in question causes harm. 
 
13. Third , we believe that in certain situations harm can  be deemed to exist, regardless of whether 
an affirmative demonstration of evidence of overfi shing or overcapacity has been made under IV.2.  
In Article IV.3, we identify two such situati ons:  (1) there is no valid scientific assessment 
establishing a sustainable allowable catch for the stock; and (2) the subsidizing Member has not 
implemented a management plan for the stock that  is designed to achieve a sustainable allowable 
catch throughout the duration of subsidization.  In those cases, the burden would shift to the subsidizing Member to demonstrate that the subsidy in question has not caused harm.   
 14. Attribution of a subsidy to the Member conferring it
.  We suggest that the Chair's current IV.2 
be moved to a separate article because it should apply to the entire agreement, not just Article IV.   
 
15. Article V  (Fisheries Management): Using the framework of the Chair's text, we have sought 
to set forth the core elements of a fisheries manage ment system that would be a prerequisite for access 
to the use of subsidies under Article II or Article  III.2(b).  These elements are based on the FAO Code 
of Conduct for Responsible Fisheries, and we believe that they reflect the common understanding 
among fisheries managers. We believe that they re present the minimum elements needed in order to 
utilize subsidies under Articles II and III.2(b).    16. We have also provided for Committee review  of Members' management systems, with 
provision for seeking the views of the FAO, the Inte rnational Council for the Exploration of the Sea 
                                                     
 
 3 For example, a Member may not fish for a certain species in one region ( e.g., the eastern Atlantic) but 
may have an interest in preventing harm from overfishing or overcapacity in that fishery if it fishes for the 
species in another region ( e.g., the Southern Pacific) or imports fish or fish products from the stock or directly 
competitive or substitutable products. 
 4 We recognize that the presence of some of these indicators ( e.g., significant declin e in catches, catch 
per unit of fishing effort or the length of the fishing season) would not invariably mean that harm to the stock is 
occurring.  To take an example from US experience, regu latory measures may limit fishing for a stock in order 
to protect other aspects of the marine environment ( e.g., sea turtles); in such cases, overfishing of the stock may 
not be occurring, but there may nevertheless be a significant decrease in catches, catch per unit of fishing effort 
or the length of the fishing season. We expect, however, that this would be the unusual case.  We anticipate that 
identification of appropriate factors will require additional technical work. TN/RL/GEN/165 
Page 4  
 
  (ICES) or other recognized international fisheries organizations concerning scientific and technical 
matters.
5 
 17. We note that our proposal does not draw a di stinction between management conditions that 
should apply in a Member's domestic fisheries and tho se that should apply in international fisheries, 
i.e., those that involve stocks shared with othe r Members and managed through a regional fisheries 
management organization.  In our view, compliance with the same basic conditions, such as scientific 
stock assessments, capacity assessments, measures to br ing capacity and effort into line with stock 
conditions and so on – should be required before subsidies are provided, regardless of where the 
fishing is conducted. To that end, we have clarif ied that fishing subject to Article V includes all 
fishing conducted by a Member's flag vessels, including on the high seas.  However, we have not 
specifically attempted to address the relations hip between these management disciplines and 
requirements that are imposed by the regional fish eries management organizations themselves, which 
may vary significantly in terms of their robustn ess and effectiveness.  We look forward to further 
discussion of this important issue.
6  
 
 
                                                      
 5 As noted in the attachment, these provisions may u ltimately be best placed in the separate article in 
the Annex on notifications and surveillance, but for purposes of discussion we retain them here. 
 6 This issue is also raised to some extent in the proposal by Brazil, China, India and Mexico 
(TN/RL/GEN/163), which appears to contemplate an important role for regional fisheries management organizations. TN/RL/GEN/165 
Page 5 
 
 
   
Text Proposal – Articles I.2, II, IV and V  
 
 I.2 In addition to the subsidies pr ohibited in paragraph 1,  any subsidy referred to in paragraphs 1 
and 2 of Article 1 [of the ASCM] that is provided or used  for fishing activity
1 affecting 
marine wild capture fish stocks2 that are manifestly overfished3 shall be prohibited.    
 
