Agreement on Fisheries Subsidies (AFS) : Daily Current Affairs

Relevance: GS-2: Important International institutions, agencies and fora- their policy.

Key phrases: Agreement on Fisheries Subsidies, Twelfth ministerial conference, World Trade Organisation, Sustainable Development Goal 14.6, Illegal, unreported, or unregulated (IUU) fishing, Marine infrastructure, Special and differential treatment, Exclusive Economic Zone.

Why in News?

Negotiations over the global commons are not easy. But the Agreement on Fisheries Subsidies is an important milestone in trade governance.

Context:

One of the most promising outcomes of the recently concluded twelfth ministerial conference of the World Trade Organisation (WTO) is the adoption of a new, first-of-its-kind, sustainability-driven trade agreement called the Agreement on Fisheries Subsidies (AFS).
The significance of the adoption of AFS can be gauged from the fact that this is only the third instance of amending the WTO agreement in its 27-year history.

Agreement on Fisheries Subsidies (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. That mandate was elaborated in 2005 at the Hong Kong Ministerial Conference, including a call for prohibiting certain forms of fisheries subsidies that contribute to overcapacity and overfishing.
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.
Finally at twelfth ministerial conference of the World Trade Organisation (WTO) adopted a sustainability-driven trade agreement called the Agreement on Fisheries Subsidies (AFS).
The aim of AFS as echoed by Sustainable Development Goal (SDG) 14.6 is to address harmful fisheries subsidies provided by countries towards marine fishing and to save the world’s fish stocks from further depletion.
AFS prohibits three kinds of subsidies:
- illegal, unreported, or unregulated (IUU) fishing
- fishing of already over-exploited stocks
- fishing on unregulated high seas.

Sustainable Development Goal (SDG) 14.6

SDG 14.6, part of the 2030 Agenda for Sustainable Development adopted by all United Nations member states in 2015, affirms the WTO's role in the global fisheries subsidies agenda.
SDG 14.6 targets to “by 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU fishing, and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation.”

India’s stance on Agreement on Fisheries Subsidies:

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 (that is, fuel subsidies not limited to marine fishing purposes) in the text.
India contends that 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), prove the discrepancies.
India has steadfastly demanded that developing countries be given a longer transition period of 25 years to end OCOF subsidies within their EEZ.
However, India’s demand for a longer transition period was not acceptable to many countries who insisted on this period being seven years.
Consequently, 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.
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).

Fisheries Sector in India:

India is the second major producer of fish through aquaculture in the world.
India is the 4th largest exporter of fish in the world as it contributes 7.7% to global fish production.
Fish constituted about 10% of total exports from India and almost 20% of agriculture exports in 2017-18.
The fisheries and aquaculture production contributes around 1% to India’s GDP and over 5% to the agricultural GDP.
Around 28 million people are employed in the fisheries sector in India.
The sector has immense potential to more than double the fishers and fish farmers’ incomes, as envisioned by the government.

Why does India demand for longer transition period?

India’s stand on this issue is rooted in its national interest. 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.
India needs the policy space to invest in developing the marine infrastructure to harness the full potential of the blue economy.
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.

Exclusive Economic Zone (EEZ)

Each coastal State may claim an EEZ beyond and adjacent to its territorial sea that extends seaward up to 200 nm from its baselines.
Within its EEZ, a coastal state has:
- Sovereign rights to explore, exploit, conserve, and manage the seabed and subsoil's natural resources, whether living or nonliving.
- Rights to carry out activities like the production of energy from the water, currents and wind.
- Unlike the territorial sea and the contiguous zone, the EEZ only allows for the above-mentioned resource rights. It does not give a coastal state the right to prohibit or limit freedom of navigation or overflight, subject to very limited exceptions.

Way forward:

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 and/or weaponisation of this agreement as a bargaining chip in other negotiations.
One balancing act could be to consider different ways to effectuate such flexibilities while accommodating the demands in a more targeted manner. Other strategies for India could involve strengthening infrastructure and mechanisms now to be able to utilise any future exemptions.
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. Countries, true to the SDGs, should fulfil their mandates of sustainability and development in good faith. Although the road ahead is arduous, the AFS is an important milestone in global trade governance.

Source: Indian Express

Mains Question:

Q. “The WTO agreement on fisheries subsidies is flawed but significant.” Examine the statement.