FFA FISHERIES TRADE NEWS Volume 4: Issue 4 April 2011

Volume 4: Issue 4 April 2011
By Amanda Hamilton, Elizabeth Havice, Liam Campling[1]
Fisheries Subsidies
WTO Doha Round on the brink of collapse 
Implications of a Doha Collapse for fisheries subsidies 

Preferential Trade Agreements
Free Trade Agreement signed between the EU, Columbia and Peru

Fisheries Management
Outcomes from PNA Annual Ministerial Meeting
Draft MSC assessment report is released for PNA skipjack fishery
Greenpeace’s ongoing push to establish the ‘Pacific Commons’

Fisheries Development
Pacific Island Countries receive € 8 million for fisheries development under DEVFISH II

Quality Standards
US-FDA releases new seafood hazards guide

Fisheries Subsidies

WTO Doha Round on the brink of collapse 

During an April 29 meeting of the Trade Negotiations Committee (TNC), the highest negotiating body of the WTO, the WTO Director-General, Pascal Lamy, warned members that the Doha Development Round is once again on the brink of collapse.  TNC discussions were centred on a set of documents from the various negotiating groups (released on 21 April) providing updates on the current state of play of negotiations or new draft texts, with the intention of addressing the issue of what comes next for the Doha Round.[2] 
Lamy indicated during the TNC meeting that the major issue blocking progress in negotiations and seriously threatening the conclusion of the Doha Round by the end of 2011 are ‘unbridgeable gaps’ in member positions concerning market access for non-agricultural (industrial) goods (NAMA).  One of the stalemates in NAMA negotiations has been a serious rift in positions concerning the extent to which developing countries, particularly larger developing countries such as China, India and Brazil, would need to cut or eliminate tariffs on industrial goods.  Negotiations on agriculture have also been contentious. 
Lamy has appealed to WTO members to carefully reflect on a way forward, so as to not throw away ten years of solid work and has indicated that he still senses a desire from members to find a solution, despite a current lack of clarity about what that solution might actually be.   He stressed that “business as usual”, “stopping and starting from scratch” and “drifting away….by wishing the issue would simply disappear” are not acceptable options.[3]
Throughout the TNC meeting, members reportedly remained focussed on discussing options for finalising ‘Plan A’; that is, members’ reaching consensus in all facets of the negotiations and concluding the Doha Round.  However, informal discussions amongst trade officials and the media have reportedly commenced on potential ‘Plan B’ alternatives, should the Doha Round completely collapse.[4]  One such option, raised previously when negotiations stalled in 2006, is ‘hand-picking’ less contentious issues where solid progress has been made in negotiations and attempting to conclude stand-alone agreements on these, while setting aside the controversial sectors like NAMA and agriculture.  However, with the exception of trade facilitation, members’ positions would likely differ on which issues to focus attention on for devising stand-alone agreements.  Another ‘Plan B’ option discussed by some Geneva-based trade officials is providing duty or quota-free market access to exports from LDCs, as well as a waiver which would authorise preferential selection of LDC service providers.  A third option is suspension of the Doha Round or imposition of a ‘quiet time’ from intensive Doha negotiations, during which time WTO members could focus their attention on addressing developing country concerns about existing rules or focus on newer issues.[5]   
Since the commencement of the Doha Round in November 2001, negotiations have stalled several times.  While it is possible that the round will not collapse completely, rendering Doha ‘dead’, this largely depends on whether consensus can be reached on industrial goods under NAMA.  Currently, this looks unlikely, particularly in the wake of a US presidential election due in 2012.  To date, the US has sought the highest level of ambition from large developing countries (i.e. Brazil, India and China) concerning a reduction in tariffs in all industrial sectors under NAMA.[6]  
The TNC is scheduled to meet on 31 May and continue discussions about the future of the Doha Round.  In the meantime, trade ministers from a number of WTO member countries will have an opportunity to discuss Doha Round issues in the margins of the annual ministerial meeting of the Organisation for Economic Co-operation and Development (OECD) and Asia-Pacific Economic Cooperation (APEC) summit to be held during May.[7] 
