WORLD TRADE  
ORGANIZATION  TN/RL/GEN/163 
11 February 2010 
 (10-0770) 
Negotiating Group on Rules Original:   English 
   
FISHERIES SUBSIDIES:   
SPECIAL AND DIFFERENTIAL TREATMENT 
 
Communication from Brazil, China, India and Mexico
 
 
 
 The following communication, dated 8 February 20 10, is being circulated at the request of the 
Delegations of Brazil, China, India and Mexico.    
_______________ 
 
 
This legal draft was the result of contri butions from the co-sponsors as well as other 
delegations that actively participated in the drafti ng process.  It remains open for the subscription of 
other delegations.    
This document is intended to follow up on the latest contributions by Developing Country 
Members regarding the special and differential treatment issue (S&DT) and the applicable 
controls in the future disciplines on fisheries subsidies .  Those contributions include the joint 
statement on S&DT presented by Brazil, Chin a, Ecuador, Mexico and Venezuela (document 
TN/RL/W/241/Rev.1) and legal text proposals such  as the ones circulated by China, India and 
Indonesia (TN/RL/GEN/155/Rev.1) and by Brazil and Argentina (TN/RL/GEN/151/Rev.1).   
 
This text is an attempt at putting together all t hose contributions side by side with the Chair's 
November 2007 draft consolidated text, taking into account the debate on the pertinent questions of 
the December 2008 roadmap for fisheries subsidies.    
Our main objective is to make real the Hong K ong mandate in that "appr opriate and effective 
special and differential treatment for developing a nd least-developed Members should be an integral 
part of the fisheries subsidies negotiations, taki ng into account the importance of this sector to 
development priorities, poverty reduction, a nd livelihood and food security concerns".   
 
The focus on S&DT and its applicable controls is the reason why only Articles III, IV and V 
of the Chair's first draft text are dealt with in this document.  This does not mean that the 
proponents agree with the Chair's suggestions  on the other parts of that draft text , rather the 
proponents just seek to convey what they believe  is needed for fulfilling the Hong Kong mandate 
regarding S&DT.   
 
Our assumption here is that the prohibition of subsidies causing excessive fishing effort and 
negatively impacting fisheries resources can and sh all be reconciled with the important role of 
fisheries subsidies in the economic development of  developing countries.  The applicable controls 
should allow developing countries to achieve deve lopment priorities, poverty reduction, and address 
their livelihood and food security concerns.   
 TN/RL/GEN/163 
Page 2  
 
  On the issue of small-scale,  artisanal fisheries , the proponents decided to bring forward a 
definition based on socio-economic criteria , inspired by the current Article 6.2 of the Agreement on 
Agriculture.  We believe that this is the best way for striking a satisfactory balance, in the absence of 
internationally-agreed definitions on those fisherie s activities by other Organizations more directly 
involved in fisheries issues.  Each Member should be  able to work on its own definition, insofar as the 
criteria set forth in the future WTO disciplines are observed.   
 
On the larger scale fisheries , criteria such as the boat size and the area of capture were 
replaced with provisions structured on the rights Members have under the international law .  
For those activities the controls in Articles IV and V would fully apply, in order to implement the 
Hong Kong mandate consistently w ith its main goal:  to bar harmful fisheries subsidies that create 
over-fishing and produce overcapacity, as well as distor t trade or production.  Artificial distinctions 
such as the Exclusive Economic Zone limitation and th e 10 meters threshold were thus deleted.   
 
The provision of fisheries adverse effects in Article IV were strengthened by a definition of 
these effects in paragraph 2, followed by a list of situations where fisheries adverse effects would be 
deemed to exist.  We are suggesting two types of  analyses under that Article:  a complete one in 
which the occurrence of fisheries adverse effects w ould have to be demonstrated by the complaining 
Member;  and a simplified one in which only the asp ects presented as "shortcuts" would need to be 
demonstrated.    
Article V was streamlined by means of splitti ng its paragraphs concerning the content of 
fisheries management systems, the relationship between  them and international standards and, finally, 
transparency obligations.  On the content asp ect, this proposal follows the principle that only the core 
elements of fisheries management systems shou ld be included in the final Agreement, leaving 
room for their implementation by Members on a case by case basis and adequate to their fishing 
activities .  Notwithstanding their attempts on that matter, the proponents' views on Article V are 
dependent on a final unders tanding on its scope and coverage, in particular its application beyond the 
S&DT exceptions and the nature of the overall notif ication requirements of the fisheries disciplines.   
 