Article II  
 
General Exceptions  
 
Subject to compliance with Article V, the following subsidies shall not be prohibited under Article I: 
  (a) A subsidy exclusively for improving the safety of a fishing or service vessel or its 
crew , such as a subsidy for life boats, other life saving equipment or safety training , 
provided that: 
   (1) the subsidy is not used for new vessel construction or vessel acquisition;    (2) the subsidy does not result in  an increase in fishing capacity
4 of any fishing or 
service vessel; 
   (3) the subsidy does not result in the continuation in operation of any fishing or 
service vessel where such continued oper ation otherwise is inconsistent with 
generally accepted commercial practices w ithin the relevant industry;  and  
 
  (4) the subsidy is used to further co mpliance with safety requirements imposed 
by law.  
  (b) A subsidy exclusively for one of the following purposes:    
  (1) adopting gear for selective fishing techniques
5;  
 
                                                      
 1 The term "fishing activity" means fishing for marine  wild capture stocks, as well as any operation in 
support of such fishing including harvesting, landing, processing, transshipping at sea or in port, refueling, 
resupplying and transporting of fish. 
 2 The term "fish stock" means fish that a regional fisheries management organization treats as a unit for 
purposes of conservation and management.  In the absence of any consideration of the issue by a regional 
fisheries management organization, a "fish stock" means fish, identified on the basis of geographical and 
scientific characteristics, that can reasonably be treated  as a unit for purposes of conservation and management.   
 3 A fish stock is manifestly overfished if the stock is at such a low level of abundance that mortality 
from fishing needs to be restricted to allow the stock to rebuild to sustainable levels.  Manifestly overfished 
stocks include cases in which:  (a) the stock has si gnificantly reduced spawning biomass or reproductive 
capacity; or (b) the stock is recovering from such a low level of abundance or potential for collapse, but further 
expansion of exploitation would adversely affect recovery. 
 4 For purposes of this Annex, the term "capacity" m eans the ability to harvest fish, as determined on the 
basis of widely accepted methods for assessing such ability , including standards and guidance developed by the 
UN Food and Agriculture Organization (FAO) and relevant international fisheries organizations. 
 5 The term "selective fishing techniques" means gear modifications or methods of fishing that reduce 
the mortality or incidental take of non-target fish or other marine species, or otherwise reduce harm to 
ecosystems. TN/RL/GEN/165 
Page 6  
 
    (2) reducing the impact of fishing ac tivity on the marine habitat, such as 
incentives to avoid bycatch or fishing that harms vulnerable marine ecosystems;  or 
 
  (3)  covering expenses for actions ta ken towards complying with a fishery 
conservation and manageme nt regime, such as the costs of equipment for 
providing electronic catch reports, vessel monitoring systems, and observers;   
   provided that the subsidy results in neithe r an increase in the fishing capacity of any 
fishing or service vessel, nor the continuati on in operation of any such vessel where 
such continued operation otherwise is inconsistent with generally accepted 
commercial practices within the relevant industry.   
  (c) A subsidy provided or used for a vessel decommissioning programme,
6 provided that:  
 
  (1) any vessel subject to the programme is scrapped or otherwise permanently 
and effectively prevented from being used  for fishing anywhere in the world; 
   (2) any fish harvesting rights
7 associated with such a vessel  in the fishery that is 
the subject of the programme are permanently revoked and may not be 
reassigned; 
 
  (3) the owner of such a vessel and th e holder of any such fish harvesting rights 
are required to relinquish  
    (i) any claim associated with that vessel; and  
 
  (ii) any harvesting rights that could qualify the owner or holder for any 
present or future harvesting rights in the fishery to which the programme applies;  and 
   (4) the fisheries management system  in place in the fishery to which the 
programme applies includes management  control measures and enforcement 
mechanisms designed to preven t overfishing in the fishery.
8 
  (d) A subsidy provided  to an individual or a group for the purpose of acquiring user-
specific allocations under limited access privileges.
9  
 