Implications of a Doha Collapse for fisheries subsidies [8]
The Chair of the Negotiating Group on Rules, Ambassador Dennis Francis, provided a detailed narrative report on the current state of play of fisheries subsidies negotiations to the 29 April meeting of the WTO’s Trade Negotiations Committee (TNC).  Ambassador Francis indicated that given the ongoing lack of convergence on core substantive issues, as well as technical issues, he is not yet in a position to draft a revised ‘bottom-up’ legal text.
Numerous new proposals received during 2010-2011 generally reflect and elaborate on already well-established and divided positions of members.  Hence, according to the Chair, despite intensive work undertaken and a wealth of new proposals, the fisheries subsidies negotiations remain in more or less the same impasse as at the end of 2008, with member positions hardening, if anything. 
Ambassador Francis’ report notes that the fisheries subsidies negotiations pose significant challenges for both him, as the Chair, and also negotiators, due in part to the fact that the main elements of the negotiation – prohibition, general exceptions, special and differential treatment for developing countries and fisheries management – are interdependent.  These inter-linked elements need to be carefully balanced and adjustments to one element will in turn require corresponding adjustments in the others.  An additional challenge highlighted by the Chair is the lack of agreement over the scope and definition of some of the basic terms and concepts under negotiation, which in some cases are highly technical and pertain to a sector which is relatively new to the WTO. 
Strong consensus exists amongst members concerning the serious decline in global fisheries resources and the significant contribution that harmful fisheries subsidies make to overfishing.  Despite this, the Chair feels that rather than seeking to build convergence and accepting an appropriate level of disciplines to effectively address the issue, the majority of delegations are focussing on minimising the impact of any disciplines on their own activities, while placing the responsibility to implement solutions on other members.  Ambassador Francis warns that unless members focus less on protecting their short-term defensive interests, he does not hold great prospects for the fisheries subsidies negotiations.
The Chair’s report provides a detailed summary of members’ positions, an assessment of the main challenges and highlights specific areas where wide gaps remain.[9]  Environmental NGO, WWF, has commended the Chair on the strong language adopted in the report which “clearly leaves the door open to strong WTO rules on fisheries subsidies”.[10]
In the event that the Doha Round collapses completely, the opportunity to use trade rules for effective disciplines on fisheries subsidies through the WTO will potentially be lost.   This is of great concern to all WTO members (not least of all PICs, who depend heavily on fisheries resources for food security and economic development), given 85 per cent of world fish stocks are either fully exploited or already over exploited, and harmful fisheries subsidies have contributed considerably to global fishing overcapacity.  However, hope still remains for an agreement on disciplines for fisheries subsidies, should attempts be made to conclude selected stand-alone agreements, should the Doha Round collapse. Fisheries subsidies disciplines are one such area of negotiations identified by a number of trade specialists that could be a suitable candidate for pursuing a smaller stand-alone agreement.
Should the Doha Round fully collapse, one consolation for ACP countries who enjoy duty free market access to the EU under the Cotonou Agreement, is that trade preferences will not be eroded through multilateral tariff liberalisation.  This will bring some relief to PIC canned tuna processors in PNG, Fiji and Solomon Islands, who rely heavily on tariff preferences to remain competitive in the EU market against other lower cost processors in Southeast Asia and Latin America.  However, if the Doha Round collapses, there is likely to be a rise in importance of free trade agreements (FTAs), which if concluded between PIC’s major competitors (e.g. Thailand) and principal markets for tuna (i.e. EU, US), then PIC trade preferences will erode indirectly.  
Preferential Trade Agreements

