Hello from Brussels, where the home team got through to the quarter-finals of the Euro 2020 football tournament last night. Belgium, under their inspirational manager Roberto Martinez, seen here at the peak of his playing career, ground out a 1-0 win over Portugal in a match with more bad temper and dirty tackles than a European Council summit. As it happens it’s just days before Portugal’s six-month turn at chairing the EU council of ministers expires as well. Sad times and no doubt a sense of empty anticlimax in Lisbon.
Today’s main piece looks at fish, and specifically how talks on fisheries subsidies at the World Trade Organization, which might seem a bit of a specialist subject, are in fact a much broader test of the institution’s functioning, flexibility and leadership. Charted waters is about the impact that Brexit has had on UK exporters. (Spoiler: bad.)
“Talking fish” as in talking about fish, obviously: we’re not hallucinating. Incidentally, it’s traditional in all fish stories to throw in a bunch of piscine puns to liven things up (or lower the tone, depending on your view) but we’ll leave those to the end as a treat.
The WTO has spent a long time on this issue. Talks on reducing trade-distorting fisheries subsidies that started in 2001 are, supposedly, in their end-game. WTO director-general Ngozi Okonjo-Iweala has called an ad hoc meeting of ministers for July 15 and asked it to deliver some progress.
The negotiations, aimed at preventing overfishing, are a pretty big deal in themselves. The Food and Agriculture Organization, which monitors and tries to address such things, says about a third of global fish stocks are now at biologically unsustainable levels, up from 10 per cent in 1970. But they also have systemic implications for the WTO. The talks are simultaneously a test of the organisation’s traditional consensus negotiating model, a trial of whether rich and poor nations can overcome divisions about rights and responsibilities, a challenge about whether the institution can properly address environmental concerns, and an experiment by Okonjo-Iweala (still with less than four months in the job) about leading from the front rather than waiting for unanimity to emerge.
The WTO needs a win. Its biennial full ministerial meeting takes place at the end of November, and as usual ministers and ambassadors are casting about for something that can be announced there as a win (it doesn’t help that the US is sceptical that much can get done, an issue to which we’ll return in future newsletters).
Are the fisheries talks a candidate? Not at the current rate of progress, unfortunately. There’s no lack of energy: Santiago Wills, the Colombian ambassador who chairs the talks, is well-regarded and has been described to us as the hardest-working man in Geneva. He released a draft text for the agreement in May, but it necessarily leaves a lot of things undecided.
The talks are still stuck on familiar issues of “special and differential” (S&D) treatment for developing countries, or countries that define themselves as such. Unsurprisingly the disagreement includes India, usually in the thick of arguments at the WTO, plus on this occasion countries from the African, Caribbean and Pacific grouping. They want exemptions from subsidy controls, including some that support “illegal, unreported and unregulated” fishing, partly to support small-scale “artisanal” operators (though there is no accepted definition of what that means), and catches up to 200 miles from the shore of the home country. The grouping recently released a proposal for some permanent exemptions from the rules for some developing countries.
On this occasion, the S&D exceptionalism, already one of the US’s big complaints about the WTO, has wider implications. The fisheries talks are quite unlike most negotiations there. Their goal isn’t just undistorted trade but delivering a global public good, in this case protecting the ecosystems of the world’s oceans. A deal that gives exemptions to countries to continue subsidising overfishing isn’t just protectionist and inefficient: it’s a threat to the health of the planet.
The imperative to conserve fish stocks is enshrined in the UN sustainable development goals (target 14.6 if you’re taking notes). Marginalised though the goals often are — governments have already missed the 2020 deadline for fisheries — these talks are about the WTO’s ability to serve a wider system of global governance.
Unfortunately, that doesn’t seem enough of an imperative to shift positions, despite intensive talks. Nor is it only India and other developing countries displaying something less than a sense of urgency. The US decided to expand the scope of the talks as recently as last month by introducing provisions against forced labour on fishing boats. This is an admirable aim, obviously, but as other governments pointed out, there are other agreements addressing labour rights, and bringing in new issues at this stage is not the action of a US administration pressing for a quick win.
Okonjo-Iweala’s gamble — to call a ministerial as an action-forcing event to make governments cough up concessions — seems unlikely to pay off spectacularly. She’s attempting to use her famously energetic personal diplomacy to square a stubbornly round circle. On the one hand, get agreements done: on the other, respect the commitment to the consensus model of negotiating she made while campaigning for the director-generalship. By all accounts her activity is an impressive thing to watch, but by her own admission it’s not produced a major breakthrough yet.
Okonjo-Iweala told ambassadors in Geneva last week: “This ministerial level [meeting] is an effort to try something new. Given where we’ve been, and where we’ve been going for the past 20 years, I thought I’d introduce one or two new ways of doing things . . . We are not expecting a thunderbolt but one or two lightning strikes would be good.” We’ll keep scanning the horizon for signs of pressure building up that might force a change. But it has to be said that things look pretty becalmed at present.
Finally, here goes with the puns if you’ve been waiting: the talks, always a haddock, which are floundering and according to one shoal of thought have become tench (a freshwater fish, yes, we know), need to scale up rather than skating over problems, but there are few rays of light and cod knows when they might get done. Fin.
Six months in, we’re far from certain about exactly what impact Brexit has had on UK exporters. But it’s fair to say that it hasn’t been good. The latest sign that all is not well came over the weekend following the results of an Institute of Directors poll. You can find Daniel Thomas’ and Peter Foster’s write-up here. Here are a couple of snapshots. Claire Jones
The Peterson Institute for International Economics has an interesting paper out looking at China’s attempts to blunt extraterritorial enforcement of US sanctions. Its conclusion is that new measures proposed by Beijing will leave multinationals caught between the US and Chinese countermeasures. Meanwhile, Taiwan and the US will discuss supply chain security and digital trade in talks set for Wednesday, their first on trade in five years.
Rana Foroohar has a nice column on why the US and Europe need to do a Bennifer and rekindle their relationship.
For those of our readers who count themselves as Brussels-based expats struggling to come to terms with all things Belgian, we think you’ll appreciate this Economist ($) article / survival guide. Claire Jones