This legal draft is a work in progress and do es not constitute Members' final position on the 
subject.    TN/RL/GEN/163 
 Page 3 
 
 
  Article III 
 
Special and Differential Treatment of Developing Country Members  
 
III.1 The prohibition of Article 3.1(c) and Article  I shall not apply to least-developed country 
("LDC") Members. 
 III.2 For developing country Members other than LDC Members,  the subsidies referred to in 
Article I.1 shall not be prohibited  
  (a)
 Subsidies referred to in Article  I.1 shall not be prohibited  where those subsidies relate 
exclusively to marine wild cap ture fishing performed on an inshore basis (i.e., within 
the territorial waters of the Member) with non -mechanized net -retrieval, provided that 
(1) the activities are carried out on their own behalf by fishworkers, on an individual 
basis which may include family members, or organized in associations;  (2) the catch 
is consumed principally by the fishworker s and their families and the activities do not 
go beyond a small profit trade;  and (3) there is no major employer -employee 
relationship in the activities  carried out.  Fisheries management measures aimed at 
ensuring sustainability, such as the measures referred to in Article V, should be 
implemented in respect of the fisheries in question, adapte d as necessary to the 
particular situation, including by maki ng use of indigenous fisheries management 
institutions and measures.   
 
 where the benefits of those subsidies are co nferred on low income, resource poor or 
livelihood fishing activities, provided that these activities are performed by fishworkers on an individual or family basis or employed by associations or micro-enterprises or 
individual boat owners.  Fisheries management measures aimed at ensuring a 
sustainable level, such as the measures refe rred to in Article V, should be implemented 
in respect of the fisheries in question, adapte d as necessary to the particular situation, 
including by making use of indigenous fish eries management institutions and measures. 
 
III.3  (b)
 In addition, subject to the provisions of Article V , the following subsidies referred 
to in Article I.1 shall not be prohibit ed for developing country Members other 
than LDC Members : 
  (a) (1)
 Subsidies referred to in Articles I. 1(d), I.1(e) and I.1(f) shall not be 
prohibited . 
 
  (2)  Subsidies referred to in Article I.1(a) and I.1(c) shall  not be prohibited 
provided that they are used exclusively for marine wild capture fishing 
employing decked vessels not greater than 10 meters or 34 feet in length 
overall, or undecked vessels of any length.  
 
 (b) (3) (2) For fishing and service vessels of such Members other than the vessels 
referred to in paragraph (b)(2),  Subsidies referred to in Article s I.1(a) and 
I.1(c),  shall not be prohibited  where their purpose is to exploit  stocks over 
which the subsidizing Member has (i) jurisdiction, sovereignty or 
sovereign rights1 or (ii) fishing quotas or any other fishing rights2 
                                                      
1 For the purpose of this article, "jurisdiction,  sovereignty or sovereign rights" shall mean the 
exclusive rights a Member has und er the international law with respect to the exploitation of natural 
resources in areas such as the Territorial  Sea and the Exclusive Economic Zone.  TN/RL/GEN/163 
Page 4  
 