Free Trade Agreement signed between the EU, Columbia and Peru

In mid-April 2011, a free trade agreement was signed between the EU, Colombia and Peru, following nine rounds of trade negotiations which commenced in January 2009.  Upon implementation, the trade agreement will eliminate tariffs in all industrial and fisheries products and reduce technical barriers to trade, amongst other cited benefits.[11]
The agreement also leaves open the possibility for increased trade cooperation between the EU and the Andean Region (i.e. Bolivia and Ecuador, in addition to Colombia and Peru), through the inclusion of an ascension clause.  While originally included in FTA negotiations, Ecuador withdrew in July 2009 due to several concerns directly relating to the FTA, as well as a long-running dispute with the EU over its banana tariffs.[12]  
Both Colombia and Peru have established tuna industries.  In 2010, Colombia had a fleet of eleven purse seine vessels and three canned tuna processing facilities, which combined, have a maximum processing capacity of 415 mt/day (99,600 mt/year).  Peru has a small purse seine fleet comprised of less than ten vessels.[13] 
Colombia and Peru currently enjoy duty free access for canned tuna and cooked loins to the EU under GSP Plus, but in qualifying for this trade preference, have had to ratify 27 international conventions on good governance, human rights, labour standards and the environment, as well as complying with rules of origin.   The conclusion of an FTA will ensure that Colombia and Peru maintain duty free access to the EU, without the burden of ratifying a plethora of international conventions, when the current GSP+ preference expires on 31 December, 2011.   
Fisheries Management

Outcomes from PNA Annual Ministerial Meeting[14]
From 4-11 April 2011, fisheries officials and Ministers gathered in Tuvalu for the annual meeting of the Parties to the Nauru Agreement (PNA).  Fisheries officials first met to discuss a range of issues relating to the sustainable management and development of PNA tuna resources, and then draft recommendations for consideration by Fisheries Ministers.  Discussions and subsequent decisions made at the Ministerial level centred on three key areas – increasing PNA members’ share of economic profits from the tuna fishery; strengthening conservation and management measures; and, taking greater control of fisheries management.
Key decisions made by PNA Ministers included:
* Increase PNA share of economic profits – establish a PNA Crewing Agency in Tarawa, Kiribati to support the PNA requirement that a minimum of 10% of crew members on board purse seine fishing vessels are Pacific Island nationals; strengthen commercial ties with industry and retailers.
* Strengthening conservation and management measures – extend the current three-month FAD closure period to six months, during which time purse seine vessels will only be able to fish on free-swimming schools; restriction of mesh size of purse seine nets (no less than 90mm) to limit incidental catch of juvenile bigeye and yellowfin; note the trial currently being undertaken of a Longline Vessel Day Scheme (LL VDS).
* Taking control of fisheries management – establish a PNA Observer Agency with hubs in FSM and PNG to help meet the requirement for 100% observer coverage on purse seine vessels; establish an online fisheries information management system to better integrate and control fisheries data (i.e. log sheets, observer reports, surveillance reports, licencing information , days fished etc.).
Draft MSC assessment report is released for PNA skipjack fishery

