From Fisheries Subsidies To Energy Reform Under International Trade Law

"This paper argues that World Trade Organization (WTO) fisheries subsidies negotiations should be a priority area for those practitioners and researchers building links between trade and climate law. It is submitted that successful fisheries subsidies reform will directly contribute to the implementation of the Paris Agreement and to the delivery of Sustainable Development Goal (SDG) 13 ("Take urgent action to combat climate change and its impacts"), given the important synergies that exist between the transformation of fisheries subsidies and climate mitigation and adaptation. Furthermore, fisheries subsidies negotiations are of crucial importance for international climate law because they can provide a case study to learn from and increase chances of success with fossil fuel subsidy reform. This paper provides a brief historical overview of trade law negotiations aiming to reduce and reform fisheries subsidies, and shows the important synergies that exist between reforming fisheries subsidies and implementing the Paris Agreement as well as the SDGs. The paper then extracts five drivers for success that can be observed from the current process of fisheries subsidies reform: leadership of key countries and of the WTO Secretariat itself; meticulous academic, scientific and policy background analysis; commitment by civil society and the private sector; the development of alternatives to those subsidies that encourage overfishing; and inter-regime learning. Lastly, the paper discusses the transferability of these drivers for success to prevent climate harms and to address more general challenges encountered in both the climate and trade regimes." --

This much-needed book provides an empirically-grounded, and theoretically informed account of international law sources, mechanisms, initiatives and institutions which address and affect the practice of subsidising fossil fuel consumption and production. Drawing on recent scholarship on emerging international governance mechanisms, ‘informal’ international law-making and regime interaction, it offers suggestions, and critiques suggestions of others, for how the international law framework could be employed more effectively and appropriately to respond to environmentally and fiscally harmful fossil fuel subsidies.

Fossil fuel subsidies, like subsidies to the fishing sector, lead to trade-distorting and ecologically harmful practices. The US$35 billion in subsidies provided by countries every year to the fishing sector leads to more and more boats being built, even as 90% of fish stocks are either fully exploited or overfished. An estimated US$444 billion in subsidies are provided annually for the production of fossil fuels by G20 countries, even as evidence emerges that oil, gas and coal reserves must remain unexploited to limit global warming increases to 2° Celsius. Of course, each country has its own development priorities, livelihood concerns and need for food and energy security. Agreeing upon subsidy reform is a complex undertaking that requires the assessment of social, political and historical considerations, as well as the involvement of international and transnational legal regimes that govern climate change, energy, fisheries and trade. This article reviews proposals for reform within the World Trade Organization and regional trade agreements, including the new disciplines on fisheries subsidies that were endorsed in the text of the Trans-Pacific Partnership. Although the latter agreement is unlikely to enter into force, consensus is emerging on the need to prohibit subsidies that contribute to overfishing or that are linked to illegal, unreported or unregulated fishing. The article shows how these legal developments might inform attempts to limit fossil fuel production and consumption subsidies. It highlights the need for learning and open deliberation about subsidy reform by affected stakeholders, including representatives from international organisations and civil society. It also points to new arrangements that link compliance with subsidy rules to standards and benchmarks from fisheries regimes, and demonstrates how such inter-regime connections are legitimate in the context of the fragmentation of international law. While reform to fisheries subsidies is still preliminary and fraught, there are useful lessons for the equally important project of energy transitions.

Subsidies to fisheries have been in existence for centuries. However, these remained outside the spotlight of the international community until the turn of this century when the negative effects that fisheries subsidies have on international trade, the environment and sustainable development became increasingly clear. As a result the Doha Round Negotiations set the parameters for an effective fisheries subsidies regime. WTO Members thus embarked in intensive negotiations with the collaboration of various international organizations. These negotiations culminated with publication of the legal text of the Chairman of the Negotiating Group on Rules in 2007 which reflects to a large extent the mandates of the Ministerial Conferences and reconciles the diverse interests of the negotiators. The EU as a major WTO Member and with its own Common Fisheries Policy which has been in effect for a number of years can serve as the basis for comparison and improvement of the proposed regulations.

Available online: https://pub.norden.org/temanord2020-539/ Estimated at USD 478 billion in 2019, fossil fuel subsidies strain the public purse, contribute to climate change, slow the uptake of renewable energy, and lead to local air pollution and associated impacts on public health. Their reform could thus lead to a wide range of socioeconomic and environmental benefits. Despite its binding rules to regulate subsidies, the World Trade Organization (WTO) has so far failed to play any significant role in constraining government support to fossil fuels. Against this backdrop, this report explores whether WTO rules and practices are fit for purpose in addressing fossil fuels subsidies and supporting the clean energy transition, and how they could be reformed to more effectively contribute to these key objectives. It also offers practical recommendations for WTO members and other stakeholders interested in moving this agenda forward.

