Members of the World Trade Organization (WTO) Negotiating Group on Rules discussed special and differential treatment (S&DT), subsidy caps, forced labor, and a number of additional issues related to transparency, notification, and entry into force during meetings from 14-16 June 2021. Ministers will meet in July to finalize an agreement.

On 14 June, WTO Director General Ngozi Okonjo-Iweala told heads of delegation that “we still have large gaps,” and “much is left to be done to secure an agreement.” Still, she stressed that an outcome is “within reach.” The Chair of the negotiations, Ambassador Santiago Wills of Colombia, called on members to demonstrate flexibility and compromise in upcoming meetings to refine the draft text.

The African, Caribbean and Pacific (ACP) Group and the Africa Group shared a joint proposal to replace S&DT provisions under the overfishing pillar of the Chair’s text. According to a Geneva-based trade official, large developed countries said permanent exemptions for developing countries, as contained in the joint proposal, were unacceptable. Some expressed disappointment that this position, rather than support for timebound exemptions, was still being discussed this close to the end of the negotiations. One country that opposed the proposal said the provision exempting from subsidy prohibitions developing countries with less than 2.5% of global marine catch would result in only five developing countries being covered by the disciplines.

Brazil presented a proposal for a subsidy capping and reduction mechanism, which it had previously circulated in 2020. In an explanatory note, dated 11 May, Ambassador Wills said the placeholder for capping had been removed in the draft consolidated text, “given the significant progress that we have made based on the hybrid approach.” Several WTO members, including ones that had previously submitted their own capping proposals, supported a capping approach, arguing it would enable more ambitious reductions in fishing subsidies. Other members said they preferred the hybrid approach, as contained in the Chair’s text, which prohibits subsidies on the combined basis of a determination of their impact on fish stocks and an indicative list of harmful subsidies. According to a Geneva-based trade official, a group of developing country members suggested including a “rendezvous clause” in the Chair’s text that would require members to open negotiations on capping at a later stage.

Members discussed a proposal by the US on the use of forced labor on fishing vessels. The US’ proposal expands the ban on subsidies for illegal fishing to also include refueling at sea and transshipment. The US argued such a proposal is needed because refueling at sea and transshipment can exacerbate the problem of undetected forced labor. The proposal also suggests adding a notification obligation for members to report on vessels that use forced labor on an annual basis. Several countries said there are more stringent provisions in international labor treaties, and questioned the added value of notifications in the WTO. Some observed that forced labor is not part of the agreed mandate for the negotiations, and said the proposal raises additional issues about linking trade laws and human rights. According to a Geneva-based trade official, the US indicated that its proposal does not represent a departure from the negotiations because the proposal uses the sustainability provisions in the Chair’s consolidated text.

Several developing and developed countries expressed support for the US’ proposal, with several saying they appreciated that the proposal does not affect the structure of the instrument or the negotiation timetable. Members recognized that a subsidy agreement could be another tool to fight forced labor.

On transparency, the current draft provision requires members to submit information on their subsidy programs and fish stocks before they can qualify for exemptions from the subsidy provisions. Members generally agreed that such transparency is necessary for the agreement’s implementation but expressed varying levels of support for how much transparency would be required and for which members. Members also discussed how much the WTO should be authorized to examine fish stock assessments and conservation efforts.

On institutional arrangements, the Chair sought perspectives on how members envision the agreement entering into force. Ambassador Wills said some members have suggested creating a provisional application mechanism in the event entry into force takes too long or a grace period for members to bring measures into compliance if entry into force happens quickly. Members further discussed how a committee would oversee the agreement’s implementation and what additional notifications would be required.

Members reviewed two additional proposals during a meeting on 16 June. A proposal from Chinese Taipei focuses on dispute settlement provisions, including language on the scope of countermeasures in the event of a non-compliant member that refuses to comply with the finding of a dispute settlement. A proposal by Cameroon and Morocco addresses the overfishing pillar.

On 25 June, the Trade Negotiations Committee (TNC) will meet to discuss how to run the July ministerial meeting. [SDG Knowledge Hub Sources] [WTO Press Release]