WORLD TRADE  
ORGANIZATION  WT/CTE/GEN/10/Suppl.1 
5 October 2005 
 
 (05-4452) 
Committee on Trade and Environment 
  
 
 
 
ENVIRONMENT-RELATED ISSUES IN THE NEGOTIATIONS ON WTO RULES 
 
Update by the Rules Division1 
 
Paragraph 51  
 
Supplement  
  I. INTRODUCTION:  NEGOTIATIN G MANDATE ON WTO RULES 
1. Following prior discussions and consideration by Members, including in the CTE, Ministers 
at Doha agreed on the following negotiating mandate in respect of WTO Rules: 
"28. In the light of experience and of the increasing application of these 
instruments by Members, we agree to ne gotiations aimed at clarifying and improving 
disciplines under the Agreements on Implementation of Article VI of the GATT 1994 
and on Subsidies and Countervailing Measure s, while preserving the basic concepts, 
principles and effectiveness of these Agreements and their instruments and objectives, and taking into account the n eeds of developing and least-developed 
participants.  In the initial phase of the negotiations, participants will indicate the 
provisions, including disciplines on trade distorting practices, that they seek to clarify 
and improve in the subsequent phase.  In the context of these negotiations, 
participants shall also aim to clarify and improve WTO disciplines on fisheries 
subsidies, taking into account the im portance of this sector to developing 
countries.  We note that fisheries subsidies are also referred to in paragraph 31. " 
 
2. The most explicitly environmental issue encompas sed within this mandate is that of fishery 
subsidies, the subject of the specific language shown in highlighted text.  While the focus of the 
fishery subsidies mandate is subsidy disciplines, th e reference to "paragraph 31" of the Ministerial 
Declaration is a recognition of the environmental asp ects of this issue as well (paragraph 31 being in 
the section of the Declaration concerning trade a nd the environment).  Thus, while the fishery 
subsidies negotiations are concentrating on disciplini ng subsidies, the mandate also takes note of the 
environmental aspects of the fisheries subsidies issue.  Furthermore, certain other potentially 
environment-related issues were flagged early in  the negotiations, although to date these have not 
been developed.  
                                                     
 
1 This paper updates document WT/CTE/GEN/10, dated 11 April 2003. WT/CTE/GEN/10/Suppl.1 
Page 2  
 
II. THE NEGOTIATIONS 
A. F
ISHERY SUBSIDIES2 
3. The issue of fishery subsidies was originally raised in th e CTE some years ago.  The 
demandeurs consistently maintained that this issu e has trade, environmental and development aspects, 
all of which should be addressed by new, enhanced, subsidy disciplines.  On the other side of this 
debate, certain participants questi oned the relevance of environmental concerns in the context of the 
Agreement on Subsidies and Countervailing Measur es ("the SCM Agreement"), as well as the link 
between subsidies and environmenta l damage to fisheries, pointing in this regard to inadequate 
fisheries management.  These participants took  the position that any in adequacies in the SCM 
Agreement should be addressed on a horizontal basis ra ther than sectorally, to avoid fragmentation of 
subsidies disciplines. 
4. In the Rules negotiations, the main environmental damage attributed by the demandeurs to 
fishery subsidies, via the fostering of overcapacity and over fishing, is the depletion of world fish stocks.  The demandeurs have cited estimates of subsidization at 20-25 per cent of total sectoral 
revenues, and have argued that these subsidies not only finance overcapacity di rectly (e.g., through 
shipbuilding subsidies) but also by reducing the co sts and risks of investing in this sector (e.g., 
through income and price supports, insurance subsid ies, etc.).  The demandeurs also argue that 
fisheries subsidies cause trade distortion, in the fo rm of distorting access to the resource – the fish – 
which type of distortion is not reached by the ex isting subsidy rules of the SCM Agreement.  The 
demandeurs have proposed, as the most effective way to tackle these problems, a broad ban on 
subsidies to the fisheries sector, with certain excepti ons (see below).  Particip ants on the other side of 
the issue have responded in recent submissions and discussions that if these are the fisheries-specific 
problems, then fisheries-specific subsidy disciplines s hould be targeted at subsidies that demonstrably 
have such effects.  They further argue that the existence of such effects will vary depending on the 
fisheries management context in which a particular  subsidy operates, and that any new disciplines 
should reflect this.  These participants disagree with  a broad ban approach, and instead argue that only 
certain, listed subsidies with the identified effects should be prohibited.   
5. Participants on all sides of the debate recogni ze the potentially positiv e environmental effects 
of some kinds of fishery subsidies, such as certa in subsidies for retiring obsolete fishing vessels, 
research subsidies for sustainable use and renewal of  fish stocks, subsidies for fisheries management 
enforcement, and others.  Participants generally ag ree that subsidies that do not harm fish stocks 
should be outside the scope of any prohibition.  Th ere are differences of vi ew as to whether such 
subsidies should be actionable (potentially subject  to countervailing measures and/or WTO dispute 
settlement), or entirely non-actionable.   
6. There is general recognition that many de veloping countries' economies are heavily 
dependent on the fisheries sector, and that any new di sciplines need to take account of this sustainable 
development aspect of the issue.  A number of pr oposals for differentiated disciplines for developing 
country Members are under discussion.  The range of these proposals includes:  exempting from new 
disciplines certain specified measu res for/by developing country Members (including government 
access payments, subsidies to small-scale and arti sanal fishing), longer transition periods and 
actionability instead of prohibition for certain fisher ies subsidies of developing country Members, and 
full exemption from any new prohibitions for developing country Members.   
 