                                                      
 6 The term "vessel decommissioning programme" includes government assistance to vessel owners and 
license holders for the permanent retir ement of vessels from fishing or re tirement of licenses from a specific 
fishery for the purpose of removing overcapacity from that fishery.   
 7 Fish harvesting rights may be reflected, inter alia , in permits, licences, and fish quotas.   
 8 Such fishery-specific measures may include limit ed entry systems, catch quotas, limits on fishing 
effort or allocation of exclusive quotas to vessels, individuals and/or groups, such as individual transferable 
quotas. 
 9 The term "limited access privilege" means the allocation to an individual or gr oup of the privilege to 
harvest a certain amount of fish, commonly expressed as a percentage of the total allowable catch of a fishery 
that may be received by, or held for the exclusive use of, that individual or group.  TN/RL/GEN/165 
 Page 7 
 
 
   
Article IV  
 
General Discipline on the Use of Fisheries Subsidies  
 
IV.1. No Member shall cause, through the use of an y subsidy referred to in paragraphs 1 and 2 of 
Article 1 [of the ASCM], harm to a fish stoc k in which another Member has a demonstrable 
interest.10   
 
IV.2. Harm in the sense of paragraph 1 exists where:      (a) The capacity of the subsidizing Member's fleet actively fishing the relevant stock is 
above the level necessary to harv est a sustainable allowable catch
11; or 
 
 (b) The subsidizing Member's rate of harvest  of the relevant stock is above the level 
necessary to harvest a sustainable allowable catch. 
  In determining the presence of such situations , the following factors may be considered:  (i) a 
significant decrease in catches or landings; (ii)  a significant decline in catches per unit of 
fishing effort; (iii) a significant increase in the pe rcentage of juvenile or smaller fish in the 
composition of the catch of all vessels; or (iv) a significant decrease in the length of the fishing season. 
 IV.3. Harm in the sense of paragraph 1 shall be deemed to have been caused by the subsidy in 
question where:    
  (a) Neither the subsidizing Member nor an  international fisheries organization has 
conducted a scientific assessment, within a reasonable period prior to granting the 
subsidy, that establishes a sustainable allo wable catch for the relevant stock; or 
 
 (b) The subsidizing Member has not implem ented a management plan for the relevant 
stock that includes measures to control fishi ng effort and capacity and is designed to 
achieve a sustainable allowable catch throug hout the duration of subsidization of the 
stock. 
                                                     
 
 10 A Member shall be deemed to have a demonstrab le interest where: (1) it has a substantial trade 
interest in fish from the relevant stock or in any directly competitive or substitutable product; (2) it is a party or 
cooperating non-party to a relevant fi sheries agreement; or (3) the range of the relevant stock includes waters 
under that Member’s national fisheries jurisdiction.  
11 The term "sustainable allowabl e catch" means the annual  catch level that represents the optimal 
current use of the resource to ensure its long-term conservation.  The sustainable allowable catch is based on the 
best available scientific information and is set at a level reduced from the maximum sustainable yield (the maximum long-term average catch that can be achieved from the resource) to allow for scientific and 
management uncertainty. Note:  We have deleted the language in the Ch air's text under Article II(c) (exceptions to 
Article I.1(c) for subsidies for, e.g., retraining for activities other than fishing, re-education and 
early retirement) because we believe that these subs idies should not be prohibited in the first place. 
In our view, they could be clearly excluded thro ugh an appropriately targeted definition of which 
"personnel costs" should be prohibited in Article  I.1(c), rather than through an exception in 
Article II.  In this connection, Members should have a fuller discussion as to what other kinds of 
"social safety net" provisio ns should not be prohibited.  
 TN/RL/GEN/165 
Page 8  
 
   
IV.4. Notwithstanding paragraph 3, a subsidy sh all not be found to have caused harm if the 
subsidizing Member demonstrates that the subsidy has not resulted in th e situations identified 
in paragraphs 2 (a) and (b).    
  
