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Five not so easy pieces : globalization of fishing and seafood markets Swartz, Wilfram 2013

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Five Not So Easy Pieces: Globalization of Fishing and Seafood Markets by Wilfram Swartz BSc., The University of British Columbia, 2000 MSc., The University of British Columbia, 2004  A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY  in The Faculty of Graduate Studies (Resource Management and Environmental Studies)  THE UNIVERSITY OF BRITISH COLUMBIA (Vancouver) April 2013 ©Wilfram Swartz 2013  Abstract Over the past 60 years, the world’s marine fisheries have more than quadrupled their total output from 20 million t to around 80 million t. Yet, a closer examination of the catch statistics, as conducted in this thesis, reveals that this increase was achieved by geographical expansion of the global fisheries from the coastal waters off North Atlantic and Northwest Pacific to the waters in the Southern Hemisphere and into the high seas. The globalization of fisheries coincides with the globalization of seafood markets and an analysis of trade statistics carried out in this dissertation indicates net flows of marine fisheries resources into the markets of the EU, Japan and USA with their “consumption footprints” covering most of the world’s ocean. Recognizing the global limit to growth, various international initiatives have been launched in recent years to improve the state of world’s marine fisheries. This thesis examines fisheries subsidies negotiations at the World Trade Organization and its failure to reach an agreement, despite a general consensus that some forms of fisheries subsidies contribute to overcapacity and overfishing. The failure of the WTO negotiations exposes the difficulties of overcoming the status quo in fisheries. This thesis argues that improvements in our understanding of the states of world fisheries and their values and economic contributions are critical to achieving meaningful political actions. As such, the thesis explores two approaches for enhancing existing fisheries statistics. First, a new methodology for predicting the values of seafood across various national markets was developed, allowing improved economic evaluations of fisheries resources and the ii  fisheries industry. Second, a recently developed catch-reconstruction method was applied to the fisheries of Japan to examine the scale of previously ignored components of marine fisheries catch even in countries where fisheries are generally considered to be data-rich. The two approaches presented, jointly, should enable the development of a more comprehensive picture of the state of marine fisheries which can then be presented to the public; a picture that, combined with other efforts by fisheries scholars around the world, I hope, will speak loud enough to initiate the transition to sustainable fishing.  iii  Preface Apart from thesis Chapter 1 and 7, all of the Chapters in this dissertation have been prepared as stand-alone manuscripts. Three of the research papers have been submitted to the primary literature, with Chapters 3 and 4 published and Chapter 5 in press. In addition, Chapter 2 has been accepted for a non-peer reviewed publication. Chapter 6 is currently being prepared for submission. I am the senior author on all of the papers, and I led the design, implementation, analysis and writing of the papers. Chapter 2 is coauthored by Enric Sala, Sean Tracey, Reg Watson and Daniel Pauly. Sean Tracey and Reg Watson assisted with data and information on the marine fisheries catch database, while Enric Sala and Daniel Pauly offered their expertise in the design of the research and in preparation of the manuscript. A version of this Chapter is published in PLoS ONE (Swartz W, Sala E, Tracey S, Watson R, Pauly D. 2010. The spatial expansion and ecological footprint of fisheries (1950 to present). PLoS One 5(12):e15143). Chapter 3 is coauthored by Rashid Sumaila, Reg Watson and Daniel Pauly. Reg Watson assisted with data and information on marine fisheries catch while Rashid Sumaila and Daniel Pauly provided guidance throughout. A version of this Chapter is published in Marine Policy (Swartz W, Sumaila UR, Watson R, Pauly D. 2010. Sourcing seafood for the three major markets: the EU, Japan and the USA. Marine Policy 34:1366-1373). Chapter 4 is coauthored by Rashid Sumaila, who provided guidance throughout the development of the manuscript. A version of the Chapter is accepted for publication in the Proceedings of the Ocean, Green Shipping and Sustainable Energy Symposium held in April, iv  2011 (Swartz W, Sumaila UR. In press. Fisheries governance, subsidies and the World Trade Organization. Proceedings of the Ocean, Green Shipping and Sustainable Energy Symposium) and in preparation for submission for a peer-reviewed publication. Chapter 5 is coauthored by Reg Watson and Rashid Sumaila. Reg Watson provided data on marine fisheries catch, while Rashid Sumaila provided guidance throughout. A version of the Chapter has been accepted by Environmental and Resource Economics (Swartz W, Sumaila UR, Watson R. In press. Ex-vessel fish price database revisited: a new approach for estimating ‘missing’ prices. Environmental and Resource Economics). Chapter 6 is coauthored by Gaku Ishimura and Rashid Sumaila. Gaku Ishimura assisted in data collection and offered his expertise in the Japanese marine fisheries. Rashid Sumaila provided guidance throughout the development of the paper. A version of this Chapter is in preparation for submission.  v  Table of Contents  Abstract ................................................................................................................................ii Preface ................................................................................................................................iv Table of Contents ................................................................................................................vi List of Tables ..................................................................................................................... viii List of Figures ...................................................................................................................... ix Acknowledgements............................................................................................................. xi Chapter 1: Introduction ...................................................................................................... 1 Chapter 2: The spatial expansion and ecological footprint of fisheries (1950 to present) 7 Introduction..................................................................................................................... 8 Material and methods ................................................................................................... 10 Results and discussion ................................................................................................... 11 Chapter 3: Sourcing seafood for the three major markets: the EU, Japan and the USA . 19 Introduction................................................................................................................... 20 Materials and methods ................................................................................................. 28 Results ........................................................................................................................... 31 Conclusion ..................................................................................................................... 36 Chapter 4: Fisheries governance, subsides and the World Trade Organization .............. 38 Introduction................................................................................................................... 39 Subsidies and their impacts on the fisheries sector ..................................................... 40 Fisheries subsidies negotiations at the WTO and challenges ahead ............................ 49 Conclusion ..................................................................................................................... 60 Chapter 5: Ex-Vessel Fish Price Database revisited: a new approach for estimating ‘missing’ prices ...................................................................................................... 62 Introduction................................................................................................................... 63 Theory and methods ..................................................................................................... 65 Results and discussion................................................................................................... 71 Chapter 6: Assessment of total fisheries-related biomass removal from Japan’s Exclusive Economic Zones: 1950-2010. ................................................................................ 81 vi  Introduction................................................................................................................... 82 Methods ........................................................................................................................ 83 Results ........................................................................................................................... 91 Discussion ...................................................................................................................... 94 Chapter 7: Conclusion ....................................................................................................... 98 Bibliography .................................................................................................................... 103 Appendix A. Proposed changes to the 2007 Chair’s Draft. ............................................. 118  vii  List of Tables Table 4-1. Global subsidy estimates by program type. .................................................... 46 Table 5-1.2Top ten marine fishing countries by landed values and their global shares. . 77 Table 6-1.3Summary of reconstructed catch by type: 1950-2010. .................................. 92  viii  List of Figures Figure 2-1. Primary production required (PPR) to sustain global marine fisheries. ......... 12 Figure 2-2. Time series of areas newly exploited by marine fisheries (1950-2005). ........ 12 Figure 2-3. Time series of areas exploited by marine fisheries (1950-2005). .................. 13 Figure 2-4. Time series of areas exploited by marine fisheries by latitude class. ............ 14 Figure 2-5. Newly exploited area (103 km2) for each latitude class.................................. 15 Figure 3-1.6Trends in global marine fisheries landings from 1950 to 2005. .................... 21 Figure 3-2.7Origin of fish landed, consumed and relative consumption by the EU......... 32 Figure 3-3.8Origin of fish landed, consumed and relative consumption by Japan. ......... 33 Figure 3-4.9Origin of fish landed, consumed and relative consumption by the USA. ..... 34 Figure 3-5.10Origin of fish consumed by the three markets............................................ 36 Figure 5-1.11Average ex-vessel values of marine fisheries landing. ................................ 72 Figure 5-2.12Average ex-vessel values of selected species groups. ................................ 73 Figure 5-3.13Frequency distribution of correlation coefficients. ..................................... 74 Figure 5-4.14Plots of estimated verses reported prices and residuals. ........................... 75 Figure 5-5.15Plots of estimated versus reported prices and residuals. ........................... 76 Figure 5-6.16Total marine fisheries landings and landed value. ...................................... 77 Figure 5-7.17Spatial distribution of average annual landed values. ................................ 78 ix  Figure 5-8.18Proportion of landed values captured by domestic fisheries. .................... 79 Figure 6-1.19Total fisheries-related biomass removals from the Japanese EEZ. ............. 92 Figure 6-3.22 Reconstructed illegal catches in the Japanese EEZ by fleet type. .............. 93 Figure 6-2.20Reconstructed catches by foreign fleets operating in the Japanese EEZ. ... 93 Figure 6-4.21 Number of fisheries-related arrests reported by the Japan Coast Guard. 93 Figure 6-5.23Estimated discards by fishery type. ............................................................. 94 Figure 6-6.24Realized catch as a proportion to the Total Allowable Catches. ................. 95  x  Acknowledgements This thesis was conducted as part of the Global Ocean Economics Project, an activity funded and initiated by the Pew Charitable Trusts with additional financial support from the Fisheries Economic Research Unit of the Fisheries Centre, University of British Columbia. I would like to begin with thanks to Dr. Rashid Sumaila, my PhD supervisor, for believing in me and my research. He has been the most patient adviser, always taking the time to listen as I waddled my way through this dissertation. I sincerely hope the economist in him is satisfied by the return he is seeing in his investment. I was fortunate to have spent six months in 2011 at the World Trade Organization as a Research Officer. It was a tremendous learning experience for me to observe the workings of international policy negotiations and I am extremely grateful for the opportunity. Thanks to Johann Human, Clarisse Morgan and my colleagues at the WTO for making my time in Geneva not only fruitful but also enjoyable. Thanks to my friends and colleagues at the Fisheries Centre, who have made my journey as a graduate student a most unforgettable one. Thanks also to my non-piscademic friends, particularly Tyler Bruce and Erin MacDougall, for hours spent listening to my ramblings about fish and economics, or at least pretending to be listening. I would like to thank my committee member, Dr. Gordon Munro. It has been a privilege to learn from him over the years and I am fortunate to have such a supportive committee member.  xi  Finally, I would like to express my eternal gratitude to Dr. Daniel Pauly for his mentorship throughout my academic life, from my undergraduate years to the present and I hope the future. I began as an aspiring archeologist (Indiana Jones) and was transformed into an aspiring fisheries economist and I owe it all to him.  xii  To Mom & Dad  xiii  Chapter 1: Introduction  1  The fishery sector plays a key role in food security. In 2007, fish accounted for 15.7 per cent of the global population’s intake of animal protein and 6.1 per cent of total protein consumption, with more than 1.5 billion people depending on fish for 20 per cent of their total animal protein intake (FAO 2011). This is not the historical norm, rather the total and per capita consumption of seafood has expanded significantly in the past six decades, with annual per capita fish consumption increasing from 9.9 kg in the 1960s to 17.0 kg in 2007 (FAO 2011). The human population itself has doubled over the same period, resulting in a near quadrupling in the quantity of fish consumed. Increasing income and urbanization in many developing countries, most notably China, and health concerns about other sources of animal protein are expected to further fuel the global demand for seafood into the future. The bulk of this ever-growing demand is supplied by marine capture fisheries, not only as a direct source of seafood, but also indirectly via aquaculture production, a good part of which relies heavily on the input of marine fisheries catches in the form of feed, i.e., fishmeal and oil. However, mariculture has yet to make a significant net contribution to the global supply of fish (Naylor et al. 2009), while the supply of seafood from marine capture fisheries appears to have reached its limit (Watson and Pauly 2001). With global landings peaking in the late 1980s, and 85 per cent of world’s marine fish stocks now considered to be fully- or overexploited (FAO 2011), demand is rapidly outpacing supply. In Chapter 2, a closer inspection of catch statistics reveals that the ‘growth’ in marine fisheries which took place in the late 20th Century was fuelled by a rapid geographical expansion of fisheries targeting new stocks in offshore waters and in the high seas, while the traditional  2  resources of coastal waters were sequentially overexploited (Pauly et al. 2002). Thus, a decline in local supply, particularly in the EU and Japan, was supplemented by increased supply from foreign waters, first via distant water fishing, and more recently, via the import of foreign catches (Swartz 2004). Marine fisheries now cover most of the world’s oceans, leaving only a few remote corners of the high seas and the Polar Regions as the last remaining ‘frontiers’. The expansion of global marine fisheries coincided with the globalization of the seafood market. As the local supply of seafood became scarce due to overexploitation, the markets of the developed countries became increasingly dependent on supply from foreign waters, both via intensified activities of distant water fishing fleets and via an increase in international seafood trade. The share of fisheries landings entering international trade increased from 25 per cent in the mid-1970s to close to 40 per cent in 2008 (FAO 2011). The analyses in Chapter 3 demonstrate the extent of the global seafood network with an overall flow of seafood from the waters off the coasts of developing countries (and in the high seas) to the markets of the developed countries. Despite the approaching limits to the growth and the need for restoration and rebuilding of fisheries resources (Worm et al. 2009; Sumaila et al. 2012), international initiatives to address overfishing and overcapacity have been met with mixed results, both at the inter-government level (e.g., management of Atlantic bluefin tuna, Webster 2011; Sumaila and Huang 2012) and at at the non-governmental level (e.g., public awareness campaigns, Jacquet and Pauly 2007; Jacquet et al. 2010). The difficulties of overcoming the status quo of global fisheries were evident in the recent failure of the negotiation for international regulation  3  of fishing subsidies at the World Trade Organization despite a general consensus that some forms of fisheries subsidies contribute to overcapacity and overfishing (Munro and Sumaila 2002; Sumaila et al. 2010) and, thus, need to be regulated (Chapter 4). I argue that this lack of global response to be due to the aforementioned geographical expansion of marine fisheries and globalization of the seafood market. These two global trends jointly have had the effect of shielding the consumers of the developed countries from the impact of diminishing global percapita supply, thereby removing the impetus for international regulation of marine fisheries. The final two analysis chapters (Chapters 5 and 6) present tools for enhancing our current understanding of the states of world fisheries and their values and economic contributions as means to overcoming the status quo and encouraging public and policy makers to undertake meaningful political actions. In Chapter 5, I re-examine the Ex-Vessel Fish Price Database of Sumaila et al. (2007) and update the methodology for estimating ex-vessel prices across countries. The database described in Sumaila et al. (2007) is the first effort at creating a complete list of ex-vessel prices for all commercially exploited marine fish and invertebrates for all coastal countries, and has been extensively used for economic analyses of marine fisheries sectors (e.g., Sumaila et al. 2010, Christensen et al. 2009, Sethi et al. 2010). A database of this type, as rightly noted in Sumaila et al. (2007), requires updating over time, both in terms of methodologies and input data, as our understanding of the international seafood markets improves. In Chapter 6, I re-examine basic catch data. Fisheries landings data compiled by national fisheries agencies serve as the primary tool for evaluating the state and health of marine  4  fisheries resources and ecosystems (Ricker 1975; Hilborn and Walters 1992). However, it is now recognized that the reported data are incomplete and often underestimate not only actual catches, particularly those caught by informal sectors of fisheries and by illegal activities, but fail to include other fisheries-related removals of stock biomass such as discarding at sea (see contributions in Zeller and Pauly 2007; Booth and Zeller 2008; Rossing et al. 2010; Harper and Zeller 2011). To evaluate the full impact of fishing on marine ecosystems, Pauly (1998) outlines rationale and method for reconstruction fisheries-related biomass removals, which includes the use of grey literature and anecdotes, as well as the incorporation of non-fisheries statistics as indicators of trends in marine fisheries. The “catch reconstruction” method of Zeller et al. (2007) is adopted and applied in Chapter 6 to estimate the biomass removals from the Japanese Exclusive Economic Zone between 1950 and 2010, to demonstrate the need for such a full accounting of marine fisheries even in developed countries, where official statistics are generally perceived to be fairly complete. Japan represents an interesting case study for catch reconstruction, as it The reconstructed catches and removals, combined with the updated ex-vessel price estimates, will allow better valuation of the marine fisheries sectors, including their contribution to national and global economies (e.g., Dyck and Sumaila 2010). This dissertation, thus, begins with an in-depth examination of the negotiation for fisheries subsidies regulations at the WTO and its failure, and identifies globalization of fisheries and seafood markets as two important contributors to the general lack of public awareness 5  toward the state of the world’s fisheries and the subsequent lack of enthusiasm among policy makers for implementing international regulations of marine fisheries. As means for improving our understanding of the status of marine fisheries, two approaches for enhancing fisheries statistics, i.e., catch values and volumes, are assessed and applied. It is my hope that as the picture of fisheries and the need for improved management becomes clearer, the public support for international conservation initiatives will become stronger.  6  Chapter 2: The spatial expansion and ecological footprint of fisheries (1950 to present)1  1  Published as Swartz W, Sala E, Tracey S, Watson R, Pauly D. 2010. The spatial expansion and ecological footprint of fisheries (1950 to present). PLoS One 5(12):e15143.  7  Introduction There is a wide realization that fisheries, similar to agriculture on land (Tilman 1999), has a tremendous impact on marine ecosystems and on the biodiversity embedded therein (Jackson et al. 2001; Pauly et al. 1998). This applies particularly to modern industrial fisheries, here defined as fisheries using craft powered by fossil fuel, which began in about 1880, when the first British steam trawlers were deployed. These quickly depleted the coastal population of flatfish and other bottom fish they were targeting, and they had to move offshore, gradually expanding into the entire northeastern Atlantic (Pauly et al. 2002; Roberts 2007). A similar development was mirrored off New England, and along the coast of Japan, where local fish populations, already much reduced by operation conducted off sail-powered vessels (e.g., Rosenberg et al. 2005), were strongly depleted. The aftermath of the First and Second World War saw both a recovery of these stocks, and an increase in the sophistication of industrial vessels; which were equipped with diesel engine and increasingly sophisticated eco-locating equipment, and with refrigeration, enabling longer and longer trips. In 1950, the Food & Agriculture Organization of the United Nations (FAO 2009) began issuing annual compendia of global fisheries statistics (Ward 2004) which documented that global catches increased throughout the 1960s and 1970s, though the rate at which this increase proceeded slowly declined. In the late 1980s, global catches ceased to increase and peaked at 90 million t when account is taken of systematic over reporting of catches by China (Watson and Pauly 2001). The slow decrease of about half million t per year  8  which then ensued has not been reversed since (FAO 2009), and is not likely to ever be (Pauly et al. 2003). This decrease occurred, essentially, because the rate at which new fish stocks (for example of deep sea fish; Morato et al. 2007) were accessed, from the late 1980s on, failed to compensate for the rate at which ‘traditional’ stocks were depleted. Moreover, the number of new stocks has been decreasing linearly over time (Froese et al. 2008). This can be shown, e.g., using catch-status plots for different Large Marine Ecosystems (Sherman and Hempel 2008), which account for the state of thousands of single-species stocks (Pauly et al. 2008). However, the global impact of fishing on the ecosystem, which includes species across the food chain from herbivores to top predators, cannot be fully assessed by the study of single-species catches. A more appropriate way of quantifying the expansion of and limits to fisheries is using the primary production required (PPR) to sustain catches – a metric of the ecological footprint of fishing. As defined by Pauly and Christensen (Pauly and Christensen 1995), PPR allows direct comparison of the primary production required to generate a catch of a given (group of) species in a given time period (here: 1 year), and hence it allows for (indirect) comparisons between the catches of very different species of fish and invertebrates. Further, when the PPR of a given catch taken at a given locale is expressed as a fraction or percent of the primary production observed at that locale, we can use arbitrary thresholds of this fraction to define this locale as ‘exploited’, i.e., drawn into the scope of fisheries. Here we used different levels of “% PPR” (i.e., percentage of the primary production of the cells of a map of the global  9  ocean) to quantify the expansion of fisheries since 1950 and extract the dominant patterns of this expansion.  Material and methods The analysis, which covers the period from 1950 to 2005, defines fisheries exploitation based on the primary production that is required to generate the catches of marine fisheries. The Primary Production Required (PPR), as proposed by Pauly and Christensen (1995) is computed from:  where Ci is the catch of species i, CR is the conversion rate of wet weight to carbon, TE is the trophic transfer efficiency, TLi is the trophic level of species i and n is the number of species caught. We applied a 9:1 ratio for CR and 10% for TE (Pauly and Christensen 1995). Species-specific trophic levels, usually derived from diet composition, i.e., stomach content data, were taken from FishBase (www.fishbase.org) for fishes and SeaLifeBase (www.sealifebase.org) for invertebrates. Annual catch data were taken from the spatially disaggregated global catch database of the Sea Around Us project (Watson et al. 2004). This online database (www.seaaroundus.org) is derived mainly from FAO global fisheries catch statistics, complemented by the statistics of various international and national agencies, and reconstructed datasets (Watson et al. 2004, Zeller and Pauly 2005). These statistics, after harmonization, are disaggregated into a spatial grid system that breaks down world’s ocean into 180,000 cells (0.5o latitude by 0.5o longitude) 10  based on the geographical distribution of over 1500 commercially exploited fish and invertebrate taxa, using ancillary data such as the fishing agreements regulating foreign access to the Exclusive Economic Zones (EEZs) of maritime countries. Landing data were adjusted to account for discarded bycatch on the global estimates (Zeller and Pauly 2005). However no adjustment was made to account for regional or local variations in discards and other unreported catches. Primary production estimates were derived using the model described by (Platt and Sathyendranath 1998) which computes depth-integrated primary production based on chlorophyll pigment concentration based on SeaWiFS (www.seawifs.gsfc.nasa.gov) and photosynthetically active radiation as calculated in Bouvet et al. (2002). The estimates presented here pertain to 1998, which, for the purpose of our analysis, was assumed to be representative of the entire period. Using the equation above and primary production estimates, we estimated for each year the proportion of primary production exploited in each of the 0.5 o latitude/longitude ocean cells, defined as ‘exploited’ when the proportion of primary production exploited exceed a threshold level.  Results and discussion Most of the ecological footprint of fishing concentrated on the waters off the industrialized countries of North America and Europe, and off Japan in 1950, and have expanded to cover most of the world’s productive waters by 2005. Figure 2-1 presents the spatial patterns of the proportion of the local primary production required to sustain the catch, 11  for 1950 and 2005. These figures clearly demonstrate the expansion of fisheries, particularly of areas where the proportion of primary production exploited equal or exceed 30% (in red). The expansion is accompanied by the nearly five-fold increase in catch, from 19 million t in 1950 (equivalent to 9 billion t, wet weight, of primary production) to 87 million t in  Figure 2-1. Primary production required (PPR) to sustain global marine fisheries landings expressed as percentage of local primary production (PP). Estimates o of PPR, PP and PPR/PP computed per 0.5 latitude/longitude ocean cells. PPR estimates based on the Sea Around Us catch database (www.seaaroundus.org) and PP estimates derived from SeaWiFS’s global ocean colour satellite data. The maps represent total annual landings for 1950 (top) and 2005 (bottom). Note that PP estimates are static and derived from the synoptic observation for 1998.  2005 (equivalent to 45 billion t, wet weight, of primary production). In 2005, the footprint of one tonne of catch was, on average, 556 t of PP (wet weight). Some patterns in Figure 2-1 should be noted. First, the exploitation levels off the coast of East Africa in 2005 are likely to be underestimated due to underrepresentation of  Figure 2-2. Time series of areas newly exploited by marine 2 fisheries (1950-2005), expressed in km . Newly exploited areas defined as regions where primary production required (PPR) to sustain reported fisheries landings exceeds the threshold percentage of local primary production (PP). Results based on three exploitation thresholds (10%, 20% and 30%) are presented.  unreported catches in the region (Jacquet and Zeller 2007a; Jacquet and Zeller 2007b). Moreover, waters off the Pacific Island countries are known fishing grounds for tuna  12  fisheries and reported to have a relatively high level of illegal and unreported catch (Agnew et al. 2009). The rate of expansion can be illustrated by estimating the size of fishing grounds that become ‘newly exploited’ in each year. The 1980s to the mid 1990s were the period of greatest expansion (Figure 2-2), which corresponds to the period during which world catches began to stagnate, peaked and declined (Wackernagal and Rees 1996). Similarly, Figure 2-3, which shows the cumulative area of the ocean that was exploited by fisheries based on multiple exploitation thresholds (10, 20 and 30%), highlights this accelerated expansion of the 1980s and the early 1990s. Comparison between the world ocean (left) and the continental shelves (coastal waters down to 200m depth; right) shows that the accelerated expansion during this period was driven primarily through expansion into the open ocean. It should be noted that for both continental shelves and the world ocean, the pace of expansion slows down, because most commercially viable regions have been expanded into, leaving areas furthest away from fishing ports such as in the South Atlantic and the shelves off Antarctica. Figure 2-4 summarizes the direction of this expansion by presenting the time series of the proportion of the world ocean that has come to be exploited across latitudinal gradients.  Figure 2-3. Time series of areas exploited by marine fisheries (1950-2005) expressed a percentage of the total ocean area. ‘Area exploited’ defined as regions where primary production required (PPR) to sustain reported fisheries landings exceeds the threshold percentage of local primary production (PP). Results based on three exploitation thresholds (10%, 20% and 30%), and for all marine areas (left) and continental shelf areas (i.e., up to 200m in depth, right) are presented.  13  Figure 2-4. Time series of areas exploited by marine fisheries by latitude class, expressed as a percentage of the total ocean area. ‘Area exploited’ defined as regions where primary production required (PPR) to sustain reported fisheries landings is greater than 10% of local primary production (PP).  The figure shows that, even in the 1950s, the majority of the ocean surface in the North was already exploited and that, over time, an increasing proportion of the ocean in the South has become exploited. The waters near the poles are either covered in ice or away from fishing ports, rendering them unattractive, for now, to commercial exploitation. Finally, Figure 2-5 quantifies the rate of this southward expansion by presenting the distributions of the areas of new exploitation for each decade. This expansion in marine fisheries was increasingly reliant on new fishing grounds in the South, with the means of these new fishing grounds shifting southward, on average, by about 0.8 degree per year. The northward deviations of the means from the regression line in the 2000s suggest that the expansion has run its course. This possibility is further confirmed the reduction in the size of newly exploited areas (i.e., areas under the curve) from 1990s to 2000s. 14  The expansion of the fisheries presented here can be viewed as an ecological footprint of the world fisheries. Ecological footprints are measured as the ratio between the productivity of the ecosystem and human consumption (Wackernagel and Rees 1996). The standardization of fisheries catches into PPR enables footprints of various fisheries to be  3  2  Figure 2-5. Newly exploited area (10 km ) for each latitude class, averaged over each decade. Newly exploited area defined as ocean cells where primary production required to sustain fisheries catch exceeds the threshold percentage of primary production. Results based on three exploitation thresholds (10%, 20% and 30%) are presented. Black dots at the base of each histogram represent the mean latitude of the distribution. The dots for each exploitation threshold are fitted with a linear regression; jointly, they suggest the southward expansion of 0.7 to 0.9 degree per year.  compared against the primary productivity of marine ecosystems. The complexity and variability of fisheries and the marine  ecosystems within which they are embedded therein make it difficult to define an across-theboard exploitation threshold of sustainability. An analysis of PPR across various Exclusive Economic Zones (EEZs) and Large Marine Ecosystems (LMEs) showed that fisheries exploitation can range from 1% in the Australian EEZ up to 80% in Icelandic EEZ, with varying impacts on the ecosystem (Dulvy et al. 2009, and see contributions in Sherman and Hempel 2008). The larger values are extraordinarily high compared with the 23.8% of potential net primary productivity humans appropriate on land (Haberl et al. 2007).  15  Using PPR to calculate the loss of secondary production due to fishing, Coll et al. (2008) showed that total catch per capita from Large Marine Ecosystems is at least twice the value estimated to ensure fishing at moderate sustainable levels. Chassot et al. (2010) estimated that the primary production appropriated by current global fisheries is 17–112% higher than that appropriated by sustainable fisheries. In this study we also suggest that relatively low thresholds (between 10% and 30%) of PPR are sufficient to induce, and thus also track, expansion of fisheries. These thresholds are more significant than they may seem, because the ecological impact of fishing depends on how much of the local primary production is available to sustain seafood production. For instance, only 41% of coastal phytoplankton is consumed by herbivores and moves up the food chain (Duarte et al. 2010). Therefore, the values of % PPR presented in this study are only a fraction of the actual proportion of primary production that is available for seafood production. In cases where fisheries capture more than 30% of local primary production (Figure 2-1), they may be capturing most of the PP available to fisheries. Further work is required to determine how much PP we are ‘overcapturing’. In other words, we need to estimate the proportion of primary production can be sustainably removed each year without compromising ecosystem integrity. For our analysis, we assumed primary production to be constant over the study period, due to incomplete temporal coverage in the SeaWiFS dataset. While the level of primary production may have declined over the past 50 years concomitant with an observed reduction in the global chlorophyll concentration (Boyce et al. 2010), the spatial patterns are thought to  16  have been consistent at global scale (Conkright and Gregg 2003). The spatial patterns of expansion observed in our study should thus be independent of changes in global primary productivity, as evident by the similarities in the expansion patterns observed using three exploitation thresholds. However, our estimates of %PPR are likely conservative, and the footprint of fishing larger than reported here. Similarly, the assumption of 10% trophic transfer efficiency has been called into question (Baumann 1995) and discussed in details in Pauly 2010. If we assume that the transfer efficiency is relatively constant across the trophic level, then the trophic transfer efficiency is a constant, and therefore, will have no significant effect on the spatial patterns observed. Nevertheless, the comparison with increase in agricultural production is startling. Tilman (1999) observed that doubling of world agricultural production over the 35-year period, from 1961 to 1995, was accompanied by an increase of only 10% of the surface under cultivation. Over the same period, marine fisheries, which underwent a comparable 2.4-fold increase in catch (34 million t to 83 million t in catch weight or 17 billion t to 44 billion t in PPR, wet weight), required a nearly 4-fold increase in exploited area (when a 10% exploitation level is used as threshold). Our results demonstrate that the growth in the world’s marine fisheries over the past 56 years was driven through a sequential exploitation of new fishing grounds. Fisheries now cover a majority of the world’s ocean, with areas of low productivity and distant waters as the final remaining ‘frontiers’. The decline of newly exploited areas since the late 1990s, which corresponds to a decline in global landings (FAO 2009), implies that the era of great expansion  17  has come to an end. With a limited room for expansion, and excessive appropriation of primary production in many regions, the only way toward sustainability of global fisheries goes through reduction of PPR.  18  Chapter 3: Sourcing seafood for the three major markets: the EU, Japan and the USA2  2  Published as Swartz W, Sumaila UR, Watson R, Pauly D. 2010. Sourcing seafood for the three major markets: the EU, Japan and the USA. Marine Policy 34:1366-1373.  