I will tell you about the fisheries subsidies negotiations that are currently underway within the World Trade Organization. I will be speaking in both French and English because the draft text that I have here is written in English. I have been told that there is a French version, but I have been unable to locate it. I believe that it has just been published.
As you are no doubt aware, a draft text on the current fisheries subsidies negotiations within the WTO has just been made public. Of course, it is only a draft text; it has not been adopted as an agreement. We don't know if it will eventually lead to an agreement. That will, of course, depend on the outcome of the Doha Round. So this is a virtual text that may become an agreement, but that is not its current status.
There are boxes in this text. At the outset, we wondered what this agreement would look like: would it resemble an agreement on agriculture, or would it be a completely separate sectoral agreement on fisheries? In the end, that is not what happened. It is important for you to be aware of that, since the operational consequences could be far-reaching.
A decision was made to add an annex to the WTO Agreement on Subsidies and Countervailing Measures, also known as the SCM Agreement. From an official point of view, the draft text has now become Annex 8 of that agreement. It is not a separate agreement, like the Agreement on Agriculture, for example. This annex is now part and parcel of the SCM Agreement. If it is adopted, it will be interpreted in relation to the agreement.
What you would like to know is what subsidies will be targeted, and which ones will be subject to some type of disciplinary action. As is the case for the agriculture agreement, a traffic light approach has been adopted; this involves red, green, blue, etc. coloured boxes. There are three boxes in this agreement, and I will tell you what is in each one of them.
The first box contains the prohibited subsidies. Picture it as a red box, within it the subsidies that are not allowed. Then we have the box of subsidies that are not prohibited. The vocabulary for this category is somewhat strange. It doesn't mean that they are allowed under all circumstances, but in most cases, they would be acceptable. Nevertheless, there are still some restrictions. That, essentially, is the green box. Then there is a box for what is known as the special and differential treatment approach, namely, all of the special treatment afforded to developing countries.
The red box is the most important one since it includes the prohibited subsidies. There are a number of subsidies that are banned and absolutely prohibited.
I will even tell you that in cases of disputes arising over the subsidies, the end of the annex states that the dispute settlement mechanism used will be the same as that used for prohibited subsidies in the subsidies agreement. This is a separate mechanism, a very specialized one and one that moves very quickly. It reflects the seriousness of that prohibition.
One important point is that we're not just talking about fishing vessels, we're also talking about service vessels, for example vessels that bring fuel to fishing vessels. It is interesting to note that there are references to both fishing vessels and service vessels. This does not deal strictly with fishing vessels. What do those prohibitions include? They include any subsidies for the acquisition, construction, repair, renewal, and modernization of fishing vessels.
The second item in the prohibited red box includes any subsidies for the purposes of transferring vessels to third countries. If Canada wants at some point to transfer or sell surplus fishing fleet vessels to other countries, any subsidies to achieve that, to sweep the dust under the rug, are totally prohibited. It is forbidden to transfer any part of Canada's fleet to third countries, because the goal is to ensure that global supply does not increase. Therefore, if Canada's dust is swept under the carpet, then that does not work. Therefore, any assistance for any transfers to third countries is prohibited.
As expected, any assistance for the operating costs of vessels is prohibited. The simplest example would be a subsidy for the purposes of purchasing fuel at a special price; that would be absolutely prohibited. Any assistance for operating costs is also prohibited. Any subsidy whose purpose would be to cover fishing vessel losses would also be absolutely prohibited.
Another equally important item is subsidies for ports or port infrastructures for activities related to fishing. If you want to repair a dock that is used by fishing vessels to unload their catch, then any subsidies related to fishing activities in that port will be prohibited.
Another item that might be very important for you is the one covering income support for fishers. Let us suppose that you decide to set a minimum income level, whether that be through prices or through income. Any policy whose purpose is to guarantee incomes directly through the use of targets, whether they be income or prices to fishers, would be absolutely unacceptable and considered to be a prohibited subsidy.
Another important point I would make is this. Let us suppose that Canada acquired access rights for fishing in another country's offshore zones. If the Government of Canada were to transfer its rights to Canadian fishers, with no compensation, at the same price it paid, then that would be called a transfer of rights and would be a prohibited subsidy.
I should make an important distinction. The fact that Canada is purchasing access rights from a developing country in order to fish in the Caribbean, for example, and is doing this government-to-government, does not constitute a subsidy in itself. Countries were concerned for a very long time about whether or not that type of contract between countries was already prohibited. It's not prohibited. When Canada transfers to fishers the rights that it purchased without making them pay for those rights, that constitutes a subsidy. But the purchase of rights by Canada from another country does not constitute a subsidy in itself.
In World Trade Organization agreements, usually all the effects that are used for subsidy criteria are trade effects. They are called trade effects. But for the first time in the fisheries sector, something completely new is happening within the World Trade Organization. For the first time, ecological effects will be used to determine disciplines for certain trade practices. For example, with respect to the red box, any time a subsidy's purpose is to stimulate fishing of a stock that is clearly threatened, then that subsidy will be absolutely prohibited. I would like to draw your attention to the fact that for the first time practices are being prohibited for considerations other than trade considerations. For example, something could increase the market share but could have ecological effects.
What is in the box of subsidies that are not prohibited? As I already pointed out, the term is somewhat ambiguous because it implies that they are absolutely allowed. Not necessarily, because the texts overlap and in the end marginal means may be used. Overall though they are actually allowed.