WORLD TRADE  
ORGANIZATION  TN/RL/W/211 
19 June 2007 
 
 (07-2579) 
Negotiating Group on Rules Original:   Spanish 
  
 
FISHERIES SUBSIDIES:  CO NTINUATION OF WORK ON 
SPECIAL AND DIFFERENTIAL TREATMENT 
 
Paper from Argentina
 
 
 
 The following paper, dated 11 June 2007, is be ing circulated at the request of the delegation 
of Argentina.  
_______________ 
 
 
I. INTRODUCTION 
1. The Chairman of the Rules Group has initiated a technical consultation process on various 
aspects relating to negotiations on the future fisher ies subsidies discipline.  In this context, on 
30 January 2007, he circulated a "non-paper" in wh ich he set forth a number of questions on various 
aspects of the proposals submitted to date, notably on the possible inclusion of "sustainability 
criteria". 
2. Bearing in mind that its proposal on special and differential treatment (TN/RL/GEN/138 and 
TN/RL/GEN/138/Rev.1) includes elements relating to  sustainability, and notwithstanding the oral 
replies given at the meetings of 12 and 13 February and 27 and 28 Ma rch, Argentina felt that it should 
submit this paper as a further contribution to the discussions. 
3. It should be noted that from Argentina's point  of view, special and differential treatment 
should grant developing and l east-developed countries the flexibility to implement policies to 
develop, within sustainable limits , their national fishing capacity, and to grant subsidies to artisanal 
fisheries. 
II. "NON-PAPER" FROM THE CHAIRMAN DATED 30 JANUARY 2007 
4. Two sets of questions posed by the Chairman  in his "non-paper" of 30 January 2007 are 
addressed below from the perspective proposed by Argentina in papers TN/RL/GEN/138 and 
TN/RL/GEN/138/Rev.1. 
A. National fisheries management systems:  During the December discussion, there was 
broad support for the idea that any Member that  would be permitted to provide an otherwise 
prohibited subsidy (either via a horizontally-a pplicable exception or via S&D provision) would 
need to have in place a sound national fisheries management system. 
 TN/RL/W/211 
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   Questions to be answered include: 
 
 Would a requirement that national fisheries management systems be "in keeping with" 
the FAO Code of Conduct for Responsible Fisheries  be sufficient, and if so how would "in 
keeping with" be defined?   
 
5. In paper TN/RL/GEN/138/Rev.1, Argentina lis ted a number of subsidies which should be 
prohibited by the future discipline, but to whic h developing countries could have recourse under 
certain cumulative conditions (Articles X.2 and X.3 of the draft legal text in paper TN/RL/GEN/138/Rev.1).  One of these cond itions is that developing country Members 
intending to grant or maintain such  subsidies shall demonstrate that " they have a national fisheries 
management system in line with the FAO Code of Conduct for Responsible Fisheries (1995) " 
(Article X.3(c) of the draft legal text). 
6. The relationship established between the national fisheries management system and the 
1995 FAO Code of Conduct would be similar to  that required, for example under the TBT or 
SPS Agreements, between technical regulations or sanitary or phytosanitary measures and "relevant 
international standards" or "international sta ndards, guidelines or recommendations" (for SPS, the 
Codex Alimentarius for instance) which are of a voluntary nature. 
7. The literal meaning of the expression "in keeping with"
1 is such that no additional definition 
would be needed, since the expression in itself indicates that the national fisheries management 
system must be in "in harmony with" or "in conf ormity with" the 1995 FAO Code of Conduct, i.e. it 
must follow the principle guidelines of the Code of  Conduct for Responsible Fisheries in respect of 
good fishing practices. 
 How relevant, if at all, to WTO rule-makin g are the possible legal implications for the 
Code of Conduct  in the FAO context of any explicit requi rement related to it at the WTO?  In 
particular, is it a matter of concern for WTO that some elements of the Code , which is a 
voluntary instrument, could have legal consequences for WTO Members via a WTO rule?  
8. Linking the future discipline on fisheries subsid ies to an international standard involves a 
practice that is not unknown in the WTO Agreemen ts (TBT or SPS).  Although the 1995 FAO Code 
of Conduct for Responsible Fisheries is by and large a voluntary instrument, the majority of its provisions are mandatory as they either inco rporate binding international instruments
2 or form part of 
customary international law.3 
                                                      