On 20 April, 2011, Moody Marine Ltd., the MSC-accredited certification body responsible for conducting a full assessment of the PNA skipjack tuna fishery under the Marine Stewardship Council (MSC) certification scheme, publicly released the draft assessment report for stakeholder comment.  Under MSC’s full assessment process, following completion of the draft report, stakeholders are given 30 days to comment on the factual content of the report (in relation to either scoring indicators or other information contained within the report body) and submit recommendations and/or criticisms, together with objective supporting evidence.[15]
The MSC full assessment commenced in April 2010 and covers skipjack caught by purse seine vessels fishing on free-swimming (unassociated) schools and natural log sets within PNA waters of the Western and Central Pacific ocean (i.e. EEZs of PNG, Kiribati, FSM, Marshall Islands, Nauru, Palau, Solomon Islands and Tuvalu).  If successful, up to 50 per cent of annual catch from PNA’s skipjack tuna fishery (around 560,000 mt in 2009), will be certified sustainable under the MSC eco-labelling scheme[16] and will provide PNA members with an opportunity to benefit from burgeoning retailer demand for sustainably caught canned skipjack tuna.
The draft report includes results of the assessment of the fishery against MSC’s principles and criteria for sustainable fishing: i) sustainability of the exploited stock; ii) maintenance of the ecosystem; and, iii) effective fisheries management.  Under the assessment, free-school set and log set fishing activities have been assessed as two separate units of certification.  Preliminary results indicate that the free-school fishery passes all three principles and as such, may be deemed to be MSC certifiable, subject to PNA members meeting a series of conditions that must be addressed over the five-year period of certification.  The log set fishery fails Principle 2 concerning maintenance of the ecosystem, and hence, is highly unlikely to be recommended for MSC certification.[17]  The results of the assessment are preliminary and are subject to change, depending on comments received by stakeholders (as well as any objections potentially received when the final report is released).   
Given the complexity of the fishery and the fact that it is the first purse seine fishery to enter into MSC certification, a series of concerns about the assessment have already been raised during the stakeholder consultation process conducted last year.  Further concerns are likely to be aired during the 30-day stakeholder comments process, in response to the scoring process and assessment results contained in the draft report.  One of the key issues of contention relates to the fact that purse seine vessels fishing on free-schools and naturally occurring log sets also generally set on artificial fish aggregation devices (FADs) during any one trip.  Besides the issue of being able to separate MSC and non-MSC-compliant segments of the catch on board during a single trip (which could be possible by designating separate fish wells on board and verification of the separation by observers), there is concern that the certification ignores the fact that the portion of vessels’ catch taken from FAD sets, could in fact be unsustainable, given the incidental by-catch of juvenile bigeye and yellowfin associated with FAD fishing.[18]  
Following receipt of comments from stakeholders on the draft report, Moody Marine Ltd., will make a final determination on whether the fishery should be certified or not.  The assessment process is expected to be completed on 22 July 2011.  Following release of the final report, 15 working days will be allowed for stakeholders to lodge objections to the decision.  Provided the fishery is deemed certifiable and no objections are received, it is anticipated that the PNA skipjack fishery would be eligible to start using the MSC logo on 28 October, 2011.[19]
If objections are raised, the fishery will enter into MSC’s ‘Objections Procedure’, which attempts to resolve disagreements concerning the assessment recommendations.  If objections cannot be solved informally, an Independent Adjudicator will be bought in to review the objection and make a final decision.[20]  It is highly likely that objections to the final assessment results will be raised by stakeholders such as the International Seafood Sustainability Foundation (ISSF) and/or environmental NGOs (e.g. Pew).  ISSF has already publicly opposed the MSC certification for PNA skipjack and in a recent media release has warned that “the world will have to wait” and that “there’s still plenty of process left before the fishery is given a thumbs up or down”.[21]  
Greenpeace’s ongoing push to establish the ‘Pacific Commons’

One of Greenpeace’s major fisheries-related lobbying initiatives is the establishment of ‘no-take’ marine reserves covering 40 per cent of the world’s oceans, in which all fishing and extractive industries would be banned.  In an effort to conserve tuna in the WCPFC Convention Area,  Greenpeace has been calling for the establishment of the ‘Pacific Commons’, which entails the closure of four high seas pockets areas to all forms of fishing.[22]
Greenpeace commended efforts by the Parties to the Nauru Agreement in 2008 to close two high seas pocket areas to purse seine fishing (effective from 1 January 2010), which was later adopted by all WCPFC members.  These high seas pockets cover waters bounded by the EEZs of PNG, FSM, Indonesia and Palau (referred to as Area 1 by Greenpeace) and FSM, Fiji, Kiribati, Marshall Islands, Nauru, PNG, Solomon Islands and Tuvalu (Area 2). Ultimately, Greenpeace would like to see all types of fishing banned in these two areas, as well as in an additional two eastern high seas pockets areas (Areas 3 & 4). 
PNA members proposed at the most recent annual session of WCPFC (held in December 2010) to close additional high seas areas located within 10˚N and 20˚S latitude and 170˚E and 150˚W longitude.  These areas cover 4.5 million km of international waters and include Greenpeace’s designated Areas 3 & 4.
However, this proposal was not adopted at WCPFC 7, so the area closure only applies to those purse seine vessels licenced to fish in PNA members’ waters (effective 1 January 2011).  This has been implemented under an amendment to PNA’s Third Implementing Arrangement to the Nauru Agreement. 
In addition to applying pressure on coastal and fishing states through the RFMO process, Greenpeace has been exerting considerable pressure at the retail end of the tuna supply chain, in an ongoing effort to enhance the sustainability of global tuna fisheries.  As reported in the Jan-Feb 2011 edition of FFA Fisheries Trade News, major UK retailers, Sainsbury’s, Marks & Spencer, Princes and ASDA have committed to supporting Greenpeace’s call for the establishment of the ‘Pacific Commons’ and have undertaken not to source tuna caught from within these waters.[23]  This is in spite of the fact that there is currently no restriction in place at the RFMO level which extends to the additional high seas pockets areas covering Areas 3 & 4 or applies to all types of fishing (i.e. longlining is still permitted in Areas 1 & 2). 
This development is evidence of the growing influence that environmental NGO’s are having in the management and conservation of tuna stocks, by identifying their own solutions outside of RFMO processes, given the widely recognized failure of RFMO’s to effectively carry out their responsibilities. 
Fisheries Development