19  Introduction Seafood consumption is on the rise. The global per capita seafood consumption has been increasing steadily, from an average of 9.9 kg in the 1960s to 16.7 kg (live weight equivalent) in 2006 (FAO 2009). Human population itself has doubled over the same period, resulting in a near quadrupling in the quantity of fish consumed. Increasing income and urbanization in many developing countries, most notably China, and health concerns about other sources of animal protein are expected to further fuel the global demand for seafood into the future (Delgado et al. 2003). However, the consumption of seafood is not distributed evenly, and considerable regional differences occur. In 2005, the annual per capita fish consumption of the industrialized countries stood at 29.3 kg, nearly three times that of the developing countries (10.6 kg, excluding China). The difference is even greater when consumption in countries classified as “low income and food deficient” is considered (8.3kg, FAO 2009). The bulk of this ever-growing demand is supplied by marine capture fisheries, not only as a direct source of seafood, but also indirectly via aquaculture production, which itself relies heavily on the input of marine fisheries catches in the form of feed, i.e., fishmeal and oil (Naylor et al. 2000). Indeed, mariculture has yet to make a significant net contribution to the global supply of fish (Naylor et al. 2009). This supply of seafood from marine capture fisheries, however, appears to have reached its limit, with global landings on a decline since the late 1980s (Figure 3-1, Watson and Pauly 2001) and 80 percent of world’s fish stocks now considered to be fully or over-exploited (FAO 2009). Closer inspection of the catch statistics 20  reveals that there is considerable ‘fishing down’ (Pauly et al. 1998) of the marine food web with invertebrates and low-trophic level fish replacing piscivorous species such as cod and tuna that had Figure 3-1.6Trends in global marine fisheries landings from 1950 to 2005 (www. seaaroundus.org). Note that total landings (bold) have levelled off at around 80 million tonnes since the late 1980s and are on a decline when the landings of Peruvian anchoveta (Engraulis ringens) are excluded (grey). The thin black line represents the landings by distant water fleets (i.e., catches occurring outside thedomestic EEZs of the fleets).  historically met world demand. While such fishing down may contribute to some initial increases in catches of prey species, more common consequences of this fishing down are outbursts of  previously suppressed species which may or may not be suitable for human consumption (e.g. jellyfish, Pauly et al. 2009). Clearly, the current pattern of seafood consumption is not sustainable (Myers and Worm 2003; Pauly et al. 2003). Globalization of fisheries Although its multi-faceted nature makes globalization difficult to define in universally agreed terms, it can be summarized as “the growth or more precisely, the accelerated growth, of economic activity that spans politically defined national and international boundaries” (Oman 1999). This definition clearly reflects the current trends in the world’s fisheries. Sophisticated networks of trade relationships, supplied by large distant water fleets operating beyond the maritime boundaries of their home states, mean that in a large proportion of global fisheries landings are being consumed in countries outside the boundaries of the waters where the catches were taken. The disconnect between the regions of fish supply and consumption leads to the movement of fish into the markets and onto the tables of the affluent 21  industrialized countries (Kurien 2005). Such flow results in the skewed distribution of fish noted above, with potential consequences to food security in many developing coastal countries (Alder and Watson 2007). Gravitation of seafood at sea Large numbers of industrial fishing vessels from developed countries fish in the waters of developing countries. The emergence of the United Nations Conference on Law of the Sea (UNCLOS), in the late 1970s, enabled coastal countries to claim exclusive rights to waters reaching 200 nautical miles into the open sea, including essentially all coastal shelves and their fisheries resources. Under this new regime, developed countries with established distant water fleets, could not dismantle them without significant economic and social consequences. Consequently, they began to engage in ‘cash-for-access’ fishing agreement. Under these arrangements, they secured fishing opportunities in the waters of developing countries in exchange for financial compensation (Figure 3-1). In some countries, fishing by foreign fleets far exceeds fishing by the host country (Bonfil et al. 1998; Gianni and Simpson 2005). While access agreements provide a valuable option for developing countries to extract economic benefits from their fisheries resource, there are concerns about the equity of these arrangements and their impact on local artisanal fishers and the development of domestic fisheries (see e.g. Kaczynski and Fluharty 2002). Moreover, in countries with limited resources for management, surveillance and enforcement, there are also concerns about the impact of distant water fleets on the environment and sustainability. Regional and distant water fishing by vessels from developing countries are also 22  expanding and fishing fleets of ‘flag of convenience’ states are reportedly increasingly involved in illegal distant-water fishing (Gianni and Simpson 2005). For developing countries with distant water fleets operating in such EEZs, the process of negotiating fair compensation is extremely difficult because the detailed operational cost of distant water fleets is not available. In general, there seems to be little relationship between the value of the catch by distant water fleets and the level of fees they pay (Kaczynski and Fluharty 2002; Petersen 2002), indicative of weak negotiating power of the host countries, or, worse, possible corruption on both sides. Moreover, most of the hosts lack the capacity to monitor the catches of foreign fleets, making it difficult for host countries to assess the quantities and value of the fish caught by the distant water fleets. This further contributes to developing countries being underpaid and their waters overfished by foreign fleets. In the 1990s, for example, fishing access agreements signed between the EU and developing countries generated on average, value added of EUR 694 million annually in the EU member states through processing and marketing of fish caught. This amount represented three times the benefits accruing to the host countries that have signed fisheries agreements with the EU (Gorez 2005). Moreover, distant water fleets generally benefit from a variety of subsidies, including the payment of access agreement compensation by their home governments. With these subsidies, distant water fleets have been able to continue to operate even when the stocks have become too depleted to make their exploitation economically profitable (Munro and Sumaila 2002). This also results in unfair competition between industrialized distant water 23  fleets and local fleets for access to resources and markets, especially for the artisanal fishers of developing world. Gravitation of seafood via the international market International trade in fish products, like other kinds of trade, is often assumed to benefit all involved actors. However, given the large amounts of fish entering into international markets, there are concerns that exported fish species will no longer be available for domestic consumption, thus compromising the food security of the exporting countries, particularly in low-income, food-deficient countries (LIFDCs). Fish is one of the most widely traded commodities in the world with nearly 40 percent of world fish production entering the international market—significantly more than for other food staples such as wheat (20 percent) and rice (5 percent) (FAO 2009). The trends toward globalization of business, banking, and telecommunications, as well as the policies of trade liberalization and expansion of global fishing fleets over the past 50 years have greatly contributed to this increase in fish trade. The total volume and value of fish trade have steadily increased from 8 million t worth USD 8 billion in 1976 to 54 million t worth USD 85.9 billion in 2006 (volume in live weight equivalent, FAO 2009). Fish trade flows can be summarized as follow (FAO 2009): •  Developing countries accounted for just under 60 percent and 50 percent of exports in quantity and value, respectively. LIFDCs accounted for 20 percent of the total export value in 2006;  24  •  A total of 97 countries, mostly in Latin America, the Caribbean, Africa and developing Asia and Oceania, were net exporters of fish and fisheries products. Europe, Japan and North America were characterized by a fish trade deficit;  •  85 percent of the value of developed country exports was destined to other developed countries; meanwhile, only 15 percent of the value of fishery exports of developing countries was to other developing countries.  It is evident from these statistics that there is a net flow of fish in the international market from developing to developed countries. Whether this should be viewed as problematic remains a matter of debate. Proponents of free markets would point out that a large share of traded fish products is comprised of high value products, such as shrimp and tuna may be of little interest to consumers in the poorer countries. Therefore, they would also argue that the substantial amount of foreign exchange earned from the export of these luxury fish products can be used to import much larger volumes of low cost foods, with a large net nutritional gain. But while increasing international trade in fish and fishery products undoubtedly provides social and economic benefits for developing countries, there is a need for caution. Although the export-oriented fisheries sector may present opportunities for developing countries to earn foreign exchange, the demand from international markets exerts huge pressures on fisheries resources. Thus, meeting demand may encourage intensive, destructive and illegal fishing to the detriment of sustainability. There are also concerns that promoting international trade in fisheries products could have negative consequences for local food security. Impacts may include reduced physical and economic access to fish by channelling fish  25  away from local markets to international markets and perhaps of even greater consequence, a large increase in the local price of fish with considerable food security consequences to the poor parts of the population (Kurien 2005). Moreover, in many cases, much of the foreign exchange earned from the export of fish is not devoted to purchasing low cost, nutritious foods for an undernourished population, but is diverted to the purchase of luxury products in demand by local elites or tourists (van Mulekom et al. 2006). Thus, participation in international fish trade may result in a net gain of benefit to the country as a whole, but a net loss to the poor majority. New market opportunities for fishmeal, supported by the growth of aquaculture could also lead to local artisanal fisheries exporting small pelagic species that have traditionally been consumed locally – similar to the situation which occurred for demersal fish in West Africa with the artisanal fishery supplying the export market rather than local markets (Neiland 2006). Moreover, many fisheries operations in developing nations are owned by people or firms from developed countries, thus contributing less to the local economies than it would seem. Participants in a joint fisheries venture often have contradictory objectives with regard to what they hope to achieve through the arrangement, which is a major obstacle in attaining a successful partnership (Greboval 1987). For the local partner and the government of the host country, the primary concern is the long-term development of fisheries and the creation of associated social and economic benefits. They therefore assume that the joint venture arrangement will provide employment and training opportunities for the local population while providing a low cost food supply for the local market. On the other hand, foreign partners may 26  be more concerned with short-term security of fishing access and the attainment of the maximum return on their investment. In some extreme cases, the joint venture is seen as merely a means of securing fishing access for the parent companies of the foreign partners, and not as a profit-generating system, their objective being to minimize costs, as documented in an older, but very thoughtful analysis of a Japanese joint venture in the Salomon Islands (Meltzoff 1983). Lastly, heavy utilization of fishmeal and oil as livestock and aquaculture feed further contributes to the ‘invisible’ export of fish for many developing countries, when finished products, i.e., chicken, pork and salmon, are exported (Kent 2003). Globalization of ‘consumption footprint’ As noted previously, the major consequence of the expansion of distant water fleets and the development of international fish market is that consumers in the developed world are now increasingly purchasing fish products originating from outsides the EEZ of their countries. In other words, countries can now consume fish at a level that exceeds the productivity of their domestic water, i.e., have their ecological footprints (Wackernagel and Rees 1996) – or ‘fishprints’, as it were – far exceeding the total area of their EEZ, as long as they have the economic means to do so (Talberth et al. 2006). That said, this contribution seeks to establish an overall picture of fish consumption by major markets in industrialized countries under globalization, and how the consuming countries influence marine fisheries resources across the world. The approach is as follows. First, using records of bilateral trade flows, the exporting country from which the traded fish commodity 27  was likely to have been produced (i.e., source fisheries) is determined. Then, based on the spatial distribution of source fisheries and that of domestic fisheries of the three markets, the spatial patterns of their fish consumption are plotted onto global maps. These maps provide the basis for further discussion and exploration of the impact that the demands of these markets have had on the world’s fish resource and the implications for the sustainability of marine fisheries.  Materials and methods The methodology used to predict consumption footprints relies on two databases: one on spatially disaggregated marine fisheries catches and on bilateral trade flows of fisheries commodities. Consumption is computed using a ‘disappearance’ model where net domestic supply (fisheries landings plus import minus export) are assumed to be fully consumed each year with no carryover of supply to the following year (NMFS 2009). Both food and industrial (i.e., fishmeal) consumption are evaluated, although the analysis, which excludes trades of aquaculture product, considers industrial consumers of fishmeal as the final consumer and thus does not take into account the indirect consumption of fishmeal by the consumers of aquaculture products (e.g., farmed salmons and shrimps). Spatial patterns of the consumption footprints are derived from distribution of domestic fisheries and those of fisheries in trading partners. In the present study, the databases developed by the Sea Around Us Project (www.seaaroundus.org) are used, particularly, its database of spatially disaggregated marine fisheries landing which relies on reported statistics from the FAO and other national and 28  international agencies for inputs (Watson et al. 2004). For some countries and regions that have been historically underrepresented due to their relatively large informal fisheries sectors (i.e., subsistence fisheries), the officially reported landings are supplemented by estimates of unreported catches (e.g. Zeller and Pauly 2007). Using ancillary data regarding the geographic distribution of commercially exploited taxa and fishing agreements that regulate foreign access to the Exclusive Economic Zones (EEZs) of maritime countries as proxies for locations of reported catches, the database presents reported worldwide catches, from 1950 to the present, at a spatial resolution of a 30 minute latitude by 30 minute longitude ocean grid system. This database, after accounting for exports (see below), composes the capture fisheries component of seafood consumption. For the imported component of consumption, a database of bilateral trade flows of marine fish commodities is developed. Like the marine landings database, this trade database utilized reported statistics of the United Nations (UN ComTrade), regional (e.g., OECD, EU) and national agencies (e.g., Japan Customs Agency). Much of the reported statistics is expressed as processed products (e.g., fillets, cans); with the volume of trade given in product weights. In order to harmonize the trade with the fisheries landings information, the quantities in the trade database are re-expressed as live weight equivalents. Wherever possible, attempts are made to distinguish between commodities derived from marine fisheries and those derived from aquaculture or freshwater fisheries. However, under the current international reporting system (e.g. Harmonized System codes), distinction between products of wild and farmed origins are not made. Thus, an algorithm that determines the likely origin of commodities using the relative proportions between fisheries landings and aquaculture production is used. Moreover, 29  these commodity classifications are often based on non-biological characteristics, such as price and associated trade restrictions, rather than by their taxonomic relationships. For this as well, a rule-based algorithm, which estimate the taxonomic identity of underspecified commodities using the catch composition of exporting countries is used. Landings records for the year and exporting country corresponding to a trade record and for taxa within the range of all possible taxonomic identities of the commodity reported in the record are first extracted from the fisheries landings database. This yielded a subset of the exporting country’s landings that are potential sources of the trade record. For some taxonomically underspecified commodities, this subset could include a great majority of the exporting country’s landings. Therefore, this subset is further reduced to the top twenty landed taxa (by weight). If the total volume of the exporting country’s landings within the subset is less than the volume reported to have been exported from that country in the trade record, then the volume reported in the record is assigned to all landings, and the portion exceeding the landings is logged as an ‘error’. Otherwise the volume traded is assigned proportionally amongst the subset of the exporting country’s landings. Once the trade volume is assigned to the landings, the portion of the landings assigned is removed from the exporting country’s landings to prevent double counting. In doing so, it is assumed that a country is likely to export the species of fish that are most abundant in their reported landings. Once records of imports have been identified with the exporting country’s landings, spatial distribution of imports can be approximated using that of the exporting fisheries.  30  Combining the distribution of imports with that of the domestic fisheries then yields the consumption maps for the three markets analysed in the study.  Results Figures 3-2, 3-3 and 3-4 present the origins of fish consumed in the three markets examined. The patterns of their consumptions are described below for each market. One of the major patterns that emerge from this study is the appearance of what could be referred as ‘spheres of influence’ for each of the three markets in which the market constitutes as the major destination of fisheries catch in the region. These ‘spheres of influence’ demonstrate the occurrence of trading blocs (Hirst and Thompson 1992), despite the perceived trends toward the “globalization” of the world economies and trade. The European Union Expansion of the European distant water fishing fleets are well documented (e.g. Alder and Sumaila 2004; Kaczynski and Fluharty 2002), particularly off the West African coast, where the EU has entered into fishing access arrangements with multiple countries in the region. Under the Common Fisheries Policy, the EU collectively enters into bilateral fisheries agreements with coastal countries with agreed fishing opportunities allocated to its member countries, mostly amongst the major fishing nations of Spain, Portugal and France, and mostly for tuna vessels and bottom trawlers. Over the past decade, the EU has increased its distant water fishing presence beyond their traditional fishing grounds of the West Africa, with newly  31  negotiated fishing arrangements in the East Africa (e.g., Mozambique, Madagascar and Comoros Islands) and the South Pacific (e.g., Kiribati, Solomon Islands and Micronesia). From 2001 to 2005, 29 percent (8.8 million t) of the fisheries landings by EU countries originated outside of their collective EEZs: 19 percent (5.6 million t) from foreign EEZs and 10 percent (3.1 million t) from the high seas. In terms of trade, the EU countries are increasingly dependent on imports for their fish  Figure 3-2.7Origin of fish landed by the EU (A), the origin of fish consumed by EU (B) and relative seafood consumption (C). Five year average from 2001–2005.  supply. While a large bulk of their imports is of an intra-EU origin, a large amount of fish enters EU  markets from developing countries, particularly from those that qualify under the Generalised System of Preferences (GSP) that provides preferential access to its market. It is estimated that the EU annually imports over 9.5 million t (live weight equivalent) of marine fish and invertebrates. Figure 3-2B shows that the EU seafood supply covers most of the world’s productive coastal waters, from the Humboldt Current system off South America to the Benguela system of the South Africa to the South China Sea. Figure 4-2C, which portrays the areas of world’s  32  ocean for which EU serves as the major destination of their fisheries catch, shows that the EU is a major market for the catches in the east Atlantic, not only in the northeast but also in the waters off the West Africa. This is likely due to two contributing factors: the geographical proximity of EU to these regions and the historical ties that EU countries have had with countries of Africa, as exemplified by the Lomé Convention which provided a framework for preferential treatment of trades with developing Africa, Caribbean and Pacific (ACP) countries, in  Figure 3-3.8Origin of fish landed by Japan (A), the origin of fish consumed by Japan (B) and relative seafood consumption (C). Five year average from 2001–2005.  particular former British, Dutch, Belgian and French colonies.  Japan Japan, once the largest fishing nation in the world, has undergone a transition from the world’s major fish exporter to its biggest importer over the latter half of the 20th century (Swartz 2004). Its distant water fisheries, once operating around many of the world’s productive fishing grounds, have been on a decline since the late 1970s, faced with increased cost of operations following the oil shocks of 1972 and 1979 and the increased costs of accessing the foreign fishing grounds under the emerging EEZ regime. Nonetheless, Japanese 33  fishing fleets continue to operate beyond their domestic EEZ, particularly its tuna longline fleets across the Pacific. At present, half of Japanese marine catches originate from outside the Japanese EEZ. Of these, 60 percent are caught within foreign EEZs, mostly among its neighbouring EEZs of China, South Korea and Russia where reciprocal fishing arrangements are agreed upon annually. Japan is also a major destination for marine fish export, importing approximately 5.5 million t of seafood annually. Their major trading Figure 3-4.9Origin of fish landed by the USA (A), the origin of fish consumed by USA (B) and relative seafood consumption (C). Five year average from 2001–2005.  partners are Peru (for imports of fish meals), China and the USA, as well as many Asian  countries such as Taiwan, South Korea, Thailand and Indonesia. Figure 4-3C shows that Japan is the major destination of catch taken in the Pacific as well as for the high seas catches in the Southeast Atlantic. This pattern is because of the geographical proximity of the region and because Japan is the largest market for tuna, the important export fishery for many of the countries in the South Pacific.  34  The United States of America The United States, a relative late comer to international fisheries, has a small distant water fisheries presence, except for its tuna fisheries in the South Pacific. In fact, following the declaration of its EEZ in 1977, the primary focus of its fisheries development policy was to phase out distant water fisheries operating within its EEZ (e.g., Japan and Russia) and replace them initially by joint ventures between US and foreign fleet operators, and eventually by its national fleets. As Figure 3-4A depicts, fishing by the American fleets are concentrated in the North Pacific and in the Northwest Atlantic. Currently, less than 20 percent of the catches by the US fleets originate outside the American EEZ (560,000 t from foreign EEZs and 300,000 t from the high seas). Despite the limited extent of its fisheries, US fish consumption, like for the other two markets, does extend to most of the world’s productive waters, particularly off the coast of South America and along Southeast Asian coastlines (Figure 3-4B). Overall The three markets, jointly, are estimated annually consumed an average of 28 million t of non-farmed marine fish and invertebrates during the period of 2001 to 2005, accounting for 35 percent of the total marine fisheries landings. Figure 3-5, representing the proportion of the global catches consumed in the three markets, shows that in many regions, particularly in the high seas, consumption by these three markets accounts for over 2/3 of the fisheries catch. The combined impact of the three markets, therefore, can be said to be truly global.  35  It should be noted that the seafood consumption described here does not include farmed fish. It is most likely that the footprints of  Figure 3-5.10Origin of fish consumed by the three markets expressed in percentage of total consumption. This map represents the geographic extent of the consumption footprints of the consumers in the industrialized countries. Five-year average from 2001 to 2005.  the three markets would have been more pronounced had the ‘shadow’ trade of forage fish species, used for fish meal production that  ultimately end up in these markets as farmed salmons, shrimps, and increasingly tunas, been included.  Conclusion This is the first time that global fisheries catch and fish import data have been integrated to establish, in this manner, the relationship between fisheries catch and fish consumption. The results are startling. Notably that 12 percent of the world’s population consumes 30 percent of world’s fish supply. It is noteworthy that the three markets, the EU, Japan and the USA are amongst the most affluent. Since the types of fish and the quantities in which they are consumed can be considered to be a luxury, the fact that they gravitate toward these markets should not come as a great surprise. However, the fact that these three markets have such distinctive ‘spheres of influence’ was unexpected, especially in view of what is commonly assumed to be the nature of globalization. Such result raises some interesting questions that demands further exploration. How and why did this pattern emerge? From the perspective of fisheries sustainability, or 36  economics, or even a geopolitical view, is this positive or negative? And perhaps most importantly, what are the implications, both positive and negative, for the people in the countries whose waters and fleets are providing these fish?  37  Chapter 4: Fisheries governance, subsides and the World Trade Organization3  3  Accepted for publication as Swartz W, Sumaila UR. In press. Fisheries governance, subsidies and the World Trade Organization. Proceedings of the Ocean, Green Shipping and Sustainable Energy Symposium.  38  Introduction Despite decades of international efforts, the rules and mechanisms of fisheries governance have yet to halt the problem of overfishing (Pauly et al. 2003). While in some fisheries, a combination of effective regulations and proper economic policies has demonstrated that sustainability in marine fisheries is attainable (Worm et al. 2009), such cases remain the exception rather than the rule. While many factors contribute to the difficulty of achieving sustainable fisheries, such as limits on current scientific understanding of underlying marine ecosystems or the insufficiency of administrative capacity, it is increasingly becoming apparent that the current models of fisheries suffer from the misalignment of economic incentive structures that inadvertently endorse over-investment in the industry and overexploitation of the resource base (Clark 2006; Munro 2010). One of the main sources of perverse economic signals encouraging overfishing is the provision of inappropriate government subsidies that artificially generate profit in unprofitable fishing operations. Fisheries subsidies have been provided for a wide range of purposes, including stimulating industry development and supporting regional and rural communities (Sumaila et al. 2010). While it is unreasonable to suggest that fisheries subsidies are implemented in a deliberately destructive way, the economic incentives that such programs create can lead to overcapacity and overfishing. Thus many types of fisheries subsidies enable fleets to continue their operation even when their resource bases (i.e. targeted fish stocks) have been reduced beyond optimal or sustainable levels (and without subsidies, economically  39  unprofitable levels), resulting in further depletion of the fish stocks and increasing underperformance of the fishing industry. Over the past several decades, the issues of fisheries subsidies and their regulation have increasingly become the subject of international diplomatic discussions, culminating in the inclusion of international regulation on fisheries subsidies as one of the mandates for the current Doha Round of negotiations at the World Trade Organization (WTO), launched in 2001. While the Doha Round is currently stalled, and the future of the negotiations on fisheries subsidies regulations at the WTO is highly uncertain, it is clear that in the decade following the WTO Doha Declaration, there has been significant progress in international awareness of the problem of fisheries subsidies. This contribution examines the impact and the scale of fisheries subsidies and discusses the current state of play on the fisheries subsidies negotiations at the WTO.  Subsidies and their impacts on the fisheries sector Defining fisheries subsidies A subsidy is generally understood to be some type of government support to the private sector, yet there is no clear universal definition of what type of support constitutes ‘subsidy’. A great deal of effort has been devoted to the definition issue in international forums such as WTO, OECD, FAO, UNEP and APEC as well as by analysts in the academic world, with much of the debate focused around the breadth of the definition of a subsidy.  40  The 1994 WTO Agreement on Subsidies and Countervailing Measures (ASCM, WTO 1999), which provides the legal definition of a subsidy in international trade law, defines subsidy as a “financial contribution” by a government or any public body which confers “benefit” to the private sector via: •  Transfers of funds including grants, loans and equity infusions or potential transfers of funds such as loan guarantees;  •  Foregone government revenue from tax exemptions;  •  Goods and services provided to the private sector other than general infrastructure;  •  Indirect support through government payments into private funding mechanisms;  •  Any form of income or price support.  The ASCM also limits its definition of subsidy to programs “specific” to certain enterprises, industries, regions or groups thereof, with aim of excluding any programs that may be considered provision of general services by governments. Unfortunately, the Agreement fails to explicitly describe what is meant by a “specific” group of enterprises/industries/regions and this has caused considerable complications in the ongoing negotiations on fisheries subsidies disciplines. The OECD definition of subsidies (“government financial transfers”) is broader than that of the WTO, covering “interventions associated with fishery policies, whether they are from central, regional or local governments” (OECD 2003). Under this definition, programs such as management, research and enforcement, as well as the contributions by governments to  41  international fisheries access agreements which are not explicitly addressed in the ASCM, are also included. Meanwhile, the FAO uses a much broader definition of fisheries subsidies: “fisheries subsidies are government actions or inaction outside of normal practices that modify – by increasing or decreasing – the potential profits by the fisheries industry in the short-, medium-, or long-term” (Westlund 2004). The APEC also takes a broad approach, defining subsidy as all government support measures to the fishing industry (APEC 2000). A similarly broad definition was also used in the recent global analysis of fisheries subsidies by Sumaila et al. (2010). Categories of fisheries subsidies As is the case with defining fisheries subsidies, there is no single criterion for classifying fishery subsidies. Various categories have been proposed (Milazzo 1998; OECD 2000; APEC 2000) with various combinations of the following criteria: policy objectives; program descriptions; scope, coverage and duration; monetary values; sources of funding; administering authority; subsidy recipients; and mechanisms of transfer (Westlund 2004). Sumaila et al. (2010), using the potential impact of subsidy programs on the sustainability of fishery resources, classify subsidies as “beneficial”, “capacity enhancing” and “ambiguous”. The following are the classification system as defined by Sumaila et al. (2010). Beneficial subsidies are programs that lead to investment in natural capital assets (fishery resources), including enhancement of fish stocks through conservation and effective surveillance and enforcement of management measures.  42  Fisheries management programs and services: programs ensuring that fishery resources are appropriately managed and that regulations are enforced. These programs include monitoring and surveillance, stock assessment and resource surveys, and habitat and stock enhancement (e.g. hatcheries). Fishery research and development: programs aimed at improving fishing methods, processing and other technological improvements to enhance the resource base and promote its sustainable exploitation. Marine Protected Areas: programs for the establishment and management of areas where commercial fishing is prohibited, with the aim of replenishing the enclosed and surrounding fish stocks. Capacity enhancing subsidies are programs that lead to disinvestments in natural capital assets such that the fishing capacity develops to a point where resource overexploitation makes it impossible to achieve optimal long-term yield (i.e. maximum sustainable yield, MSY). These programs include all forms of capital investments by the government that reduce cost of fishing or enhance revenue. Fuel subsidies: programs which enable fishers to purchase fuel below the national average price applied to purchases for other uses. These programs include fuel price support, rebates and fuel tax exemptions. Boat construction, renewal and modernization programs: programs where fishers receive public funds for purchase, construction, renewal and modernization of  43  fishing vessels, including lending programs and loan guarantees which enable fishers to receive loans at a below market rate. Fishing port construction and maintenance: programs where public funds are used to provide land-based infrastructures and services to fishers. Examples include landing sites, harbor maintenance and discounted moorage for fishing vessels. Price and marketing support: programs of market interventions such as value addition and price support to enhance the revenue generated from the fisheries. Fishery development projects and support services: programs geared for fisheries enterprises development, including the provision of institutional support and services such as crew and vessel insurance, duty free imports of inputs and other economic incentive programs. Foreign access fee: bilateral or multi-lateral fishing agreements where public funds are used to secure fishing rights in foreign Exclusive Economic Zones for the domestic distant water fleet. Acquisition of such fishing rights are commonly achieved through cash payments or provision of fishing technologies or favorable market access and when the costs of fishing right acquisitions are not recouped from the fishing industry, they are considered subsidies. Ambiguous subsidies are programs whose impacts are undetermined and may depend heavily on the conditions under which they are granted.  44  Fisher assistance programs: payments to fishers to stop fishing temporarily or to ensure income during seasons of reduced catches. This type of subsidy can be capacity enhancing since it increases revenue; or may reduce fishing pressure by enabling fishers to cease fishing and allow the recovery of exploited fish stocks. Vessel buybacks: programs where public funds are used to promote decommissioning of fishing vessels and retirement of fishing licenses. In principal, such programs would reduce fishing pressure and allow stock recovery; however, if these programs are anticipated by fishers, they can be capacity enhancing by encouraging fishers to increase their fishing capacity prior to the buybacks (Clark et al. 2005). Rural fishing community development program: programs geared towards development of rural fishing communities with objectives of poverty alleviation and food security. Subsidy support programs such as these are unsustainable without sufficient fisheries management and promote a large excess of rural labor that may lead to Malthusian overfishing (Pauly 1997). Scale of fisheries subsidies Because of the lack of access to reliable and consistent information on fisheries subsidies programs worldwide, there has been a diverse range of estimates of the magnitude of government subsidies to the sector, with little consistency in definition, data source or methodology across the estimates.  45  Table 4-1. Global subsidy estimates by program type (in billion USD, from Sumaila et al.2010).  