  
Article IV bis
 
 
Attribution of Subsidy to the Member Conferring It  
 Any subsidy referred to in this A nnex shall be attributable to the Member conferring it, regardless of 
the flag of the vessel that the subs idy recipient uses or the origin of th e fish that are harvested by that 
vessel.    
Article V
 
 
Fisheries Management  
 
V.1 Any Member granting or maintaining any subsid y referred to in Article II or Article III.2(b) 
shall operate a fisheries management system that regulates marine wild capture fishing 
subject to its national fisheries jurisdiction12, and that is designed to prevent overfishing and 
overcapacity and to promote the rec overy of overfished stocks.   
  (a) The management system shall be based on  internationally-recognized best practices 
for fisheries management and conservation as reflected in the relevant provisions of 
international instruments aimed at ensuri ng the sustainable use and conservation of 
marine species.
13 
  (b) The management system shall include, at a minimum:       (i) regular scientific assessments of fish stocks;  
  (ii) regular assessments of the capacity of the Member's fishing fleets, and a plan 
for managing capacity consistent with the FAO International Plan of Action 
for the Management of Fishing Capacity;  
   (iii) legally binding measures regulati ng fishing effort that are designed to 
maintain populations of harvested species at levels no lower than necessary to 
produce a sustainable allowable catch, taking into account ecosystem interactions where applicable;  
   (iv) mechanisms for the regular collection of and readily available public access 
to data on catches (including discards) in sufficient detail to allow sound 
analysis of trends in fishing effort and stock health; 
   (v) requirements that all vessels have licenses and be registered in a national 
registry and, where applicable, inte rnational registry, that are readily 
available to the public; and 
                                                     
 
 12 Such fishing includes all fishing conducted by that Member’s flag vessels, including on the high 
seas.  
13 These instruments include the United Nations  Convention on the Law of the Sea, the UN Fish Stocks 
Agreement , the FAO Code of Conduct for Responsible Fisheries , and the 1993 FAO Compliance Agreement .    TN/RL/GEN/165 
 Page 9 
 
 
   
  (vi) in the case of shared, straddling, highly migratory and discrete high seas 
stocks, measures requiring cooperation with other parties and cooperating 
non-parties in the fishery and the rele vant regional fisheries management 
organization. 
 
 (c) A Member referred to in paragraph 1 shall ensure that judicial, quasi-judicial or 
administrative proceedings, in accordance w ith its law, are available to ensure 
compliance with its management system. 
 
V. 2. (a)  Each Member shall notify to the Co mmittee any laws, regulations, and administrative 
procedures relating to marine fisheries management, including any modifications thereto, in accordance with the provisions of Article VI.4. 
  (b)  A Member referred to in paragraph 1 shall notify to the Committee information as to 
the operation of its management system, including the results of fish stock and fleet 
capacity assessments performed.  The Comm ittee shall conduct an examination of the 
management system within six months of such notification.  To facilitate this examination, the Committee shall seek the views of the relevant bodies of the FAO, the International Council for the Exploration of the Sea (ICES) or the relevant regional fisheries management organiza tion concerning scientific and technical 
matters, unless the Committee deci des not to seek such views. 
    
 
 V.3. A Member referred to in paragraph 1 shall ma intain an enquiry point to answer all reasonable 
enquiries from another Member and from interest ed person of another Member concerning its 
fisheries management systems, including me asures in place or proposed to address fishing 
capacity and fishing effort; size, landings and catch rates of that Member's fleet; and the 
biological status of the relevant fish stoc k.  Each Member shall notify to the Committee 
contact information for this enquiry point.   
 
__________  Note:  The substance of Article V.2 may ultimately be best addressed in the separate "notifications 
and surveillance" article (currently Article VI).  However, because these provi sions are so integrally 
connected with fisheries management, we include  them here for purposes of further discussion.