1 According to the New Oxford Dictionary of English (page 1001), the expression "in keeping with" 
means "in harmony with" or "in conformity with". 
2 Article 1 of the FAO Code of Conduct states that "This Code is voluntary.  However, certain parts of 
it are based on relevant rules of international law, including those reflected in the United Nations Convention on 
the Law of the Sea of 10 December 1982.  The Code also contains provisions that may be or have already been 
given binding effect by means of other obligatory legal instruments amongst the Parties, such as the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the 
High Seas, 1993, which, according to FAO Conference resolution 15/93, paragraph 3, forms an integral part of 
the Code". 
3 Cf. UNEP document "Sustainability Criteria for Fisher ies Subsidies", 2007, page 16:  "The Code of 
Conduct represents a substantial and growing body of international norms of responsible fishing.  The Code 
itself enjoys a breadth of support and an absence of dissent  that is rare even for a "voluntary" agreement.  And 
many of its core elements are replicated in binding international instruments, including UNCLOS, the 
UN Stocks Convention, and the UN Compliance Agreement".  TN/RL/W/211 
 Page 3 
 
 
  9. It should also be kept in mind that the countries participating in the FAO Committee on 
Fisheries (most of which are also  WTO Members) review the implem entation of the Code of Conduct 
for Responsible Fisheries every two years and propose steps to ensure that it is implemented correctly, 
thus contributing to its validity as a universa lly recognized guide to good fishing practices. 
 If no reference were made to the Code of Conduct  itself, what would be the necessary 
elements of a sound national fisheries management system?  
10. The Code is a comprehensive instrument estab lishing the principles and standards applicable 
to the conservation, management and development of fisheries.  Hence, in Argentina's view, it would 
be unwise to identify only some of its principles or concepts for inclusion "in isolation" in the future 
fisheries subsidies discipline.  Removing such principles or concepts from their context would 
necessarily lead to their re-wording or re-interpr etation, a task which would clearly exceed the 
WTO's specific sphere of competence. 
 What, precisely, would a country's obligation be, i.e. would having legislation in force 
that de jure  contained certain required elements (e.g. scientific stock assessments, licensing, 
quotas, data reporting, etc.) be sufficient or wo uld each element need to respond to specified 
criteria? 
 
11. In order to grant or maintain the subsidies pr ohibited by the general discipline, a developing 
country would have to prove that a national fisherie s management system had been incorporated into 
its domestic legislation and that the principles and elements of this system were "in keeping with" 
those required under the 1995 FAO Code of Conduct for Responsible Fisheries.  Such elements would 
therefore have to meet the "criteria" set forth in the Code. 
 Would having legislation be enough, or would be the country in question also have to 
demonstrate that it was enforcing its own law adequately? 
 12. A developing country Member in tending to maintain or grant fi sheries subsidies under special 
and differential treatment would have to ensure, inter alia , that it had a "valid" national fisheries 
management system in keeping with the 1995 FAO Code.  In accordance with the Code, this would 
have to include an adequate system of monitori ng, surveillance and penalties to ensure compliance 
with good fishing practices, since it is assumed that  a State has the obligation to enforce its own 
domestic legislation. 
13. With regard to the effective incorporation of the Code's guidelines into domestic legislation, it 
should be noted that FAO has been working on this i ssue for several years.  Pursuant to Article 4 of 
the Code, the FAO Committee on Fisheries (COFI) is re quired to monitor the Code's implementation.  
To this end, a questionnaire was prepared and sent to  all FAO Members, and the results were used to 
provide COFI with information on the domes tic measures adopted to implement the Code.
4 
 What sort of notification would be needed, and how frequently? 
 
14. The lack of transparency in the field of fish eries subsidies is a problem recognized by all 
Members, so that strict disciplin es in this area are necessary.  Arge ntina has therefore proposed that 
future disciplines relating to transparency also  extend to special and differential treatment. 
15. Notifications should be comprehensive enough to  demonstrate that the conditions authorizing 
special and differential treatment are met.  The developing country Member should provide 
information on the state of the resource upon which the fishery for which the subsidy is intended 
                                                      
4 For further information go to the following link:  http://www.fao.org/docrep/meeting/003/x9187e.htm. TN/RL/W/211 
Page 4  
 
  relies and on the fulfilment of the other conditions established in the discipline.  Such notification 
must be given when adopting or planning a fisher ies subsidies programme, and there should be an 
obligation to provide regular notifications so that the rest of the Members are kept informed of the 
programme's development. 
 Would compliance be self declared?  If the subsidizing Member had to demonstrate that 
it had such a system in place, what sorts of information would need to be provided for such a 
demonstration? 
 