The earliest global estimate (FAO 1993), derived from estimated revenues and costs of global fisheries, valued fisheries subsidies at USD 54 billion, although this figure is now considered to be too high. An in-  depth study by Milazzo (1998) concluded that subsidies represent nearly 20 per cent of the landed value of the global fisheries at USD 11-20 billion per year. A study by a major international accounting firm conducted for the Asia Pacific Economic Cooperation (APEC 2000) estimated subsidies by its members at USD 8.9 billion and the OECD, based on data reported by its members, reports annual subsidies of USD 6.4 billion (OECD 2010). WWF, using subsidies reported by APEC, OECD and WTO members, found that officially reported subsidies were USD13 billion per year in 2001 and concluded that the actual global yearly total was “at the least USD 15 billion, and very possibly higher” (WWF 2001). In 2010, Sumaila et al. (2010), using diverse sources from government publications and grey literature, computed the global total subsidies to be between USD 25 and 29 billion (Table 4-1). Using the classification described above, they concluded that USD 16 billion, or about 60 per cent of the global subsidies, should be considered to be of the ‘capacity enhancing’ type, with an additional USD 3 billion as ‘ambiguous’ subsidies, which may also contribute to overcapacity and overfishing depending on the conditions under which the subsidies were provided. The analysis by Sumaila et al. (2010) provided estimates by countries and showed 46  that the developed countries jointly accounted for nearly 70 per cent of the global subsidies and 65 per cent of the ‘capacity enhancing’ subsidies. Although there are large differences among the estimates, all studies conclude that the scale of fisheries subsidies is considerable, given that the total value of global fisheries (i.e. landed values of the marine fisheries catches) is reported to be around USD 90 billion per year (Swartz et al. In press). Impacts of fisheries subsidies Fisheries subsidies have an impact on the profits of fishing enterprises by either increasing their revenues (e.g. income or price support) or reducing their costs (e.g. government funding of vessel construction and maintenance, or provision of fuel tax exemptions, Sumaila 2003). Whilst the effects of subsidies on resources will depend on the type of the fisheries management regimes as well as on the state of the fish stocks (Hannesson 2001; OECD 2006; von Molke 2011), many such subsidies act as perverse economic incentives, encouraging fisheries industries to over-invest in themselves. In open access fisheries, where entry into fisheries is not restricted, subsidies that improve the profitability of the fishery will lead to overcapitalization and overexploitation (Munro and Sumaila 2002). In the absence of effective control of fishing effort, the abnormal profit generated by subsidies will encourage reinvestment into the fishery, as fishing enterprises compete to capture a greater share of the abnormal profit, until it is dissipated through a combination of reduced catch and increased cost (“too many vessels chasing too few  47  fish”). Hence, subsidies in open access fisheries can be considered both unsustainable in both economic and resource terms. Effective controls of catch in the form of a total allowable catch (i.e. regulated open access fisheries) can mitigate the overfishing effect of fisheries subsidy programs. Nevertheless, subsidies to such management regimes, lacking effective controls of fishing effort, will likely lead to fleet overcapacity, commonly manifesting in the gross shortening of fishing seasons (Munro and Sumaila 2002). Some consequences of this “race to fish” include reductions in price due to flooding of the market, inferior quality of catches and overcapacity in the processing facilities to cope with highly seasonal peaks in fish supplies. Again, such programs cannot be considered economically sustainable. Moreover, overinvestment in a fishery caused by subsidies, may lead to greater industry pressure to increase the caps on the total catch, potentially to levels beyond what would be considered biologically sustainable. Assuming perfect enforcement, the negative effects of fisheries subsidies can be eliminated under effective management of both catch and fishing effort. However, in reality, perfect enforcement is rarely, if ever, achieved. Furthermore, from a societal standpoint, the introduction of subsidies into fisheries distorts economic incentives in the society, needlessly attracting human and other resources into an industry where they yield a lower return than they would if they were employed in other sectors of the economy. Provisions of subsidies, therefore, represent a new welfare loss to society, even in the presence of effective management (Cox and Sumaila 2010).  48  In the international arena, the effects of fisheries subsidies have been perceived in general trade distortion terms. That is, subsidies to the industries targeting the international market can harm unsubsidized industries in other countries by distorting their market competitiveness. It is likely that such effects exist in fisheries, given that a large proportion of the global catch is traded internationally (FAO 2011), although the trade-distorting effects of fisheries subsidies have yet to be explicitly challenged in international forums such as the World Trade Organization, whose primary objective is to curtail trade-distorting subsidies. Moreover, with regard to shared and straddling stocks, the resource effects (i.e. overfishing) of subsidized fleets may cause considerable harm to the economic performance of unsubsidized fleets at the production level by reducing the biological productivity of the jointly targeted stocks (i.e. ‘production-distorting effects’).  Fisheries subsidies negotiations at the WTO and challenges ahead Early Stages of the WTO Subsidies Negotiation The inclusion of fisheries subsidies in the Doha Round of the WTO negotiations marked the first effort by the international trade organization to address the environmental issues in a key natural resource sector using trade related disciplines. This unique environmental aspect of the negotiation mandate was unfamiliar to the WTO and the negotiations have proved to be challenging and complex.  49  The initial difficulties in the WTO negotiation can be attributed to the language of the mandate itself. The Doha Ministerial Declaration (WTO 2001) which launched the Doha Round in 2001 described the negotiation mandate on the fisheries subsidies as follows: …participants shall also aim to clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to developed countries. (Para 28) The somewhat ambiguous language of the mandate, particularly the lack of explicit reference to the nature of the required clarifications and improvements of the existing WTO disciplines (i.e. ASCM), has meant that for first few years after Doha, the negotiations were dominated by discussions on the interpretation of the mandate. Some countries, namely the ‘Friends of Fish’ coalition of countries united in their aspirations for broad prohibition of fisheries subsidies, argued that the mandate covers both disciplining of trade-distorting subsidies and overcapacity/overfishing inducing subsidies, while other member countries such as the EU, Japan, Republic of Korea and Taiwan argued that the mandate for the ASCM should be limited to strengthening the existing agreement on the trade-distorting effects of fisheries subsidies. By 2004, however, a consensus began to emerge for acceptance of the environmental mandate of the negotiations. Several factors contributed the emergence of consensus. First, the identification of the Doha Round as a “development” Round, emphasizing the need to address developing country issues, has resulted in an increasing number of developing countries getting actively involved in the negotiations on fisheries subsidies, thus broadening the discussion beyond issues promoted by the established coalitions of predominantly 50  developed countries. Moreover, the internal dialogue within the European Union, particularly following the expiration of the existing EU Common Fisheries Policy, spurred the reexamination of EU fisheries policies, including restructuring of its subsidies program, and led to the adjustment of the EU’s position with regard to the WTO fisheries subsidies negotiations. The acceptance of the environmental mandate by the EU, Japan and China, among others, paved the way for more explicit language in the 2005 Hong Kong Declaration (WTO 2005a). The new Declaration stated that the negotiations for strengthening disciplines on fisheries subsidies should include “the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and over-fishing”, whilst adopting appropriate and effective special and differential treatments to developing countries taking into account the importance of fisheries to “development priorities, poverty reduction, and livelihood and food security concerns” in these countries. The Hong Kong mandate fundamentally altered the dynamics of the fisheries subsidies negotiations. The focus of the negotiation shifted from the scope of the negotiation mandate to identifying the types of subsidies to be included in the ensuing prohibition and formulating the nature of the special and differential treatments for developing countries. With regard to the breadth of the prohibition, the discussion revolved around the so-called ‘top-down versus bottom-up’ debate. The ‘Friends of Fish’ coalition argued for a comprehensive list of prohibited subsidies which includes most fisheries subsidy programs (i.e. ‘top-down’), to be circumscribed by a limited list of exceptions targeting programs aimed at improving fisheries management and surveillance as well as active capacity reduction (WTO 2004). Meanwhile, arguing that only  51  some subsidies programs can be associated with overcapacity and overfishing, a group led by Japan, Korea and Taiwan pushed for a ‘bottom-up’ approach, limiting the scope of the prohibition to a narrowly defined list of specific programs (WTO 2005b). These countries maintained that fisheries subsidies are damaging only in poorly managed fisheries and, therefore, the prohibition should be applied only in absence of proper management. Meanwhile the discussion on the nature of the special and differential treatment focused on identifying the types of subsidy programs that can be beneficial in addressing the development needs of the developing countries while instituting a certain set of conditions under which the special and differential treatments are granted, so as to prevent their abuse. The Hong Kong Declaration also opened a period of negotiations centered on the legal language of the resulting agreement, with many countries proposing various versions of legal texts. While the proposals and negotiations did not yield significant convergences on major issues, by 2007, following a brief suspension of the Doha Round in 2006, the Chair of the Negotiating Group on Rules was requested to prepare a draft of proposed rules for fisheries subsidies. Elements of the Chair’s Draft The Chair’s Draft (WTO 2007) consists of two core elements: a broadly set of prohibited subsidies and a list of general exceptions to these prohibitions with complementary regulations guarding against circumvention; and ‘special and differential treatment’ giving policy flexibility to developing countries through provisions of additional exceptions based on various combinations of factors such as types and location of fisheries. 52  Specifically, the Draft identified following types of subsidies to be prohibited: •  vessel acquisition, construction, repair or other modifications;  •  transfer of vessels to a third country (i.e. forms of vessel buyback programs where the excess capacity is exported instead of being scrapped);  •  support on operating cost (e.g. fuel and license fees) of fishing and land-based processing activities;  •  port infrastructure exclusively or predominantly for fisheries activities;  •  income support;  •  price support;  •  acquisition of fishing access to foreign waters.  In addition, the draft prohibited subsidies to any vessels engaged in illegal, unreported or unregulated (IUU) fishing as well as subsidies affecting fishing on “unequivocally overfished stocks.” At the same time, it allowed subsidies programs which are aimed at assisting adoptions of vessel safety and sustainable fishing practices as well as capacity-reducing programs such vessel buybacks and fisher re-education, provided these programs do not contribute to a net increase in fishing capacity. Moreover, the Draft addressed the issue of the productiondistorting effects of subsidies on jointly exploited stocks by enabling countries to challenge any subsidies that are deemed to be causing adverse effects on any stocks in which disputing countries have an “identifiable” interest under international law. For developing countries, the Chair’s Draft recognized the following exceptions as “special and differential treatment”: 53  •  full exception for least-developed countries;  •  full exception (except for programs affecting overfished stocks) for artisanal fisheries defined as inshore fisheries operating non-mechanical gear with minimal commercial relationships;  •  partial exception (including subsidies for vessel acquisition and modification and on operating costs) for small-scale fisheries with vessels under 10 meters;  •  exceptions for vessel modification subsidies on domestic fisheries operating within the Exclusive Economic Zones, provided that prior scientific stock assessments show that the fishing capacity does not exceed a sustainable level.  These exceptions, apart from those provided to least-developed countries, require the subsidizing countries to maintain a fisheries management system meeting certain international standards, including possible involvement of the FAO in a peer review process, and notification of all programs to the WTO secretariat. The responses to the Chair’s Draft were mixed. It was applauded by the ‘Friends of Fish’ countries and strongly endorsed by environmental organizations, including the WWF, which describes it as containing “the necessary elements of success” (WWF 2007). Meanwhile, other countries expressed their disappointment with the approach taken in the Draft, namely in what they perceived as the Chair’s attempt to artificially generate convergences despite lack of such convergence. Nonetheless, the text was widely embraced as a basis for continuing negotiations and almost all of the subsequent proposals by members were submitted as amendments to the text.  54  State of Play in the WTO Negotiation as of 2012 Spurred by renewed calls for “deliverables” on the Doha Round by the G20 and APEC leaders in late 2010, the delegations and the WTO Secretariat engaged in a period of intense negotiations in early 2011. The declared target of these discussions (for all components of the Doha Round) was to produce revised legal texts to be submitted for possible confirmation at the next round of Ministerial meetings to be held by the end of the year. The collective enthusiasm for the completion of the Round stimulated a proliferation of proposals in the fisheries subsidies negotiations, with eight new proposals being submitted in the span of three months in addition to the six proposals submitted in 2010. The following are highlights from some of the proposals and discussions on key issues (see Appendix A for summaries of the proposed amendments). Proposals by the ‘Friends of Fish’ coalition The ‘Friends of Fish’ coalition strongly endorsed the Chair’s Draft and proceeded to submit a series of proposals aimed at clarifying some of the ambiguous language of the Draft and at addressing the technical details. The proposal by the United States (WTO 2010a) and by Australia (WTO 2010b), for example, provided some clarifications to the concept of the “unequivocally overfished state” of fisheries resources, the definition of attributable “harm” with regard to jointly exploited stocks, and the necessary components of the fisheries management requirement. These proposals also presented several amendments on the exceptions to the prohibition, in order to eliminate potential “loopholes”. Meanwhile Argentina, Chile, Costa Rica, Egypt and Uruguay (WTO 2011a) endeavored to refine the conditions for 55  exceptions for developing countries under the special and differential treatment by putting forward a proposal that required most exceptions to be applied only if the existing level of fishing capacity should prove to be “substantially lower” than needed to achieve optimal exploitation. Proposal by Japan The proposal by Japan (WTO 2011b) reiterated its previously stated position that subsidies do not “a priori contribute to overcapacity or overfishing” and that capacityenhancing effects of subsidies, if any, can be mitigated by effective fisheries management. Based on this line of argument, Japan proposed to reduce the list of prohibited subsidies, for example, limiting the prohibition of subsidies on operating costs to what it deems as “direct” operating costs and to allow subsidies on vessel construction provided that an increase in fishing capacity resulting from such programs is complemented with withdrawals of existing capacity. The proposal also removed the provision on “unequivocally overexploited stocks” and introduced, as a general exception, subsidies programs targeting small-scale fisheries for both developing and developed countries. Proposals by the Republic of Korea Like the proposal submitted by Japan, the proposals submitted by the Republic of Korea were centered on the belief that effective fisheries management systems can minimize the negative impacts of fisheries subsidies. As such, Korea’s first proposal with Taiwan stipulated that the prohibition of subsidies should apply only when a subsidizing country fails to maintain sufficient fisheries management systems (WTO 2008a), while its more recent proposal (WTO 56  2010c) subcategorized prohibited subsidies between those outright prohibited (e.g. vessel construction and modification) and those for which adverse effects of the subsidy programs must be demonstrated to exist before measures to prohibit such programs can be enforced. Korea also submitted a proposal incorporating the concept of de minimis (WTO 2011c), first introduced in the context of fisheries subsidies by Canada (below). Proposal by Canada Arguing for a simple and enforceable approach to the discipline on fisheries subsidies, Canada submitted a proposal based on the concept of de minimis general exception (WTO 2011d). This proposal argued for a system where countries would be able to provide subsidies of any type, up to an agreed threshold, with a higher threshold for developing countries, possibly differentiated according to the scale of their fisheries. The simplicity of the proposal has garnered some support, for example from the European Union, which implements a similar program for its members; however, some countries contended that such a system may create loopholes in the discipline and that without knowing the size of the de minimis caps, it is not possible to assess the impact of such proposals. Proposals by large developing countries With the Chair’s Draft setting out the types of exceptions available to the developing countries and conditions under which such exceptions are permitted, several large developing countries presented their positions on the issue via two sets of proposals: one by India, Indonesia and China (WTO 2008b) and another by Brazil, China, India and Mexico (WTO 2010d). The main objection to the Chair’s Draft expressed in these proposals was the restriction of the 57  special and differential treatment provision to those fisheries operating solely within the domestic Exclusive Economic Zones. These countries contended that developing countries, as latecomers to high seas fisheries, need to catch up with the high seas fleets of the developed world and that the cost advantages enjoyed by the fleets of developed countries are too great to overcome without subsidies. According to the report by the Chair (WTO 2011e), this issue of subsidization of high seas fishing became one of the most contentious issues in the latter stage of the negotiation, with opponents of such an exception countering that fishing activities in the high seas are highly industrialized operations and should, therefore, face the same subsidy rules as all other high seas fleets. Proposal by other developing countries Several proposals put forward by the coalition of small and vulnerable economies (SVEs) and Africa, Caribbean and Pacific (ACP) argued that due to the relatively small scale of their fisheries, contributions by these countries to global overcapacity and overfishing are negligible (WTO 2008c; WTO 2010e; WTO 2011f). These proposals, therefore, seek to exempt from the prohibition countries with a total marine fisheries catch below a specified threshold, e.g. less than 0.1% of the global total. In addition, there were proposals submitted by Morocco (WTO 2010f), Ecuador and Peru (WTO 2011g), and Malaysia (WTO 2011h), the objectives of which were to clarify some of the language used in describing small and artisanal fisheries and subsidies programs available to these fisheries under the special and differential treatment provision.  58  In addition to the issues highlighted by various proposals described above, the negotiations also attempted to address some of the long-standing concerns over the fisheries subsidies debate. The subject of fuel subsidies, for example, has been the most contentious and several sessions of the negotiations were dedicated exclusively to addressing this issue. Some delegates considered that all fuel subsidies, regardless of their specificity to fisheries, should be disciplined, while others argued for a more tailored approach to regulating their use. Some delegates, noting the wide range of fuel prices between countries, challenged the various fuel pricing policies, including fuel tax policies. However, many countries were cautious in addressing fuel tax policies, concerned that any regulation of fuel tax may be perceived as intrusion of WTO rules into member countries’ domestic taxation system as a whole (WTO 2011e). In the end, three months of negotiations in early 2011 saw minimal convergences in key issues with delegates offering little room for compromise. The Negotiating Group Chair concluded that he is not in a position to present a revised legal text on the subject as was mandated and instead produced a report that summarized the state of the negotiations (WTO 2011e). The conclusion from the report was not promising. Noting that delegates must reexamine their short-term approaches to the discussion in order for the negotiations to make progress, he concluded that he does not hold “great prospect for the fisheries subsidies negotiations.” It should also be noted that the WTO negotiations are conducted as a “single undertaking”, meaning that results must be achieved in all areas of the negotiations, not only in  59  those regarding fisheries subsidies, and must be applicable to all member countries. Any potential breakthroughs in the negotiations on fisheries subsidies at the WTO, must therefore be coupled with similar breakthroughs in the negotiations on the Doha Round as a whole. Like the current situation on the fisheries subsidies negotiations, the outlook for the Doha Round as a whole is bleak.  Conclusion Despite the significant amount of effort devoted to identifying and measuring fisheries subsidies and to analyzing their potential and actual impacts on environmental and economic sustainability over the past decade, there has been little progress made in formulating an international regime for the regulation of fisheries subsidies. The negotiation for the improved discipline on fisheries subsidies at the WTO has stalled in recent years and considerable challenges remain before a meaningful agreement can be attained. Nonetheless, the negotiations at the WTO have been valuable in recognizing the urgent need to control fisheries subsidies and the 2007 Chair’s Draft remains an important document in envisioning what an international agreement on fisheries subsidies should look like. Perhaps the aspiration of achieving a comprehensive agreement in an organization dedicated to international trade was over-ambitious. However, the standstill of the Doha Round may present opportunities for other international organizations with dedicated interest in sustainable management of marine fisheries. The production-distorting effects of fisheries subsidies are most pronounced in high seas fisheries and focusing on these fisheries via regional fisheries management organizations (RFMOs) such as the International Commission for the Conservation 60  of Atlantic Tuna (ICCAT) may prove to be a more suitable environment for constructive negotiations. Alternatively, the future of international fisheries subsidies regulation may be a coordinated effort between the WTO and international fisheries agencies such as the FAO, where the WTO disciplines the trade-distorting effects and the FAO and RMFOs regulate the production-distorting effects.  61  Chapter 5: Ex-Vessel Fish Price Database revisited: a new approach for estimating ‘missing’ prices4  4  Accepted for publication as Swartz W, Sumaila UR, Watson R. In press. Ex-vessel fish price database revisited: a new approach for estimating ‘missing’ prices. Environmental and Resource Economics.  62  Introduction The Global Ex-Vessel Fish Price Database (Ex-Vessel DB), described by Sumaila et al. (2007), was the first effort at creating a database that presented a complete list of type of fish and market specific annual average ex-vessel prices, i.e., the prices that fishers receive for their catch, or the price at which fish are sold when they first enter the seafood supply chain, for all commercially exploited marine fish stocks from 1950 to the present. Through their extensive search of publicly available, but widely scattered and incompatible, national and regional statistical reports and grey literature, Sumaila et al. (2007) accumulated over 30,000 records of reported ex-vessel prices in 35 countries and for 875 species groups . However, despite the large number of records collected, catch records (i.e., year/country/taxa) with a matching price accounted for only 18% of the total catch, and so the authors were compelled to devise a methodology for estimating ex-vessel prices for all unaccounted catches based on the available reported prices. The database contains taxa-, country- and year-specific ex-vessel prices, and therefore, any estimation of missing prices, or ‘filling the gap,’ requires that prices from one taxon (or country or year) be transferred to another using various assumptions about how ex-vessel prices of fish relate across taxa, countries and years. When the database was designed, very little information was available as to the relationship of ex-vessel prices between taxa or between countries, particularly at the level applicable to the database. Consequently, reported prices within a country were selected to be most representative of the missing prices, and reported prices from the nearest year, or average prices from taxonomically related groups  63  were used for estimating missing prices. While such an approach is quite sensible when dealing with small data gaps, it proved to be impractical in countries where reported prices were scarce. This is because under this approach, the majority of the estimated prices for such countries were anchored on a few data points from years that might not be representative of the market environment of the ‘gap’ years. As for countries for which no reported prices were available, the original Ex-Vessel DB applied regional averages, and absent such averages being available, the global average was applied. Again, while the use of regional averages as a proxy for domestic prices is reasonable, the use of a broadly defined regional average (i.e., “Asia”) or global average fails to account for relative price level differences that exist between countries. This limitation in the cross-country price estimation proved to be problematic, considering that the absence in the reported ex-vessel prices in many countries. While the ex-vessel price database of Sumaila et al. (2007) provided full coverage across the time period (i.e., at least one reported price for each of the years from 1950 to 2006 in the most updated version) and fairly adequate coverage across taxa (at least one reported price for 28% of taxa recorded in the official marine fisheries catch, accounting for 71% of the world’s catch), the coverage across countries was limited (reported prices available for 16% of the countries with reported marine fisheries catch, accounting for 43% of the global total). A database of this type, as rightly noted in Sumaila et al. (2007), requires updating and improving over time, both in terms of input data (i.e., by exploring additional sources and expanding the coverage of the recorded ex-vessel prices) and in terms of the price estimation methodologies (i.e., by modifying the underlying assumptions to address counter-intuitive results generated by the model). Over the past few years, the database has been utilized in 64  various economic analyses of world’s fisheries (e.g., Sumaila et al. 2010, Christensen et al. 2009, Sethi et al. 2010), and consequently many areas for improvements or amendments have been identified. This article, therefore, describes the second, updated, version of the Ex-Vessel DB. Moreover, we combined the estimated ex-vessel prices with a geo-referenced marine fisheries catch database (Watson et al. 2004) to examine the spatial patterns of the marine fisheries values. Such analyses allowed us to identify regions of high commercial importance, as well as information on how the economic benefits derived from fisheries are distributed across countries, particularly in waters where domestic fishing fleets compete with foreign distant water fleets. Such analyses should, for instance, contribute to better understanding of the economic potentials of the world’s coastal marine fisheries resources and assist coastal countries in improving their negotiating positions for granting fishing accesses to distant water foreign fleets.  Theory and methods Price estimation The purpose of the Ex-Vessel DB is to provide annual estimates of ex-vessel prices for all commercial fisheries landings between 1950 and the present, by species group and by country of origin of fishing fleets. As such, the price estimation model described in this paper is not intended for forecasting future seafood prices. Rather, it is designed strictly for the estimation of prices in regions (and for commodities) where reported prices do not exist. Thus, our model focuses on cross-commodity and cross-country price comparison. It is, therefore, not an inverse  65  demand model that predicts price responses to changes in variables such as the supply level, consumer income or prices of substitutes and complements. Ex-vessel prices, for the purpose of our database, are determined based on three characteristics: nationality of the fleet (i), which serves as the proxy of where the catch is landed or the national market into which the catch enters the supply chain; taxonomy (j); and year (t). Price pi,j,t can be described in the following generalized function: (1) pi,j,t=f(αi,βj,γt ) αi βj γt  = = =  country effect on price taxa effect on price time effect on price  It should be noted here that the use of the nationality of the fleet, defined as “flag country” or the country in which the vessel is registered (Edeson 1999), as the proxy of the exvessel market for a catch may be problematic in certain circumstances (e.g., at sea or in port transfers of the catch from one vessel to another vessel of a different flag, and the landing of the catch in a foreign port). Nevertheless, the “flag” of the fishing vessel is still considered to be the best available criterion for the assignment of nationality to catch (Edeson 1999) and of the ex-vessel market. Equation (1) can be simplified further: (2) pi,j,t=f(αi,t,βj,t) αi,t βj,t  = =  country effect on price in year t commodity (taxa) effect on price in year t 66  This simplified two-parameter model is similar to the Country Product Dummy (CPD) model, first proposed by Summers (1973) for the purpose of international price comparisons, which expresses commodity prices as follows: (3) pi,j=aibjui,j ai bj ui,j  = = =  country effect on price taxa effect on price random variable  The parameter ai is interpreted as the general price level in country i relative to prices in other countries. It is possible to express ai relative to a reference country 1 (i.e., a1 = 1), then ai represents the purchasing power parity (PPP) of country i showing the numbers of units of country i’s currency needed to buy, in country i, the same amount of goods (and services) as one unit of country 1’s currency would buy in country 1. Similarly, the parameter bj is the relative values that purchasers in all countries put on the commodity j. Again, by expressing this parameter relative to a reference commodity 1 where b1 equals one ‘international currency’ being equivalent to, say, one US dollar, we have a world-average price for commodity j. Such prices are usually called ‘international price,’ but are not to be confused with prices at which commodities actually trade in world markets. Given a reported price of species group j in any country i and a dataset of PPPs for all i, it is then possible, using the Equation 3, to estimate the international price for each species group and the domestic price of j in all countries. In our model, the international prices of a species group were estimated independently for each year using year-specific PPP data.  67  The next issue that needs to be addressed is: how to derive a price estimate for species group j for which no reported price is available in any country. How prices of fish vary across species groups is a question that has so far not been explicitly addressed. Yet product differentiation based on taxonomy clearly exists, as evidenced by the range of prices commanded by different tuna (Thunnus spp.) species (McConnell and Strand 2000). For our model, we assumed that all commercially important species groups that command distinct ex-vessel prices would be identified by our source statistics and any taxa that are not explicitly recognized in the statistics (i.e., those belonging to ‘misc.’ categories) are simply substitutes of their related taxa. Thus, for species groups with reported catches but no corresponding ex-vessel price, we transposed reported prices of related species groups, first across genera and if none were available, across families. We limited the transposing of prices across the taxonomic categories using additional criteria such as relative size (e.g., small, medium and large) and habitat types (e.g., pelagic and demersal) so as to avoid applying prices of tunas (genus Thunnus) to mackerels (genus Scomber) even if they are of the same family (Family Scombridae). Once this process was completed, international prices (bj,t) for all species groups j were computed using Equation 3, with a ui,j of zero. Wherever more than one price for j was reported, we took the weighted average based on the catch quantity. The International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT) developed by the International Food Policy Research Institute also bases its estimation of domestic commodity prices on international prices (Rosegrant et al. 2008). However, unlike the CPD model, IMPACT accounts for the cross-country price differences via  68  factors such as ‘producer subsidy equivalents (PSEs)’ and ‘market margins’. The former measures the level of taxation or subsidy borne by producers relative to world prices, while the latter reflect factors such as transportation cost, jointly accounting for the wedge between domestic and world price. For the purpose of our database, we chose the PPP-based model, partially due to data limitations associated with estimations of country- and taxa-specific PSEs and market margins for all countries engaged in marine fisheries, but more importantly to better capture the variations in the relative price differentials over time. Data The previous version of the Global Ex-Vessel Price Database contained over 31,000 records of reported prices from 35 countries and 875 species groups covering the period from 1950 to 2001. These reported prices were obtained from various sources, with fisheries statistics (landings and values) from national and inter-governmental agencies comprising the majority of the records. Prior to our re-estimation of ‘missing’ prices, we revisited our sources to update our records, expanding the coverage to 2010. Moreover, the proliferation of online governmental databases and publications over the past several years has led to improvements in both the quantity and the quality of datasets, with several new landings/landed value time series becoming available from countries for which no data was found in our previous search (e.g., Malta). These new datasets were checked to ensure relative consistency in their trends over time, with any abrupt increase or decrease (defined as a single year where the price is five times higher or lower than previous and succeeding years) in reported prices highlighted and carefully examined. Additionally, efforts were made to include only the prices specifically 69  identified as ‘ex-vessel’ (or words to similar effect) or those computed from landed value records. As noted, all datasets were defined by the fishing fleet nationality, species group and year. All reported prices were recorded as nominal prices in local currencies. Historical PPP and the market (or official) exchange rates were obtained from the Penn World Table (http://pwt.econ.upenn.edu/; Heston et al. 2011), which covers 190 countries from 1950 to 2009. For years where no purchasing power parity estimates were available, we used the price level index (expressed as PPP divided by market exchange rate, equivalent to real exchange rate) of the nearest year. For countries with no data for any year, regional averages of the price level index, estimated from the available datasets, were applied. All reported and estimated prices were re-expressed in US dollars based on market exchange rates and converted to real 2005 US dollars using the historical US Consumer Price Index from the US Bureau of Labor Statistics (http://www.bls.gov/cpi/) to allow comparison across countries and over time. Note that market exchange rates, rather than PPP were used for conversion of domestic prices into US dollars. This is done simply to facilitate comparison across currencies, not to compare the ‘real’ value of ex-vessel prices (which, based on our underlying model, would be equal to their ‘international’ price). Mapping landed value One of the key advantages of the Ex-Vessel Price Database is that it is compatibility with the Sea Around Us Catch Database (www.seaaroundus.org, Watson et al.2004) and enables landed values to be expressed in terms of geographical origins from which the catches were taken. 70  The Sea Around Us Catch Database is composed of various world fisheries catch statistics that have been disaggregated into a spatial grid system that breaks down the world’s oceans into 180,000 ½ degree latitude by ½ degree longitude cells using ancillary data such as geographical distribution of commercially exploited fish taxa and fishing agreements that regulate foreign access to the Exclusive Economic Zones (EEZs) of maritime countries as proxies for locations of reported catches. The compatibility between this catch database and the ExVessel Price Database thus enables the landed values of marine fisheries catches to be expressed in the same geographical resolution as the catches. Moreover, the ocean grid system allows landed values to be summarized by various spatial entities, e.g., geopolitical (e.g., EEZ) or ecological (e.g., Large Marine Ecosystems). Considering that landed values are generally expressed based on fishing entities (i.e., fleet, port, country that landed the catch), this georeferencing of landed values greatly enhances our understanding of the role of fisheries resources in spatial context, particularly for many coastal developing countries that accommodate foreign distant water fishing fleets within their EEZs.  