WORLD TRADE  
ORGANIZATION  TN/RL/W/207 
2 April 2007 
 (07-1348) 
Negotiating Group on Rules Original:   English 
  
 
PROMOTING DEVELOPMENT AND SUSTAINABILITY IN 
FISHERIES SUBSIDIES DISCIPLINES:   
AN INFORMAL DIALOGUE ON SELECT TECHNICAL ISSUES 
 
Communication from New Zealand
 
 
  The following communication, dated 27 March 2007,  is being circulated at the request of the 
Delegation of New Zealand
. 
 
_______________ 
 
  In the interests of keeping th e Rules Negotiating Group informed of related events outside the 
WTO, we attach the Summary of the Chair of  the recent WWF-UNEP Workshop on Disciplining 
Fisheries Subsidies:  Incorporating Sustainability at the WTO and Beyond, on 1-2 March 2007.   
 TN/RL/W/207 
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  DISCIPLINING FISHERIES SUBSIDIES: 
INCORPORATING SUSTAINABILITY AT THE WTO & BEYOND 
 
1-2 MARCH 2007 - GENEVA, SWITZERLAND 
 
 
Chair’s Summary  
 
 
I. INTRODUCTION  
1. This two day Symposium, jointly organized by  UNEP and WWF, was held at the Palais des 
Nations in Geneva on 1-2 March 2007.  It constituted the latest in a series of conferences and 
workshops organized by the sponsors both jointly and individually since their first joint conference on 
fisheries subsidies in 1997. 
2. Participants included more than 120 indivi duals from 50 national governments (including 
officials from environment, trade, and fisher ies agencies), as well as ten intergovernmental 
organizations, three regional fisheries manage ment organizations, seventeen non-government 
organizations, and eight academic institutions.  More than thirty participants made formal 
presentations.  Participants were all invited to speak  in their personal capacities.  The symposium was 
presided by former FAO COFI chairman, Mr. Will Ma rtin, who noted the unique mix of participants 
and the opportunity presented for a dialogue between experts in fisheries and trade policies.  The 
Chair also stressed that this Symposium was intende d as an informal dialogue, and not in any sense as 
a negotiating forum.   
3. The meeting was held at a critical juncture in the negotiations towards new WTO fisheries 
subsidies disciplines, with formal talks now resu med and focussed directly on specific language for 
proposed new rules.  Trade ministers agreed at  the Sixth Ministerial Meeting in Hong Kong to 
"strengthen disciplines on subsidies in the fisheries sector, including through the prohibition of certain 
forms of fisheries subsidies that contribute to overcapacity and overfishing ."  This Symposium 
examined the related question of how WTO rules and national policies should deal with subsidies that 
may remain outside the scope of an eventual ban. 
4. Opening presentations by the organizers and by the Chairman of the WTO Negotiating Group 
on Rules stressed the timeliness of the Symposium, the importance of its focus, and their high hopes 
and optimism for the future of th e WTO fisheries subsidies talks. 
5. This summary has been prepared under the res ponsibility of the Chair.  Although it has been 
reviewed by all participants (with comments reflec ted in the final draft), it is not intended as a 
consensus document.  Without attempting to itemi ze all of the important  contributions made, it 
provides a synthesis of the main issues raised  and suggestions offered by participants.  
II. MAIN FINDINGS AND POINTS OF DISCUSSION 
A. WHY (AND HOW) THE "SUSTAINABILITY CONTEXT " MATTERS  
6. The economics and the impacts of fisheries subsidies have received much more extensive 
study than was the case when the topic first emerged onto the international age nda a decade ago.  The 
studies that have been conducted have confirmed that fisheries subsidies often have direct 
consequences not only on profits and rents, but also on the sustainability of stocks.  TN/RL/W/207 
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  7. Subsidies to the fishery sector are often directed  at goals unrelated to fisheries management, 
such as social development.  However, economists and policy analysts at leading intergovernmental 
organizations increasingly agree that subsidies to fishing activities are suboptimal or even counter-productive means to achieve such goals.  Give n their potential to have unintended negative 
consequences, fisheries subsidies should be carefully  examined in every case.  Still, some developing 
countries see subsidies as necessary to support indus trial development (particularly in their own 
EEZs) and to achieve competitive parity with forei gn fleets that have enjoyed subsidies for many 
years. 
8. The impacts of fisheries subsidies on resour ces and on trade can depend heavily on the 
context in which subsidies are employed.  In part icular, many participants noted that three key 
indicators - namely the status of fish stocks, the capacity of fishing fleets, and the adequacy of 