Pacific Island Countries receive € 8 million for fisheries development under DEVFISH II

The second phase of the European-Union funded project – Development of Tuna Fisheries in the Pacific ACP Countries (DEVFISH II) - is now underway. Under DEVFISH II, Pacific Island countries will receive € 8.2 million funding assistance over four years for a range of activities relating to national and regional tuna industry development and deterrence of IUU fishing.[24]  The Project has both national and regional level components and is jointly managed by FFA and SPC. 
DEVFISH II follows on from the former € 3 million DEVFISH I project (2004-2008), which was jointly administered by FFA and SPC.  The objective of DEVFISH II remains the same as DEVFISH I – to increase the contribution from the sustainable use of highly migratory marine resources, particularly tuna fisheries, to poverty alleviation in Pacific ACP countries. The main intended beneficiaries are Pacific Islanders involved in tuna fishing, marketing, processing and service industries. 
Planned activities relating to tuna industry development include: assistance with fishery development strategies; improving transparency in systems and procedures; technical support to EU-accredited Competent Authorities;  technical assistance for export-orientated industry participants; piloting new technologies and support for artisanal fishing operations.  In efforts to deter IUU fishing, DEVFISH II will offer support for the implementation of a regional MCS strategy; enhanced enforcement databases and integrated enforcement operations. 
Quality Standards

US-FDA releases new seafood hazards guide

To ensure the safe and sanitary processing and importation of fish and fishery products into the US, seafood exporters are required to have in place an approved Hazard Analysis Critical Control Point (HACCP) plan.[25]  HACCP programmes govern food safety for food exports into the US, as well as EU and Japanese markets, and are designed to prevent contamination by regulating and measuring quality indicators at specified ‘critical control points’ through the food handling process.    
The US-Food and Drugs Administration has launched the fourth edition of the Fish and Fishery Products Hazards and Controls Guide.[26]  This guide is designed to assist seafood exporters in the development of Hazard Analysis Critical Control Point (HACCP) plans, and is a particularly useful reference document for PIC tuna exporters who supply product to the US market.  The guide is available for download at: 
Coming in the next issue (May 2011, Vol. 4: Issue 5)