                                                     
 
2 The full list of fisheries subsidie s-related documents submitted to date to the Negotiating Group on 
Rules is set forth in the Annex to this paper.    WT/CTE/GEN/10/Suppl.1 
 Page 3 
 
 
7. Differing views have been expressed in the nego tiations as to which forum or fora offer the 
most accurate, reliable information concerning the st ate of world fish stocks and the adequacy of 
fisheries management.  Organizations/fora referred to  in this regard include the FAO, the OECD, the 
UN, regional fisheries management organizations (RFMOs), and othe rs.  Differing views also have 
been expressed as to the extent to which any new di sciplines should be conditional on or refer to such 
information.   
B. OTHER ENVIRONMENT -RELATED ISSUES  
8. During the Uruguay Round, certain environment -related provisions were introduced into the 
SCM Agreement, although on a provisional basis.  In  particular, in something of a deviation from the 
"polluter pays" principle, certain subsidies for adaptations to new environmental standards were 
defined as non-actionable.  This provision, along with the other non-actionable subsidy provisions, 
lapsed at the end of 1999, due to the absence of a consensus among Members to extend them.  
Proposals to revive the non-actionable category in on e form or another (including reinstating this 
category as it was) were tabled early in the negotia tions.  To date, this issue has not been actively 
pursued, however.   
9. It remains possible that other environmental issues could be raised during the subsidy 
negotiations, although to date this has not happened.  In this regard, there is increased pressure from 
NGOs to bring environmental issues into WTO dis putes concerning subsidy and countervail issues, as 
well as increased activity among certain environmenta l NGOs in respect of environmental effects of 
various forms of subsidies, and in respect of general subsidy issues in the DDA.  These views from 
civil society could eventually find their way into the negotiating positions of certain participants.  
 
 WT/CTE/GEN/10/Suppl.1 
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ANNEX 
 
FISHERIES SUBSIDIES PROPOSALS SUBM ITTED BY PARTICIPANTS WITHIN THE 
FRAMEWORK OF THE NEGOTIATING GROUP ON RULES 
(2002-2005) 
 