Results and discussion Ex-vessel prices Based over 41,800 records of ex-vessel prices, our model estimated prices for 260,000 records of reported marine commercial fisheries catches from 1950 to 2006, across 193 countries and entities and 1452 species groups.  71  Figure 5-1 plots the average exvessel values (in 2005 real USD per tonne) of the global marine fisheries catches over time (in black). The figure shows that unlike  Figure 5-1.11Average ex-vessel values of marine fisheries landing: 1950-2006, comparing the values estimated by our model (black solid) with those estimated by Sumaila et al. (grey solid) and those reported by FAO (black dashed).  the trends observed in the previous model (in grey), from Sumaila et al. 2007 with values re-estimated using the updated  dataset) which displayed a decline in the average ex-vessel value of marine fish over the time period particularly since the late 1970s, the real ex-vessel value of the marine fisheries catch has remained relatively stable, i.e., fluctuating between USD 1,200 and 1,400, except for a period of high values in the 1970s and the early 1980s. Moreover, the ex-vessel values estimated by our model are, on average, about 20% lower than the values computed by Sumaila et al. 2007, although the differences between the two sets of estimates narrows in the last 15 years. Our estimates also differ from the values reported by the Food and Agriculture Organization of the United Nations (FAO 2008), with our model calculating average values that are around 30% higher. These differences between our figures and those reported by FAO may be due to the fact that our model does not distinguish between fish for food consumption and for industrial (i.e., aquaculture and agriculture) consumption, thus we may be overestimating the average value of the low trophic, small pelagic fishes, many of which are landed for low value fishmeal production.  72  It should be cautioned that the ex-vessel values presented in the two figures are of highly aggregated groups of species with a range of ex-vessel prices from less than USD 100 per tonne (e.g., sardinella in Ghana) to over USD 60,000 per tonne (e.g., giant abalone in Japan). The trends observed in the average value may, therefore, be caused by changes in the compositions of the catch as well as the variations in ex-vessel prices. The decrease in average value in the early 1960s, for example, is likely caused by the increased share of low-value anchoveta in the marine fisheries catch. Nonetheless, the high average ex-vessel value observed in the late 1970s is likely reflective of a general increase in the ex-vessel prices as the late 1970s was the period in which the major fishing nations such as Japan experienced a dramatic spike in the cost of fishing due to a rise in fuel costs linked with the oil shocks of 1973 and 1979, and the emergence of the extended maritime jurisdictions (e.g., the establishment of the 200 nautical mile EEZs by major coastal countries such as the United States, Canada and the Soviet Union in 1977), which greatly restricted the areas of operation in the high seas and distant water (Iwasaki 1997). Such an increase in the cost of operation would have resulted, at least partly, in the observed increased price for the catch. Figure 5-2, which presents the time series of average ex-vessel values for five major taxa, supports the assertion that the  Figure 5-2.12Average ex-vessel values of selected species groups: 1950-2006.  drop in the average values observed in the  73  1960s is due to the spike in the catches of small pelagic species rather than from declining exvessel prices as the ex-vessel values of other taxa groups show increases over this period. The figure also shows increases in the prices of high-value species (crustaceans and large pelagic fishes) in the 1970s followed by their decline in the past 25 years. Such trends indicate that the second, less significant, period of high prices in the early 1990s may have been driven by the changes in the value of large pelagic species such as tunas, which decreased in value by a third from around USD 3,000 to less than USD 2,000 in the mid 1990s following a brief spike in the early 1990s. Such a decrease may have been caused by the downturn in the Japanese economy during this period, following the period of the economic ‘bubble’ of the 1980s. Japan is a major market for large pelagic species, most notably the prized bluefin tunas, and the data from the Fisheries Agency of Japan shows there were significant drops in the prices of tuna during this period. The reported ex-vessel prices of the Atlantic bluefin tuna in Japan, for example, halved from USD 29,900 per tonne in 1989 to USD 14,000 in 1999. The correlation between the volume of the catch and the ex-vessel prices (in real value) was tested by computing the correlation coefficient for 6193 ‘fisheries’ defined as unique combinations of country and taxa with over 10 years of reported commercial catch. The result shows that at for the majority of fisheries, the correlation between the volume of the catch and the price is weak, Figure 5-3.13Frequency distribution of correlation coefficients computed for world’s fisheries, defined by their country-taxa combinations (with over 10 years of reported catch, n=6193).  74  Figure 5-4.14Plots of estimated verses reported prices (top) and the distributions of residuals (bottom) by our model (A) and Sumaila et al. (B). The dataset represents estimations across countries with records from 15 randomly selected countries removed and estimated from the remaining subset of reported ex-vessel prices denoting 75% of the data. The plots show that the ex-vessel prices estimated by our model have a significantly higher correlation to the reported prices than the prices estimated by Sumaila et al (Z=7.3908) while the histograms demonstrate that both sets of estimations are relatively unbiased (the grey line represents normal distribution around a mean of zero).  with over 50% of the fisheries (3,948) having a correlation coefficient less than 0.1 while less than 5% of the fisheries (212) had a correlation coefficient over 0.5 (Figure 5-3). Our results, though a crude measurement of price elasticity, indicate that ex-vessel prices are relatively inelastic to supply and vice versa. The price estimation capability of the model was compared with that of Sumaila et al. (2007) by removing a sub-sample of the recorded prices and testing how well the models predicted these ‘missing’ prices. We tested the model for its estimation across countries and  75  Figure 5-5.15Plots of estimated versus reported prices (top) and the distributions of residuals (bottom) by our model (A) and Sumaila et al. (B). The dataset represents estimations across taxa with records from 506 randomly selected taxa groups removed and estimated from the remaining subset of reported ex-vessel prices denoting 75% of the data. While the plots show no significant differences in the correlations between two models’ estimated prices with the reported prices, the residual distribution of the estimates from Sumaila et al. suggests a slight upward bias in the estimations (the grey line represents normal distribution around a mean of zero).  across taxa by generating two subsets of the reported ex-vessel prices, with each subset missing reported prices of 15 randomly selected countries and 506 randomly selected taxa groups (both subsets representing 75% of the total dataset). Figures 5-4 and 5-5 depict the results from the two models. Comparison of the correlation coefficients between the two sets of estimated prices with the reported prices show that our model significantly improves the estimation of prices across countries compared to Sumaila et al. (Z=7.3908), while the two models show no significant differences in their estimation across taxa (Z=0.4871), although the analysis of the residuals indicates that the price estimation across taxa by Sumaila et al. (2007) may be biased upwards. 76  Landed values Globally, marine fisheries catches, as reported by countries to the FAO, increased from less than 20 million t/year in the early Figure 5-6.16Total marine fisheries landings (black) and landed value (gray): 1950-2006. Table 5-1.2Top ten marine fishing countries by landed values and their global shares.  1950s to a peak around 85 million t/year in the mid 1990s (Figure 5-6). The total marine fisheries landing in 2005 was estimated at 80.5 million t, with marine fish species comprising about 86 percent of the total landings, while crustaceans and molluscs made up 6 and 8 percent, respectively. The  estimated landed value of marine fisheries in 2005 was USD 100 billion, a four and a half-fold increase from the USD 22 billion estimated in 1950 (Figure 5-6). The total landed value underwent a steady increase through 1950s to the 1970s, exceeding USD 100 billion in 1978 and 1979 before decreasing to about USD 85 billion in the early 1980s despite a further increase in landings. Since the late 1980s, the landed value of the global marine fisheries has fluctuated around USD 100 billion, with an exception of a sharp increase in 1995 when it is estimated to have reached USD 126 billion. About 55% of total landed values were accounted for by 10 countries in 2005 (Table 5-1). China was the top fishing country, both in terms of landings (9.8 million t, 12 percent of the global total) and landed value (USD 13 billion, 13 percent of the global total), while Japan and 77  the USA recorded the second and third highest landed value (USD 9.2 billion and 8 billion or 9 and 8% of the global total, respectively) despite accounting for only 6 and 5 percent of the global total in landings, respectively. Cumulatively, over the 57 year period (1950-2006), marine  Figure 5-7.17Spatial distribution of average annual landed values 2 (2005 USD per km per year) by decade.  fisheries catches generated total landed value of USD 4.2 trillion. Japan accounted  for 17% of the total landed value in this period, followed by USA (10%) and China (8%). Through the 1970s and 1980s, Japan accounted for over 20% of the total landed value globally. Figure 5-7 presents geo-referenced distributions of landed values, each representing the decadal averages of annual landed values of the world’s fisheries. In all six maps, concentrations in landed value can be seen in the productive and heavily exploited coastal waters of Europe and Asia as well as along areas of major upwelling such as the western coast of South America. Figure 5-7 also highlights the southward and offshore expansion of the fishing grounds over time, particularly since the 1970s, with the growth of distant water fishing fleets (Swartz et al. 2010a; Berkes et al. 2006). Despite the offshore expansion of marine fisheries, the Exclusive Economic Zones of coastal, particularly developing, countries still account for over 80% of the total landed values. Yet, it is not necessarily the case that the coastal countries derive the majority of the economic 78  benefits from their marine resources. The prominence of distant water fishing fleets in many coastal waters means that in some regions, a large proportion of the value of marine fisheries is captured by foreign Figure 5-8.18Proportion of marine fisheries landed values captured by domestic fisheries.  countries, particularly, if the distant water fishing fleets are targeting high value  species such as large pelagic species, while the domestic fishing fleet targets low value species. Figure 5-8 presents the distribution of the landed value of the coastal fisheries resources between domestic and foreign fleets. The figure displays high levels of domestic capture of landed value in North America, South America, Australia and Asia, while in regions with active large distant water fishing, particularly for tunas, the share of landed value captured by domestic fisheries is considerably smaller. Some notable exceptions are the Northeast Atlantic, where the EU jointly manages the fisheries of their member states and where several reciprocal fishing access agreements exist in order for coastal countries to retain fishing access to the traditional fishing grounds that were open to them prior to the 200 nautical mile extensions of marine jurisdictions. The low level of domestic capture of landed value within the Russian EEZ in the Sea of Okhotsk may be due to the large discrepancies in the ex-vessel prices received in Russia and in Japan, whose fleets operates in the region under several reciprocal fishing arrangements. We must note, however, that the distribution of landed values alone does not present a full picture of how the economic benefits are shared between various countries. For example, 79  in many developing countries, the policies of fleet domestications were pursued via the encouragement of joint ventures between domestic and foreign operators. In some extreme cases, it may be possible that the benefits derived by joint venture fleets may contribute little to the local economy despite being officially recognized as ‘domestic’ catch. Conversely, recent improvements in the terms of foreign fishing access arrangements have meant that coastal countries are capturing a greater share of the economic benefits from distant water fishing via conditionalities such as quotas for local employment and requirements to land the catch in domestic ports. Moreover, the high level of international trade of marine fish and fish products (Swartz et al. 2010b) implies that domestic catch may not necessary enter the local markets. Further, more comprehensive analyses are, therefore, needed to address the distributional issues of marine fisheries. Understanding the size of landed value derived from global marine fisheries is an important step in enhancing our awareness of the significant contributions made by marine fisheries resources, and analysing the effectiveness of various fisheries policy options in achieving ecological and economic sustainability. Sumaila et al. (2007) was the first attempt at constructing a comprehensive database of marine fisheries ex-vessel prices and this contribution further advances our ability to examine the economic contributions of marine fisheries to the global and national economies.  80  Chapter 6: Assessment of total fisheries-related biomass removal from Japan’s Exclusive Economic Zones: 1950-2010.  81  Introduction A recent series of studies aimed at re-assessing fisheries catch data found that catch statistics reported by agencies at national and international levels, e.g., United Nations Food and Agriculture Organization, FAO (Garibaldi 2012), consist mostly of commercial landings, i.e., a subset of the catch that is landed at ports, rather than the total biomass extracted from marine ecosystems (Jacquet et al. 2010; Le Manach et al. 2011; Wielgus et al. 2010; Zeller et al. 2006; Zeller et al. 2007; Zeller et al. 2011a; Zeller et al. 2011b). Components of fisheries catches that remain unreported include illegally caught fish, globally estimated at 11-26 million t per year (Agnew et al. 2008), catches from recreational fisheries (Coleman et al. 2004; Zeller et al. 2008) and for subsistence (Zeller et al. 2007), and catches that are discarded at sea due to their low commercial values (Kelleher 2005). In some cases, the unreported component of the fisheries catch can be greater than the reported catch (e.g., Mozambique, Jacquet et al. 2010), distorting the perception of the state of marine fisheries in these countries. The incomplete nature of catch statistics is a serious concern for the management of fisheries resources. Catch statistics are a crucial component of fisheries management and the basis for nearly all forms of stock assessments (Ricker 1975; Hilborn and Walters 1992). Given the current, sub-optimal state of the world’s fisheries (FAO 2012a), improvements in catch records to reflect the true level of resource extraction are urgently needed. The objective of this study is to create a baseline of total fisheries-related biomass removals in the Japanese Exclusive Economic Zones to supplement the reported commercial fisheries landings and contribute to the development of ecosystem-based fisheries 82  management, which cannot be implemented without a comprehensive assessment of the total impact of fisheries on the resource base. Because of the very nature of the unreported catch, the reconstructed biomass removals derived in this study will not be precise, but rather wellinformed estimates, drawing upon diverse sets of data sources that can be used to replace a zero value when we are certain that these unreported components of catches exist (Pauly 1998). We expect that by reconstructing the unreported components of Japanese marine fisheries, an improved and more comprehensive picture will emerge of the total biomass extracted from the EEZ of Japan over the past 60 years.  Methods Time series of total fisheries-related biomass removal have been successfully estimated in many regions and countries around the world (Jacquet et al. 2010; Le Manach et al. 2011, Wielgus et al. 2010; Zeller et al. 2006; Zeller et al. 2007; Zeller et al. 2011a; Zeller et al. 2011b), including in regions where catch statistics were previously thought to be relatively complete (e.g., the Baltic Sea, Zeller et al. 2011a). The ‘catch-reconstruction’ method utilized in these studies applies the following general procedure (adopted from Zeller et al. 2007): (1) identify and assess data gaps (e.g. artisanal and small-scale sector, illegal catches, discards) in the official catch statistics; (2) obtain point data of catches for the data gaps identified in (1) to serve as anchor points of catch-time series interpolation; (3) identify alternative information sources (e.g., coastal population time-series, per capita seafood consumption) which can serve as proxies for fishing activities and catch; 83  (4) interpolate catches and other fisheries-related biomass removal across time, fisheries and species, and, if necessary, extrapolate from regional estimates to country- (or EEZ) wide estimates; (5) estimate total fisheries-related biomass removal by combining reported and estimated catches and other fisheries-related biomass removals. Information used for catch reconstruction comes from a range of sources, including peer-review literature, government publications, expert knowledge and anecdotal evidence such as news reports of illegal fishing operations. Every attempt is made to ensure that these diverse sources of information are used in a conservative manner (Zeller and Pauly 2007). Official fisheries catch statistics of Japan Statistics on commercial marine fisheries are maintained by the Fisheries Agency (JFA) of the Ministry of Agriculture, Forestry and Fisheries (MAFF) and are published annually in its Statistical Yearbook (e.g., MAFF 2012a). The landings statistics are compiled from the Survey on Marine Fisheries Production, which obtains information on marine fisheries landings via direct interviews (for landing facilities and fishing entities engaged in skipjack and other tuna fisheries) and questionnaires (for landing facilities and other fishing entities). All commercial fishing entities are required to participate in the survey, including independent operators and households, with the exception of those whose participation in the fisheries lasted less than 30 days of the year. The survey defines fisheries landings (or ‘production’) as all marine organisms obtained from fishing operations including catches consumed onboard by crew and those retained for household consumption. It does not include catches discarded at sea or of vessels 84  lost at sea and those retained as bait, aquaculture ‘seedlings’ or fertilizer (unless they are sold commercially, in which case they are required to be reported as fisheries landings). The official landings statistics (MAFF 2012b), provide the baseline of our catch reconstruction, to which adjustments are made to account for unreported landings and catches discarded at sea. Since the focus of our analysis is on the total marine biomass removed by fisheries in the Japanese EEZ, landings by fisheries classified as distant water were not considered, with exception of the East China Sea Trawl fishery (Inan Sokobiki Ami) which operates in the East China Sea, spanning the EEZs of Japan, the Republic of Korea (South Korea) and the People’s Republic of China (China). Japan did not fully declare its 200-nm EEZ until 1996 (200 nm jurisdiction was partially established in 1977 in the Sea of Japan east of 135oE and in the Pacific). However, our analysis will focus on the waters within the current EEZ boundaries for the whole time period, from 1950 to 2010, thus considering these areas as ‘EEZ-equivalent waters’. Subsistence and small-scale fisheries In previous reconstructions of marine fisheries catches, subsistence and small-scale fisheries were found to be a considerable component of the unreported catch (e.g., Jacquet et al. 2010; Wielgus et al. 2010). However, given the breadth of fisheries identified in the official statistics that include many fisheries generally considered small-scale operations (e.g., shellfish collecting, diving and beach seining), we assume all small-scale commercial fisheries to be accounted for in the official statistics. Moreover, we assume subsistence fishing to be negligible,  85  given that the official statistics require catches for household consumption to be included (MAFF 2012a). Foreign fisheries Japanese fishing vessels are not the only vessels operating within Japan’s EEZ. Bilateral fishing agreements signed with neighboring countries allow reciprocal fishing access in the East China Sea, the Sea of Japan, the Sea of Okhotsk and in the Northern Pacific. Summaries of these reciprocal fishing arrangements are as follows: (1) Russia: Following the establishment of the EEZ by the USSR in March, 1977 and by Japan in July, 1977, the two countries entered into a reciprocal fishing arrangement, initially as a series of 1-year provisional agreements until the conclusion of the Japan-USSR Offshore Fisheries Agreement in 1984. The agreement allows Russian trawlers to fish off Hokkaido and the Sanriku region of the Pacific where they had operated prior to the establishment of EEZs. The Russian quota in the Japanese EEZ was initially set at 650,000 t·year-1, though this may be reflective of Japan’s historical catch in the Russian (USSR) EEZ prior to 1977 rather than Russian (USSR) historical catch in the Japanese EEZ (Nakajima 1996). Nakajima (1996) indicates that Russia’s (USSR) failure to achieve its quota led to its reduction under the 1984 arrangement. Quotas are negotiated annually, with Japan purchasing additional quotas for its fleet operating within the Russian EEZ. (2) South Korea: The declaration of a 200 nm EEZ by Japan was primarily in response to the EEZ declaration by the USA, USSR, EC and Canada. Thus, it was not enforced in the western Sea of Japan and the East China Sea where Japan, South Korea and China 86  maintained informal arrangements of unlimited, open fishing (effectively mare liberum) beyond 12 nm territorial waters. With the ratification of the UN Convention on the Law of the Sea in 1994 and the subsequent extension of the EEZ boundaries into the western Sea of Japan and the East China Sea in 1996, Japan entered into a reciprocal fishing agreement with South Korea. Under the agreement concluded in 1998, Korean trawlers, purse seiners and squid jiggers are granted fishing access to the waters off Kyushu and Sanin and in the joint management regions around Takeshima Island in the Sea of Japan and the Socotra Rock in the East China Sea. (3) China: As noted above, EEZ boundaries between Japan and China were not established until 1996, allowing vessels from both countries to operate, in principle, freely in the East China Sea. As was the case with South Korea, Japan entered into a reciprocal fishing agreement with China in 1997 under which Chinese trawlers and squid jiggers are granted fishing access to the waters off Kyushu and the Sea of Japan, respectively. In addition, a joint management region was established off Senkaku Islands, allowing vessels from both countries to operate without an authorization from the other country. For the purpose of the catch reconstruction, we assume all quotas allocated to foreign fleets to have been realized, with the exception of the quotas allocated to the USSR from 1978 to 1983. As noted above, we believe the quotas in this period were arranged to accommodate Japan’s foreign fishing capacity rather than the Russian (USSR) fishing capacity, particularly given that the negotiated quota of 650,000 t accounted for over half of the reported Russian catch of the small pelagic and longfin codling fisheries in the Northwest Pacific, and up to 85% of the realized catch in 1978. We conclude that the current approach of annually negotiated 87  quotas better reflects the realized catches by the participating countries, particularly in the case of Japan’s arrangement with Russia where Japan purchases quotas in addition to the negotiated reciprocal quotas to meet its fishing capacity. While we were able to obtain the negotiated quotas for most years from the Fisheries White Paper (JFA 1989-2004; JFA 2005-2011) and JFA press releases (JFA 2006, 2007, 2008, 2009a, 2009b, 2010, 2011a, 2011b), we were required to interpolate for years where we could not. For the purpose of interpolation, we assume the changes in the negotiated quotas between years to be linear. For years preceding the reciprocal fishing arrangements, we assume the catches by foreign fleets within the Japanese EEZ to be directly correlated with the total reported catches of these fleets in the Northwest Pacific (FAO Statistical Area 61). We calculate the ratio between the quota allocated in the first year of the arrangement (1978 for Russia, 2001 for South Korea and China) and the reported catch in the Northwest Pacific (from the FAO FishStat, FAO 2012b) for Russia, South Korea and China, and extrapolate back to 1950. For South Korea and China, we assume the composition of their catch to be the same as that of Japan’s squid jiggers and the East China Sea trawlers (Inan Sokobiki AmiI). We assume the catches in the joint management regions to be negligible or included in the allocated quota, though reports indicate overfishing in the joint management region off Takeshima Island may have led to the decline in the red snow crab population of the Sea of Japan (JFA 2010).  88  Illegal fisheries Illegal fisheries in the Japanese EEZ can be classified into two groups: illegal fishing by the domestic fleet and by foreign fleets. (1) Domestic fleet: Illegal operations by Japan’s domestic vessels can range from use of illegal gears to violations of area and seasonal closures, and possession and sale of illegal fish. Illegal activities are monitored by the coast guard in cooperation with prefectural regulators and local fisheries coops. According to Japan Coast Guard reports, more than 95% of the arrests made in relation to the Fisheries Acts involve illegal fishing (JCG 2011). In recent years, the trend has been the increased participation of noncommercial fishers in illegal fishing activities, particularly by organized crime syndicates using recreational vessels and diving equipment. These groups target high value species such as abalone, sea cucumber, horned turban and crabs (JCG 2009). These illegal fishing activities can be a considerable source of revenue for organized crime syndicates, with values up to JPY 300 million in some cases (JCG 2010). (2) Foreign fleets: In addition to those operating under the bilateral fishing agreements, unlicensed foreign vessels periodically enter the Japanese EEZ. Moreover, reports indicate that many fishing gear illegally placed by foreign vessels (traps, gillnet and longlines) are in operation within the Japanese EEZ (Nihonkai Shinbun 2012). To assess the level of the illegal catch by the domestic fleet, we used the data on the number of arrests resulting from violations of fisheries-related regulations obtained from JCG Statistical Yearbooks (JCG 1950-1997). We focused mainly on violations related to illegal 89  possession and sale of marine fish and did not consider other violations such as illegal gear or infringement of fishing rights. We assume the catch per arrest to be equal to the average annual reported catch per fishing entity. For years prior to 1976, for which the category “illegal possession/sale of marine species” was not used, we assume the ratio of arrests of illegal possession/sale to total arrest to be same as the average for 1976-2010. Similarly, for illegal fishing by foreign fleets, we use the data on the number of arrests and assume the catch per vessel arrested to equal that of the foreign vessels operating legally. In addition to the number of arrest, statistics on the number of seized illegal fishing gear and the approximate catch (2001-2008) were used to compute the illegal catch by gears. The approach used in the estimation of legal catch by foreign fleets is applied to extrapolate back to 1950. Recreational fisheries Statistics on the recreational fisheries are limited, although JFA began compiling estimates of catches by recreational fishers in 1998 and has continued to do so every five years through its Recreational Fishing Catch Volume Survey (MAFF 1998, 2003, 2008). These estimates are based on questionnaires submitted by recreational fishing operators and noncommercial marine vessel owners. As a result, the estimates derived from these surveys are limited to recreational fishing at sea and do not include shore-based recreational fishing activities. Prior to 1998, the statistics on recreational fishing focused on economic data such as the number of participants and operators, again estimated every five years via the Fisheries Census, back to 1973. The statistics on the recreational fishers reported by the Fisheries Census 90  vary from year to year, with some years including the number of recreational fishers engaged in shore-based and pier-based fishing as well shellfish collections, while other years simply provide a total figure. The historical catches by recreational fishers are, therefore, reconstructed by multiplying the species specific per capita catch rate derived from the 2008 statistics and the reported number of recreational fishers. For years between the Fisheries Census (1973-1997) and the Recreational Fishing Catch Volume Surveys (1998-2008), we assume the changes in the number of recreational fishers to be linear and computed accordingly. For years prior to 1973, the number of recreational fishers (and therefore, catches by recreational fishers) is assume to be equal to that of 1973 and, similarly, for 2009 and 2010 to be that of 2008. Discards at sea To estimate the level of discarding in the Japanese fisheries, we use the fleet-specific discarding rates assembled by Matsuoka (1996), updated, where possible, with more recent studies of discard rates in Japan (Hirai and Nishinokubi 2004; Akiyama 1997; Kojima et al. 2007). These studies present discarding rates for each category of the Japanese commercial fisheries. We assume the discarding rates to have remained constant over time.  Results From 1950 to 2010, total fisheries-related biomass removal was estimated at 403 million t, with the commercial fisheries landings (reported) accounting for almost 83% of the total (336.5 million t), discarding at sea 9% (37.7 million t), catches by foreign fleets 6% (22.7  91  million t), recreational fishing 1% (5.3 million t) and illegal fishing 0.2% (0.8 million t). The total biomass removal peaked in the mid 1980s, exceeding 10 million t·year-1  Figure 6-1.19Total fisheries-related biomass removals from the Japanese EEZ by type: 1950-2010. Table 6-1.3Summary of reconstructed catch by type: 1950-2010. Type Reported Recreational Foreign Illegal Discards Total  1950s 4,025 63 82 8 398 4,576  Average annual catch by decade (103 t yr-1) 1960s 1970s 1980s 1990s 4,684 6,293 8,568 5,783 63 102 154 79 142 214 404 243 10 21 15 12 589 629 753 701 5,488 7,259 9,894 6,816  2000s 3,932 67 158 15 640 4,811  All Years 5,516 87 206 13 619 6,441  from 1983 to 1988, but is currently at 4.5 million t·year-1 (Figure 6-1, Table 6-1). The peak in the mid 1980s is predominantly due to record catches in the Japanese pilchard fishery.  Russia (USSR) accounted for the largest component of catches by foreign fleets (Figure 6-2), with over 400,000 t·year-1 estimated in the mid-1980s. In total, the Russian catch was estimated to be 8.8 million t over the full time period, with the ROK catch at 3.0 million t and 0.8 million t by the PRC fleet. Assuming that the type of fleets operating in Japan’s EEZ and their catch composition have remained constant, small pelagic fish accounts for the majority of the catch (e.g., mackerels and Pacific saury), with the Russian vessels also targeting longfin codlings, while the ROK and PRC vessels also target squid and largehead hairtails.  92  The Japanese fleet accounted for 80% of the illegal catches in the Japanese EEZ, with a total of 662,000 t over the 61 year period (Figure 6-2). The illegal catch  Figure 6-2.21Reconstructed catches by foreign fleets operating in the Japanese EEZ: 1950-2010. Solid lines represent negotiated quota and dashed lines are estimated catch based on the catch history of the three countries in the Northwest Pacific (FAO 61).  was estimated to be highest in 1977 at over 40,000 t·year-1, though on average, illegal fishing was estimated to account for about 26,000 t·year-1 of biomass removal. Figure 6-3 presents the time-series of the fisheriesrelated arrests reported by the Japan Coast Guard (JCG 1950-1997, JCG 2012).  Figure 6-3.20 Reconstructed illegal catches in the Japanese EEZ by fleet type (domestic or foreign): 1950-2010. No illegal fishing by foreign vessels was assumed prior to the establishment of the Japanese EEZ.  The trawl fisheries were the largest source of the discarded catches and, with longlines and driftnet/gillnets, accounted for over 90% of the estimated discards. Despite the large increase in the reported catch during the 1980s, our estimates of discards have remained fairly stable  Figure 6-4.22 Number of fisheries-related arrests reported by the Japan Coast Guard: 1950-2010. Solid lines are reported values and dashed lines are estimates based on the ratio of the arrest for possession or sale of illegal fish to all fisheries-related arrests (12% of the total).  through the 1960s to 2000s at about 600,000 t·year-1 (Figure 6-5). This is due to  93  the fact that the large increase in the reported catches was the result of the increase in Pacific pilchard catches by pelagic purse seiners which had a small  Figure 6-5.23Estimated discards by fishery type: 1950-2010.  discard rate (Hara 1995).  Discussion Our reconstruction of total fisheries-related marine biomass removals from the Japanese EEZ suggested that fisheries resulted in catches that are approximately 14% (56 million t) greater than the officially reported commercial catches between 1950 and 2010. This difference between official statistics and estimated total catches highlights the magnitude of fisheries-related mortalities that are previously unaccounted for when considering the total impact of fisheries on the marine ecosystems in the Japanese EEZ. We consider our estimates to be relatively conservative, given the methodology we applied; thus, we believe the true level of total catches to likely be higher than the level estimated here. Nonetheless, the estimates provided here represent an improvement over the previously available estimates of total biomass removals (i.e., official catch) and present a superior baseline for management of marine fisheries resources in the Japanese EEZ. One of the key assumptions applied in this analysis is the assumption of no misreporting of the commercial catch. This assumption was applied partly in order to maintain the conservative nature of our estimation, but also because of the apparent lack of incentives for 94  misreporting. Traditionally, the primary mode of fisheries management in Japan has been input control, via regulation of vessel numbers, gear types and engine size  Figure 6-6.24Realized catch as a proportion to the Total Allowable Catches for the seven stocks managed under the TAC scheme in Japan (from JFA 2012).  (Kishita 1998). Under such a management regime, there is no limit on the catch and,  therefore, incentives to under-report may be negligible, in contrast to areas where output control management regimes (i.e., the Total Allowable Catch, TAC) are in place (e.g., the Baltic Sea, Zeller et al. 2011). Japan did institute a TAC-based management regime in 1996 for seven of its primary fisheries resources (saury, Alaska pollock, jack mackerel, Japanese sardine, chub mackerel, snow crab and Japanese flying squid). However, the TACs are set at levels far in excess of the realized catch and it is highly doubtful if such an ineffective TAC regime would serve as an incentive for misreporting (Figure 6-6). The absence of catch quota may also be a factor in the level of illegal fishing, at least in terms of catch. As noted above, the primary mode of fisheries management in Japan is the regulation of effort. Illegal fishing activities in Japan, therefore, mainly involves use of illegal gears, violations of local fishing zones or area closures (JCG 2011). Other than poaching for high valued invertebrates or violations of seasonal closures where detection at ports are possible, it may be that a large proportion of illegally caught fish are reported at ports and entering the distribution chain as legal catch. Clearly, detailed examination is needed into the nature of illegal fishing activities as well as some form of survey to determine the enforcement and 95  detection rates, both for domestic and foreign vessels, to improve our understanding of the level of illegal fisheries catch. Our analysis identified discarding as the most important source of unaccounted biomass removals. Our figures are based on point estimates of discarding ratios (i.e., catch-to-discard) observed in various localized studies (as identified in Matsuoka 1996 and by our extensive review of the literature) lacking information on changes over time. Discarding is highly sensitive to local conditions (e.g., the demand of the local market, gear technology employed, catch composition, catch volume) and may vary considerably across regions and over time. Again, our estimates should be viewed as a baseline, to be adjusted and improved upon whenever possible. The economic implications of the unaccounted biomass removals identified in our analysis are difficult to assess. Legal components of our estimates (catches by foreign vessels and recreational fisheries) are likely to be providing considerable benefits, both directly, as in the case of recreational fisheries utilizing local guides and other services, and indirectly, as in the case of foreign catches which provide reciprocal fishing opportunities for Japanese vessels. These catches should, therefore, be considered fully integrated into the local and national fishing industries of Japan. The other components, namely the illegal catches and discards, should, however, be viewed as a loss to the Japanese economy. As noted above, the illegal fishing activities in recent years have focused on high value invertebrate species such as sea cucumbers and sea urchins, valued at around JPY 300 million in some cases (JCG 2010). Additionally, the discarded catches, though they may be of less valued species, would be of  96  considerable loss to the Japanese economy by the virtue of their sheer volume, particularly if the catches discarded are of commercially important species but are below the legal size limits. Finally, the management implications of the unaccounted catches identified by our analysis may be small under the input control management regimes applied to most of the Japanese coastal and offshore fisheries. However, if Japan is to continue its implementation of TAC-based management regimes, or move towards an Individual Transferable Quota (ITQ) system as some have called for (Makino 2009, Yagi et al. 2012), it will be imperative that the full fisheries-related biomass removals, as evaluated here, be applied in the assessments of the catch limits.  