Home / Economy / India’s fishing subsidy win at WTO the start of a long fight

India’s successful defence of the rights of developing countries to subsidise their fisheries at the World Trade Organization’s ministerial conference signals the start of a long battle ahead.

The small print of the fisheries agreement suggests the matter will require further negotiations to secure the right to subsidise. The pact says that members will need to come out with comprehensive disciplines within the next four years, or see the current agreement terminated.

“If comprehensive disciplines are not adopted within four years of the entry into force of this Agreement, and unless otherwise decided by the (WTO) General Council, this Agreement shall stand immediately terminated," said article 12 of the agreement on fisheries subsidies.

During the negotiations at last week’s ministerial meeting in Geneva, India strongly opposed the article in the draft that required developing countries to do away with subsidies that contribute to overfishing and overcapacity within 7 years of the agreement coming into effect, or up to 2030.

Instead, India sought a 25-year transition period as the sector still requires support in developing countries to protect the livelihoods of low-income fishermen. These subsidies include the ones given for construction, acquisition, modernisation or upgrade of vessels; purchase of machines and equipment for vessels including fishing gear and engine, refrigerators; and for insurance and social charges.

However, as talks reached a deadlock last week, the provision cited above was removed from the text and will now need to be negotiated afresh within four years. However, subsidies on overfishing, deep sea fishing, and illegal, unreported and unregulated fishing have been covered in the current pact.

India was also pressing for disciplines on subsidies given by developed countries with large industrial fleets in the form of non-specific fuel subsidies, which account for 22% of total fisheries subsidies. However, the text completely excludes these subsidies from the pact, allowing countries to continue with these.

Experts argue that the “termination of agreement" clause of future will ensure that developing countries will continue to face pressure from rich countries to end subsidies that contribute to overfishing and overcapacity such as those given to buy vessels, refrigerators, expanding vessels, and upgrading vessels.

Some experts believe that developing countries will need a stronger negotiating position to get what they want on fisheries subsidies, as otherwise the entire agreement will expire. However, others felt the pressure on developing countries will mount to accept a deal without any special and differential treatment that gives developing countries more flexibility in trade rules and disciplines than rich nations as otherwise India would risk being labelled a deal blocker as an agreement that took 21 years to negotiate will collapse.

Biswajit Dhar, professor, Jawaharlal Nehru University, said there will be intense pressure to develop comprehensive disciplines within four years, else the 21 years of negotiations would go waste. “There will be an additional set of pressures on India as it would have to get provisions on special and differential treatment included in the agreement, which would not exist after two years."

Ranja Sengupta of Third World Network said that India lost out on the opportunity to get developed subsidizing countries with industrial fishing fleets to face disciplines.

India gives a subsidy of only $15 per fisherman per year, while the corresponding amounts for Denmark, Sweden, and the Netherlands are $42,000, $65,000, and $75,000.

ABOUT THE AUTHOR

Dilasha Seth

" Dilasha Seth is a journalist reporting on macroeconomic policy for the last 11 years. She writes extensively on issues including international trade, macroeconomic data, fiscal policy, and taxation. At Mint, she reports on trade deals that India is signing besides key policy decisions of the Ministry of Finance. She closely tracked and covered the transition to the goods and services tax (GST) regime in 2017 and also writes on direct tax-related issues. In the past, she has worked with Business Standard and The Economic Times. She is based in Bangalore."
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