fisheries management - have a direct and signifi cant bearing on the likelih ood that subsidies will 
contribute to overcapacity or overfishing in any give n fishery.  Several part icipants concluded that 
subsidies should not be used until these three key indi cators are in proper condition.  Participants took 
note of the multiple studies and national experi ences that have illustrated the fundamental link 
between these key indicators and the effect of subsidies. 
9. Governments worldwide have accepted the intern ational obligation to manage fisheries for 
long term sustainability, and many participants noted the current urgency of this obligation.  The U.N. 
Code of Conduct for Responsible Fishing articulates a genuine global consensus, even if its norms are 
broad and the specific application of those nor ms is subject to a degree of variability and 
interpretation.  However, there remains a wide ga p between the norms set out in the Code and the 
success of efforts to implement these norms. 
10. An understanding of these realities has led to a "p aradigm shift" in the approach of leading 
IGOs and many governments to financing fisheries development.  After several decades of investment 
in expanded fishing capacity and effort, the trend since the 1990s has been on management strategies 
that emphasize sustainable fisheries and, where a ppropriate, alternative live lihoods.  The urgency and 
relevance of this paradigm shift is evident in  the approximately USD $50 billion lost annually in 
global resource rent from fisheries as a result of po or governance.  This is a preliminary estimate, 
according to the ongoing "Rent Drain Project" by the World Bank and FAO. 
11. The sustainability challenge facing governments is pressing. Several times it was repeated 
that "sustainability is not automatic" and that th e burden is on governments to act vigorously to 
reverse the practices that today contribute to th e unsustainable character of many of the world’s 
fisheries.  Disciplining fisheries subsidies is one t ool in the "sustainability to olkit", but subsidy rules 
alone cannot eliminate overcapacity and overfishing. 
12. Even where significant steps towa rds implementing the basic requ irements of the Code have 
been taken, the results can fall short.  For example, many North Atlantic fisheries enjoy 
welldeveloped legal infrastructures and significant levels  of data and scientific analysis.  Yet some of 
these fisheries have experienced overfishing and depl etion.  Several participants concluded that 
criteria built on the basic elements of the Code co uld not assure the genuinely sustainable use of 
subsidies. 
B. S
TOCK -RELATED CONSIDERATIONS  
13. The relevance of stock health to the potentia l impacts of fisheries subsidies was noted, and 
provided a starting place for discussion.  If a stock is not robust, and not subject to proper 
management, the use of fisheries subsidi es can have a significantly perverse impact. TN/RL/W/207 
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  14. The focus of discussion was thus on approaches to stock assessment, the level of priority that 
should be given to stock assessment as a matter of policy, and the implications for possible criteria for 
gauging the risks of subsidization. 
15. The principal limit on assessments is access to reliable data, although limited capacity for data 
analysis can also be problematic.  Participants noted both the importance of sound data and the real 
limits on its acquisition, particularly in small-scale ar tisanal fisheries.  In so me fisheries, data-poor 
management techniques must be considered approp riate, particularly in small-scale, multi-species 
contexts. 
16. However, data-poor management needs to be  accompanied by precautionary approaches to 
management, with precaution rising in proportion to the lack of information.  The emerging concept 
of ecosystem-based management requires substantia lly more data than single-species management, 
and implies an even stronger need for precaution where data is lacking. 
17. In general, data-poor techniques should not be viewed as optimal or permanent solutions, and 
priority needs to be given to improving informat ion about fish stocks and ecosystem conditions.  
Moreover, where stocks are not subject to formal assessment, the need for a formal review of the 
management context may be increased. 
18. In the case of straddling, migratory, and hi gh-seas stocks, international cooperation is 
necessary to allow ass essments that adequately cover the en tire range of the stocks involved. 
19. Stock-related data compiled by the FAO Secret ariat is useful and relevant, but may not 
always be sufficient as a sole basis for decision- making.  FAO data can, for instance, sometimes be 
"low resolution" where it is not provided on an individual fishery, stock-bystock basis.  The FAO 
category of "fully exploited" stocks, which repr esents roughly half of the fisheries for which 