97  Chapter 7: Conclusion  98  Fisheries can be sustainable (Worm et al. 2009). Yet, the history is filled with examples of fisheries exterminating the population upon which they originally relied, and moving on to other species (Ludwig et al. 1993; Jackson et al. 2001; Berkes et al. 2006). At a global level, the period of rapid growth that saw the total output from marine fisheries quadrupling from less than 20 million t in the 1950s to over 80 million t by the end of the 1980s has ceased (FAO 2012) and studies suggesting that global fisheries output is on a decline (Watson and Pauly 2001, Worm et al. 2009) with an increasing number of commercially exploited fish stock now considered overexploited (FAO 2012; Froese et al. 2012). A closer examination of the global marine fisheries landings statistics over the past 60 years reveals that the period of growth observed in the total landings was primarily due to the geographical expansion of fisheries from the coastal waters of the North Atlantic and the Northwest Pacific to the waters in the Southern Hemisphere and the high seas. Using the proportion of primary production captured as marine fisheries catch (%PPR) as an indicator of exploitation, my analysis found the southward expansion of fisheries occurred at a rate of almost one degree latitude per year, with the greatest period of expansion occurring in the 1980s and early 1990s. By the mid 1990s, a third of the world’s ocean, and two-thirds of continental shelves, were exploited at a level where fisheries captured over 10% of local primary production, leaving only relatively unproductive waters of high seas, and relatively inaccessible waters in the Arctic and Antarctic as the last remaining ‘frontiers.’ My results show that the growth in marine fisheries catches was only made possible through sequential exploitation of new fishing grounds and with their rapidly diminishing number, a global limit to growth has been reached. 99  The era of fisheries expansion coincides with the globalization of the seafood market. In Chapter 3, I use a series of global maps depicting seafood consumption footprints of three of the world’s major markets (the EU, Japan and the USA) to demonstrate the extent of the global seafood trade networks. These maps display a high level of dependence by these markets on foreign sources as the serial depletion of local fisheries resources forced these markets in search of new seafood supplies beyond their domestic waters, by dispatching distant water fishing fleets that directly exploit foreign stocks and by importing catch landed elsewhere by local fleets. The findings from this Chapter, thus, concur with the results observed in Chapter 2. One implication of the two global phenomena described in Chapters 2 and 3 is the general lack of awareness toward the precarious status of marine fish stocks and the lack of impetus to overcome the status quo of global fisheries (Jacquet and Pauly 2007; Jacquet et al. 2010). This was most evident in the negotiations for international fisheries subsidies regulation at the World Trade Organization (Chapter 4), which failed to reach an agreement despite a series of studies by fisheries economists finding some forms of fisheries subsidies act as perverse incentives for overcapacity and overfishing (Millazo 1998; Munro and Sumaila 2002; Sumaila et al. 2010). In order to improve our understandings of the state of marine fisheries, Chapter 5 and 6 examine two sets of fisheries statistics that are vital economic and ecological (and single stock) fisheries assessments: the volume and value of catches. In Chapter 5, the Ex-Vessel Fish Price Database, first proposed by Sumaila et al. (2007), is revisited and its methodology updated. By accounting for the purchasing power differences between markets, the new methodology  100  enhances the estimation of ex-vessel prices in regions where reported prices are scarce or nonexistent. The updated database allows better analyses of the economic contribution that marine fisheries make to national and global economies and in assessing the values of informal components of fisheries when applied in the context of catch reconstruction discussed below. My analysis shows that the global marine fisheries landings have generated total value of USD 4.2 trillion since 1950, including USD 100 billion in 2005. In Chapter 6, the official catch statistics of Japanese marine fisheries is evaluated using the recently developed method of catch reconstruction (Zeller et al. 2007). The method is design to compute the scale of the informal components of marine fisheries, commonly referred to as the Illegal, Unreported and Unregulated (IUU, Sumaila et al. 2006; Agnew et al. 2009) fisheries, and other forms of fisheries-related marine biomass extraction such as discarding at sea and recreational fisheries that are not included in the official catch statistics. My results, which found the total biomass removal from the Japanese Exclusive Economic Zone (EEZ) from 1950 to 2010 to be about 392 million t, 15 percent of which were previously unaccounted IUU and recreational catches as well as discards, demonstrate the need for improvement in the official catch statistics, even in regions that are considered to be wellstudied and data-rich. This dissertation highlights the two major global phenomena in marine fisheries over the past 60 years: the geographical expansion of fishing and international seafood trade networks. As a result of these two advancements, the ecological footprint of our seafood consumption now covers all corners of the world ocean and the impacts of unsustainable  101  fishing are beginning to surface in commercially important fisheries around the world. A fundamental shift in the way marine fisheries operate is needed. 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Acquisition and Construction of Fishing Vessels and Service Vessels Proposal  Prohibition  General Exception  S&DT  2007 Chair Text  Art I.1(a) Subsidies the benefits of which are conferred on the acquisition, construction, repair, renewal, renovation, modernization, or any other modification of fishing vessels78 or service vessels79, including subsidies to boat building or shipbuilding facilities for these purposes.  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/W/213)  fn 78 For the purposes of this Agreement, the term "fishing vessels" refers to vessels used for marine wild capture fishing and/or on-board processing of the products thereof. fn 79 For the purposes of this Agreement, the term "service vessels" refers to vessels used to tranship the products of marine wild capture fishing from fishing vessels to onshore facilities; and vessels used for at-sea refuelling, provisioning and other servicing of fishing vessels.  fn 77 Subsidies referred to in this provision shall not be prohibited when limited to the relief of a particular natural disaster... Conditionality fn 77 ...subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI. Exception 2 (vessel & crew safety) Art II(a) For the purposes of Article I.1(a), subsidies exclusively for improving fishing or service vessel and crew safety shall not be prohibited... Conditionality  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited where they relate exclusively to marine wild capture fishing performed on an inshore basis (i.e., within the territorial waters of the Member) with nonmechanized net-retrieval... Conditionality Art III.2(a) ...(1) the activities are carried out on their own behalf by fishworkers 82, on an individual basis which may include family members, or organized in associations; (2) the catch is consumed principally by the fishworkers 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, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 82 For the purpose of this Agreement, the term "fishworker" shall refer to an individual employed in marine wild capture fishing and/or directly associated activities.  Art II ... subject to the provision of Article V. Exception 3 (non-LDC small vessels) Art II(a)...(1) such subsidies do not involve new vessel construction or vessel acquisition; (2) such subsidies do not give rise to any increase in marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn; and (3) the improvements are undertaken to comply with safety standards. Exception 3 (implementation of fisheries management measures) Art II(b) For the purposes of Articles I.1(a) and I.1(c) the following subsidies shall not be prohibited: subsidies exclusively for: (1) the adoption of gear for selective fishing techniques; (2) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing; (3) compliance with fisheries management regimes aimed at sustainable use and conservation (e.g., devices for Vessel Monitoring Systems); Conditionality Art II ... subject to the provision of Article V. Art II(b) ...the subsidies do not give rise to any increase in the marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn.  Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2) ...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 Exception 4 (non-LDC other vessels) Art III.2(b)(3) ... subsidies referred to in Article I.1(a) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(3)(i) the vessels are 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 have been subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level; and (iii) that assessment has been subject to peer review in the relevant body of the United Nations Food and Agriculture Organization ("FAO").83 fn 83 If the Member in question is not a member of the FAO, the peer review shall take place in another recognized and competent international organization.  119  Proposal  General Exception  S&DT  Korea Proposal  Prohibition  Exception 1 (de minimis)  Exception 1 (LDCs)  (TN/RL/GEN/178)  Para 7 ...the introduction of the small-scale de minimis exemption in the General Exceptions provision...  no specific amendments proposed Exception 2 (non-LDCs) Art III.2(b) ...subsidies referred to in Article I.1(a) shall not be prohibited...  no specific amendments to other exceptions proposed Conditionality Art III.2 ...subject to the provisions of Article V... Art III.2(b)...(i) the vessels are 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 have been subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level; and (iii) that assessment has been subject to peer review in the relevant body of the United Nations Food and Agriculture Organization ("FAO").12  no specific amendments proposed  fn 12 If the Member in question is not a member of the FAO, the peer review shall take place in another recognized and competent international organization. Exception 3 (de minimis) Para 11 "In Korea's view, the small scale de minimis provision to be introduced in the general exceptions category should be able to address these concerns of developing Members. If Members agree to provide the developing Members (including those regarded as major fishing powers) with a bigger number (i.e. X+Y) than the one for the developed Members (i.e. X) with respect to the de minimis carve out, a significant portion of the concerns and political sensitivities of the developing Members (including those regarded as major fishing powers) should be addressed by the de minimis provision. At the same time, Members could consider providing a more comfort zone (i.e. X+Y+Z) for the SVEs taking into account their peculiar economic vulnerability." Kenya ACP Proposal  Exception 1 (LDCs)  (TN/RL/GEN/176)  no specific amendments proposed Exception 2 (non-LDC subsistence) no specific amendments proposed Exception 3 (non-LDC small vessel) Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... no specific amendments proposed  Conditionality no specific amendments proposed Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2)(i) ...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, Exception 4 (non-LDC with % share of global marine wild capture ≥0.60%) Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2)(ii) ...those developing country Members whose percentage share of global marine wild capture is  120  Proposal  Prohibition  General Exception  S&DT not more than 0.60 per cent. Exception 5 (non-LDC other vessels) Art III.2(b)(3) ...subsidies referred to in Article I.1(a) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(3) ... the vessels are used exclusively for marine wild capture fishing activities of such Members in respect of particular, identified target stocks within: (i) their Exclusive Economic Zones ("EEZ"); (ii) the EEZ of another Member through reciprocal access agreements between two or more Members, including agreements for access to shared migratory or straddling stocks between neighbouring Members where those Members are all Members of and in compliance with the management measures of the relevant RFMO, (iii) stocks under (i) and (ii) have been subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level  Malaysia Proposal  Exception 1 (natural disaster)  (TN/RL/GEN/174)  no specific amendments proposed Exception 2 (vessel & crew safety) Art II(a) For the purposes of Article I.1(a), subsidies exclusively for improving fishing or service vessel, crew safety or food safety shall not be prohibited... Conditionality no specific amendments proposed  Art II ... subject to the provision of Article V.  no specific amendments proposed  Art II(a)...(1) such subsidies do not involve new vessel construction or vessel acquisition; (2) such subsidies do not give rise to any increase in marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn; and (3) the improvements are undertaken to comply with crew safety or food safety standards. Exception 3 (implementation of fisheries management measures) no specific amendments proposed Exception 1 (LDCs)  Argentina, Chile, Costa Rica, Egypt & Uruguay Proposal (TN/RL/GEN/173/ Rev.2)  Art III.1 ... subsidies referred to in paragraphs I.a) and I.c) of Article I of this Annex shall not be prohibited... Conditionality no specific amendments proposed  no specific amendments proposed  Art III.6 ...subject to provisions of Articles I.2 (overexploited stocks), IV (unfavorable effects), V (fisheries management), VI (notifications) and VIII (dispute settlement) of this Annex. Para 17 None of the cases mentioned in the latter paragraph (LDCs and subsistence fisheries) should be subject to the specific conditionalities of special and differential treatment (Articles III.2, III.3 and III.4 of the text infra); nevertheless they would be subject to the conditionalities considered in other articles of the Annex (in particular, Articles I.2, IV, V, VI and VIII). In order to facilitate the fulfillment of the latter, special provisions could eventually be considered (for instance, longer periods to implement and notify the programs).  121  Proposal  Prohibition  General Exception  S&DT Exception 2 (non-LDC subsistence) Art III.1 ... subsidies referred to in paragraphs I.a) and I.c) of Article I of this Annex shall not be prohibited... Conditionality Art III.6 ...subject to provisions of Articles I.2 (overexploited stocks), IV (unfavorable effects), V (fisheries management), VI (notifications) and VIII (dispute settlement) of this Annex. Para 17 None of the cases mentioned in the latter paragraph (LDCs and subsistence fisheries) should be subject to the specific conditionalities of special and differential treatment (Articles III.2, III.3 and III.4 of the text infra); nevertheless they would be subject to the conditionalities considered in other articles of the Annex (in particular, Articles I.2, IV, V, VI and VIII). In order to facilitate the fulfillment of the latter, special provisions could eventually be considered (for instance, longer periods to implement and notify the programs). Exception 3 (non-LDCs) Art III.1 ... subsidies referred to in paragraphs I.a) and I.c) of Article I of this Annex shall not be prohibited... Conditionality Art III.2 ...[the Member granting the subsidy] has reliably notified that its domestic fishing capacity 17 is substantially lower18 than that needed to cover the total allowable catch 19 of exploited stocks20 exclusively in the maritime domain21 of the Member. fn 17 For the purpose of this Article, "domestic fishing capacity" means the capacity of fishing vessels flagged by a Member State, owned by companies constituted under the domestic law of that Member State, and operated by crews the members of which are in the majority nationals of that State. fn 18 For the purpose of this Article, "substantially lower" means less than [X%] of the capacity needed to cover the total allowable catch. fn 19 For the purpose of this Article, "total allowable catch" refers to quantitative limits imposed by the Member State on the catch of a given species or a group of species, which must be based on the best scientific information available 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 FAO Code of Conduct for Responsible Fisheries. fn 20 "Exploited stocks" shall mean all fish stocks that are being exploited below levels which are capable of producing a long term maximum sustainable yield (including the ones with no or almost no fishing activities), based on the best scientific evidence available. fn 21 For the purpose of this Article "maritime domain" refers to the areas subject to the sovereignty or jurisdiction of the Member State as established in the United Nations Convention on the Law of the Sea. Art III.3 ...[the Members granting the subsidy] ensure that, even if fully utilized, the resulting fishing capacity22 will not exceed the level of sustainable catch of the exploited stock. fn 22 "Resulting fishing capacity" means the total capacity authorized by the Member for the fishing of a stocks or group of stocks within its jurisdiction, namely the domestic fishing capacity plus the capacity of other vessels authorized by the Member to fish within its jurisdiction. Art III.5 ...[the Members granting the subsidy] include in its notification to the Committee on Subsidies and Countervailing Measures a Register of vessels which shall contain information that will permit to establish ex ante the level of fishing effort in their operations regarding the fishing resource subjects to exploitation. To that end, it will be credited in the register the specific characteristic that properly describes the level of potential fishing effort of the vessel25. Similarly, physic changes or transformations in the vessels registered shall be informed, together with a measure of the variation in fishing effort, as the result of transformations occurred or 26 the incorporation of new vessels to the Register . Besides, the Register will contain a list with all valid fishing  122  Proposal  Prohibition  General Exception  S&DT licenses belonging to vessels benefited by subsidies mentioned in Article III.1. These licenses shall apply solely for the species or group of species defined in accordance with the provisions of this Annex, and may not be used for the fishing of other species. fn 25 For the purpose of this article, "specific characteristic that properly describes the level of potential of fishing effort of the vessel" means structural characteristics of fishing vessels, such as length of the boat, hold capacity, power of the main engine or working surface of the ship. fn 26 For an effective application of this proposal, the disciplines contained in Article VI (Notifications) are fundamental. Art III.6 ...subject to provisions of Articles I.2 (overexploited stocks), IV (unfavorable effects), V (fisheries management), VI (notifications) and VIII (dispute settlement) of this Annex. Exception 1 (LDCs)  Ecuador & Peru Proposal  no specific amendments proposed (TN/RL/GEN/172) Exception 2 (non-LDCs) Art III.2(a) Subsidies referred to in Article I.1(a), (c), (d) and (e) shall not be prohibited... Conditionality  no specific amendments proposed  no specific amendments proposed  Art III.2(a) ...they are granted for the purpose of promoting food security, the development of local communities and poverty reduction and where they relate exclusively to marine wild capture fishing performed within waters under the national jurisdiction of the Member States, provided that all the following conditions are met: (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, micro enterprises or other forms of small producer organizations; (2) the fishery product does not go beyond a small scale trade and is mainly destined for direct human consumption; (3) the vessels are not greater than 15 metres in length overall; (4) the operations are carried out using simple fishing gear, tools and techniques and involve predominantly manual labour; and (5) no destructive fishing practices are used1. Fisheries management measures aimed at ensuring sustainability, such as the measures referred to in Article V, shall be implemented in respect of the fisheries in question within a period of not more than (5) years, adapted as necessary to the particular situation, including by making use of ad hoc and indigenous fisheries management institutions and measures. fn 1 "Destructive fishing practices" refers to those practices recognized as such in Article 8.4.2 of the Code of Conduct for Responsible Fisheries.  Japan Proposal (TN/RL/GEN/171)  Art I.1(a) Subsidies the benefits of which are conferred on the acquisition, construction, repair, renewal, renovation, modernization, or any other significant modification of fishing vessels78 or service vessels79, including subsidies to boat building or shipbuilding facilities for these purposes. fn 78 For the purposes of this  Exception 1 (natural disaster) fn 77 Subsidies referred to in this provision shall not be prohibited when limited to the relief of a particular natural disaster... Conditionality fn 77 ...subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI. Exception 2 (vessel & crew safety) Art II.1(b) ...subsidies on the repair, renewal, renovation, modernization  Exception 1 (LDCs) Art III.1...the prohibition of Article 3.1(c) and Articles I.1 (a), I.1 (b), I.1 (c) and I.1 (d) shall not apply to leastdeveloped country ("LDC") Members. Conditionality Art III.1 Subject to the provisions of Article IV... Exception 2 (non-LDCs) Art III.2(a) Subsidies referred to in Articles I.1 (a), I.1 (c) and I.1 (d) shall not be prohibited... Conditionality Art III.2 Subject to the provisions of Article IV, for developing country Members other than LDC Members, which are listed in Attachment [Y] to this Annex... Art III.2(a) ...subject to the provisions of Article V, where they relate exclusively to marine wild capture fishing  123  Proposal  Prohibition Agreement, the term "fishing vessels" refers to vessels used for marine wild capture fishing and/or on-board processing of the products thereof. fn 79 For the purposes of this Agreement, the term "service vessels" refers to vessels used to tranship the products of marine wild capture fishing from fishing vessels to onshore facilities; and vessels used for at-sea refuelling, provisioning and other servicing of fishing vessels.  General Exception  S&DT  or any other significant modification of existing fishing or service vessels...  performed within the territorial sea and the EEZ of the developing country Member.  Conditionality Art II.1 ... subject to the provisions of Articles IV and V... Art II.1(b)(2) There is no increase in both volume of fish hold and engine power of the fishing or service vessels...(i) for the purpose of improvement of vessel safety and accommodation for crews on-board... Exception 3 (implementation of fisheries management measures) Art II.1(b) ...subsidies on the repair, renewal, renovation, modernization or any other significant modification of existing fishing or service vessels... Conditionality Art II.1 ... subject to the provisions of Articles IV and V... Art II.1(b)(2) There is no increase in both volume of fish hold and engine power of the fishing or service vessels... (ii) as a measure necessary for fisheries management, such as conservation, management and sustainable use of fish stocks including mitigation of incidental catches, reduction of fishing capacities, and protection and preservation of marine environment; or (iii) as a measure necessary to ensure compliance with international agreements of the United Nations and its relevant specialized agencies, and regional fisheries management organizations (“RFMOs”). Exception 4 (acquisition or construction of new vessels) Art II.1(a) ... subsidies on the acquisition or construction of new fishing or service vessels... Conditionality Art II.1 ... subject to the provisions of Articles IV and V... Art II.1(a) ...where the gross tonnage of the new vessels is not more than fifty per cent of the sum of the gross tonnage of the withdrawn vessels in the same fishery category, provided that the withdrawn vessels are scrapped or otherwise permanently and effectively prevented from being used for fishing anywhere in the world. Exception 5 (repair, renewal, renovation, modernization or any other significant modification) Art II.1(b) ...subsidies on the repair, renewal, renovation, modernization or any other significant modification of existing fishing or service vessels... Conditionality Art II.1 ... subject to the provisions of Articles IV and V... Art II.1(b)(1) There is no increase in any of gross tonnage, volume of fish hold and engine power of the fishing or service vessels  Art III.2(b) For the purposes of Article II.2, developing country Members shall not be required to be subject to the provisions of Article V, provided that they shall endeavor to operate, to the extent possible, their fisheries management systems referred to in Article V, taking into consideration the nature of fisheries of that Member and the constraints of relevant fisheries management authority.  124  Proposal  Prohibition  General Exception Exception 6 (small scale fisheries) Art II.2 Notwithstanding the provisions of Articles I.1 (a) and I.1 (c)... subsidies for marine wild capture fishing activities that satisfy all the following conditions shall not be prohibited... Conditionality Art II.2 ...subject to the provisions of Articles IV and V... Art II.2 ...(a) Such activities are conducted by a fishing vessel of not more than [X] gross tonnage [note: [X] is specific numerical value to be decided by the Members], registered to the relevant authority of the Member which entitles the vessel to fly its flag, subject to an appropriate fisheries management system of that Member; (b) Any refrigerator used as a fish hold is not installed in the fishing vessel; (c) The fishing vessel is operated within the territorial sea and the exclusive economic zone (“EEZ”) of the Member, and within the EEZ of another Member through reciprocal fishing access under the bilateral agreement between them, (d) The catches are landed at domestic ports designated by the relevant authority, without calling at any foreign port or transhipping the catches to another vessel at sea.  S&DT  125  Proposal  Prohibition  Morocco Proposal  Art I.1(a) Subsidies the benefits of which are conferred on the acquisition, construction, repair, renewal, renovation, modernization, or any other modification of fishing vessels2 or service vessels3, including subsidies to boat building or shipbuilding facilities for these purposes.  (TN/RL/GEN/170)  General Exception  S&DT Exception 1 (LDCs) no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2 Subsidies referred to in Article I.1 shall not be prohibited... Conditionality Art III.2 ...exclusively to small scale marine wild capture fishing activities performed on an inshore basis (i.e. within the territorial waters of the Member), provided that these activities land their catch fresh 8 and are performed by fishworkers on an individual or family basis or employed by associations, micro enterprises, cooperatives or individual boat owners. Fisheries management measures aimed at ensuring a sustainable level, such as the measures referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures.  fn 2 For the purposes of this Agreement, the term "fishing vessels" refers to vessels used for marine wild capture fishing and/or on-board processing of the products thereof.  fn 8 Fishing activities by vessels that are not equipped with an on board catch freezing and/or refrigeration system. However, the provisioning of vessels with ice shall not be interpreted as constituting a freezing and/or refrigeration system. Exception 3 (non-LDC non-subsistence) no specific amendments proposed  Art III.3(b) Subsidies referred to in Articles I.1(a) and I.1(c) shall not be prohibited... Conditionality  fn 3 For the purposes of this Agreement, the term "service vessels" refers to vessels used to tranship the products of marine wild capture fishing from fishing vessels to onshore facilities; and vessels used for at-sea refuelling, provisioning and other servicing of fishing vessels.  Korea Proposal (TN/RL/GEN/168)  Art I.1(a) Subsidies the benefits of which are conferred on the acquisition, construction, repair, renewal, renovation, modernization, or any other modification of fishing vessels2 or  Art III.3(b) ...where their purpose is to exploit stocks over which the subsidizing Member has (i) jurisdiction, sovereignty or sovereign rights9 or (ii) fishing quotas or any other fishing rights10 established by a regional fisheries management organization or arrangement (RFMO) 11 or applicable international instruments for identified target stocks, provided that those stocks are subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level as determined by their maximum sustainable yield. fn 9 For the purpose of this article, "jurisdiction, sovereignty or sovereign rights" shall mean the exclusive rights a Member has under the international law with respect to the exploitation of natural resources in areas such as the Territorial Sea and the Exclusive Economic Zone. fn 10 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. fn 11 For the purpose of this Annex, RFMOs are international organizations or arrangements which: (a) carries out management activities over specific fisheries in a determined area; (b) are open to new entrants; (c) publish a list of all conservation measures in force; (d) have specific procedures to deal with illegal, unreported and unregulated fishing; (e) and have a decision making process in accordance with an agreement, convention or procedure. Exception 1 (natural disaster) Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives by supporting ...(5) the relief of a particular natural disaster... Conditionality  no specific amendments proposed  126  Proposal  Prohibition  General Exception  service vessels3, including subsidies to boat building or shipbuilding facilities4 for these purposes.  Art III ...subject to the provision of Article V...  fn 2 For the purposes of this Agreement, the term "fishing vessels" means vessels used for marine wild capture fishing and/or on-board processing of the products thereof. fn 3 For the purposes of this Agreement, the term "service vessels" means vessels used to tranship the products of marine wild capture fishing from fishing vessels to onshore facilities; and vessels used for at-sea refuelling, provisioning and other servicing of fishing vessels.  Art III(c)(5) ...they are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a sciencebased assessment of the post-disaster status of the fishery. Exception 2 (vessel and crew safety) Art III(a) Subsidies exclusively for improving fishing or service vessel and crew safety... Conditionality Art III ...subject to the provision of Article V... Art III(a) ...(1) such subsidies do not involve new vessel construction or vessel acquisition; (2) such subsidies do not give rise to any increase in marine wild capture fishing capacity12 of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn; and (3) the improvements are undertaken to comply with safety standards. fn 12 For purposes of this Agreement, the term "fishing capacity" means the ability to harvest fish, as determined on the basis of generally accepted methods for assessing such ability, including standards and guidance developed by the UN Food and Agriculture Organization and relevant international organizations. Exception 3 (implementation of fisheries management measures) Art III(b) Subsidies exclusively for facilitating the achievement of the objectives of this Annex... Conditionality  fn 4 For the purpose of this Agreement, the term "boat building or shipbuilding facilities" means facilities for fishing vessels and/or service vessels as defined in footnotes 2 and 3 above.  Art III ...subject to the provision of Article V... Art III(b) ...(1) the adoption of gear for selective fishing techniques 13; (2) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing; (3) the adoption of measures to ensure compliance with fisheries management regimes aimed at sustainable use and conservation (e.g., installing devices for Vessel Monitoring Systems, adopting electronic catch reports, or deploying observers); or (4) the adoption of measures to sustain the livelihood of fishworkers on the condition that they suspend the fishing activity if the duration of the measures is confined to the period of actual suspension; provided that the subsidies do not give rise to any increase in the marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn. fn 13 For the purpose of this Agreement, the term "selective fishing techniques" means gear modifications or methods of fishing that reduce the mortality or incidental take of non-target fisheries or other  S&DT  127  Proposal  Prohibition  General Exception marine species, or otherwise reduce negative impact on ecosystems. Exception 4 (subsistence) Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives... Conditionality Art III ...subject to the provision of Article V... Art III(c)(3) ...maintenance of livelihood of impoverished fishworkers whose economic sustenance will be threatened in the absence of governmental programs, provided that: (i) the fishing activities take place on an inshore basis or within the EEZ of the Member providing the subsidies or within the EEZ of an adjacent Member who has provided access rights to fishworkers of the former Member regarding the fishery in question; (ii) the fishing activities cover most of the household living expenses of fishworkers and constitute a predominant source of income for such household; and (iii) the amount of the annual total catch of a Member claimed to fall under this sub-paragraph does not exceed [X]% of the annual total catch of the Member arising from the whole fishing activity in the base year.  S&DT  128  Proposal  Prohibition  Australia Proposal  Art I.1(a) Subsidies for the acquisition, construction, repair, renewal, renovation, modernization, or any other modification of fishing vessels3 or service vessels4, including subsidies to boat building or shipbuilding facilities for these purposes.  (TN/RL/GEN/167)  General Exception  fn 3 For the purposes of this Agreement, the term "fishing vessels" refers to vessels used for marine wild capture fishing and/or on-board processing of the products thereof.  no specific amendments proposed  S&DT  no specific amendments proposed  fn 4 For the purposes of this Agreement, the term "service vessels" refers to vessels used to tranship the products of marine wild capture fishing from fishing vessels to onshore facilities; and vessels used for at-sea refuelling, provisioning and other servicing of fishing vessels. United States Proposal  Exception 1 (natural disaster)  (TN/RL/GEN/165)  no specific amendments proposed Exception 2 (vessel and crew safety) no specific amendments proposed  Art II(a) A subsidy exclusively for improving the safety of a fishing or service vessel or its crew, such as a subsidy for life boats, other life saving equipment or safety training Conditionality Art II Subject to compliance with Article V... Art II(a) ...(1) the subsidy is not used for new vessel construction or  no specific amendments proposed  129  Proposal  Prohibition  General Exception  S&DT  vessel acquisition; (2) the subsidy does not result in an increase in fishing capacity4 of any fishing or service vessel; (3) the subsidy does not result in the continuation in operation of any fishing or service vessel where such continued operation otherwise is inconsistent with generally accepted commercial practices within the relevant industry; and (4) the subsidy is used to further compliance with safety requirements imposed by law. fn 4 For purposes of this Annex, the term "capacity" means the ability to harvest fish, as determined on the basis of widely accepted methods for assessing such ability, including standards and guidance developed by the UN Food and Agriculture Organization (FAO) and relevant international fisheries organizations. Exception 3 (implementation of fisheries management measures) Art II(b) A subsidy exclusively for one of the following purposes... Conditionality Art II Subject to compliance with Article V... Art II(b) ...(1) adopting gear for selective fishing techniques 5; (2) reducing the impact of fishing activity on the marine habitat, such as incentives to avoid bycatch or fishing that harms vulnerable marine ecosystems; or (3) covering expenses for actions taken towards complying with a fishery conservation and management regime, such as the costs of equipment for providing electronic catch reports, vessel monitoring systems, and observers; provided that the subsidy results in neither an increase in the fishing capacity of any fishing or service vessel, nor the continuation in operation of any such vessel where such continued operation otherwise is inconsistent with generally accepted commercial practices within the relevant industry. fn 5 The term "selective fishing techniques" means gear modifications or methods of fishing that reduce the mortality or incidental take of non-target fish or other marine species, or otherwise reduce harm to ecosystems. Exception 1 (LDCs)  Brazil, China, India & Mexico Proposal  no specific amendments proposed (TN/TL/GEN/163) Exception 2 (non-LDC subsistence) Art III.2 ...the subsidies referred to in Article I.1shall not be prohibited... no specific amendments proposed  no specific amendments proposed  Conditionality Art III.2 ...the benefits of those subsidies are conferred 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 referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC, non-subsistence)  130  Proposal  Prohibition  General Exception  S&DT Art III.3(b)(2) Subsidies referred to in Articles I.1(a) and I.1(c) shall not be prohibited... Conditionality Art III.3 ...subject to the provisions of Article V... Art III.3(b)(2) ...