  established by a regional fisheries management organization or 
arrangement (RFMO)
3 or applicable international instruments for 
identified target stocks, provided that  (i) the vessels a re used exclusively for 
marine wild capture fishing activities of such Members in respect of 
particular, identified target stocks within their Exclusive Economic Zones 
("EEZ"); (ii)  those stocks are have been  subject to prior scientific status 
assessment conducted in accord ance with relevant international standards, 
aimed at ensuring that the resulting capacity does not exceed a sustainable 
level as determined by their maximum sustainable yield.  ; and (iii) that 
assessment has been subject to peer review in  the relevant body of the United 
Nations Food and Agriculture Organization ( "FAO "). 
 III.4   III.3
  Subsidies referred to in Article I.1(g) shall not be prohibited where the access rights 
are acquired by a developing country Member and the fishery in question is within the EEZ of a 
developing country Member, provided that the ag reement pursuant to which the rights have been 
acquired is made public, and contai ns provisions designed to prevent overfishing in the area covered 
by the agreement based  referenced  on internationally-recognized  best practices for fisheries 
management and conservation as reflected in the re levant provisions of international instruments 
aimed at ensuring the sustainable use and conservation of marine species, where they exist , such as, 
inter alia, the Agreement for the Implementation of the Provisions of the United Nations Convention 
on the Law of the Sea of 10 December 1982 Relati ng to the Conservation and Management of 
Straddling Fish Stocks and Highly Migratory Fish St ocks ("Fish Stocks Agreement"), the Code of 
Conduct on Responsible Fisheries of the Food and Ag riculture Organization ("Code of Conduct"), the 
Agreement to Promote Compliance with Interna tional Conservation and Management Measures by 
Fishing Vessels on the High Seas ("Compliance Agreem ent"), and technical guidelines and plans of 
action (including criteria and precautionary refere nce points) for the implementation of these 
instruments, or other related or successor instru ments.  These provisions shall include requirements 
and support for science-based stock assessment before fishing is undertaken pursuant to the agreement 
and for regular assessments thereafter, for management  and control measures, for vessel registries, for 
reporting of effort, catches and discards to the nati onal authorities of the host Member and to relevant 
international organizations, and for such other measures as may be appropriate.   
 
III.5   III.4  Members shall give due regard to the needs and resource constraints  of developing 
country Members in complying with the requirement s of this Annex, including the conditions and 
criteria set forth in this Article and in Article V, .  
 III.6 and
 Members  shall establish mechanisms for, and facilitate, the provision of technical 
assistance for developing country Members  in this regard, bilaterally and/or through the appropriate 
international organizations.    
                                                                                                                                                                    
 
2 For the purpose of this article "fishing quotas  or any other fishing rights" means enforceable 
quantitative limits, established through scientific assessment, imposed on fish volumes for specified 
period, or limits to fishing efforts on a given fishery, area or time as may be incorporated in conservation 
measures.   
3 If the Member in question is not a member of th e FAO, the peer review shall take place in another 
recognized and competent international organization.  For the purpose of this Annex, RFMOs are 
international organizations or arra ngements which:  (a) carries out ma nagement activities over specific 
fisheries in a determined area;  (b) are open to new entrants;  (d) publish a list of all conservation 
measures in force;  (c)have specific procedures to de al with illegal, unreported a nd unregulated fishing;  
(d) and have a decision-making process in accordan ce with an agreement, convention or procedure.    TN/RL/GEN/163 
 Page 5 
 
 
  Article IV 
 
General Discipline on the Use of Subsidies  
 
IV.1 No Member shall cause, through the use of any subsidy [referred to in paragraphs 1 and 2 of 
Article 1 ], fishery adverse effects  to the interest of other Members in respect of identifiable wild 
marine fish stocks.  
 IV.2 For the purpose of paragraph 1, fishery ad verse effects shall include any case in which it 
has been demonstrated that the su bsidizing Member's fishing capacity
4 for those stocks has 
increased above the level necessary to harvest a sustainable allowable catch5 and it has resulted 
in more than moderate exploitation, so that  there remains no potential for further non-
subsidized expansion of production.  depletion of or harm to, or creation of overcapacity in respect 
of, (a) straddling or highly migratory fish stoc ks whose range extends into the EEZ of another 
Member;  or (b) stocks in which another Me mber has identifiable fishing interests, i ncluding through 
user-specific quota allocations to individuals and gr oups under limited access privileges and other 
exclusive quota programmes.   The existence of such situations shall be determined taking into account 
available pertinent information, including from  other relevant intern ational organizations, and 
referencing to  Such information shall include the status of the subsidizing Member 's implementation 
of internationally-recognized best practices for fi sheries management and conservation as reflect ed in 
the relevant provisions of international instruments  aimed at the sustainable use and conservation of 
marine species , where they exist , such as, inter alia, the Fish Stocks Agreement, the Code of 
Conduct, the Compliance Agreement, and technical guidelines and plans of action (including criteria 
and precautionary reference points) for the implemen tation of these instruments, or other related or 
successor instruments.  IV.3 Fishery adverse effects in the sense of pa ragraph 1 shall be deemed to exist in the 
following situations:    
(a) a Member invoking any of the exceptions provided in Articles II, III.3 and III.4 
does not have a national fisheries management system in place compliant with Article V;  
(b) a subsidy referred to in Article I is used for fishing stocks the status of 
exploitation of which is declared "overexploited", "depleted", or "recovering" by a regional or international organization  with jurisdiction over the fishery in 
question, or has other equivalent status;  or 
(c) a subsidy referred to in Article I results in the increase of the gross tonnage, 
volume of fish hold and/or engine po wer of the subsidizing Member fishing 
vessels with respect to any fishing stock th e status of exploitation of which is 
declared "overexploited", "depleted" , or "recovering" by a regional or 
international organization with jurisdiction over the fishery in question, or has other equivalent status. 
 IV.4 IV.2
  Any subsidy referred to in this Annex shall be attributable to the Member conferring it, 
regardless of the flag(s) of the vessel(s) involved or the application of rules of origin to the fish 
involved.    
                                                     