* Update on Vanuatu’s accession to WTO
1 Prepared for the FFA Fisheries Development Division by Liam Campling, Consultant Fisheries Trade Analyst, FFA and School of Business and Management, Queen Mary, University of London, Elizabeth Havice, University of North Carolina at Chapel Hill; and Amanda Hamilton, independent consultant. Desktop publishing by Antony Price. The authors would like to thank Hugh Walton for his input on an earlier draft of this briefing. The contents of this briefing (including all analysis and opinions) are the responsibility of the authors and do not necessarily reflect the positions or thinking of the FFA Secretariat or its Members.
2 ICTSD 2011a, TNC: WTO Chief Lamy Calls for ‘Serious, Active Reflection’ on How to Save Doha, Bridges Weekly Trade News Digest, 4 May 2011.  Available at: http://www.ictsd.org 
3 ICTSD 2011a, 4 May 2011. 
4 ICTSD 2011b, WTO Members Exploring Options for Doha ‘Plan B’, Bridges Weekly Trade News Digest, 4 May 2011. 
5 ICTSD 2011b.  Available at: http://www.ictsd.org 
6 ICTSD 2011, ‘Pessimism Reigns as WTO Hits Easter Deadline, Bridges Weekly Trade News Digest, 20 April 2011.  Available at: http://www.ictsd.org 
7 ICTSD 2011a.
8 Unless indicated otherwise, this article is based on the following source: WTO 2011, Communication from the Chairman – Negotiating Group on Rules, TN/RL/W/254, Report to the WTO Trade Negotiations Committee, 21 April 2011.  Available at: http://ictsd.org/downloads/2011/04/rules-francis.pdf
9 For specifics, please refer to the Chair’s report, available at: http://ictsd.org/downloads/2011/04/rules-francis.pdf
   or previous editions of FFA Fisheries Trade News where issues pertaining to WTO Fisheries Subsidies negotiations are covered on an ongoing basis. 
10 FIS 2011, WWF applauds WTO for urging governments to halt fisheries subsidies, 26 April 2011.  Fish Information and Services,  Available at:  http://www.fis.com
11 ICTSD 2011, EU, Columbia, Peru FTA to Slash Fisheries Tariffs, Promote Sustainable Development, ICTSD Bridges Trade Bio Res, 18 April, 2011.  Available at:  http://www.ictsd.org
12 ICTSD 2009, Colombia and Peru – Minus Ecuador – Forge ahead in EU trade talks.  Bridges Weekly Trade News Digest, 5 August 2009.  Available at: http://www.ictsd.org 
13 This information is based upon findings from a major new study commissioned by FFA to be published later this year. Amanda Hamilton, Antony Lewis, Mike A. McCoy, Elizabeth Havice and Liam Campling (forthcoming),  Impact of industry and market drivers on the global tuna supply chain, Honiara: FFA.
14 Anouk Ride 2011, PNA Ministers decide: increase PNA share of economic profits, ban small mesh nets, limit FADs, take control of fisheries management.  FFA media release.  11 April 2011.  Available at:  www.ffa.int.
15 MSC 2011, Track a Fishery in Assessment – PNA Western and Central Pacific Skipjack Tuna.   Available at:  www.msc.org
16 Amanda Hamilton, Elizabeth Havice & Liam Campling 2010, PNA skipjack purse seine fishery to enter into MSC certification, FFA Fisheries Trade News-April 2010.  Available at: http://www.ffa.int/trade_news
17 Moody Marine Ltd., 2011, MSC Assessment Report for PNA Western and Central Pacific Skipjack Tuna unassociated and log set purse seine fishery – Version 3: Public Consultation Draft.  Available at:  http://www.msc.org
18 18 Amanda Hamilton, Elizabeth Havice, Liam Campling & Manleen Dugal 2010, MSC assesses skipjack and yellowfin for sustainability, advocacy groups ISSF and Pew object, FFA Fisheries Trade News-October-November, 2010.  Available at: http://www.ffa.int/trade_news
19 Atuna 2011, High Interests at Stake with MSC Skipjack Tuna for PNA, Atuna, 28 April 2011.  Available at: http://www.atuna.com
20 For more information on the MSC full assessment process, visit: http://www.msc.org/get-certified/fisheries/assessment-process/assessment
21 Susan Jackson 2011, Analyzing the PNA Draft Assessment – What it Means for a World Market in Search of Sustainable Tuna, ISSF, 26 April 2011.  Available at: http://iss-foundation.org
22 Greenpeace International (2009) The Pacific Commons.  4 August 2009.  Available at: www.greenpeace.org
23 FFA Fisheries Trade News – Jan-Feb 2011, Volume 4: Issue 1 & 2.  Available at: www.ffa.int/trade_news
24 Anouk Ride (2011) DEVFISH II project of EU funded $10 million USD underway to develop fisheries in Pacific Islands.  Media release. 14 March 2011, FFA.
25The US requirement for seafood exporters to have in place a HACCP plan is stipulated under the US Fish and Fishery Products Regulation (21 CFR 123).  Available at: www.accessdata.fda.gov/scripts/cdrh/cfdocs/cfcfr/CFRSearch.cfm?CFRPart=123
26 Megapesca 2011, News Edition of FDA Seafood Hazards Guide, FishFiles Lite, 29 April 2011. 
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