categories have been assigned, comprises both stable , well-managed fisheries and fisheries that are 
being overfished without yet having declined to a biomass level below MSY e quilibrium.  In either 
case, the category reflects a judgment that no increases in catches are sustainable. 
20. Economic data about fisheries performance - su ch as price fluctuations or catch per unit 
effort- can provide some useful indicators of stock condition, although economic signals can be 
masked by subsidies including, e.g., the existe nce of low-interest loans or forgiven loans. 
21. Some participants felt that improving data ava ilability is not always the first priority for 
achieving responsible fishing where data-poor t echniques are working and where other priorities 
require attention.  Nevertheless, where subsidies ar e being introduced into data-poor fisheries, it is 
advisable in almost every case to improve data availability (as well as government and institutional 
capability) before expanding capacity or effort.  As levels of exploitation rise, the need for data 
generally rises. 
C. C
APACITY -RELATED CONSIDERATIONS  
22. Overcapacity is recognized as a critical problem and as one direct link between fisheries 
subsidies and overfishing.  If capac ity-enhancing subsidies are to be used at all, a precautionary 
approach might include making only "stepwise" investments over many years, and in the context of a 
strict stock management regime. 
23. There was support for subsidies to "decommission"  vessels that could help reduce the size of 
the fleet as part of facilitating reforms in fisheries management, and subsidies that help fishworkers in 
the transition to alternative and/or  diversified forms of employment.  TN/RL/W/207 
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  24. Fisheries with high capacity are often difficult to manage in light of the uncertainties and 
rapid changes that can be caused by market forces  and environmental fluctu ations.  Subsidizing as 
capacity nears "full" entails significant risks of overrunning sustainable limits. 
25. Effective fishing capacity (fishing power) normally increases by approximately 2-4 per cent 
per year as a result of improved technology and fishing techniques, without any visible increase in the 
number of fishing vessels.  This introduces furt her need for cautionary approaches to capacity 
management and to policies regard ing capacity-enhancing subsidies. 
26. Quantitative approaches to capacity assessment depend on large amounts of data and on 
complex statistical formulas.  They are relatively new,  and still infrequently applied.  Still, where they 
are possible, quantitative capacity assessments could c ontribute to criteria for the responsible use of 
subsidies.  The use of a suite of internationally recognized qualitative indicat ors - such as changes in 
the total allowable catch to a season length, decreases in  catch per unit effort, and the biological status 
of a fishery - can help identify overcapacity. 
27. Rights-based fisheries management is receiving increased consideration from governments.  
Some experts feel that rights-based management is  the best means to resolve the underlying cause of 
overcapacity. 
28. Vessel registries are a critical tool of capacity assessment and management.  Participants 
noted the current work at the FAO towards establishing a global fishing vessel registry. 
D. MANAGEMENT -RELATED CONSIDERATIONS  
29. The basic international normative framework for fisheries management consists of the U.N. 
Convention on the Law of the Sea (UNCLOS) as su pplemented by the United Nations Fish Stocks 
Agreement, the FAO Code of Conduc t for Responsible Fishing and the international plans of action 
adopted by the FAO to promote implementation of th e Code.  The status of the Code of Conduct was 
discussed.  A number of participants pointed out the integration of the Code’s basic principles into 
binding international instruments (such as the U.N. Fi sh Stocks Agreement) a nd into the national laws 
of many states. 
30. The principles articulated in the Code of Conduct are widely accepted.  These include 
orienting management towards long term conserva tion and sustainable use of fisheries resources 
through science-based decision-making, use of the precautionary approach, and effective 
implementation of monitoring, control, and surv eillance (MCS) measures.  There can be, however, 
significant variability in how management should be conducted on a case-by-case basis.  Moreover, 
the Code’s broad norms can be s ubject to various interpretations, particularly as the objectives of 
management are not uni-dimensional, but include biological, social, and economic considerations. 
31. Nevertheless, the main challenge to sustaina bility comes from inadequate implementation of 
and adherence to the Code’s norms.  For example, adequate funding for MCS infrastructure is critical 