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 established by a regional fisheries management organization or arrangement (RFMO) 3 or applicable international instruments for identified target stocks, provided that those stocks are subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level as determined by their maximum sustainable yield. fn 1 For the purpose of this article, "jurisdiction, sovereignty or sovereign rights" shall mean the exclusive rights a Member has under the international law with respect to the exploitation of natural resources in areas such as the Territorial Sea and the Exclusive Economic Zone. fn 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. fn 3 If the Member in question is not a member of the 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 arrangements which: (a) carries out management 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 deal with illegal, unreported and unregulated fishing; (d) and have a decision-making process in accordance with an agreement, convention or procedure.  131  Proposal  Prohibition  General Exception  S&DT  SVEs Proposal  Exception 1 (LDCs)  (TN/RL/GEN/162)  no specific amendments proposed Exception 2 (non-LDC subsistence) no specific amendments proposed Exception 3 (non-LDC small vessel) Art III.2(b)(2)(i) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2)(i) ...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, Exception 4 (non-LDC with % share in world NAMA ≥0.1% and global marine wild capture ≥1%) Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... no specific amendments proposed  no specific amendments proposed  Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2)(ii) ...those developing country Members whose percentage share in world NAMA trade is not more than 0.1 per cent and whose percentage share of global marine wild capture is not more than 1 per cent. Exception 5 (non-LDC other vessels) Art III.2(b)(3) ...subsidies referred to in Article I.1(a) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(3) ...(i) the vessels are 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 have been subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level; and (iii) that assessment has been subject to peer review in the relevant body of the United Nations Food and Agriculture Organization ("FAO").4 fn 4 If the Member in question is not a member of the FAO, the peer review shall take place in another recognized and competent international organization.  Korea & Chinese Taipei Proposal (TN/RL/GEN/159)  Art I.1(a) Subsidies the benefits of which are conferred on the acquisition, construction, repair, renewal, renovation, modernization, or any other modification of fishing vessels4 or service vessels5, including subsidies to boat building or shipbuilding facilities  Exception 1 (natural disaster) Art II(e) Nothin in Article I shall prevent subsidies on natural disaster relief... Conditionality no specific amendments proposed Art II(e) ...limited to the relief of a particular natural disaster, provided that the subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-  132  Proposal  Prohibition  General Exception  for these purposes.  based assessment of the post-disaster status of the fishery.  fn 4 For the purposes of this Agreement, the term "fishing vessels" refers to vessels used for marine wild capture fishing and/or on-board processing of the products thereof. fn 5 For the purposes of this Agreement, the term "service vessels" refers to vessels used to tranship the products of marine wild capture fishing from fishing vessels to onshore facilities; and vessels used for at-sea refuelling, provisioning and other servicing of fishing vessels. Conditionality for prohibition Art I.1 ...where a subsidizing Member fails to properly maintain all the elements in Article V in its fisheries management system or a subsidizing Member fails to demonstrate, for example, through the peer review stipulated in Article V, that its fishery management system is likely to prevent over-fishing or overcapacity in light of the objective, design, and intended function of the system... Art I.3 For the purpose of paragraph  Exception 2 (vessel and crew safety) Art II(a) For the purposes of article I.1(a), subsidies exclusively for improving fishing or service vessel and crew safety shall not be prohibited... Conditionality Art II(a) ... (1) such subsidies do not involve new vessel construction or vessel acquisition; (2) such subsidies do not give rise to any increase in marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn; and (3) the improvements are undertaken to comply with safety standards. Exception 3 (implementation of fisheries management measures) Art II(b) For the purposes of Articles I.1(a) and I.1(c) the following subsidies shall not be prohibited... Conditionality Art II(b) ...(1) the adoption of gear for selective fishing techniques; (2) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing; (3) compliance with fisheries management regimes aimed at sustainable use and conservation (e.g., devices for Vessel Monitoring Systems); provided that the subsidies do not give rise to any increase in the marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn.  S&DT  133  Proposal  Prohibition  General Exception  S&DT  1, a subsidizing Member shall, in its notification of subsidies referred to in that paragraph made in accordance with Article 25, or in the information it supplies in accordance with Article V, include science-based assessments that demonstrate possible impacts of those subsides on marine fish stocks and/or the preventive effects of its fisheries management system on them. Canada Proposal  Exception (de minimis)  (TN/RL/GEN/156/Rev.1)  Art II(f) Members may provide subsidies that are used exclusively in support of fisheries conducted within waters subject to its jurisdiction Conditionality Art II ...subject to the provisions of Article V... no specific amendments proposed  Art II(f) ...(i) the annual amount of subsidies does not exceed X% of the average annual landed value of fish harvested in these waters for the three preceding years for which data is available, or (ii) for developing country Members accounting for less than 0.5% of the average annual global fish catch over the three preceding years for which data is available, the annual amount of subsidies does not exceed X% + Y%, or $US xxx xxx, whichever is greater.  no specific amendments to other exceptions proposed  no specific amendments proposed  134  Proposal  Prohibition  General Exception  S&DT  India, Indonesia & China Proposal  Art I.1(a) Subsidies the benefits of which are conferred on the acquisition, construction, repair, renewal, renovation, modernization, or any other modification of fishing vessels8 or service vessels9, including subsidies to boat building or shipbuilding facilities for these purposes.  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/GEN/155/Rev.1)  fn 8 For the purposes of this Agreement, the term "fishing vessels" refers to vessels used for marine wild capture fishing and/or on-board processing of the products thereof. fn 9 For the purposes of this Agreement, the term "service vessels" refers to vessels used to tranship the products of marine wild capture fishing from fishing vessels to onshore facilities; and vessels used for at-sea refuelling, provisioning and other servicing of fishing vessels.  fb7 Subsidies referred to in this provision shall not be prohibited... Conditionality fb7 ...when limited to the relief of a particular natural disaster, provided that the subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI.  no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited... Conditionality Art III.2(a) ...relate exclusively to marine wild capture fishing performed within the territorial waters of the Member without deploying any of the internationally recognized destructive fishing methods, provided that the activities are carried out by fish workers, on an individual basis or organized in associations or on employment basis.  Exception 2 (vessel and crew safety)  It is desirable that adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures.  Art II(a) For the purposes of Article I.1(a), subsidies exclusively for improving fishing or service vessel and crew safety shall not be prohibited...  Exception 3 (non-LDC small vessels)  Conditionality Art II ... subject to the provision of Article V... Art II(a) ...(1) such subsidies do not involve new vessel construction or vessel acquisition; (2) such subsidies do not give rise to any increase in marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn; and (3) the improvements are undertaken to comply with safety standards. Exception 3 (implementation of fisheries management measures) Art II(b) For the purposes of Articles I.1(a) and I.1(c) the following subsidies shall not be prohibited... Conditionality Art II ... subject to the provision of Article V... Art II(b) ... subsidies exclusively for: (1) the adoption of gear for selective fishing techniques; (2) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing; (3) compliance with fisheries management regimes aimed at sustainable use and conservation (e.g., devices for Vessel Monitoring Systems); provided that the subsidies do not give rise to any increase in the marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn.  Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1 (c )... Conditionality Art III.2(b)(2) ...(i) they are used exclusively for marine wild capture fishing employing decked vessels not greater than 24 meters or 82 feet in length overall, or undecked vessels of any length; and (ii) adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures. Exception 4 (non-LDC other vessels) Art III.2(b)(3) ...subsidies referred to in Article I.1(a) and Article I.1(c) Conditionality Art III.2(b)(3) ...(i) the vessels are used for marine wild capture fishing activities of such Members in respect of particular, identified target stocks within their Exclusive Economic Zones ("EEZ"); (ii) the vessels with fishing quotas or any other rights established by a regional fisheries management organization (RFMO) or a regional fisheries management arrangement; (iii) the vessels for fishing activities in accordance with access arrangements. (iv) those stocks have been subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level.  135  II. Transfer of Fishing or Service Vessels to Third Country Proposal  Prohibition  General Exception  S&DT  2007 Chair Text  Art I.1(b) Subsidies the benefits of which are conferred on transfer of fishing or service vessels to third countries, including through the creation of joint enterprises with third country partners.  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/W/213)  fn 77 Subsidies referred to in this provision shall not be prohibited when limited to the relief of a particular natural disaster...  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence)  Conditionality fn 77 ...subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a sciencebased assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI.  Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited where they relate exclusively to marine wild capture fishing performed on an inshore basis (i.e., within the territorial waters of the Member) with non-mechanized net-retrieval... Conditionality Art III.2(a) ...(1) the activities are carried out on their own behalf by fishworkers 82, on an individual basis which may include family members, or organized in associations; (2) the catch is consumed principally by the fishworkers 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, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 82 For the purpose of this Agreement, the term "fishworker" shall refer to an individual employed in marine wild capture fishing and/or directly associated activities.  Korea Proposal  Exception 1 (de minimis)  Exception 1 (LDCs)  (TN/RL/GEN/178)  Para 7 ...the introduction of the small-scale de minimis exemption in the General Exceptions provision...  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (de minimis)  no specific amendments proposed  Argentina, Chile, Costa Rica, Egypt & Uruguay Proposal (TN/RL/GEN/173/Rev.2)  no specific amendments proposed  no specific amendments to other exceptions proposed  no specific amendments proposed  Para 11 "In Korea's view, the small scale de minimis provision to be introduced in the general exceptions category should be able to address these concerns of developing Members. If Members agree to provide the developing Members (including those regarded as major fishing powers) with a bigger number (i.e. X+Y) than the one for the developed Members (i.e. X) with respect to the de minimis carve out, a significant portion of the concerns and political sensitivities of the developing Members (including those regarded as major fishing powers) should be addressed by the de minimis provision. At the same time, Members could consider providing a more comfort zone (i.e. X+Y+Z) for the SVEs taking into account their peculiar economic vulnerability."  no S&DT exemptions on the third country transfer of vessels proposed  136  Proposal  Prohibition  Japan Proposal  Art I.1(b) Subsidies on transfer of fishing or service vessels to third countries, including through the creation of joint enterprises with third country partners.  (TN/RL/GEN/171)  General Exception  S&DT Exception 1 (LDCs) Art III.1...the prohibition of Article 3.1(c) and Articles I.1 (a), I.1 (b), I.1 (c) and I.1 (d) shall not apply to least-developed country ("LDC") Members. Conditionality Art III.1 Subject to the provisions of Article IV... Exception 2 (non-LDCs)  no general exemption on the third country transfer of vessels proposed  Art III.3 ...subsidies for transfer of fishing or service vessels to developing country Members shall not be prohibited... Conditionality Art III.3 ...subject to the provisions of Articles IV and V... Art III.3 ...(a) both transferring Member and receiving Member which is a developing country Member are members of the same RFMO to be responsible for the management of fish stocks of the transferred vessels; (b) appropriate measures for conservation, management and sustainable use of fish stocks, including measures to prevent overcapacity and overfishing, are implemented by the receiving Member under the framework of the RFMO; and (c) arrangements necessary for such transfer, including the arrangement to establish joint ventures, are made public.  Morocco Proposal (TN/RL/GEN/170)  Exception 1 (LDCs)  Art I.1(b) Subsidies the benefits of which are conferred on transfer of fishing or service vessels to third countries, including through the creation of joint enterprises with third country partners.  no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2 Subsidies referred to in Article I.1 Conditionality  no specific amendments proposed  Art III.2 ...exclusively to small scale marine wild capture fishing activities performed on an inshore basis (i.e. within the territorial waters of the Member), provided that these activities land their catch fresh 8 and are performed by fishworkers on an individual or family basis or employed by associations, micro enterprises, cooperatives or individual boat owners. Fisheries management measures aimed at ensuring a sustainable level, such as the measures referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 8 Fishing activities by vessels that are not equipped with an on board catch freezing and/or refrigeration system. However, the provisioning of vessels with ice shall not be interpreted as constituting a freezing and/or refrigeration system.  Korea Proposal (TN/RL/GEN/168)  Art I.1(b) Subsidies the benefits of which are conferred on transfer of fishing or service vessels to third countries, including through the creation of joint enterprises with third country partners.  no specific amendments proposed  no specific amendments proposed  137  Proposal  Prohibition  Australia Proposal  Art I.1(b) Subsidies on transfer of fishing or service vessels to third countries, including through the creation of joint enterprises with third country partners.  (TN/RL/GEN/167)  General Exception  S&DT  no specific amendments proposed  no specific amendments proposed  Exception 1 (LDCs)  Brazil, China, India & Mexico Proposal  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members.  (TN/TL/GEN/163)  Exception 2 (non-LDC subsistence) no specific amendments proposed  Art III.2 ...the subsidies referred to in Article I.1 shall not be prohibited... no specific amendments proposed  Conditionality Art III.2 ...the benefits of those subsidies are conferred 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 referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures.  138  Proposal  Prohibition  General Exception  Korea & Chinese Taipei Proposal  Art I.1(a) Subsidies the benefits of which are conferred on transfer of fishing or service vessels to third countries, including through the creation of joint enterprises with third country partners.  Exception 1 (natural disaster)  (TN/RL/GEN/159)  Conditionality for prohibition Art I.1 ...where a subsidizing Member fails to properly maintain all the elements in Article V in its fisheries management system or a subsidizing Member fails to demonstrate, for example, through the peer review stipulated in Article V, that its fishery management system is likely to prevent over-fishing or overcapacity in light of the objective, design, and intended function of the system... Art I.3 For the purpose of paragraph 1, a subsidizing Member shall, in its notification of subsidies referred to in that paragraph made in accordance with Article 25, or in the information it supplies in accordance with Article V, include science-based assessments that demonstrate possible impacts of those subsides on marine fish stocks and/or the preventive effects of its fisheries management system on them.  S&DT  Art II(e) Nothin in Article I shall prevent subsidies on natural disaster relief... Conditionality Art II(e) ...limited to the relief of a particular natural disaster, provided that the subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the postdisaster status of the fishery.  no specific amendments proposed  139  Proposal  Prohibition  General Exception  S&DT  Canada Proposal  Exception (de minimis)  (TN/RL/GEN/156/Rev.1)  Art II(f) Members may provide subsidies that are used exclusively in support of fisheries conducted within waters subject to its jurisdiction Conditionality Art II ...subject to the provisions of Article V... no specific amendments proposed  Art II(f) ...(i) the annual amount of subsidies does not exceed X% of the average annual landed value of fish harvested in these waters for the three preceding years for which data is available, or (ii) for developing country Members accounting for less than 0.5% of the average annual global fish catch over the three preceding years for which data is available, the annual amount of subsidies does not exceed X% + Y%, or $US xxx xxx, whichever is greater.  no specific amendments proposed  no specific amendments to other exceptions proposed India, Indonesia & China Proposal (TN/RL/GEN/155/Rev.1)  Art I.1(b) Subsidies the benefits of which are conferred on transfer of fishing or service vessels to third countries, including through the creation of joint enterprises with third country partners.  Exception 1 (LDCs) no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited... no specific amendments proposed  Conditionality Art III.2(a) ...relate exclusively to marine wild capture fishing performed within the territorial waters of the Member without deploying any of the internationally recognized destructive fishing methods, provided that the activities are carried out by fish workers, on an individual basis or organized in associations or on employment basis. It is desirable that adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures.  140  III. Operating Costs Proposal  Prohibition  General Exception  S&DT  2007 Chair Text  Art I.1(c) Subsidies the benefits of which are conferred on operating costs of fishing or service vessels (including licence fees or similar charges, fuel, ice, bait, personnel, social charges, insurance, gear, and at-sea support); or of landing, handling or inor near-port processing activities for products of marine wild capture fishing; or subsidies to cover operating losses of such vessels or activities.  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/W/213)  fn 77 Subsidies referred to in this provision shall not be prohibited when limited to the relief of a particular natural disaster... Conditionality fn 77 ...subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a sciencebased assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI. Exception 2 (vessel & crew safety) Art II(a) For the purposes of Article I.1(a), subsidies exclusively for improving fishing or service vessel and crew safety shall not be prohibited...  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited where they relate exclusively to marine wild capture fishing performed on an inshore basis (i.e., within the territorial waters of the Member) with non-mechanized net-retrieval... Conditionality Art III.2(a) ...(1) the activities are carried out on their own behalf by fishworkers 82, on an individual basis which may include family members, or organized in associations; (2) the catch is consumed principally by the fishworkers 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, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures.  Conditionality Art II ... subject to the provision of Article V.  fn 82 For the purpose of this Agreement, the term "fishworker" shall refer to an individual employed in marine wild capture fishing and/or directly associated activities.  Art II(a)...(1) such subsidies do not involve new vessel construction or vessel acquisition; (2) such subsidies do not give rise to any increase in marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn; and (3) the improvements are undertaken to comply with safety standards.  Exception 3 (non-LDC small vessels)  Exception 3 (implementation of fisheries management measures)  Art III.2(b)(2) ...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  Art II(b) For the purposes of Articles I.1(a) and I.1(c) the following subsidies shall not be prohibited: subsidies exclusively for: (1) the adoption of gear for selective fishing techniques; (2) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing; (3) compliance with fisheries management regimes aimed at sustainable use and conservation (e.g., devices for Vessel Monitoring Systems); Conditionality Art II ... subject to the provision of Article V. Art II(b) ...the subsidies do not give rise to any increase in the marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn.  Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V:  141  Proposal  General Exception  S&DT  Korea Proposal  Prohibition  Exception 1 (de minimis)  Exception 1 (LDCs)  (TN/RL/GEN/178)  Para 7 ...the introduction of the small-scale de minimis exemption in the General Exceptions provision...  no specific amendments proposed Exception 2 (de minimis)  no specific amendments proposed  no specific amendments to other exceptions proposed  Para 11 "In Korea's view, the small scale de minimis provision to be introduced in the general exceptions category should be able to address these concerns of developing Members. If Members agree to provide the developing Members (including those regarded as major fishing powers) with a bigger number (i.e. X+Y) than the one for the developed Members (i.e. X) with respect to the de minimis carve out, a significant portion of the concerns and political sensitivities of the developing Members (including those regarded as major fishing powers) should be addressed by the de minimis provision. At the same time, Members could consider providing a more comfort zone (i.e. X+Y+Z) for the SVEs taking into account their peculiar economic vulnerability."  Kenya ACP Proposal  Exception 1 (LDCs)  (TN/RL/GEN/176)  no specific amendments proposed Exception 2 (non-LDC subsistence) no specific amendments proposed Exception 3 (non-LDC small vessel) Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... Conditionality no specific amendments proposed  no specific amendments proposed  Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2)(i) ...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, Exception 4 (non-LDC with % share of global marine wild capture ≥0.60%) Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2)(ii) ...those developing country Members whose percentage share of global marine wild capture is not more than 0.60 per cent. Exception 1 (LDCs)  Argentina, Chile, Costa Rica, Egypt & Uruguay Proposal  Art III.1 ... subsidies referred to in paragraphs I.a) and I.c) of Article I of this Annex shall not be prohibited...  (TN/RL/GEN/173/Rev.2) Conditionality no specific amendments proposed  no specific amendments proposed  Art III.6 ...subject to provisions of Articles I.2 (overexploited stocks), IV (unfavorable effects), V (fisheries management), VI (notifications) and VIII (dispute settlement) of this Annex. Para 17 None of the cases mentioned in the latter paragraph (LDCs and subsistence fisheries) should be subject to the specific conditionalities of special and differential treatment (Articles III.2, III.3 and III.4 of the text infra); nevertheless they would be subject to the conditionalities considered in other articles of the Annex (in particular, Articles I.2, IV, V, VI and VIII). In order to facilitate the fulfillment of the latter, special provisions could eventually be considered (for instance, longer periods to implement and notify  142  Proposal  Prohibition  General Exception  S&DT the programs). Exception 2 (non-LDC subsistence) Art III.1 ... subsidies referred to in paragraphs I.a) and I.c) of Article I of this Annex shall not be prohibited... Conditionality Art III.6 ...subject to provisions of Articles I.2 (overexploited stocks), IV (unfavorable effects), V (fisheries management), VI (notifications) and VIII (dispute settlement) of this Annex. Para 17 None of the cases mentioned in the latter paragraph (LDCs and subsistence fisheries) should be subject to the specific conditionalities of special and differential treatment (Articles III.2, III.3 and III.4 of the text infra); nevertheless they would be subject to the conditionalities considered in other articles of the Annex (in particular, Articles I.2, IV, V, VI and VIII). In order to facilitate the fulfillment of the latter, special provisions could eventually be considered (for instance, longer periods to implement and notify the programs). Exception 3 (non-LDCs) Art III.1 ... subsidies referred to in paragraphs I.a) and I.c) of Article I of this Annex shall not be prohibited... Conditionality Art III.2 ...[the Member granting the subsidy] has reliably notified that its domestic fishing capacity 17 is substantially lower18 than that needed to cover the total allowable catch 19 of exploited stocks20 21 exclusively in the maritime domain of the Member. fn 17 For the purpose of this Article, "domestic fishing capacity" means the capacity of fishing vessels flagged by a Member State, owned by companies constituted under the domestic law of that Member State, and operated by crews the members of which are in the majority nationals of that State. fn 18 For the purpose of this Article, "substantially lower" means less than [X%] of the capacity needed to cover the total allowable catch. fn 19 For the purpose of this Article, "total allowable catch" refers to quantitative limits imposed by the Member State on the catch of a given species or a group of species, which must be based on the best scientific information available 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 FAO Code of Conduct for Responsible Fisheries. fn 20 "Exploited stocks" shall mean all fish stocks that are being exploited below levels which are capable of producing a long term maximum sustainable yield (including the ones with no or almost no fishing activities), based on the best scientific evidence available. fn 21 For the purpose of this Article "maritime domain" refers to the areas subject to the sovereignty or jurisdiction of the Member State as established in the United Nations Convention on the Law of the Sea. Art III.3 ...[the Members granting the subsidy] ensure that, even if fully utilized, the resulting fishing capacity22 will not exceed the level of sustainable catch of the exploited stock. fn 22 "Resulting fishing capacity" means the total capacity authorized by the Member for the fishing of a stocks or group of stocks within its jurisdiction, namely the domestic fishing capacity plus the capacity of other vessels authorized by the Member to fish within its jurisdiction. Art III.5 ...[the Members granting the subsidy] include in its notification to the Committee on Subsidies and Countervailing Measures a Register of vessels which shall contain information that will permit to  143  Proposal  Prohibition  General Exception  S&DT establish ex ante the level of fishing effort in their operations regarding the fishing resource subjects to exploitation. To that end, it will be credited in the register the specific characteristic that properly describes the level of potential fishing effort of the vessel 25. Similarly, physic changes or transformations in the vessels registered shall be informed, together with a measure of the variation in fishing effort, as the result of transformations occurred or the incorporation of new vessels to the Register 26. Besides, the Register will contain a list with all valid fishing licenses belonging to vessels benefited by subsidies mentioned in Article III.1. These licenses shall apply solely for the species or group of species defined in accordance with the provisions of this Annex, and may not be used for the fishing of other species. fn 25 For the purpose of this article, "specific characteristic that properly describes the level of potential of fishing effort of the vessel" means structural characteristics of fishing vessels, such as length of the boat, hold capacity, power of the main engine or working surface of the ship. fn 26 For an effective application of this proposal, the disciplines contained in Article VI (Notifications) are fundamental. Art III.6 ...subject to provisions of Articles I.2 (overexploited stocks), IV (unfavorable effects), V (fisheries management), VI (notifications) and VIII (dispute settlement) of this Annex. Exception 1 (LDCs)  Ecuador & Peru Proposal  no specific amendments proposed (TN/RL/GEN/172) Exception 2 (non-LDCs) Art III.2(a) Subsidies referred to in Article I.1(a), (c), (d) and (e) shall not be prohibited... Conditionality  no specific amendments proposed  no specific amendments proposed  Art III.2(a) ...they are granted for the purpose of promoting food security, the development of local communities and poverty reduction and where they relate exclusively to marine wild capture fishing performed within waters under the national jurisdiction of the Member States, provided that all the following conditions are met: (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, micro enterprises or other forms of small producer organizations; (2) the fishery product does not go beyond a small scale trade and is mainly destined for direct human consumption; (3) the vessels are not greater than 15 metres in length overall; (4) the operations are carried out using simple fishing gear, tools and techniques and involve predominantly manual labour; and (5) no destructive fishing practices are used 1. Fisheries management measures aimed at ensuring sustainability, such as the measures referred to in Article V, shall be implemented in respect of the fisheries in question within a period of not more than (5) years, adapted as necessary to the particular situation, including by making use of ad hoc and indigenous fisheries management institutions and measures. fn 1 "Destructive fishing practices" refers to those practices recognized as such in Article 8.4.2 of the Code of Conduct for Responsible Fisheries.  144  Proposal  Prohibition  General Exception  S&DT  Japan Proposal  Art I.1(c) Subsidies on direct operating costs of fishing or service vessels (e.g., fuel, ice, bait and gear).  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/GEN/171)  fn 77 Subsidies referred to in this provision shall not be prohibited when limited to the relief of a particular natural disaster... Conditionality fn 77 ...subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a sciencebased assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI. Exception 2 (implementation of fisheries management measures) Art II.3 Notwithstanding the provisions of Article I.1 (c)...following subsidies shall not be prohibited... Conditionality Art II.3 ...subject to the provisions of Articles IV and V... Art II.3 ...(b) supports for fishworkers, as an integral part of the fisheries management of a Member, such as conservation, management and sustainable use of fish stocks including mitigation of incidental catches, reduction of fishing capacities, and protection and preservation of marine environment; (c) measures necessary to ensure compliance with international agreements of the United Nations and its relevant specialized agencies, and RFMOs... Exception 3 (small scale fisheries) Art II.2 Notwithstanding the provisions of Articles I.1 (a) and I.1 (c)... subsidies for marine wild capture fishing activities that satisfy all the following conditions shall not be prohibited... Conditionality Art II.2 ...subject to the provisions of Articles IV and V... Art II.2 ...(a) Such activities are conducted by a fishing vessel of not more than [X] gross tonnage [note: [X] is specific numerical value to be decided by the Members], registered to the relevant authority of the Member which entitles the vessel to fly its flag, subject to an appropriate fisheries management system of that Member; (b) Any refrigerator used as a fish hold is not installed in the fishing vessel; (c) The fishing vessel is operated within the territorial sea and the exclusive economic zone (“EEZ”) of the Member, and within the EEZ of another Member through reciprocal fishing access under the bilateral agreement between them, (d) The catches are landed at domestic ports designated by the relevant authority, without calling at any foreign port or transhipping the catches to another vessel at sea. Exception 4 (socioeconomic welfare of fishers) Art II.3 Notwithstanding the provisions of Article I.1 (c)... Conditionality Art II.3 ...subject to the provisions of Articles IV and V...  145  Art II.3(a) measures to be implemented, in accordance with the national legislation, programmes or plans of a Member, to mitigate socio-economic damages which are not attributable to fishworkers , such as natural disaster and unexpected change of economic situation Art II.3(d) measures necessary to ensure the social welfare of fishworkers.  Art III.1...the prohibition of Article 3.1(c) and Articles I.1 (a), I.1 (b), I.1 (c) and I.1 (d) shall not apply to least-developed country ("LDC") Members. Conditionality Art III.1 Subject to the provisions of Article IV... Exception 2 (non-LDCs) Art III.2(a) Subsidies referred to in Articles I.1 (a), I.1 (c) and I.1 (d) shall not be prohibited... Conditionality Art III.2 Subject to the provisions of Article IV, for developing country Members other than LDC Members, which are listed in Attachment [Y] to this Annex... Art III.2(a) ...subject to the provisions of Article V, where they relate exclusively to marine wild capture fishing performed within the territorial sea and the EEZ of the developing country Member. Art III.2(b) For the purposes of Article II.2, developing country Members shall not be required to be subject to the provisions of Article V, provided that they shall endeavor to operate, to the extent possible, their fisheries management systems referred to in Article V, taking into consideration the nature of fisheries of that Member and the constraints of relevant fisheries management authority.  Proposal  Prohibition  Morocco Proposal  Art I.1(c) Subsidies the benefits of which are conferred on operating costs of fishing or service vessels (including licence fees or similar charges, fuel, 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.  (TN/RL/GEN/170)  General Exception  S&DT Exception 1 (LDCs) no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2 Subsidies referred to in Article I.1 shall not be prohibited... Conditionality Art III.2 ...exclusively to small scale marine wild capture fishing activities performed on an inshore basis (i.e. within the territorial waters of the Member), provided that these activities land their catch fresh 8 and are performed by fishworkers on an individual or family basis or employed by associations, micro enterprises, cooperatives or individual boat owners. Fisheries management measures aimed at ensuring a sustainable level, such as the measures referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 8 Fishing activities by vessels that are not equipped with an on board catch freezing and/or refrigeration system. However, the provisioning of vessels with ice shall not be interpreted as constituting a freezing and/or refrigeration system. Exception 3 (non-LDC non-subsistence) no specific amendments proposed  Art III.3(b) Subsidies referred to in Articles I.1(a) and I.1(c) shall not be prohibited... Conditionality Art III.3(b) ...where their purpose is to exploit stocks over which the subsidizing Member has (i) jurisdiction, sovereignty or sovereign rights9 or (ii) fishing quotas or any other fishing rights10 established by a regional fisheries management organization or arrangement (RFMO) 11 or applicable international instruments for identified target stocks, provided that those stocks are subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level as determined by their maximum sustainable yield. fn 9 For the purpose of this article, "jurisdiction, sovereignty or sovereign rights" shall mean the exclusive rights a Member has under the international law with respect to the exploitation of natural resources in areas such as the Territorial Sea and the Exclusive Economic Zone. fn 10 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. fn 11 For the purpose of this Annex, RFMOs are international organizations or arrangements which: (a) carries out management activities over specific fisheries in a determined area; (b) are open to new entrants; (c) publish a list of all conservation measures in force; (d) have specific procedures to deal with illegal, unreported and unregulated fishing; (e) and have a decision making process in accordance with an agreement, convention or procedure.  Korea Proposal (TN/RL/GEN/168)  Art II.1(a) Subsidies the benefits of which are conferred on operating costs of fishing or service vessels (including licence fees or similar  Exception 1 (natural disaster) Art III(c)(5) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives by supporting ...(5) the relief of a particular natural disaster... Conditionality  no specific amendments proposed  146  Proposal  Prohibition  General Exception  charges, fuel, ice, bait, personnel, social charges, insurance, gear, and at-sea support); or of landing, handling or in- or nearport processing activities for products of marine wild capture fishing; or subsidies to cover operating losses of such vessels or activities.  Art III ...subject to the provision of Article V...  Conditionality for prohibition  Conditionality  Art II.1 ...that cause adverse effects on fish stocks through overcapacity and overfishing...  