 
 4 For the purpose of this Article,  "fishing capacity" me ans the total capacity authorized by the 
Member for the fishing of identifiable wild marine fish stocks or group of stocks.   
5 For the purpose of this Article, "sustainable  allowable catch" means a total allowable catch 
below levels which are capable of producing a long term maximum sustainable yi eld, based on the best 
scientific evidence available.   TN/RL/GEN/163 
Page 6  
 
  Article V 
 
Fisheries Management
6 
 
V.1 Any Member granting or maintaining an y subsidy as referred to in Article II or 
Article III.2(b)  III.3 and III.4  shall operate a fisheries management system regulating marine wild 
capture fishing within its jurisdiction, designed to  prevent overfishing.  Such management system 
shall be based  referenced on the relevant internationally -recognized best standards and practices for 
fisheries management aimed at ensuring the sustainable use and conservation of marine species , 
where they exist,  such as, inter alia, the Fish Stocks  Agreement, the Code of Conduct, the 
Compliance Agreement, technical guidelines and plans of action (including criteria and precautionary 
reference points) for the implementation of these instruments, or other related or successor instruments.    V.2  The
 A fisheries management system within the meaning of paragraph 1  shall include 
regular science-based stock assessment, as well as capacity, effort and catch-based  management 
measures, including harvesting licences or fees ;  vessel registries;  esta blishment and allocation of 
fishing rights, or allocation of exclusive quotas to vessels, individuals and/or groups, and re lated  
enforcement mechanisms;  species -specific quotas, seasons and other  stock management measures; 
vessel monitoring which could include electronic tracking and on -board observers ;  systems for 
reporting in a timely and reliable manner to th e competent national authorities and relevant 
international organizations data on effort, catch  and discards in sufficient detail to allow sound 
analysis;  and research and other measures rela ted to conservation and stock maintenance and 
replenishment.  To this end, the Member shall a dopt and implement pertinent domestic legislation and 
administrative or judicial enforcement mechanisms.  It is desirable that such fisheries management 
systems be based on limited access privileges7.   
 
V.3 Members shall notify information as to the nature and operation of these systems, including 
the results of the stock assessments performed, shal l be notified to the relevant body of the FAO, 
where it shall be subject to peer revi ew prior to the granting of the subsidy.   References for su ch the 
legislation and mechanism required under paragraph 2 , including for any modifications thereto, 
shall be notified to the Committee on Subsidi es and Countervailing Measures ("the Committee") 
pursuant to the provisions of Article VI.4.   
 V.4 V.2
 Each Member shall maintain an enquiry point  to answer all reasonable enquiries from other 
Members and from interested parties in other Members concerning its fisheries management system, including measures in place to address fishing capacity  and fishing effort, and the biological status of 
the fisheries in question.  Each Member shall no tify to the Committee contact information for this 
enquiry point.  The Committee shall discuss issues related  to fisheries management system 
brought to its attention by any Member in a de dicated session at least on an annual basis. 
 
  
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6 Developing country Members shall be free to implement and operate these management requirements 
on a regional rather than a national basis provided that all of the requirements are fulfilled in respect of and by 
each Member in the region.   
7 Limited access privileges could include, as approp riate to a given fishery, community-based rights 
systems, spatial or territorial rights systems, or individual quota systems, including individual transferable 
quotas.