This book seeks to answer the questions: how do the rules of international treaties on trade and investment apply to the new laws and policies relating to energy-related trade, and do the rules of the multilateral system contribute to or detract from sustainable development? An emerging set of new problems in the law of international trade is how to reconcile the rules of the multilateral trading system with shortages of certain natural resources and the necessity to develop renewable energy resources. The chapters in this book provide a comprehensive analysis of the international trade issues presented by national trade laws and policies with regard to natural resources and energy. This book is about the extent to which we are interpreting existing rules to cover emerging problems and how the rules of the multilateral trading system can be adapted to achieve sustainable development in natural resources and energy. The book begins with a survey of selected national laws relating to recent restrictions on the export of natural resources, both resources used to produce energy as well as natural resources essential for industrial production. After examining the range of such laws in selected important countries, we turn to the application of the rules of the multilateral trading system to such export restrictions. We discuss the major rules of the World Trade Organization (WTO) as well as the natural resources rules in selected regional preferential free trade agreements. While there is not a comprehensive global legal regime on competition law, we believe it is also important to examine how selected national competition laws impact export restrictions on natural resources. This book will be a major contribution to the international dialogue on international economic law issues with respect to trade in natural resources and energy.

Chapter 3 National Experiences with Subsidies, their Impacts and Reform Processes; Introduction; Fisheries Subsidies: The Senegalese Experience; The Impact of Fisheries Subsidies on Tuna Sustainability and Trade in Ecuador; Fisheries Subsidy Reform in Norway; Common lessons from Senegal, Ecuador and Norway Cases; Chapter 4 Emergence of an International Issue: History of Fisheries Subsidies in the WTO; Introduction; Phase I: Early Analysis and Preliminary International Action; Phase II: Globalization and the Shift of Focus to the WTO; Phase III: The WTO Negotiations Take Shape

Starting from the premise that a multilateral legal framework is the surest way to achieve predictability and transparency under conditions of increasing reliance on internationally traded energy, the essays gathered in this book treat the many complex interlocking issues raised by examining that desideratum in the light of current reality. Concentrating on the application of WTO agreements to energy trade - as well as energy-related issues addressed in the current WTO negotiations - the authors offer in-depth discussion and analysis of such issues as the following: the effectiveness of existing WTO agreements in addressing issues pertinent to energy trade how restrictive practices of energy endowed countries can be tackled under existing international trade rules; existing frameworks for investment in highly capital-intensive energy infrastructure projects;and conditions for access to pipelines and transmission grids; regulation of energy services; bioenergy development and trade; energy issues addressed in the WTO accession negotiations of energy endowed countries; international instruments of resolution of energy-related disputes.

Fossil fuel subsidies undercut the international community's Sustainable Development Goals and climate change objectives in many ways. Estimated at several hundred billion dollars a year, such subsidies also affect fossil fuel prices, and can therefore have distorting impacts on trade and investment. Given its central role in disciplining trade-distorting subsidies across sectors, the World Trade Organization (WTO) is an obvious candidate for advancing fossil fuel subsidy reform internationally. However, its engagement on this topic has been limited. While a growing body of disputes on renewable energy support measures have been brought before the WTO, Members have yet to initiate legal proceedings against subsidies for oil, coal or gas. This Article highlights the range of explanations for this puzzling discrepancy. The Article analyses the compatibility of four selected fossil fuel support measures in the Group of 20 countries with the WTO's 1994 Agreement on Subsidies and Countervailing Measures. In doing so, it identifies some of the key legal questions and challenges faced at the WTO. Specifically, the findings highlight the difficulty of litigating fossil fuel consumption subsidies. In light of these shortcomings, the Article identifies five complementary avenues for reform of international trade policy to enable countries to better address fossil fuel subsidies: (i) promoting technical assistance and capacity building; (ii) enhancing transparency; (iii) pledging subsidy reform and ensuring credible follow-up through reporting and review; (iv) adopting a political declaration; and (v) expanding the category of prohibited subsidies. Some of these options could be pioneered by one or several WTO Members, or through regional, megaregional and plurilateral trade agreements. The adoption of the 2030 Agenda and the Paris Agreement represent a call for more decisive action on climate change and sustainable development, providing a clear mandate for deeper engagement of the international trade community in this space.