Art III(b) ...(1) the adoption of gear for selective fishing techniques 13; (2) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing; (3) the adoption of measures to ensure compliance with fisheries management regimes aimed at sustainable use and conservation (e.g., installing devices for Vessel Monitoring Systems, adopting electronic catch reports, or deploying observers); or (4) the adoption of measures to sustain the livelihood of fishworkers on the condition that they suspend the fishing activity if the duration of the measures is confined to the period of actual suspension;  Para 3 ... Korea has moved certain prohibited subsidies in Article I of the Chair's Text to a new article providing for actionable subsidies and made them subject to an adverse effect test. Korea has also brought Article IV of the Chair's Text stipulating "General Disciplines on the Use of Fisheries Subsidies" into the same new article. This new article is now Article II of Korea's textual proposal as attached. Korea has maintained the title of the new article as "General Disciplines on the Use of Fisheries Subsidies" as, in its view, this term also covers the new actionable subsidy subject to an adverse effect test as proposed by Korea.  Art III(c)(5) ...they are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Exception 2 (implementation of fisheries management measures) Art III(b) Subsidies exclusively for facilitating the achievement of the objectives of this Annex...  Art III ...subject to the provision of Article V...  provided that the subsidies do not give rise to any increase in the marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn. fn 13 For the purpose of this Agreement, the term "selective fishing techniques" means gear modifications or methods of fishing that reduce the mortality or incidental take of non-target fisheries or other marine species, or otherwise reduce negative impact on ecosystems. Exception 3 (re-education, retraining or redeployment of fishworkers) Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives... Conditionality Art III ...subject to the provision of Article V... Art III(c) ...(1) re-education, retraining or redeployment of fishworkers 14 into occupations unrelated to marine wild capture fishing or directly associated activities; (2) early retirement or permanent cessation of employment of fishworkers as a result of government policies to reduce marine wild capture fishing capacity or effort... fn 14 For the purpose of this Agreement, the term "fishworker" means an individual employed in marine wild capture fishing and/or directly associated activities.  S&DT  147  Proposal  Prohibition  General Exception  S&DT  Exception 4 (subsistence) Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives... Conditionality Art III ...subject to the provision of Article V... Art III(c)(3) ...maintenance of livelihood of impoverished fishworkers whose economic sustenance will be threatened in the absence of governmental programs, provided that: (i) the fishing activities take place on an inshore basis or within the EEZ of the Member providing the subsidies or within the EEZ of an adjacent Member who has provided access rights to fishworkers of the former Member regarding the fishery in question; (ii) the fishing activities cover most of the household living expenses of fishworkers and constitute a predominant source of income for such household; and (iii) the amount of the annual total catch of a Member claimed to fall under this sub-paragraph does not exceed [X]% of the annual total catch of the Member arising from the whole fishing activity in the base year. Australia Proposal (TN/RL/GEN/167)  Art I.1(c) Subsidies on operating costs of fishing or service vessels (including licence fees or similar charges, fuel, ice, bait, personnel , social charges, insurance, gear, and at-sea support); or of landing, handling or in- or nearport processing activities for products of marine wild capture fishing; or subsidies to cover operating losses of such vessels or activities.  no specific amendments proposed  no specific amendments proposed  148  Proposal  Prohibition  General Exception  United States Proposal  Exception 1 (natural disaster)  (TN/RL/GEN/165)  no specific amendments proposed  S&DT  Exception 2 (implementation of fisheries management measures) Art II(b) A subsidy exclusively for one of the following purposes... Conditionality Art II Subject to compliance with Article V... no specific amendments proposed  Art II(b) ...(1) adopting gear for selective fishing techniques 5; (2) reducing the impact of fishing activity on the marine habitat, such as incentives to avoid bycatch or fishing that harms vulnerable marine ecosystems; or (3) covering expenses for actions taken towards complying with a fishery conservation and management regime, such as the costs of equipment for providing electronic catch reports, vessel monitoring systems, and observers; provided that the subsidy results in neither an increase in the fishing capacity of any fishing or service vessel, nor the continuation in operation of any such vessel where such continued operation otherwise is inconsistent with generally accepted commercial practices within the relevant industry. fn 5 The term "selective fishing techniques" means gear modifications or methods of fishing that reduce the mortality or incidental take of non-target fish or other marine species, or otherwise reduce harm to ecosystems.  no specific amendments proposed  149  Proposal  Prohibition  General Exception  S&DT Exception 1 (LDCs)  Brazil, China, India & Mexico Proposal  no specific amendments proposed (TN/TL/GEN/163) Exception 2 (non-LDC subsistence) Art III.2 ...the subsidies referred to in Article I.1shall not be prohibited... Conditionality Art III.2 ...the benefits of those subsidies are conferred 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 referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC, non-subsistence) Art III.3(b)(2) Subsidies referred to in Articles I.1(a) and I.1(c) shall not be prohibited... Conditionality no specific amendments proposed  Art III.3 ...subject to the provisions of Article V... no specific amendments proposed Art III.3(b)(2) ...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 established by a regional fisheries management organization or arrangement (RFMO) 3 or applicable international instruments for identified target stocks, provided that those stocks are subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level as determined by their maximum sustainable yield. fn 1 For the purpose of this article, "jurisdiction, sovereignty or sovereign rights" shall mean the exclusive rights a Member has under the international law with respect to the exploitation of natural resources in areas such as the Territorial Sea and the Exclusive Economic Zone. fn 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. fn 3 If the Member in question is not a member of the 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 arrangements which: (a) carries out management 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 deal with illegal, unreported and unregulated fishing; (d) and have a decision-making process in accordance with an agreement, convention or procedure.  150  Proposal  Prohibition  General Exception  S&DT  SVEs Proposal  Exception 1 (LDCs)  (TN/RL/GEN/162)  no specific amendments proposed Exception 2 (non-LDC subsistence) no specific amendments proposed Exception 3 (non-LDC small vessel) Art III.2(b)(2)(i) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... Conditionality no specific amendments proposed  no specific amendments proposed  Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2)(i) ...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, Exception 4 (non-LDC with % share in world NAMA ≥0.1% and global marine wild capture ≥1%) Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1(c) shall not be prohibited... Conditionality Art III.2(b) ...subject to the provisions of Article V: Art III.2(b)(2)(ii) ...those developing country Members whose percentage share in world NAMA trade is not more than 0.1 per cent and whose percentage share of global marine wild capture is not more than 1 per cent.  151  Proposal  Prohibition  General Exception  Korea & Chinese Taipei Proposal  Art I.1(c) Subsidies the benefits of which are conferred on operating costs of fishing or service vessels (including license fees or similar charges, fuel, ice, bait, personnel, social charges, insurance, gear, and at-sea support); or of landing, handling or inor near-port processing activities for products of marine wild capture fishing; or subsidies to cover operating losses of such vessels or activities.  Exception 1 (natural disaster)  Conditionality for prohibition  Art II(b) ...(1) the adoption of gear for selective fishing techniques; (2) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing; (3) compliance with fisheries management regimes aimed at sustainable use and conservation (e.g., devices for Vessel Monitoring Systems); provided that the subsidies do not give rise to any increase in the marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn.  (TN/RL/GEN/159)  Art I.1 ...where a subsidizing Member fails to properly maintain all the elements in Article V in its fisheries management system or a subsidizing Member fails to demonstrate, for example, through the peer review stipulated in Article V, that its fishery management system is likely to prevent over-fishing or overcapacity in light of the objective, design, and intended function of the system.  152  Art 1.3 For the purpose of paragraph 1, a subsidizing Member shall, in its notification of subsidies referred to in that paragraph made in accordance with Article 25, or in the information it supplies in accordance with Article V, include science-based assessments that demonstrate possible impacts of those subsides on marine fish stocks and/or the preventive effects of its fisheries management system on them.  S&DT  Art II(e) Nothin in Article I shall prevent subsidies on natural disaster relief... Conditionality Art II(e) ...limited to the relief of a particular natural disaster, provided that the subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the postdisaster status of the fishery. Exception 2 (implementation of fisheries management measures) Art II(b) For the purposes of Articles I.1(a) and I.1(c) the following subsidies shall not be prohibited... Conditionality  no specific amendments proposed  Proposal  Prohibition  General Exception  Canada Proposal  Exception (de minimis)  (TN/RL/GEN/156/Rev.1)  Art II(f) Members may provide subsidies that are used exclusively in support of fisheries conducted within waters subject to its jurisdiction  S&DT  Conditionality Art II ...subject to the provisions of Article V... no specific amendments proposed  Art II(f) ...(i) the annual amount of subsidies does not exceed X% of the average annual landed value of fish harvested in these waters for the three preceding years for which data is available, or (ii) for developing country Members accounting for less than 0.5% of the average annual global fish catch over the three preceding years for which data is available, the annual amount of subsidies does not exceed X% + Y%, or $US xxx xxx, whichever is greater.  no specific amendments to other exceptions proposed  no specific amendments proposed  153  Proposal  Prohibition  General Exception  S&DT  India, Indonesia & China Proposal  Art I.1(c) Subsidies the benefits of which are conferred on operating costs of fishing or service vessels (including licence fees or similar charges, fuel, ice, bait, personnel, social charges, insurance, gear, and at-sea support); or of landing, handling or inor near-port processing activities for products of marine wild capture fishing; or subsidies to cover operating losses of such vessels or activities.  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/GEN/155/Rev.1)  fb7 Subsidies referred to in this provision shall not be prohibited... Conditionality fb7 ...when limited to the relief of a particular natural disaster, provided that the subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a sciencebased assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI. Exception 2 (implementation of fisheries management measures) Art II(b) For the purposes of Articles I.1(a) and I.1(c) the following subsidies shall not be prohibited... Conditionality Art II ... subject to the provision of Article V... Art II(b) ... subsidies exclusively for: (1) the adoption of gear for selective fishing techniques; (2) the adoption of other techniques aimed at reducing the environmental impact of marine wild capture fishing; (3) compliance with fisheries management regimes aimed at sustainable use and conservation (e.g., devices for Vessel Monitoring Systems); provided that the subsidies do not give rise to any increase in the marine wild capture fishing capacity of any fishing or service vessel, on the basis of gross tonnage, volume of fish hold, engine power, or on any other basis, and do not have the effect of maintaining in operation any such vessel that otherwise would be withdrawn.  no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited... Conditionality Art III.2(a) ...relate exclusively to marine wild capture fishing performed within the territorial waters of the Member without deploying any of the internationally recognized destructive fishing methods, provided that the activities are carried out by fish workers, on an individual basis or organized in associations or on employment basis. It is desirable that adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC small vessels) Art III.2(b)(2) Subsidies referred to in Article I.1(a) and I.1 (c )... Conditionality Art III.2(b)(2) ...(i) they are used exclusively for marine wild capture fishing employing decked vessels not greater than 24 meters or 82 feet in length overall, or undecked vessels of any length; and (ii) adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures. Exception 4 (non-LDC other vessels) Art III.2(b)(3) ...subsidies referred to in Article I.1(a) and Article I.1(c) Conditionality Art III.2(b)(3) ...(i) the vessels are used for marine wild capture fishing activities of such Members in respect of particular, identified target stocks within their Exclusive Economic Zones ("EEZ"); (ii) the vessels with fishing quotas or any other rights established by a regional fisheries management organization (RFMO) or a regional fisheries management arrangement; (iii) the vessels for fishing activities in accordance with access arrangements. (iv) those stocks have been subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level.  154  IV. Port Infrastructure Proposal  Prohibition  General Exception  S&DT  2007 Chair Text  Art I.1(d) 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 nearport fish processing facilities).  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/W/213)  fn 77 Subsidies referred to in this provision shall not be prohibited when limited to the relief of a particular natural disaster... Conditionality fn 77 ...subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its predisaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the postdisaster status of the fishery. Any such subsidies are subject to the provisions of Article VI.  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited where they relate exclusively to marine wild capture fishing performed on an inshore basis (i.e., within the territorial waters of the Member) with nonmechanized net-retrieval... Conditionality Art III.2(a) ...(1) the activities are carried out on their own behalf by fishworkers82, on an individual basis which may include family members, or organized in associations; (2) the catch is consumed principally by the fishworkers 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, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 82 For the purpose of this Agreement, the term "fishworker" shall refer to an individual employed in marine wild capture fishing and/or directly associated activities. Exception 3 (non-LDC) Art III.2(b)(1) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited. Conditionality Art III.2(b) ...subject to the provisions of Article V...  Korea Proposal  Exception 1 (de minimis)  Exception 1 (LDCs)  (TN/RL/GEN/178)  Para 7 ...the introduction of the small-scale de minimis exemption in the General Exceptions provision...  no specific amendments proposed Exception 2 (non-LDCs) no specific amendments proposed  no specific amendments to other exceptions proposed no specific amendments proposed  Exception 3 (de minimis) Para 11 "In Korea's view, the small scale de minimis provision to be introduced in the general exceptions category should be able to address these concerns of developing Members. If Members agree to provide the developing Members (including those regarded as major fishing powers) with a bigger number (i.e. X+Y) than the one for the developed Members (i.e. X) with respect to the de minimis carve out, a significant portion of the concerns and political sensitivities of the developing Members (including those regarded as major fishing powers) should be addressed by the de minimis provision. At the same time, Members could consider providing a more comfort zone (i.e. X+Y+Z) for the SVEs taking into account their peculiar economic vulnerability."  155  Proposal  Prohibition  General Exception  S&DT  Argentina, Chile, Costa Rica, Egypt & Uruguay Proposal  Exception 1 (All developing country Members)  (TN/RL/GEN/173/Rev.2)  Conditionality  Art III.4 ...subsidies referred to in paragraph 1.d) of Article I of this Annex shall not be prohibited...  no specific amendments proposed  no specific amendments proposed  Art III.4 ...a) they have as ultimate purpose the repair, renewal, modernization, or any other modification or improvement of physical port facilities, exclusively or predominantly dedicated to certain activities related to marine wild capture fishing24 (for example, piers, mooring, fish landing and gathering facilities, as well as facilities for treatment of fisheries resources landed in port, and security and hygiene conditions); b) they are granted or maintained in compliance with the FAO Code of Conduct for Responsible Fisheries. fn 24 These activities are defined below in Article III.8.b and footnote 27 of the present article. fn 27 These are activities exclusively performed in jurisdictional waters, provided that (a) the activities are carried out by fishermen on an individual basis, or through organizations of few members, including, but not necessarily, the family members; (b) they satisfy the conditions to be classified within the lowest category of economic activity; and (c) the basic scope of the activities encompasses to obtain the means for family livelihood, including small scale profit trade. Exception 1 (LDCs)  Ecuador & Peru Proposal  no specific amendments proposed (TN/RL/GEN/172) Exception 2 (non-LDCs) Art III.2(a) Subsidies referred to in Article I.1(a), (c), (d) and (e) shall not be prohibited... Conditionality  no specific amendments proposed  no specific amendments proposed  Art III.2(a) ...they are granted for the purpose of promoting food security, the development of local communities and poverty reduction and where they relate exclusively to marine wild capture fishing performed within waters under the national jurisdiction of the Member States, provided that all the following conditions are met: (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, micro enterprises or other forms of small producer organizations; (2) the fishery product does not go beyond a small scale trade and is mainly destined for direct human consumption; (3) the vessels are not greater than 15 metres in length overall; (4) the operations are carried out using simple fishing gear, tools and techniques and involve predominantly manual labour; and (5) no destructive fishing practices are used 1. Fisheries management measures aimed at ensuring sustainability, such as the measures referred to in Article V, shall be implemented in respect of the fisheries in question within a period of not more than (5) years, adapted as necessary to the particular situation, including by making use of ad hoc and indigenous fisheries management institutions and measures. fn 1 "Destructive fishing practices" refers to those practices recognized as such in Article 8.4.2 of the Code of Conduct for Responsible Fisheries.  156  Proposal  Prohibition  General Exception  Japan Proposal  Para 35 Japan, however, maintains its position that the infrastructure (Article I.1(d) of the Chair's text of 2007), income support (Article I.1(e) of the Chair's text of 2007), and the so-called "catch-all provision" (Article I.2 of the Chair's text of 2007) should be crossed out as there are no sufficient grounds for the prohibitions because neither infrastructure nor income support is related to overcapacity/overfishing....  the proposal to remove the prohibition of subsidies on infrastructure to be removed from the Annex  (TN/RL/GEN/171)  Morocco Proposal (TN/RL/GEN/170)  the proposal to remove the prohibition of subsidies on infrastructure to be removed from the Annex  Exception 1 (LDCs)  Art I.1(d) 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 fishing4 (for example, fish landing facilities, fish storage facilities, and in or near port fish processing facilities). fn 4 It being understood that, pursuant to Article I.1(iii), the provision of general infrastructure by a government is not considered to be a subsidy.  S&DT  no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2 Subsidies referred to in Article I.1 shall not be prohibited... Conditionality Art III.2 ...exclusively to small scale marine wild capture fishing activities performed on an inshore basis (i.e. within the territorial waters of the Member), provided that these activities land their catch fresh8 and are performed by fishworkers on an individual or family basis or employed by associations, micro enterprises, cooperatives or individual boat owners. no specific amendments proposed  Fisheries management measures aimed at ensuring a sustainable level, such as the measures referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 8 Fishing activities by vessels that are not equipped with an on board catch freezing and/or refrigeration system. However, the provisioning of vessels with ice shall not be interpreted as constituting a freezing and/or refrigeration system. Exception 3 (non-LDC) Art III.3(a) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited. Conditionality Art III.3 ...subject to the provisions of Article V...  157  Proposal  Prohibition  General Exception  Korea Proposal  Art II.1(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 nearport fish processing facilities), provided that the main beneficiary of the infrastructure or facilities is not the general public of a Member.  Exception 1 (natural disaster)  (TN/RL/GEN/168)  Conditionality for prohibition Art II.1 ...that cause adverse effects on fish stocks through overcapacity and overfishing... Para 3 ... Korea has moved certain prohibited subsidies in Article I of the Chair's Text to a new article providing for actionable subsidies and made them subject to an adverse effect test. Korea has also brought Article IV of the Chair's Text stipulating "General Disciplines on the Use of Fisheries Subsidies" into the same new article. This new article is now Article II of Korea's textual proposal as attached. Korea has maintained the title of the new article as "General Disciplines on the Use of Fisheries Subsidies" as, in its view, this term also covers the new actionable subsidy subject to an adverse effect test as proposed by Korea.  S&DT  Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives by supporting ...(5) the relief of a particular natural disaster... Conditionality Art III ...subject to the provision of Article V... Art III(c)(5) ...they are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Exception 2 (subsistence) Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives... Conditionality Art III ...subject to the provision of Article V... Art III(c)(3) ...maintenance of livelihood of impoverished fishworkers whose economic sustenance will be threatened in the absence of governmental programs, provided that: (i) the fishing activities take place on an inshore basis or within the EEZ of the Member providing the subsidies or within the EEZ of an adjacent Member who has provided access rights to fishworkers of the former Member regarding the fishery in question; (ii) the fishing activities cover most of the household living expenses of fishworkers and constitute a predominant source of income for such household; and (iii) the amount of the annual total catch of a Member claimed to fall under this subparagraph does not exceed [X]% of the annual total catch of the Member arising from the whole fishing activity in the base year.  no specific amendments proposed  158  Proposal  Prohibition  Australia Proposal  Art I.1(d) 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 nearport fish processing facilities).  (TN/RL/GEN/167)  General Exception  S&DT  no specific amendments proposed  no specific amendments proposed  Exception 1 (LDCs)  Brazil, China, India & Mexico Proposal  no specific amendments proposed (TN/TL/GEN/163) Exception 2 (non-LDC subsistence) Art III.2 ...the subsidies referred to in Article I.1shall not be prohibited... Conditionality no specific amendments proposed  no specific amendments proposed  Art III.2 ...the benefits of those subsidies are conferred 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 referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC, non-subsistence) Art III.3(a) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited. Conditionality Art III.3 ...subject to the provisions of Article V...  SVEs Proposal  Exception 1 (LDCs)  (TN/RL/GEN/162)  no specific amendments proposed Exception 2 (non-LDC subsistence) no specific amendments proposed  no specific amendments proposed no specific amendments proposed Exception 4 (non-LDC non-subsistence) Art III.2(b)(1) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited. Conditionality Art III.2(b)(1) ...subject to the provisions of Article V...  159  Proposal  Prohibition  Korea & Chinese Taipei Proposal  Removed  (TN/RL/GEN/159)  Para 8 It is also suggested that paragraphs (d) and (e), which are in nature out of the scope of this negotiation, be deleted. In fact, to our best knowledge, no Member has suggested to prohibit those subsides during the course of negotiations before the circulation of the Chair's text last November.  General Exception  the proposal to remove the prohibition of subsidies on infrastructure to be removed from the Annex  Canada Proposal  Exception (de minimis)  (TN/RL/GEN/156/Rev.1)  Art II(f) Members may provide subsidies that are used exclusively in support of fisheries conducted within waters subject to its jurisdiction  S&DT  the proposal to remove the prohibition of subsidies on infrastructure to be removed from the Annex  Conditionality Art II ...subject to the provisions of Article V... no specific amendments proposed  Art II(f) ...(i) the annual amount of subsidies does not exceed X% of the average annual landed value of fish harvested in these waters for the three preceding years for which data is available, or (ii) for developing country Members accounting for less than 0.5% of the average annual global fish catch over the three preceding years for which data is available, the annual amount of subsidies does not exceed X% + Y%, or $US xxx xxx, whichever is greater.  no specific amendments proposed  no specific amendments to other exceptions proposed India, Indonesia & China Proposal (TN/RL/GEN/155/Rev.1)  Art I.1(d) 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 nearport fish processing facilities).  Exception (natural disaster) fb7 Subsidies referred to in this provision shall not be prohibited... Conditionality fb7 ...when limited to the relief of a particular natural disaster, provided that the subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are timelimited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the postdisaster status of the fishery. Any such subsidies are subject to the provisions of Article VI.  Exception 1 (LDCs) no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1... Conditionality Art III.2(a) ...relate exclusively to marine wild capture fishing performed within the territorial waters of the Member without deploying any of the internationally recognized destructive fishing methods, provided that the activities are carried out by fish workers, on an individual basis or organized in associations or on employment basis. It is desirable that adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC non-subsistence) Art III.2(b)(1) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited.  160  V. Income support Proposal  Prohibition  General Exception  S&DT  2007 Chair Text  Art I.1(e) Income support for natural or legal persons engaged in marine wild capture fishing.  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/W/213)  fn 77 Subsidies referred to in this provision shall not be prohibited when limited to the relief of a particular natural disaster...  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence)  Conditionality fn 77 ...subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI.  Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited... Conditionality Art III.2(a) ... where they relate exclusively to marine wild capture fishing performed on an inshore basis (i.e., within the territorial waters of the Member) with nonmechanized 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 fishworkers 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, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC) Art III.2(b)(1) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited. Conditionality Art III.2(b) ...subject to the provisions of Article V...  Korea Proposal  Exception 1 (de minimis)  Exception 1 (LDCs)  (TN/RL/GEN/178)  Para 7 ...the introduction of the small-scale de minimis exemption in the General Exceptions provision...  no specific amendments proposed Exception 2 (non-LDCs) no specific amendments proposed  no specific amendments to other exceptions proposed Exception 3 (de minimis) no specific amendments proposed  Argentina, Chile, Costa Rica, Egypt & Uruguay Proposal (TN/RL/GEN/173/Rev.2)  no specific amendments proposed  Para 11 "In Korea's view, the small scale de minimis provision to be introduced in the general exceptions category should be able to address these concerns of developing Members. If Members agree to provide the developing Members (including those regarded as major fishing powers) with a bigger number (i.e. X+Y) than the one for the developed Members (i.e. X) with respect to the de minimis carve out, a significant portion of the concerns and political sensitivities of the developing Members (including those regarded as major fishing powers) should be addressed by the de minimis provision. At the same time, Members could consider providing a more comfort zone (i.e. X+Y+Z) for the SVEs taking into account their peculiar economic vulnerability."  no specific amendments proposed  no S&DT exception for income support proposed  161  Proposal  Prohibition  General Exception  S&DT Exception 1 (LDCs)  Ecuador & Peru Proposal  no specific amendments proposed (TN/RL/GEN/172) Exception 2 (non-LDCs) Art III.2(a) Subsidies referred to in Article I.1(a), (c), (d) and (e) shall not be prohibited... Conditionality  no specific amendments proposed  no specific amendments proposed  Art III.2(a) ...they are granted for the purpose of promoting food security, the development of local communities and poverty reduction and where they relate exclusively to marine wild capture fishing performed within waters under the national jurisdiction of the Member States, provided that all the following conditions are met: (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, micro enterprises or other forms of small producer organizations; (2) the fishery product does not go beyond a small scale trade and is mainly destined for direct human consumption; (3) the vessels are not greater than 15 metres in length overall; (4) the operations are carried out using simple fishing gear, tools and techniques and involve predominantly manual labour; and (5) no destructive fishing practices are used 1. Fisheries management measures aimed at ensuring sustainability, such as the measures referred to in Article V, shall be implemented in respect of the fisheries in question within a period of not more than (5) years, adapted as necessary to the particular situation, including by making use of ad hoc and indigenous fisheries management institutions and measures. fn 1 "Destructive fishing practices" refers to those practices recognized as such in Article 8.4.2 of the Code of Conduct for Responsible Fisheries.  Japan Proposal (TN/RL/GEN/171)  Para 35 Japan, however, maintains its position that the infrastructure (Article I.1(d) of the Chair's text of 2007), income support (Article I.1(e) of the Chair's text of 2007), and the so-called "catch-all provision" (Article I.2 of the Chair's text of 2007) should be crossed out as there are no sufficient grounds for the prohibitions because neither infrastructure nor income support is related to overcapacity/overfishing....  the proposal to remove the prohibition of subsidies on infrastructure to be removed from the Annex  the proposal to remove the prohibition of subsidies on infrastructure to be removed from the Annex  162  Proposal  Prohibition  Morocco Proposal  Art I.1(e) Income support for natural or legal persons engaged in marine wild capture fishing.  (TN/RL/GEN/170)  General Exception  S&DT Exception 1 (LDCs) no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2 Subsidies referred to in Article I.1 shall not be prohibited... Conditionality Art III.2 ...exclusively to small scale marine wild capture fishing activities performed on an inshore basis (i.e. within the territorial waters of the Member), provided that these activities land their catch fresh8 and are performed by fishworkers on an individual or family basis or employed by associations, micro enterprises, cooperatives or individual boat owners. no specific amendments proposed  Fisheries management measures aimed at ensuring a sustainable level, such as the measures referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 8 Fishing activities by vessels that are not equipped with an on board catch freezing and/or refrigeration system. However, the provisioning of vessels with ice shall not be interpreted as constituting a freezing and/or refrigeration system. Exception 3 (non-LDC) Art III.3(a) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited. Conditionality Art III.3 ...subject to the provisions of Article V...  163  Proposal  Prohibition  General Exception  Korea Proposal  Art II.1(c) Income support for natural or legal persons engaged in marine wild capture fishing.  Exception 1 (natural disaster)  Conditionality for prohibition  Conditionality  (TN/RL/GEN/168)  Art II.1 ...that cause adverse effects on fish stocks through overcapacity and overfishing... Para 3 ... Korea has moved certain prohibited subsidies in Article I of the Chair's Text to a new article providing for actionable subsidies and made them subject to an adverse effect test. Korea has also brought Article IV of the Chair's Text stipulating "General Disciplines on the Use of Fisheries Subsidies" into the same new article. This new article is now Article II of Korea's textual proposal as attached. Korea has maintained the title of the new article as "General Disciplines on the Use of Fisheries Subsidies" as, in its view, this term also covers the new actionable subsidy subject to an adverse effect test as proposed by Korea.  S&DT  Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives by supporting ...(5) the relief of a particular natural disaster...  Art III ...subject to the provision of Article V... Art III(c)(5) ...they are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Exception 2 (subsistence) Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives... Conditionality no specific amendments proposed Art III ...subject to the provision of Article V... Art III(c)(3) ...maintenance of livelihood of impoverished fishworkers whose economic sustenance will be threatened in the absence of governmental programs, provided that: (i) the fishing activities take place on an inshore basis or within the EEZ of the Member providing the subsidies or within the EEZ of an adjacent Member who has provided access rights to fishworkers of the former Member regarding the fishery in question; (ii) the fishing activities cover most of the household living expenses of fishworkers and constitute a predominant source of income for such household; and (iii) the amount of the annual total catch of a Member claimed to fall under this sub-paragraph does not exceed [X]% of the annual total catch of the Member arising from the whole fishing activity in the base year. Exception 3 (income support) Art III(c)(4) ...decoupled income support schemes for fishworkers and fishing communities... Conditionality Art III ...subject to the provision of Article V... Art III(c)(4) ... they are not related to catch or production increase, or productivity enhancement, and are introduced only to achieve social welfare objectives...  Australia Proposal (TN/RL/GEN/167)  Art I.1(e) Income support5 for natural or legal persons engaged in marine wild capture fishing. fn 5 For the purposes of this Annex, the term "income support" includes support for developing, increasing or maintaining active or latent fishing effort.  no specific amendments proposed  no specific amendments proposed  164  Proposal  Prohibition  General Exception  S&DT Exception 1 (LDCs)  Brazil, China, India & Mexico Proposal  no specific amendments proposed (TN/TL/GEN/163) Exception 2 (non-LDC subsistence) Art III.2 ...the subsidies referred to in Article I.1shall not be prohibited... Conditionality  no specific amendments proposed  no specific amendments proposed  Art III.2 ...the benefits of those subsidies are conferred 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 microenterprises or individual boat owners. Fisheries management measures aimed at ensuring a sustainable level, such as the measures referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC, non-subsistence) Art III.3(a) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited. Conditionality Art III.3 ...subject to the provisions of Article V...  Korea & Chinese Taipei Proposal (TN/RL/GEN/159)  Removed Para 8 It is also suggested that paragraphs (d) and (e), which are in nature out of the scope of this negotiation, be deleted. In fact, to our best knowledge, no Member has suggested to prohibit those subsides during the course of negotiations before the circulation of the Chair's text last November.  the proposal to remove the prohibition of subsidies on infrastructure to be removed from the Annex  the proposal to remove the prohibition of subsidies on infrastructure to be removed from the Annex  165  Proposal  Prohibition  General Exception  Canada Proposal  Exception 1 (de minimis)  (TN/RL/GEN/156/Rev.1)  Art II(f) Members may provide subsidies that are used exclusively in support of fisheries conducted within waters subject to its jurisdiction  S&DT  Conditionality Art II ...subject to the provisions of Article V... no specific amendments proposed  no specific amendments proposed  Art II(f) ...