 
Participant Proposal Symbol 
Australia, Chile, Ecuador, 
Iceland, New Zealand, Peru, 
Philippines, and the United 
States  The Doha Mandate to Address 
Fisheries Subsidies: Issues TN/RL/W/3 
China Proposal from People's 
Republic of China on Fisheries 
Subsidies TN/RL/W/9 
Japan Japan's Basic Position on 
Fisheries Subsidies Issue TN/RL/W/11 
New Zealand Fisheries Subsidies-Limitations 
of Existing Subsidies 
Disciplines TN/RL/W/12 
Korea Korea's Views on the Doha 
Development Agenda 
Discussions on Fisheries 
Subsidies TN/RL/W/17 
United States Adverse Trade and 
Conservation Effects of 
Fisheries Subsidies TN/RL/W/21 
Japan Japan's Contribution to 
Discussion on Fisheries 
Subsidies Issue TN/RL/W/52 
Argentina, Chile, Iceland, 
New Zealand, Norway, and 
Peru Subsidies in the Fisheries 
Sector: Possible Categorisations TN/RL/W/58 
Korea Korea’s Views on the 
Suggested Categorization of 
Fishery Subsidies TN/RL/W/69 
United States Possible Approaches to 
Improved Disciplines on 
Fisheries Subsidies TN/RL/W/77  WT/CTE/GEN/10/Suppl.1 
 Page 5 
 
 
 
Participant Proposal Symbol 
European Communities 
 Submission of the European 
Communities to the Negotiating 
Group on Rules- Fisheries 
Subsidies TN/RL/W/82 
Japan Questions from Japan 
Concerning Papers on the 
Fisheries Subsidies Issue TN/RL/W/84 
China Comments from the People's 
Republic of China on the 
United States Proposal on 
Fisheries Subsidies 
(TN/RL/W/77) TN/RL/W88 
Chile Possible Approaches to 
Improved  disciplines on 
Fisheries Subsidies TN/RL/W115 
Antigua and Barbuda, Belize, 
Fiji Islands, Guyana, the 
Maldives, Papua New Guinea, 
Solomon Islands, St Kitts and 
Nevis Fisheries Subsidies TN/RL/W/136 
New Zealand Fisheries Subsidies: 
Overcapacity and 
Overexploitation TN/RL/W154 
Japan Fisheries Subsidies: Proposed 
Structure of the Discussion TN/RL/W159 
Korea Questions and Comments from 
Korea on New Zealand's 
Communication on Fisheries 
Subsidies (TN/RL/W/154) TN/RL/W/160 
New Zealand Fisheries Subsidies: UNEP 
Workshop on Fisheries 
Subsidies and Sustainable 
Fisheries Management TN/RL/W/161 
Japan Proposal on Fisheries Subsidies TN/RL/W/164 
Argentina, Chile, Ecuador, 
New Zealand, Peru, 
Philippines Fisheries Subsidies TN/RL/W/166 WT/CTE/GEN/10/Suppl.1 
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Participant Proposal Symbol 
United States Additional views on the 
structure of the fisheries 
subsidies negotiations TN/RL/W/169 
Japan; Korea; and the 
Separate Customs Territory 
of Taiwan, Penghu, Kinmen 
and Matsu Contribution to the Discussion 
on the Framework for the 
Disciplines on the Fisheries 
Subsidies TN/RL/W/172 
Brazil Contribution to the Discussion 
on the Framework for 
Disciplines on Fisheries 
Subsidies TN/RL/W/176 
European Communities Fisheries Subsidies TN/RL/W/178 
New Zealand Fisheries Subsidies to 
Management Services TN/RL/GEN/36 
European Communities  Paper on Fisheries TN/RL/GEN/39 
United States Fisheries Subsidies:  Programs 
for Decommissioning of 
Vessels and License Retirement TN/RL/GEN/41 
Japan IUU Fishing And Fisheries 
Subsidies TN/RL/GEN/47 
Australia, Ecuador & New 
Zealand Contribution to the Discussion 
on the Framework for 
Disciplines on Fisheries Subsidies - Aquaculture TN/RL/GEN/54 
Brazil Contribution to the Discussion 
on the Framework for 
Disciplines on Fisheries 
Subsidies TN/RL/GEN/56 
Antigua & Barbuda, 
Barbados, Dominican 
Republic, Fiji; Grenada, 
Guyana, Jamaica; Papua New 
Guinea; St. Kitts & Nevis, St. 
Lucia, Solomon Islands, and 
Trinidad & Tobago WTO Fisheries Subsidies 
Disciplines – Architecture on 
Fisheries Subsidies Disciplines TN/RL/GEN/57/Rev.2 
 
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