WORLD TRADE  
ORGANIZATION  TN/RL/GEN/174 
17 February 2011 
 (11-0816) 
Negotiating Group on Rules Original:   English 
  
 
FISHERIES SUBSIDIES:  ARTICLE II 
 
Communication from Malaysia
 
 
 
 The following communication, dated 16 February 2011, is being circulated at the request of 
the Delegation of Malaysia.  
_______________ 
 
 
I. INTRODUCTION 
 
1. Malaysia places deep interest on the current draft text of 2007 and holds ardently that the said 
text remains relevant as a basis of continuing ne gotiations in the area.  While subscribing to the 
general structure and architecture of the Chairm an's 2007 draft text, Malaysia has consistently 
submitted that there are elements therein that may require improvement.  At this juncture, Malaysia 
would particularly like to contribute to the furthe r strengthening of Article II: General Exceptions, 
whilst upholding the basic principle of limiting the general exception to non-capacity enhancing 
subsidies and retaining the level of am bition in the Chairman's draft text.  
II. PARTICULAR IMPORTANCE OF FOOD SAFETY AND IMPLICATIONS OF 
MEETING FOOD SAFETY REQUIREMENTS 
 
2. Certain foodstuffs may present specific health risks to consumers.  This is particularly, with 
respect to food from animal origin.  In order to ensure a high level of consumer protection and protection of public health, some countries impose hea lth and hygiene standards with respect to food, 
including fish.  In the World Trade Organization (WTO) Agreement on the Application of Sanitary 
and Phytosanitary Measures (SPS Agreement), it is  recognised that that no Member should be 
prevented from adopting or enforcing measures necessary to protect human, animal or plant life or health, subject to the requirement that these m easures are not applied in a manner which would 
constitute a means of arbitrary or unjustifiable discrimination between Me mbers where the same 
conditions prevail or a disguised r estriction on international trade. 
3. Nevertheless, the imposition of food safety st andard as a condition to gain market access
1 is 
one form of non-tariff barrier widely faced by exporting countries.2  Different standards and regime 
coupled with complexity of sanitary and regula tions imposed by major importing countries are the 
                                                      
1 See, L. Ababouch, G. Gandini, J. Ryder, 'Causes of detentions and rejections in international fish 
trade' FAO Fisheries Technical Paper 473  (FAO, 2005) 1. 
2 Developing countries play an active part in intern ational fish trade and actua lly represent near 50% of 
exports (in value terms).  The net receipts of foreign exchange by developing c ountries (i.e. deducting their 
imports from the total value of their exports) increased from US$3.7 billion in 1980 to US$17.4 billion in 2002.  
See, Lahsen Ababouch, 'Assuring fish safety and quality in international fish trade' (2006) 53 Marine Pollution 
Bulletin  561,561. TN/RL/GEN/174 
Page 2  
 
  key impediment faced by exporters, the developing countries.
3 Additionally, different organizations 
and functions, practices and procedures of inspection at  borders have also significantly impacted fish 
trade.  
4. Among the standards required of fishing vessels in order to ensure food safety, includes 
redesigning vessels' spatial layout, taking into account various activities including catching, handling 
and storage of catches, and offloading at jetties.  The primary objective of upgrading is to prevent 
contamination of the fish products from various s ources of contaminants and pollutants.  Among the 
upgrading works include: 
(a) construction of specially designed toilets a nd shower facilities with toilet coaming of 
at least 8 inch height to prev ent leakage to th e sorting deck; 
(b) provision of wash basin for hand cleaning and hygiene; 
(c) partitioning of engine room compartments  and crew quarters from fish holds to 
prevent any contamination of the stored fishery products ; 
(d) fibreglass coating and epoxy food grade painting are required for wooden sorting 
deck.  As for non-wooden sorting deck , material should be upgraded to non-
corrosion, non-damaging, non-toxic, easy to clean and durable materials; 
(e) repositioning of water intake for water used  with fishery products so as to avoid 
contamination in that it has to be in safe distance from water outlet; 
(f) provision of three separated storage facilities for safe and proper keeping of 
chemicals, fish handling equipment and e ngine oil to avoid cross contamination; 
(g) replacement of freshwater tank to a non-co rrosion material and coated with food 
grade paint; 
(h) partitioning of sorting deck through deck coaming so as to preventing contamination 
from flowing water; 
(i) equipping the fish holds with hatch coaming so as to prevent water from the deck 
from flowing in whenever hatch is opene d.  Additionally, bilge well should be 
constructed so as to ensure thorough cleaning of fish holds; 
(j) fish holds to be made of materials that are easy-to-clean, durable, smooth, non-toxic 
and non-corrosion type; for wooden vessels, fi sh holds should be coated with special 
material to avoid direct contact with fish; 
(k) erection of proper shading structures on the landing, sorting and storage decks so as 
to keep the fish away from direct sunlig ht and pollution from the exhaust system; and 
(l) construction of galley at proper height on the deck.  
5. Failure of fishing vessels to meet these st andards may cause serious trade implications, 
including, the denial of market access to exporting  countries.  Therefore, it is necessary that these 
standards are met.  
                                                      