(i) the annual amount of subsidies does not exceed X% of the average annual landed value of fish harvested in these waters for the three preceding years for which data is available, or (ii) for developing country Members accounting for less than 0.5% of the average annual global fish catch over the three preceding years for which data is available, the annual amount of subsidies does not exceed X% + Y%, or $US xxx xxx, whichever is greater.  no specific amendments to other exceptions proposed India, Indonesia & China Proposal (TN/RL/GEN/155/Rev.1)  Art I.1(e) Income support for natural or legal persons engaged in marine wild capture fishing.  Exception 1 (natural disaster) fb7 Subsidies referred to in this provision shall not be prohibited... Conditionality fb7 ...when limited to the relief of a particular natural disaster, provided that the subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI.  Exception 1 (LDCs) no specific amendments proposed Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited... Conditionality Art III.2(a) ...relate exclusively to marine wild capture fishing performed within the territorial waters of the Member without deploying any of the internationally recognized destructive fishing methods, provided that the activities are carried out by fish workers, on an individual basis or organized in associations or on employment basis. It is desirable that adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC non-subsistence) Art III.2(b)(1) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited.  166  VI. Price support Proposal  Prohibition  General Exception  S&DT  2007 Chair Text  Art I.1(f) Price support for products of marine wild capture fishing.  Exception 1 (natural disaster)  Exception 1 (LDCs)  (TN/RL/W/213)  fn 77 Subsidies referred to in this provision shall not be prohibited when limited to the relief of a particular natural disaster...  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members.. Exception 2 (non-LDC)  Conditionality fn 77 ...subsidies are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a science-based assessment of the post-disaster status of the fishery. Any such subsidies are subject to the provisions of Article VI.  Art III.2(b)(1) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited. Conditionality Art III.2(b) ...subject to the provisions of Article V...  Exception 1 (de minimis)  Korea Proposal (TN/RL/GEN/178) no specific amendments proposed  Para 7 ...the introduction of the small-scale de minimis exemption in the General Exceptions provision...  no specific amendments proposed  no specific amendments to other exceptions proposed Argentina, Chile, Costa Rica, Egypt & Uruguay Proposal  no specific amendments proposed  no specific amendments proposed  no S&DT exception for price support proposed  (TN/RL/GEN/173/Rev.2) Japan Proposal (TN/RL/GEN/171)  Exception 1 (LDCs)  Art I.1(d) Price support for products of marine wild capture fishing.  Art III.1...the prohibition of Article 3.1(c) and Articles I.1 (a), I.1 (b), I.1 (c) and I.1 (d) shall not apply to leastdeveloped country ("LDC") Members. Conditionality Art III.1 Subject to the provisions of Article IV... Exception 2 (non-LDCs) Art III.2(a) Subsidies referred to in Articles I.1 (a), I.1 (c) and I.1 (d) shall not be prohibited... no specific amendments proposed  Conditionality Art III.2 Subject to the provisions of Article IV, for developing country Members other than LDC Members, which are listed in Attachment [Y] to this Annex... Art III.2(a) ...subject to the provisions of Article V, where they relate exclusively to marine wild capture fishing performed within the territorial sea and the EEZ of the developing country Member. Art III.2(b) For the purposes of Article II.2, developing country Members shall not be required to be subject to the provisions of Article V, provided that they shall endeavor to operate, to the extent possible, their fisheries management systems referred to in Article V, taking into consideration the nature of fisheries of that Member and the constraints of relevant fisheries management authority.  167  Proposal  Prohibition  General Exception  Korea Proposal  Art II.1(d) Price support for products of marine wild capture fishing.  Exception 1 (natural disaster)  Conditionality for prohibition  Conditionality  (TN/RL/GEN/168)  Art II.1 ...that cause adverse effects on fish stocks through overcapacity and overfishing... Para 3 ... Korea has moved certain prohibited subsidies in Article I of the Chair's Text to a new article providing for actionable subsidies and made them subject to an adverse effect test. Korea has also brought Article IV of the Chair's Text stipulating "General Disciplines on the Use of Fisheries Subsidies" into the same new article. This new article is now Article II of Korea's textual proposal as attached. Korea has maintained the title of the new article as "General Disciplines on the Use of Fisheries Subsidies" as, in its view, this term also covers the new actionable subsidy subject to an adverse effect test as proposed by Korea.  S&DT  Art III(c)(5) ...the relief of a particular natural disaster...  Art III ...subject to the provision of Article V... Art III(c)(5) ...they are directly related to the effects of that disaster, are limited to the affected geographic area, are time-limited, and in the case of reconstruction subsidies, only restore the affected area, the affected fishery, and/or the affected fleet to its pre-disaster state, up to a sustainable level of fishing capacity as established through a sciencebased assessment of the post-disaster status of the fishery. Exception 2 (subsistence) Art III(c) Subsidies exclusively for operating and administering governmental programmes which aim to achieve Members' legitimate socio-economic policy objectives... Conditionality Art III ...subject to the provision of Article V... Art III(c)(3) ...maintenance of livelihood of impoverished fishworkers whose economic sustenance will be threatened in the absence of governmental programs, provided that: (i) the fishing activities take place on an inshore basis or within the EEZ of the Member providing the subsidies or within the EEZ of an adjacent Member who has provided access rights to fishworkers of the former Member regarding the fishery in question; (ii) the fishing activities cover most of the household living expenses of fishworkers and constitute a predominant source of income for such household; and (iii) the amount of the annual total catch of a Member claimed to fall under this sub-paragraph does not exceed [X]% of the annual total catch of the Member arising from the whole fishing activity in the base year.  no specific amendments proposed  168  Proposal  Prohibition  Korea & Chinese Taipei Proposal  Art I.1(d) Price support for products of marine wild capture fishing.  General Exception  S&DT  (TN/RL/GEN/159) Conditionality for prohibition Art I.1 ...where a subsidizing Member fails to properly maintain all the elements in Article V in its fisheries management system or a subsidizing Member fails to demonstrate, for example, through the peer review stipulated in Article V, that its fishery management system is likely to prevent over-fishing or overcapacity in light of the objective, design, and intended function of the system. Art I.3 For the purpose of paragraph 1, a subsidizing Member shall, in its notification of subsidies referred to in that paragraph made in accordance with Article 25, or in the information it supplies in accordance with Article V, include science-based assessments that demonstrate possible impacts of those subsides on marine fish stocks and/or the preventive effects of its fisheries management system on them.  no specific amendments proposed  no specific amendments proposed  169  Proposal  Prohibition  General Exception  Canada Proposal  Exception (de minimis)  (TN/RL/GEN/156/Rev.1)  Art II(f) Members may provide subsidies that are used exclusively in support of fisheries conducted within waters subject to its jurisdiction  S&DT  Conditionality Art II ...subject to the provisions of Article V... no specific amendments proposed  Art II(f) ...(i) the annual amount of subsidies does not exceed X% of the average annual landed value of fish harvested in these waters for the three preceding years for which data is available, or (ii) for developing country Members accounting for less than 0.5% of the average annual global fish catch over the three preceding years for which data is available, the annual amount of subsidies does not exceed X% + Y%, or $US xxx xxx, whichever is greater.  no specific amendments proposed  no specific amendments to other exceptions proposed India, Indonesia & China Proposal  Exception 1 (LDCs)  Art I.1(f) Price support for products of marine wild capture fishing.  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members.  (TN/RL/GEN/155/Rev.1)  Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1... Conditionality no specific amendments proposed  Art III.2(a) ...relate exclusively to marine wild capture fishing performed within the territorial waters of the Member without deploying any of the internationally recognized destructive fishing methods, provided that the activities are carried out by fish workers, on an individual basis or organized in associations or on employment basis. It is desirable that adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures. Exception 3 (non-LDC non-subsistence) Art III.2(b)(1) Subsidies referred to in Articles I.1(d), I.1(e) and I.1(f) shall not be prohibited.  170  VII. Transfers of Fishing Opportunities in Foreign Waters Acquired via Fishing Access Agreements Proposal  Prohibition  General Exception  S&DT  2007 Chair Text  Art I.1(g) Subsidies arising from the further transfer, by a payer Member government, of access rights that it has acquired from another Member government to fisheries within the jurisdiction of such other Member.80  no general exception for transfers of fishing opportunities in foreign waters acquired via fishing access agreement proposed  Exception  (TN/RL/W/213)  fn 80 Government-togovernment payments for access to marine fisheries shall not be deemed to be subsidies within the meaning of this Agreement.  Art III.3 Subsidies referred to in Article I.1(g) shall not be prohibited... Conditionality Art III.3 ... within the EEZ of a developing country Member, provided that the agreement pursuant to which the rights have been acquired is made public, and contains provisions designed to prevent overfishing in the area covered by the agreement based on internationally-recognized best practices for fisheries management and conservation as reflected in the relevant provisions of international instruments aimed at ensuring the sustainable use and conservation of marine species, 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 Relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks ("Fish Stocks Agreement"), the Code of Conduct on Responsible Fisheries of the Food and Agriculture Organization ("Code of Conduct"), the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas ("Compliance Agreement"), and technical guidelines and plans of action (including criteria and precautionary reference points) for the implementation of these instruments, or other related or successor instruments. 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 national authorities of the host Member and to relevant international organizations, and for such other measures as may be appropriate.  Kenya ACP Proposal  Exception  (TN/RL/GEN/176)  Art III.3 Subsidies referred to in Article I.1 (g) shall not be prohibited... Conditionality Art III.3 ...where the fishery in question is within the EEZ of a developing country Member provided that: (a) The subsidies are contingent upon an agreement on access rights that is made public,  no specific amendments proposed  no specific amendments proposed  (b) The agreement contains provisions designed to prevent overfishing in the designated area based on internationally recognized best practices for fisheries management and conservation, duly ratified by the Member, and as reflected in the relevant provisions of international instruments aimed at ensuring the sustainable use and conservation of marine species, 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 Relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks ("Fish Stocks Agreement"), the Code of Conduct on Responsible Fisheries of the Food and Agriculture Organization ("Code of Conduct"), the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas ("Compliance Agreement"), and technical guidelines and plans of action (including criteria and precautionary reference points) for the implementation of these instruments, or other related or successor instruments. 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 national authorities of the host Member and to relevant international organizations, and for such other measures as may be appropriate. (c) The developed or developing country Member purchasing access rights for fishing in a developing country Members' EEZ shall provide specific technical or development cooperation for the effective implementation of the management conditions mentioned in paragraph (b) above.  Argentina, Chile, Costa Rica, Egypt & Uruguay Proposal (TN/RL/GEN/173/Rev.2)  no specific amendments proposed  no specific amendments proposed  no S&DT exception for transfers of fishing opportunities in foreign waters acquired via fishing access agreement proposed  171  Proposal  Prohibition  Japan Proposal  Art I.1(e) Subsidies arising from the further transfer, by a payer Member government, of access rights that it has acquired from another Member government to fisheries within the jurisdiction of such other Member.80, 80bis  (TN/RL/GEN/171)  fn 80 Government-togovernment payments for access to marine fisheries shall not be deemed to be subsidies within the meaning of this Agreement.  General Exception  S&DT Exception 1 (all developing country Members) Art III.4 ...subsidies referred to in Article I.1(e) shall not be prohibited... Conditionality Art III.4 Subject to the provisions of Articles IV and V...  no specific amendments proposed  fn 80bis This provision shall not apply to reciprocal provision of fishing access rights granted under a bilateral reciprocal fisheries agreement.  Art III.4 ...where the fishery in question is within the EEZ of a developing country Member, provided that the agreement pursuant to which the rights have been acquired is made public, and contains provisions designed to prevent overfishing in the area covered by the agreement based on internationally-recognized best practices for fisheries management and conservation as reflected in the relevant provisions of international instruments aimed at ensuring the sustainable use and conservation of marine species, 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 Relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks ("Fish Stocks Agreement"), the Code of Conduct on Responsible Fisheries of the Food and Agriculture Organization ("Code of Conduct"), the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas ("Compliance Agreement"), and technical guidelines and plans of action (including criteria and precautionary reference points) for the implementation of these instruments, or other related or successor instruments. 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 national authorities of the host Member and to relevant international organizations, and for such other measures as may be appropriate.  Morocco Proposal  Exception  (TN/RL/GEN/170)  Art III.4 Subsidies referred to in Article I.1(g) shall not be prohibited... Conditionality  no specific amendments proposed  no specific amendments proposed  Art III.4 ... where the fishery in question is within the EEZ of a developing country Member, provided that the agreement pursuant to which the rights have been acquired is made public, and contains provisions designed to prevent overfishing in the area covered by the agreement referenced on internationally recognized best practices for fisheries management and conservation as reflected in the relevant provisions of international instruments aimed at ensuring the sustainable use and conservation of marine species, duly ratified by the Member country, 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 Relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks ("Fish Stocks Agreement"), the Code of Conduct on Responsible Fisheries of the Food and Agriculture Organization ("Code of Conduct"), the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas ("Compliance Agreement"), and technical guidelines and plans of action (including criteria and precautionary reference points) for the implementation of these instruments, or other related or successor instruments. 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 national authorities of the host Member and to relevant international organizations, and for such other measures as may be appropriate.  172  Proposal  Prohibition  General Exception  S&DT Exception  Brazil, China, India & Mexico Proposal  Art III.4 Subsidies referred to in Article I.1(g) shall not be prohibited... (TN/TL/GEN/163) Conditionality  no specific amendments proposed  no specific amendments proposed  Art III.4 ... 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 agreement pursuant to which the rights have been acquired is made public, and contains provisions designed to prevent overfishing in the area covered by the agreement referenced on internationally-recognized best practices for fisheries management and conservation as reflected in the relevant 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 Relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks ("Fish Stocks Agreement"), the Code of Conduct on Responsible Fisheries of the Food and Agriculture Organization ("Code of Conduct"), the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas ("Compliance Agreement"), and technical guidelines and plans of action (including criteria and precautionary reference points) for the implementation of these instruments, or other related or successor instruments. 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 national authorities of the host Member and to relevant international organizations, and for such other measures as may be appropriate.  173  Proposal  Prohibition  Korea & Chinese Taipei Proposal  Art I.1(e) Subsidies arising from the further transfer, by a payer Member government, of access rights that it has acquired from another Member government to fisheries within the jurisdiction of such other Member.6  (TN/RL/GEN/159)  General Exception  S&DT  fn 6 Government-togovernment payments for access to marine fisheries shall not be deemed to be subsidies within the meaning of this Agreement. Conditionality for prohibition Art I.1 ...where a subsidizing Member fails to properly maintain all the elements in Article V in its fisheries management system or a subsidizing Member fails to demonstrate, for example, through the peer review stipulated in Article V, that its fishery management system is likely to prevent over-fishing or overcapacity in light of the objective, design, and intended function of the system. Art I.3 For the purpose of paragraph 1, a subsidizing Member shall, in its notification of subsidies referred to in that paragraph made in accordance with Article 25, or in the information it supplies in accordance with Article V, include science-based assessments that demonstrate possible impacts of those subsides on marine fish stocks and/or the preventive effects of its fisheries management system on them.  no general exception for transfers of fishing opportunities in foreign waters acquired via fishing access agreement proposed  no specific amendments proposed  174  Proposal  Prohibition  General Exception  Canada Proposal  Exception (de minimis)  (TN/RL/GEN/156/Rev.1)  Art II(f) ... subsidies that are used exclusively in support of fisheries conducted within waters subject to its jurisdiction  S&DT  Conditionality Art II ...subject to the provisions of Article V...  no specific amendments proposed  Art II(f) ...(i) the annual amount of subsidies does not exceed X% of the average annual landed value of fish harvested in these waters for the three preceding years for which data is available, or (ii) for developing country Members accounting for less than 0.5% of the average annual global fish catch over the three preceding years for which data is available, the annual amount of subsidies does not exceed X% + Y%, or $US xxx xxx, whichever is greater.  no specific amendments proposed  no specific amendments to other exceptions proposed Exception  India, Indonesia & China Proposal  Art III.3 Subsidies referred to in Article I.1(g) shall not be prohibited... (TN/RL/GEN/155/Rev.1) Conditionality  no specific amendments proposed  no specific amendments proposed  Art III.3 ...where the fishery in question is within the EEZ of a developing country Member, provided that (i) those stocks have been subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level; (ii) that assessment has been subject to peer review in the SCM Committee, (iii) the agreement pursuant to which the rights have been acquired is made public, and (iv) contains provisions designed to prevent overfishing in the area covered by the agreement based on internationally-recognized best practices for fisheries management and conservation as reflected in the relevant provisions of international instruments aimed at ensuring the sustainable use and conservation of marine species, 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 Relating to the Conservation and Management of Straddling Fish Stocks and Highly Migratory Fish Stocks ("Fish Stocks Agreement"), the Code of Conduct on Responsible Fisheries of the Food and Agriculture Organization ("Code of Conduct"), the Agreement to Promote Compliance with International Conservation and Management Measures by Fishing Vessels on the High Seas ("Compliance Agreement"), and technical guidelines and plans of action (including criteria and precautionary reference points) for the implementation of these instruments, or other related or successor instruments. 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 national authorities of the host Member and to relevant international organizations, and for such other measures as may be appropriate.  175  VIII. Subsidies to IUU fisheries Proposal  Prohibition  2007 Chair Text  Art I.1(h) Subsidies the benefits of which are conferred on any vessel engaged in illegal, unreported or unregulated fishing.81  (TN/RL/W/213)  fn 81 The terms "illegal fishing", "unreported fishing" and "unregulated fishing" shall have the same meaning as in paragraph 3 of the International Plan of Action to Prevent, Deter and Eliminate Illegal Unreported and Unregulated Fishing of the United Nations Food and Agricultural Organization.  General Exceptions  S&DT Exception 1 (LDCs) Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited where they relate exclusively to marine wild capture fishing performed on an inshore basis (i.e., within the territorial waters of the Member) with non-mechanized net-retrieval...  no general exemptions related to IUU fisheries proposed  Conditionality Art III.2(a) ...(1) the activities are carried out on their own behalf by fishworkers 82, on an individual basis which may include family members, or organized in associations; (2) the catch is consumed principally by the fishworkers 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, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 82 For the purpose of this Agreement, the term "fishworker" shall refer to an individual employed in marine wild capture fishing and/or directly associated activities.  Korea Proposal  Subsidization of IUU fisheries prohibited by an additional article (Art X, below)  (TN/RL/GEN/178)  Article [X] Regulation of the Illegal, Unreported or Unregulated Fishing Art X.1 Members shall have effective legal and administrative procedures to detect, prevent and eliminate illegal, unreported or unregulated fishing. Such procedures shall include criminal prosecution and administrative penalties, as the case may be, without prejudice to related constitutional or legal requirements in general. no specific amendments proposed  Art X.2 Members shall ensure that fishermen engaged in the illegal, unreported or unregulated fishing forfeit any benefit conferred on them by a governmental program and lose the eligibility for similar governmental programs for a designated period of time. Art X.3 Members that know or should have known that illegal, unreported or unregulated fishing takes place within their jurisdiction relating to a governmental program but fail to enforce relevant laws and regulations shall be considered to have conferred prohibited subsidies or caused adverse effect, as the case may be, within the meaning of the relevant provisions of this Annex.  Subsidization of IUU fisheries prohibited by an additional article (Art X, see General Exceptions)  176  Proposal  Prohibition  Japan Proposal  Art I.2 Nothing in this Annex shall be construed as authorizing to facilitate, in particular through the granting of any subsidy referred to Article 1, illegal, unreported or unregulated fishing.81  (TN/RL/GEN/171)  fn 81 The terms "illegal", "unreported" and "unregulated" shall have the same meaning as in Article 1(e) of the Agreement on Port State Measures to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing, adopted by the Conference of the Food and Agricultural Organization of the United Nations at its Thirty-sixth Session in November 2009  General Exceptions  S&DT no general exemptions related to IUU fisheries proposed  Para 51 Taking into account the entire picture of the Doha Development Agenda, Japan is not against the exemption of basic discipline (Article I. 1 (a), (b), (c) and (d) of Japan's proposal) for LDC Members. Members, however, should be careful so that this treatment should not facilitate IUU fishing activities. In the past, the insufficient fisheries management capacities of certain flag states were abused by IUU fishing, thereby causing serious overfishing problems. Therefore, any subsidy for IUU fishing should not be justified for any Member including LDC Members. Consequently, Article I.2 of Japan's proposal, which originally appeared in Article I.1(h) of the Chair's text of 2007, is applicable to all Members.  no general exemptions related to IUU fisheries proposed  Morocco Proposal  Exception 1 (LDCs)  (TN/RL/GEN/170)  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence) Art III.2 Subsidies referred to in Article I.1 no specific amendments proposed  no general exemptions related to IUU fisheries proposed  Conditionality Art III.2 ...exclusively to small scale marine wild capture fishing activities performed on an inshore basis (i.e. within the territorial waters of the Member), provided that these activities land their catch fresh and are performed by fishworkers on an individual or family basis or employed by associations, micro enterprises, cooperatives or individual boat owners. Fisheries management measures aimed at ensuring a sustainable level, such as the measures referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures.  177  Proposal  Prohibition  Korea & Chinese Taipei Proposal  Art I.2 In any case, subsidies the benefits of which are conferred on any vessel engaged in illegal, unreported or unregulated fishing shall be prohibited.7  (TN/RL/GEN/159)  fn 7 The terms "illegal fishing", "unreported fishing" and "unregulated fishing" shall have the same meaning as in paragraph 3 of the International Plan of Action to Prevent, Deter and Eliminate Illegal Unreported and Unregulated Fishing of the United Nations Food and Agricultural Organization.  General Exceptions  no general exemptions related to IUU fisheries proposed  S&DT  no specific amendments proposed  178  IX. Subsidies to Fisheries Targeting Unequivocally Overfished Stocks Proposal  Prohibition  2007 Chair Text  Art I.2 In addition to the prohibitions listed in paragraph 1, any subsidy referred to in paragraphs 1 and 2 of Article 1 the benefits of which are conferred on any fishing vessel or fishing activity affecting fish stocks that are in an unequivocally overfished condition shall be prohibited.  (TN/RL/W/213)  General Exception  S&DT Exception 1 (LDCs) Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited where they relate exclusively to marine wild capture fishing performed on an inshore basis (i.e., within the territorial waters of the Member) with non-mechanized net-retrieval...  no general exemptions related to subsidies to fisheries targeting unequivocally overfished stocks proposed  Conditionality Art III.2(a) ...(1) the activities are carried out on their own behalf by fishworkers 82, on an individual basis which may include family members, or organized in associations; (2) the catch is consumed principally by the fishworkers 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, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures. fn 82 For the purpose of this Agreement, the term "fishworker" shall refer to an individual employed in marine wild capture fishing and/or directly associated activities.  Korea Proposal  Exception 1 (de minimis)  Exception 1 (LDCs)  (TN/RL/GEN/178)  Para 7 ...the introduction of the small-scale de minimis exemption in the General Exceptions provision...  no specific amendments proposed Exception 2 (non-LDCs) Art III.2(b) ...subsidies referred to in Article I.1(a) shall not be prohibited...  no specific amendments to other exceptions proposed  Conditionality Art III.2 ...subject to the provisions of Article V... Art III.2(b)...(i) the vessels are 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 have been subject to prior scientific status assessment conducted in accordance with relevant international standards, aimed at ensuring that the resulting capacity does not exceed a sustainable level; and (iii) that assessment has been subject to peer review in the relevant body of the United Nations Food and Agriculture Organization ("FAO").12  no specific amendments proposed  fn 12 If the Member in question is not a member of the FAO, the peer review shall take place in another recognized and competent international organization. Exception 3 (de minimis) Para 11 "In Korea's view, the small scale de minimis provision to be introduced in the general exceptions category should be able to address these concerns of developing Members. If Members agree to provide the developing Members (including those regarded as major fishing powers) with a bigger number (i.e. X+Y) than the one for the developed Members (i.e. X) with respect to the de minimis carve out, a significant portion of the concerns and political sensitivities of the developing Members (including those regarded as major fishing powers) should be addressed by the de minimis provision. At the same time, Members could consider providing a more comfort zone (i.e. X+Y+Z) for the SVEs taking into account their peculiar economic vulnerability." Argentina, Chile, Costa Rica, Egypt & Uruguay Proposal  All exceptions subject to Art I.2 (Art III.6, below) no specific amendments proposed  no specific amendments proposed  Art III.6 ...subject to provisions of Articles I.2 (overexploited stocks), IV (unfavorable effects), V (fisheries management), VI (notifications) and VIII (dispute settlement) of this Annex.  179  Proposal  Prohibition  General Exception  S&DT  (TN/RL/GEN/173/Rev.2) Exception 1 (LDCs)  Ecuador & Peru Proposal no specific amendments proposed  no specific amendments proposed  no specific amendments proposed  (TN/RL/GEN/172) (exception for subsistence fisheries removed????) Japan Proposal  Removed  (TN/RL/GEN/171)  Para 35 Japan does not support such "catch-all provisions" as appeared in Article I.2 and some other proposals. This is because: (1) the pre-determination of specific prohibitions is extremely difficult; (2) prohibitions could be sweepingly wide, encompassing every fishing activity that inadvertently catch endangered fish species; and (3) even subsidies which are necessary for the stock recovery of such fish species could be prohibited, as a result.  Art I.2 removed  Art I.2 removed  Morocco Proposal  Exception 1 (LDCs)  (TN/RL/GEN/170)  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence) Art III.2 Subsidies referred to in Article I.1 no specific amendments proposed  no specific amendments proposed  Conditionality Art III.2 ...exclusively to small scale marine wild capture fishing activities performed on an inshore basis (i.e. within the territorial waters of the Member), provided that these activities land their catch fresh and are performed by fishworkers on an individual or family basis or employed by associations, micro enterprises, cooperatives or individual boat owners. Fisheries management measures aimed at ensuring a sustainable level, such as the measures referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures.  Korea Proposal (TN/RL/GEN/168)  Art I.2 In addition to the prohibitions listed in paragraph 1, any subsidy referred to in paragraphs 1 and 2 of Article 1 the benefits of which are conferred on any fishing vessel or fishing activity7 negatively affecting fish stocks8 that are in an unequivocally and manifestly overfished condition9 shall be prohibited. fn 7 For the purpose of this Agreement, the term "fishing activity" means any activity related to fishing for marine wild capture stocks, as well as any operation in support of such fishing including harvesting, landing, processing, transshipping at sea or in port, refueling, resupplying and transporting.  no specific amendments proposed  no specific amendments proposed  180  Proposal  Prohibition fn 8 For the purpose of this Agreement, the term "fish stock" means fish that a regional fisheries management organization treats as a unit for purposes of conservation and management. In the absence of any relevant consideration of the issue by a regional fisheries management organization, a "fish stock" means fish, identified on the basis of geographical and scientific characteristics, that can be reasonably treated as a unit for purposes of conservation and management. fn 9 For the purpose of this Agreement, the term "fish stocks that are in an unequivocally and manifestly overfished condition" means the following: (a) Fish stocks within the jurisdiction of a Member that are designated by the Member, based on sufficient scientific evidence, to be in such condition; (b) Fish stocks designated by Regional Fisheries Management Organizations and Arrangements, among fish stocks falling under their respective competence, to be in such condition; or (c) Fish species listed in the Appendices I or II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES).  General Exception  S&DT  181  Proposal  Prohibition  United States Proposal  Art I.2 In addition to the subsidies prohibited in paragraph 1, any subsidy referred to in paragraphs 1 and 2 of Article 1 [of the ASCM] that is provided or used for fishing activity1 affecting marine wild capture fish stocks2 that are manifestly overfished shall be prohibited.  (TN/RL/GEN/165)  fn 1 The term "fishing activity" means fishing for marine wild capture stocks, as well as any operation in support of such fishing including harvesting, landing, processing, transshipping at sea or in port, refueling, resupplying and transporting of fish.  General Exception  S&DT  no specific amendments proposed  no specific amendments proposed  fn 2 The term "fish stock" means fish that a regional fisheries management organization treats as a unit for purposes of conservation and management. In the absence of any consideration of the issue by a regional fisheries management organization, a "fish stock" means fish, identified on the basis of geographical and scientific characteristics, that can reasonably be treated as a unit for purposes of conservation and management. Exception 1 (LDCs)  Brazil, China, India & Mexico Proposal  no specific amendments proposed (TN/TL/GEN/163) Exception 2 (non-LDC subsistence) Art III.2 ...the subsidies referred to in Article I.1shall not be prohibited... no specific amendments proposed  no specific amendments proposed  Conditionality Art III.2 ...the benefits of those subsidies are conferred 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 referred to in Article V, should be implemented in respect of the fisheries in question, adapted as necessary to the particular situation, including by making use of indigenous fisheries management institutions and measures.  Korea & Chinese Taipei Proposal (TN/RL/GEN/159)  Removed Para 9 9. In the case of the original Article I.2, neither sufficiently clear rationale for its necessity nor clear-cut interpretative gauge for "an unequivocally over-fished condition" has been presented and as such it is apparent that this provision is unoperational. Therefore, this provision should remain deleted until we have a better understanding of this proposed paragraph.  Art I.2 removed  Art I.2 removed  182  Proposal  Prohibition  General Exception  Canada Proposal  Exception (de minimis)  (TN/RL/GEN/156/Rev.1)  Art II(f) ... subsidies that are used exclusively in support of fisheries conducted within waters subject to its jurisdiction  S&DT  Conditionality Art II ...subject to the provisions of Article V...  no specific amendments proposed  Art II(f) ...(i) the annual amount of subsidies does not exceed X% of the average annual landed value of fish harvested in these waters for the three preceding years for which data is available, or (ii) for developing country Members accounting for less than 0.5% of the average annual global fish catch over the three preceding years for which data is available, the annual amount of subsidies does not exceed X% + Y%, or $US xxx xxx, whichever is greater.  no specific amendments proposed  no specific amendments to other exceptions proposed India, Indonesia & China Proposal (TN/RL/GEN/155/Rev.1)  Exception 1 (LDCs)  Art I.2 In addition to the prohibitions listed in paragraph 1, any subsidy referred to in paragraphs 1 and 2 of Article 1 the benefits of which are conferred on any fishing vessel or fishing activity affecting fish stocks that are declared to be in an over fished condition shall be prohibited.  Art III.1 The prohibition of Article 3.1(c) and Article I shall not apply to least-developed country ("LDC") Members. Exception 2 (non-LDC subsistence) Art III.2(a) Subsidies referred to in Article I.1 shall not be prohibited... no specific amendments proposed  Conditionality Art III.2(a) ...relate exclusively to marine wild capture fishing performed within the territorial waters of the Member without deploying any of the internationally recognized destructive fishing methods, provided that the activities are carried out by fish workers, on an individual basis or organized in associations or on employment basis. It is desirable that adequate measures for ensuring sustainability and to prevent environment degradation are adapted as necessary to the particular situation, by making use of indigenous fisheries management institutions and measures.  Additional Prohibition: Australia Proposal (TN/RL/GEN/167) Subsidies provided to any vessel engaged in fishing practices which have or may have significant adverse impacts on vulnerable marine ecosystems and habitats (including bottom fishing and large scale drift-net fishing) and which are not conducted in accordance with relevant provisions of international instruments aimed at ensuring the sustainable use and conservation of marine species.  183  

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