and not always in place for effective enforcement.   Where capacity-enhancing or effort-enhancing 
subsidies are contemplated, the need for improved management is increased. 
32. The management of shared or multi-national st ocks depends on intern ational cooperation at 
all stages of management from stock assessment through enforcement of management measures. 
33. The management challenges facing developing coun tries, and particularly small island states 
with vulnerable economies, are significant.  More  financial and human resources are particularly 
needed for assessment and monitoring/enforcement ac tivities.  In many cases, regional cooperation is 
essential for effective results. TN/RL/W/207 
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  34. Participants discussed the possible value of de veloping questionnaires th at could function as 
guides to assessing management programmes.  Severa l participants noted, however, that management-
related sustainability considerations should not impose specific management decisions on developing 
countries.  It was also suggested that governments consider incorporating ri sk assessment approaches 
into the evaluation of the readiness of fisheries fo r capacity-enhancing or effo rt-enhancing subsidies. 
E. S
MALL -SCALE ARTISANAL FISHERIES  
35. For the purposes of discussion, small-scale artisanal fisheries were loosely defined as 
including small, diffuse, impoverished, and low-t ech fisheries (e.g. using undecked, owneroperated 
vessels equipped with non-automatic retrieval gear) th at are typically subject to traditional community 
management arrangements.   
36. Many participants felt that small-scale artisanal fisheries pose challenges and opportunities 
for sustainable management that must be disti nguished in several ways from the challenges and 
opportunities encountered in industrial fisheries.  Pub lic investment in small- scale artisanal fisheries 
can be a vital element of poverty-reduction strategies. 
37. Small-scale artisanal fisheries are not imm une from overcapacity or overexploitation, and 
subsidies to such fisheries s hould be approached with care. 
38. The following sustainability considerations fo r small-scale artisanal fisheries were discussed. 
• Current data-intensive assessment and manageme nt techniques are generally implausible, and 
may be unnecessary for proper management; 
• Achieving sustainability in small-scale artisanal  fisheries may often depend on factors other 
than improved fisheries management; such as co astal zone management, literacy, reduction of 
HIV/AIDS, conflict resolution, etc. 
• Participants discussed whether employment-max imizing objectives could justify temporarily 
fishing beyond MSY (while avoiding irreversible  damage to a stock).  Some participants 
supported this view, while others clearly did no t. In any case, participants noted that where 
resources are available for subsidies, purposeful  fishing beyond MSY cannot be viewed as a 
necessary or desirable strategy. 
F. OPTIONS FOR WTO  RULES AND MECHANISMS  
39. A background paper prepared by the orga nizers was presented (copy available at 
www.unep.ch/etb and www.panda.org/trade ).  The paper proposed several tests by which the 
suitability of "sustainability criteria" for use in th e WTO could be judged, and went on to present a 
range of concrete options for such criteria.  Th e paper also discussed various considerations for 
institutional mechanisms that might be adopted by  the WTO in implementing new fisheries subsidies 
rules. 
40. Substantial discussion took place regarding the feasibility of integrating sustainability 
considerations into WTO fisheries subsidies disciplin es.  There was broad agreement that the limits of 
the WTO’s institutional competence must be taken into account and respected. 
41. Some participants felt that sustainability cons iderations would inevitably be too complicated 
for consideration by the WTO.  Others felt that  the complexity of the sustainable management 
problem does not mean criteria for application in WTO rules must be overly complex, and that the 
WTO can address these issues successfully.  Participan ts shared a preference for WTO rules to be as 
simple as possible, without being simplistic.  TN/RL/W/207 
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  42. The need for sustainability-related conditionalit y will depend on the nature and scope of the 
prohibition WTO members eventually adopt.  Some pa rticipants felt that the best way to encourage 
sustainability would be through a very broad prohibi tion;  others disagreed on the grounds that some 
subsidies positively contribute to sustainable development. 
43. It was noted that fisheries subsidies are ofte n administered on a sector-wide basis, without 
distinction among fisheries or stocks affected.  Some participants viewed this as a problem for 
including effective sustainability considerations in WTO rules.  Others felt that dissociating subsidies 