3 Ibid.  TN/RL/GEN/174 
 Page 3 
 
 
  6. Nevertheless, the costs of meeting such sta ndards may be prohibitive, particularly for 
developing countries.  This includes the costs of upgrading fishing vessels by laminating fiberglass on the main deck and fish holds, repairing and ref astening hull planking, installing fiberglass toilet, 
shower and wash sink, painting underwater hull and shipside and superstruc ture.  Considering the 
significant costs of meeting these standards, it may be necessary for the Governments of Members to 
provide assistance to fishermen in order to meet thes e standards, in order to alleviate the burden on 
fisherman and ensure market access for their catch, 
7. While agreeing that subsidies on improvement s, renovation and modification of fishing 
vessels should be generally prohibited, we hold the vi ew that exception should be given with respect 
subsidies for improving fishing vessels in order to fulfil food safety standards.  We note that the 
Chairman's 2007 draft text provides an exception for vessel modification and modernization in order 
to fulfil crew safety standards.  We are of the view that the same exception should be provided for 
subsidies for improving fishing vessels in order to fulfil food safety standards. 
8. There are legitimate reasons why subsidies for fishing vessels modification in order to meet 
food safety-related objectives should be excluded from the prohibition.  Firstly, the modification that 
are made to ensure fulfilment of food safety standa rds will NOT result in the increase or enhancement 
of fishing capacity, on the basis of gross tonnage, volume of fish hold and engine power of a vessel. In order to ensure that the creation of this ex ception would not lead to enhancement of fishing 
capacity, the exception proposed is conditional.  Furt hermore, Malaysia has sought to maintain the 
level of ambition of the draft text by retaining the fisheries management conditionalities.  In this 
regard, the proposed amendment does not erode the cu rrent level of ambition contained in the Chair's 
draft text of 2007. 
9. Secondly, such subsidies would promote the fulfilment of the legitimate objectives of 
ensuring consumer protection and public health prot ection.  It would encourage the adoption of good 
handling practices, throughout the value chain, with a view to ensuring that fish is safe for public 
consumption. 
10. Thirdly, such subsidies would alleviate th e burden on fishermen to provide assistance to 
fishermen in meeting food safety standards. 
11. Based on the above considerations, we forwar d the following textual proposal, which is 
premised on Article II of the Chairman's 2007 draft text. TN/RL/GEN/174 
Page 4  
 
   
III. TEXTUAL PROPOSAL 
 
Article II
 
 
General Exceptions  
 
 Notwithstanding the provisions of Article I, and subject to the provision of Article V:  
 
 (a) For the purposes of Article I.1(a), subsidies exclusively for improving fishing or 
service vessel , and  crew safety  or food safety  shall not be prohibited, provided that:  
   (1) such subsidies do not involve ne w vessel construction or vessel acquisition;
 
   (2) such subsidies do not give rise to an y increase in marine wild capture fishing 
capacity of any fishing or service vessel, on the basis of gross tonnage, 
volume of fish hold, engine power, or on any other basis, and do not have the 
effect of maintaining in operation any such vessel that otherwise would be 
withdrawn;  and  
 
  (3) the improvements are undertaken to comply with  crew safety or food safety  
standards.  
  
*** 
 
  
__________