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EU and Chile settle WTO/ ITLOS swordfish dispute

Following four days of intensive negotiations, the EU and Chile today reached a settlement to resolve the so-called "swordfish dispute" covering both access for EU fishing vessels to Chilean ports and bilateral and multilateral scientific and technical co-operation on conservation of swordfish stocks. As a result and pending the ratification of this arrangement, the EU will request a suspension of panel proceedings within the WTO launched in November and Chile will suspend proceedings before the International Tribunal of the Law of the Sea (ITLOS), pending the enforcement of this arrangement which also covers access to ports. Welcoming this result, EU Trade Commissioner Pascal Lamy said "this arrangement shows that it is possible to resolve disputes amicably by reconciling trade and environmental concerns. I pay tribute to negotiators on both sides for their constructive and understanding approach". EU Agriculture, Rural Development and Fisheries Commissioner Franz Fischler said "I am delighted that the two parties have found an amicable and mutually beneficial solution to this longstanding dispute and I look forward to fruitful and stable relations in the fisheries field between the Union and Chile. This arrangement will benefit the two fisheries sectors and responsible fishing".

Commissioners Fischler and Lamy played an active role in creating the conditions for today's arrangement together with their Chilean counterparts, Foreign Minister Soledad Alvear and Vice-Minister Heraldo Muñoz. The settlement strikes a balance between taking due account of the requirements of the multilateral trade system and of an effective conservation and management of natural resources.

The understanding agreed today is based on three pillars:

• Meetings will be resumed between the Union and Chile within the framework of the Bi-lateral Scientific and Technical Commission (BSTC) on the swordfish stocks in the South-East Pacific. The next meeting is scheduled for April 2001.
  
  
• Access for EU vessels to Chilean ports: 4 vessels will be able to tranship or land up to 1000 tons of swordfish at three Chilean ports (Arica, Iquique and Punta Arenas) under the terms of a joint programme involving an equivalent number of Chilean vessels. This programme, with its intensive data collection plan, will substantially assist the joint scientific evaluation of the swordfish stocks.
  
  
• commitment to agree on a multilateral framework for the conservation and management of the swordfish in the South East Pacific, including an undertaking to hold an international consultation in Chile by September 2001 to which all parties with an interest in this fishery will be invited. The process will culminate in a Diplomatic Conference to be held in 2002. Currently, there is no such multilateral organization or arrangement to regulate swordfish fisheries in the South-East Pacific.

Background

On 10 November 2000, the European Commission requested the establishment of a WTO panel against the Republic of Chile with a view to securing fair access to Chilean ports, which are closed to Community vessels since 1991.

While this request was necessary to safeguard the EU's rights under the WTO, Chile and the EU continued to explore alternative avenues to settle the dispute in a negotiated way, thereby avoiding the need for a WTO panel.

In this respect, the EU considered that an agreement genuinely open to all interested parties would be the most suitable way of achieving an appropriate conservation and management of the swordfish resource in the South-East Pacific. To this end, the EU reiterated its call on Chile and other interested members to launch negotiations on such agreement and to resume in the shortest delay scientific co-operation and exchange of data with the EU through a letter addressed to the Chilean authorities by Commissioners Fischler and Lamy before the Christmas holidays.


The measure

Community fishing vessels are currently not allowed to tranship and/or land their catches of highly migratory species (such as swordfish) in Chilean ports, when these catches are made in contravention of conservation rules unilaterally imposed by Chile, regardless of the fact that they are caught in international waters. These Chilean restrictions date back to 1991. Since then, this matter has been raised several times in bilateral meetings between the EU and Chile.


Negotiations before the TBR investigation

Since 1995, Commission services and Chilean authorities recognized the need for co-operation on data collection relating to fisheries resources in the international waters of the South-East Pacific. Two meetings took place in Santiago (one in December 1995 and the other in May 1998), where scientific data were exchanged, but nor agreement was reached on the status of the swordfish stock in the area. During this period, no progress was made on the trade restriction issue either.


The TBR investigation

On 26 May 1998, ANAPA (Asociación Nacional de Armadores de Buques Palangreros de Altura - Spanish National Association of Owners of deep-sea Longliners) lodged a complaint pursuant to the Trade Barriers Regulation (TBR) claiming a violation of Chile's obligations under GATT 1994 and of several provisions of the United Nations Convention on the Law of the Sea (UNCLOS). The Commission initiated an examination procedure under the TBR on 10 July 1998.

This investigation concluded that the Chilean ban violates the principle of freedom of transit, established by Article V of GATT 1994. In addition, by making unloading in Chilean ports impossible for swordfish catches made by Community vessels, the Chilean measures render also impossible the importation of the affected catches into Chile, which is contrary to Article XI of GATT 1994.

The Community tried unsuccessfully for more than one year to find an amicable solution. To this effect, two meetings with the Chilean authorities took place in June and September 1999, which did not record any major progress, but helped understanding the respective positions.


The WTO action and the Community position on trade and environment

The Community shares the general aim of conserving swordfish resources in the South pacific and is consequently fully committed to work with all interested Countries with a view to address the issue by means of concerted and multilaterally agreed solutions. This is fully in line with the EU long standing position in the WTO on the relationship between MEAs and the WTO according to which the most effective way to tackle global environmental issues is through a negotiated agreement. Such a multilateral agreement should, from the beginning, be open to all countries concerned so that any trade measures it may contain can be negotiated and agreed by consensus: this is the best way to guarantee against discriminatory action and the use of trade measures for protectionist purposes.

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