WTO and India

Agreement on Fisheries Subsidies (AFS)

Note4Students

From UPSC perspective, the following things are important :

Prelims level : AFS

Mains level : Paper 3- Agreement on Fisheries Subsidies (AFS)

Context

The recently concluded twelfth ministerial conference of the World Trade Organisation (WTO) adopted the trade agreement called the Agreement on Fisheries Subsidies (AFS).

About the AFS

  • WTO negotiations on fisheries subsidies were launched in 2001 at the Doha Ministerial Conference, with a mandate to “clarify and improve” existing WTO disciplines on fisheries subsidies.
  • At the 2017 Buenos Aires Ministerial Conference (MC11), ministers decided on a work programme to conclude the negotiations by aiming to adopt, at the next Ministerial Conference, an agreement on fisheries subsidies which delivers on Sustainable Development Goal 14.6.
  • The recently concluded twelfth ministerial conference of the World Trade Organisation (WTO) adopted a sustainability-driven trade agreement called the Agreement on Fisheries Subsidies (AFS).

Provisions adopted in the AFS

  • Prohibits three subsidies: Fundamentally, AFS prohibits three kinds of subsidies:
  • First, illegal, unreported, or unregulated (IUU) fishing.
  • Second, fishing of already over-exploited stocks.
  • Third, fishing on unregulated high seas.
  • Two-year transition period for developing countries: As part of special and differential treatment (S&DT), developing countries like India have been given a two-year transition period for phasing out the first two kinds of subsidies within their Exclusive Economic Zone (EEZ).
  • However, the final negotiated outcome, most crucially, lacks the much-needed discipline on subsidies for fishing in other members’ waters and those that contribute to overcapacity and over-fishing (OCOF).
  • Limited AFS: WTO member countries agreed to a limited AFS sans regulations disciplining OCOF subsidies, which have been pushed to the future and are expected to be completed within four years.
  • If negotiations fail, the AFS will stand terminated, as provided in Article 12.
  • Meanwhile, all countries can continue providing most OCOF subsidies, that is, except for fishing on unregulated high seas.

What are the implications for India?

  • Longer transition period required: India has been demanding that developing countries be given a longer transition period of 25 years to put an end to OCOF subsidies within their EEZ.
  • Economic growth through ocean resources: Given its long coastline of nearly 7,500 kilometres, the blue economy — sustainable use of ocean resources for economic growth — occupies a cardinal place in India’s development trajectory.
  •  India has set a target of exporting marine products worth $14 billion by 2025.
  • Policy space for marine infrastructure: India needs the policy space to invest in developing the marine infrastructure to harness the full potential of the blue economy.
  • Livelihood concerns: Moreover, India needs to protect the livelihood concerns of close to four million marine farmers, the majority of whom are engaged in small-scale, artisanal fishing, which does not pose a great threat to sustainability.
  • However, India’s demand for a longer transition period was not acceptable to many countries who insisted on this period being seven years

The disparity between Developed countries and Developing countries

  • India rightly contends that WTO disciplines should not be developed in a manner that throttles its emerging sector while richer nations continue to negotiate exemptions for indefinite subsidisation and exclusion of horizontal, non-specific fuel subsidies in the text.
  • Rich countries have historically provided massive subsidies to build capacity for large-scale fishing and fishing in distant waters, thereby contributing the most to depletion.
  • India provided subsidies worth a mere $277 million in 2018, in sharp contrast to the top five subsidisers: China, EU, US, South Korea, and Japan, whose subsidies range from $7,261-$2,860 million respectively.

Way forward

  • Comprehensive agreement: For the sake of sustainability, countries need to overcome their differences soon and forge a comprehensive agreement with the inclusion of meaningful S&DT, else they risk the indefinite continuation of harmful subsidies by all players.
  • One balancing act could be to consider different ways to effectuate such flexibilities while accommodating the demands in a more targeted manner.
  • Strengthening infrastructure: India could strengthen infrastructure and mechanisms to be able to utilise any future exemptions.

Conclusion

For India, the AFS is less-than-perfect, with a potential of no real outcome at the end of four years if the negotiations fail. But negotiations over the global commons are not easy.

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