Robert Sisilo
The first came on 10 October 2006 when the WTO General Council agreed for the Pacific Islands Countries to use regional bodies to help them meet their obligations in three WTO Agreements.

These are the Sanitary & Phytosanitary Measures (SPS), Technical Barriers to Trade (TBT) and Trade Related Aspects of Intellectual Property Rights (TRIPS). And to put icing on the cake, the council also agreed to provide technical and financial assistance to such regional bodies.

The second came on July 27 (2007) when the WTO General Council agreed to a request by Fiji, Papua New Guinea and 17 other small developing countries to continue providing financial assistance such as income tax exemptions, etc; to industries that are producing exports until December 31, 2015.  

Under the existing WTO rules, such government support should stop at the end of 2007.

But realising the important role government support plays in their export processing and mining industries, Fiji and Papua New Guinea had other plans. They joined forces with other small countries in the Caribbean and Latin America and tabled a proposal in April 2006 seeking an extension of the deadline. This is to give more time for their industries to adequately prepare for a more competitive trading environment.

For Fiji, the programmes to benefit from the extension are the Short-Term Export Deduction Scheme, the Export Processing Factories/Export Processing Zones Schemes and the Income Tax Act (Film Making and Audio Visual). For Papua New Guinea, it is on the granting of tax exemption under Section 45 of the Income Tax Act.
It took 15 months of tough and protracted negotiations not only with the developed but also other developing countries. The countries benefiting from the decision are Antigua and Barbuda, Barbados, Belize, Costa Rica, Dominica, Dominican Republic, El Salvador, Fiji, Grenada, Guatemala, Jamaica, Jordan, Mauritius, Panama, Papua New Guinea, St. Lucia, St. Kitts and Nevis, St. Vincent and the Grenadines, and Uruguay.

These are all small, vulnerable economies (SVEs) and they all suffer diseconomies of scale. This is caused by the small size of their economies and administrations and by their physical isolation. The aggregate effect of the difficulties faced by small economies is that these economies are particularly vulnerable and unable to fully and better integrate into the multilateral trading system and benefit from the positive aspects of international liberalisation.

It should also be recognised that small, vulnerable economies account for a very small and insignificant share of total world trade.

Members remain divided on fisheries subsidies

What was said about export subsidy programmes could not, however, be said about the negotiations on fisheries subsidy disciplines. 

Members remain divided on how to treat access fees in fisheries access agreements.

Following months of negotiations, members have now accepted the argument by Forum Islands Countries not to treat government-to-government payments as subsidies and therefore banned. 

However, it is the onward transfer of fishing rights from a distant water fishing nation (DWFN) to its private fishing fleet that has become quite controversial.

For the so-called ‘Friends of Fish’ group, led by New Zealand, this constitutes a subsidy and should therefore be banned. 

But we rejected this and pointed out that the financial amount paid by a DWFN and the amount paid by a private fishing fleet does not necessarily mean it is a subsidy.

This is because it is difficult to determine the commercial rate of fishery access rights and a workable ‘market’ benchmark against which to prove the notion of ‘benefit’. 

Another complicating factor here is the inclusion of development assistance in the package of the total compensation paid by the DWFN. 

But if countries can prove to us that disciplining onward transfer of rights would not have any negative impact on the revenues of islands countries, then we could consider the inclusion of this in the new disciplines. No one stepped forward to prove that.

The Negotiating Group on Rules (including fisheries subsidies) will meet towards the end of September, focussing probably on special and differential treatment.

But now that the chairs of Agriculture and NAMA have floated their draft texts, it is expected that other chairs, will follow suit.

‘The devil is in the details’, negotiators always say. The fisheries text will show to what extent our concerns have been heard and perhaps more importantly, listened to. And the negotiations that will follow will be more focussed, text-based and even tougher.