WORLD TRADE  
ORGANIZATION  TN/RL/GEN/168/Suppl.3 
4 April 2011 
 (11-1676) 
Negotiating Group on Rules Original:   English 
  
 
FISHERIES SUBSIDIES – ARTICLES I, II AND IV 
 
Communication from the Republic of Korea
 
 
Supplement  
 
  The following communication, dated 1 April 2011, is being circulated at the request of the delegation of Republic of Korea.  
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1. On 29 March 2011, Korea submitted comments rega rding the fuel subsidy (TN/RL/W/251) in 
which it discussed the fundamental problem of the "low fuel price" in the context of fisheries subsidies negotiations. 
2. One of the suggestions contained in the co mments to address the problems and unfairness 
associated with the low fuel price was to identify a benchmark and use it as a mechanism to restrict 
the right to bring a claim based on the fuel subsid y in certain circumstances.  More specifically, a 
Member with the fuel price below the benchmark is not allowed to bring a claim based on fuel 
subsidy against a Member whose fuel price is higher than such benchmark.
1  
3. The benchmark would basically mean an average price of fuel in a relevant international 
market in a given year (for instance, at the time wh en the Fisheries Annex comes into force).  Given 
that international oil price is regularly reported a nd readily available from various reliable sources, we 
are of the view that retrieving such a benchmark would not pose a significant difficulty. 
4. The concept of a benchmark was introduced to provide an objective guideline to measure the 
level of a fuel price in a Member.  The fact that a fuel price in a particular Member is below or above 
the benchmark bears no relationship to the question of whether a program of the Member relating to 
the fuel constitutes a subsidy or not.  A governmental program or policy leading to a low fuel price (such as no or low taxation) in a Member may or may not be a subsidy within the meaning of Articles 1 and 2 of the SCM Agreement.  Likewise,  a governmental program or policy of a Member 
maintaining a high fuel price may or may not be a subsidy.  This should be a separate inquiry based 
on provisions of the SCM Agreement. 
5. Nor does the concept of "benchmark" as propo sed here have any relationship with the 
"benchmark" as discussed in the cont ext of Article 14 of the SCM Agreement in determining the level 
of benefit.  Rather, this is simply meant to be a tool  to determine the level of fuel price in a Member in 
the limited context of dispute settlement proceeding regarding the fuel subsidy.. 
                                                     
 
1 The fuel price of a Member may be taken from the average fuel price prevaili ng in the territory of the 
Member in a given year. TN/RL/GEN/168/Suppl.3 
Page 2  
 
  6. In light of the above, this contribution incl udes a textual suggestion to make these points 
clear.  More specifically, Korea inserted a footnote right after the term "fuel" in the Annex.  In Korea's 
textual proposal of 22 September 2010, the provision addressing the fuel subsidy is Article II.1(a), so 
the footnote is inserted in the provision.  Th e corresponding paragraph in November 2007 Chair's 
Text will be Article I.1(c).  The newly added footnote is noted with underlines. 
7. Korea reserves its right to modify or change its position depending on future developments 
and discussions on this issue among the Members.  Th e current contribution is simply meant to be 
Korea's effort to initiate meaningful discussions on ways to address the low fuel price problem in the 
context of the Fisheries Annex.  Korea is open to  any suggestion or proposal from any other Member 
in this regard. 
 
[Attachment:  Footnote]   TN/RL/GEN/168/Suppl.3 
 Page 3 
 
 
  Article II 
 
General Discipline on the Use of Subsidies  
 
II.1 Except as provided for in Articles III and IV , no Member shall provide following subsidies 
within the meaning of paragraph 1 of Article 1, to the extent they are specific within the meaning of 
paragraph 2 of Article 1, that cause advers e effects to fish stocks through overcapacity1 and 
over-fishing2: 
 
(a) Subsidies the benefits of which are confe rred on operating costs of fishing or service 
vessels (including licence fees or similar charges, fuel3, ice, bait, personnel, social 
charges, insurance, gear, and at-sea support);  or of landing, handling or in- or near-port processing activities for products of marine wild capture fishing;  or subsidies to cover operating losses of such vessels or activities. 
(b) Subsidies in respect of, or in the form of, port infrastructure or other physical port 
facilities exclusively or predominantly for activities related to marine wild capture 
fishing (for example, fish landing facilities, fish storage facilities, and in- or near-port fish processing facilities), provided that the ma in beneficiary of the infrastructure or 
facilities is not the general public of a Member. 
(c) Income support for natural or legal persons engaged in mari ne wild capture fishing. 
(d) Price support for products of marine wild capture fishing. 
 
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1 For the purpose of this Agreement, the term "overc apacity" means that the fishing capacity at issue is 
greater than a desirable level of fishing capacity ( i.e. target level) which may be either a long-term target 
sustainable yield, as reflected in the short-term in a total allowable catch (T AC), or a related long-term target for 
fixed inputs employed in fishing activity for the fishery in question. 
2 For the purpose of this Agreement, the term "ove rfishing" is normally expressed in terms of fishing 
mortality levels, that is, in terms of how many fish are killed during a certain reference period.  Thus overfishing 
exists when total fishing mortality (h arvesting) is at a rate that exceeds the maximum level that the stock can 
withstand on a sustainable basis ( i.e. the maximum sustainable yield). 
3 For the purpose of this Agreement, Members whos e average fuel prices ar e below the average fuel 
prices in the relevant international market shall not invoke this provision vis-à-vis Members whose average fuel 
prices are higher than such prices  in the international market, irrespective of whether the governmental 
programs for fuel maintained by the latter are regarded as a subsidy within the meaning of Articles 1 and 2 of 
the SCM Agreement.  The aver age fuel prices in the relevant international market for this purpose shall mean 
the average prices of the fuel in [nam e of the international fuel markets] at the time this Agreement comes into 
force.  Such prices shall be determined for each different category of fuel consumed by the fisheries industries.