16. In taking recourse to special and differential treatment, a developing country Member must 
demonstrate that it is in the situation described in Article X.2 and that it fulfils the conditions set forth 
in Article X.3 of the draft legal text  proposed in papers TN/RL/GEN/138 and 
TN/RL/GEN/138/Rev.1.  In other words, it mu st provide data, including objective biological 
indicators, on the state of the fisheries resour ce, and information on compliance with standards 
applicable to fisheries and with other measures adopted  in this regard which aim to preserve fisheries 
resources and which comply with standards included in  specific international instruments, such as the 
1995 FAO Code of Conduct. 
 In reviewing any such demonstration or self-declaration, what sorts of substantive 
criteria would be needed to judge compliance? 
 
17. The necessary criteria are set forth in the 1995 FAO Code of Conduct for Responsible 
Fisheries. 
 What sort of notification review process and what specific DS mechanisms would be 
necessary for judging compliance? 
 
18. No changes would need to be made to regular  DSU mechanisms.  As for the review process, 
Argentina has duly expressed its support for the idea of creating a broad review mechanism on 
fisheries subsidies. 
 What sort of specialized expertise would be  needed to make any such judgements, and 
how could WTO obtain that expertise?  Would a st anding expert body be required, or would an 
ad hoc approach suffice? 
 
19. Article 13 and Appendix 4 of the DSU already pr ovide that a panel may request information 
or technical advice from any individual or body which it deems appropriate.  In the case of fisheries, 
arrangements different to those already in place are not considered necessary. 
B. Exploitation status of a fish stock as  basis to allow/prohibit certain subsidies 
 
Surplus
 
 
 Would the individual countries be responsible for determining the level of MSY or total 
allowable catch for a given fishery, the level of current exploitation, and thus the existence of a 
surplus?  On what would it demonstrate that these conditions were fulfilled? 
 
20. The Argentine proposal reflects Article 61 of the United Nations Convention on the Law of 
the Sea which provides that " The coastal State shall determine the allowable catch of the living 
resources in its exclusive economic zone ".  National authorities are therefore responsible for 
determining the levels of exploitation, taking acc ount of the conservation and preservation of living 
resources.  TN/RL/W/211 
 Page 5 
 
 
  21. In order to ensure, however, that such a determ ination is acceptable from the point of view of 
conservation, footnote 7 of the draft legal text proposed by Argentina in paper TN/RL/GEN/138/Rev.1 sets forth the minimum sta ndard to be complied with when making the 
determination.  It must be based on " the best scientific information av ailable and allow the maximum 
sustainable yield of the species or group of species to  be reached or maintained without affecting 
existing fisheries or the marine ecosystem as a whole, in accordance with the United Nations 
Convention on the Law of the Sea and the Code of Conduct for Responsible Fisheries ". 
 Would all countries be expected to apply a uniform methodology in performing these 
assessments? 
 22. Not necessarily all developing Members would have to use the same methodology
5, although 
assessments must satisfy the established standards. 
 How would the reliability of assessments of a surplus be judged, e.g. the soundness of the 
stock assessment process (in which case, what standards would be a pplied, and how would 
WTO know which were the right standards?);  or on the basis of the results, i.e., absolute 
calculations of fishing capacity and total allowa ble catch, or similar concepts (in which case, 
what data sources could be used  to corroborate the results?)? 
 
23. The reliability of an assessment derives from the extent to which the determination is based 
on procedures that are widely accepted at internat ional level.  For instance, methods for assessing 
fishery resources are standardized  and of almost universal implem entation, e.g. "Manual of Methods 
for Fish Stock Assessment - Part 1, Fish Population Analysis (FAO)". 
24. It should be noted that the Code of C onduct for Responsible Fisheries indicates the 
importance of taking into account, inter alia , the following elements:  uncertainties relating to the size 
and productivity of the stocks, biological reference points and risk analysis, levels and distribution of 
fishing mortality, the impact of fishing activities, including discards and bycatch, and the 
environmental context, including the socio-economic dimension.  A developing country Member must 
therefore be able to provide the essential information on which its assessment is based. 
 Could FAO assessments be used as a backst op to country self-assessments (in the sense 
that a country could not declare a surplus of a stock that had been identified by FAO as 
depleted or over-exploited)? 
 25. Given that the required scientific assessment  must be formulated in accordance with 
recognized international standards,  no other sources would be needed. 
 To the extent that enforcement relied upo n outside data sources (e.g. the FAO) how 
could it be ensured that the legal status of the data in the WTO context would not cause the data 
to become unreliable (overly optimistic as to stock status)? 
 