from fishery-specific management po licies is itself a core problem that underlies policy incoherence 
and that must be addressed by new WTO rules. 
44. Various suggestions were shared regarding speci fic approaches to incorporating sustainability 
considerations into WTO fisheries subsidies rules.  Among these were: 
• Judgments requiring spatially and temporally sp ecific information pose particular challenges, 
and may not be amenable to broadly applicable rules of thumb. 
• The basic condition of a fishery can be known through various measures, including the use of 
"holistic questionnaires", without requiring undul y complex or dataintensive investigations.  
These approaches would not set hard and fast rules for judging fisheries, but would provide guidelines for acceptably objective judgments. 
• Criteria can be applied in a variety of ways, including as elements of a "preauthorization" 
process, as elements of an ex post facto evaluation; as single dispositive questions, or as elements of a list of considerations. 
• Criteria based on norms originating outside the WT O can refer to the external origin(s) of the 
norms explicitly and/or restate them directly into  WTO texts.  Where the external origin is to 
be identified, this can be done with greater or  lesser specificity, and as a closed or open list. 
• The use of criteria and institutional mechanisms for expert advice also depends on how legal 
burdens of proof are distributed by the underlying rules. 
• Different types of criteria can be applied in parallel, for example by using broad indicators 
alongside specific measures (i.e., the ex istence of key MCS infrastructure). 
45. Participants also discussed possible instituti onal mechanisms to support implementation of 
sustainability considerations in new WTO fisheries s ubsidies rules.  The presen tations by participants 
from the FAO and the WTO secretariat were especia lly useful in this regard.  Among the points 
discussed were: 
• Mechanisms having precedents in the existing WTO system include: the ad hoc use of 
individual experts or panels of e xperts engaged at the invitation of  either disputants or panels; 
the creation of standing bodies within the WTO; and the creation of relationships with new or 
existing entities outside the WTO proper. 
• There are several ways that expert advice can be used in the context of WTO rules, ranging 
from treating expert advice as part of the body of facts to giving expert bodies the right to make legally binding findings. Such advice can be sought either before a trade measure is 
taken, or after an alleged harm arises. 
• Relations among IGOs with intersecting manda tes can benefit from mission-specific liaison 
structures, such as the new memorandum of understanding between FAO and CITES, and the 
related FAO expert panel process. TN/RL/W/207 
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  46. Regardless of the particular criteria or institu tional mechanisms adopted , several participants 
felt that the burden of proof associated with c onditions on non-prohibited subs idies should rest on the 
nation granting the subsidies. 
III. CONCLUSIONS AND WAYS FORWARD 
47. The discussion throughout the Symposium confir med the high level of interest among diverse 
stakeholders in crafting WTO rules that make a r eal contribution to sustainable fisheries through 
appropriate limits on fisheries subsidies.  While the issues are at times complex, there was a general sense that plausible answers can and must be found. 
48. Strong emphasis was placed on the need for a balanced and achievable approach, as well as 
for recognizing the special circumstances of developing countries, in order to find both "a solution for 
development" and "a solution for the environment." 
49. Participants widely shared the view that a high priority must be given to public investments in 
responsible fisheries management.  Participants  also recognised the importance of social and 
economic development in developing countries, in cluding through sustainable development in the 
fisheries sector.  As a general rule, where governme nt resources are available for fisheries subsidies, 
priority should be given to investment in res ponsible management to create conditions for both 
growth and sustainability. 
50. A range of concrete options and mechanisms for integrating sustainability considerations into 
WTO rules was discussed.  Many participants expressed the view that some clarification and 
deepening of the subject had been achieved, while further discussion and technical development of the 
issues would remain necessary. 
51. The draft paper presented by the organizers was received as a useful contribution to the 
debate, and a number of specific questions and comment s were offered.  The organizers indicated that 
revisions to the paper would be forthcoming. 
 
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