26. Argentina's proposal in paper TN/RL/GEN/138/ Rev.1 suggests a system in which it would 
not be necessary to have recourse to outside information or statistics. 
                                                     
 
5 For example, Article 7.6.6 of the Code of Conduct for Responsible Fisheries acknowledges that 
recognition should be given to the particularities of indigenous peoples and local fishing communities which are 
highly dependent on fishery resources for their livelihood. TN/RL/W/211 
Page 6  
 
   What sort of mechanism(s) and institutiona l arrangements would be needed at WTO to 
verify the existence of a surplus? 
 
27. No specific institutional arrangement would be necessary, since the role of the WTO, the 
panels or the Appellate Body would not be to determine the existence of  a surplus, but to verify that 
the national determination had been made in acco rdance with recognized international methods and 
on the basis of the scientific information available. 
 Would the process of notification and revie w involve verification of surpluses and/or 
soundness of assessment methods?  On the basis of  what information could this be done by a 
WTO Committee? 
 
28. We support the idea of a broad notification and monitoring process.  As is the case in the 
various WTO committees, the information would be b ased on countries' contributions and be subject 
to a multilateral review process. 
 Would panels be called upon to verify existence of surpluses and/or soundness of 
assessment methods?  If so, how?  Would this im ply in all such disputes the need for assistance 
from experts? 
 
29. Panels must not decide on specific issues of  fisheries management, such as the maximum 
sustainable yield (MSY) or surplus species.  If assi stance from experts were needed, recourse could be 
taken to the procedures already provided for under Article 13 and Appendix 4 of the DSU. 
 What sorts of safeguards could be used to prevent subsidized capacity from moving to a 
fishery where no surplus existed (including from being used in IUU fishing)? 
 
30. In the Argentinean proposal, recourse to a s ubsidy programme is limited to a particular 
species or group of species.  Moreover, licences w ould not be applicable to the exploitation of 
fisheries that do not offer sustainable exploitation conditions. 
 How would the rules operate where, within the area of operation of the subsidized vessel 
there is a mixture of surplus and over-exploited species?  How would further depletion of the 
over-exploited species be prevented? 
 
31. The Argentinean proposal takes this situa tion into account, since it stipulates that the 
requirements must be met whether in respect of a sp ecies or group of species.  Subsidies could not be 
used to increase national capacity unless selective fish ing gear or manoeuvres could be used to exploit 
the fishery in question. 
 Where the species in question was a cross-bo undary or highly-migratory stock, how 
could the rules ensure that the subsidies of one country would not affect the rights of others in 
respect of the same fishery?  
32. Argentina is aware that the disci plines must take into account th e issue of shared species and 
feels that this matter should be discussed in deta il at Negotiating Group meetings.  One option would 
be to exclude from special and differential treatme nt the possibility of using subsidies when the 
intention is to exploit shared species.  TN/RL/W/211 
 Page 7 
 
 
   Would there be a role for RFMOs' quota enforcement mechanisms in this regard (where 
applicable)? 
 
33. Argentina's proposal envisages the possibility of  subsidizing when quotas are granted within 
the framework of an RFMO.  Consequently, in su ch cases, it would be possible to resort to a 
mechanism of this type. 
 How can it be ensured that, at the time of subsidization, the surplus will persist over the 
foreseeable lifespan of the subsidized new vessel ?  (That is, what to do where the surplus may 
last for only a few years, while the lifespan of the vessel would be 20-30 years?) 
 34. In order to comply with the requirements set  forth in Argentina's proposal, the number of 
vessels in the fishery (including subsidized vessels) must correspond to a balanced MSY.
6  Moreover, 
the existence of a fisheries management plan in keeping with the Code of Conduct for Responsible 
Fisheries would ensure that the means were in place to address any eventual decline in fishing 
resources. 
 Given the typical time lag between performi ng a stock assessment and publication of the 
results (published data are usually lagged by 2-3 ye ars) how could it be ensured that by the time 
data became available, the reported surplus still existed? 
 
35. Given that the system proposed by Argentina does not depend on the publication of results, 
the above problem would not be relevant.  Nevert heless, it should be noted that the majority of 
management systems publish their figures immediately. 
__________ 
 
 
                                                      
6 Cf. UNEP document "Sustainability Criteria for Fisheries Subsidies", 2007, page 4:  "A leading 
benchmark in efforts to define fishery health is the concept of "maximum sustainable yield" or "MSY".  Both the UN Convention on the Law of the Sea and the UN Code of Conduct for Responsible Fisheries identify MSY 
as the overarching objective of fisheries management, as do a number of other international instruments.  
According to the FAO, MSY can be defined as:  The highest theoretical equilibrium yield that can be continuously taken (on average) from a stock under existing (average) environmental conditions without 
affecting significantly the reproduction process."