   
  
TN/RL/GEN/204/Add.1  
 
12 November 2020  
(20-8128) Page: 1/2 
Negotiating Group on Rules  Original: English  
 
PROPOSED SOLUTION CONCERNING DISPUTE SETTLEMENT INVOLVING  
A TERRITORIALITY OR MARITIME DISPUTE  
Communication from the Philippines  
Addendum  
The following communication, dated 8 November 2020, is being circulated at the request of the 
delegation of the Philippines . 
_______________  
PHILIPPINE STATEMENT  
WTO NG RULES FISHERIES SUBSIDIES NEGOTIATIONS, 4 NOVEMBER 2020  
At the outset, the Philippines would like to commend our esteemed Chair for his able leadership and 
to all colleagues who are continuously working very hard even in the most trying times of the 
lingering COVID -19 pandemic.  
Despite the challenges that we continue to face, the Philippines  continues to engage constructively 
and make contributions in the negotiations with a view to find solutions that could lead us finally to 
a breakthrough agreement in the earliest possibility in December 2020  – given the missed deadline 
of our leaders unde r SDG target 14.6.  
Chair, we have specifically taken the floor today for two very important objectives:  
First and foremost , we would like to remind Members that the Philippines do not have sufficient 
political basis to support any proposal (in law or in fa ct) that carves out (or affords a carte blanche  
exemption to) Members ' IUUF infringements that are taking place in disputed jurisdictions  – under 
the guise and tutelage of "political sensitivities ". For example, the Philippines regrets to inform 
that the second paragraph of Article 11.2 (b) of the Chair’s revised text would not simply work for 
us. 
The second objective is to introduce the latest Philippine proposal, contained in document 
RD/TN/RL/131 of 3 Nov ember  2020. This newest proposal from us seek s to strike the needed balance 
between: (a) the Members ' objective of not changing the status quo with respect to the legal 
standings of Members ' territorial or maritime disputes; and (ii) the leaders mandate to 
prohibit/eliminate subsidies that contribute  to IUU fishing  – which could be legally evaded through 
carving out IUU fishing from the subsidies prohibition.  
Before we introduce our proposal in detail, let me first emphasize that the Philippine proposal in  2017 
(TN/RL/GEN/196), which essentially seeks to prohibit subsidies to fishing in disputed jurisdictions or 
to jointly agree to subsidize, remains on the table that Members must continue to consider as it 
offers a more straightforward solution which is at the same time more aligned w ith the SDG 
target  14.6 to prohibit subsidies and more politically correct than permanently shielding 
infringements in disputed jurisdictions.  TN/RL/GEN/204/Add.1  
 
- 2 - 
 
  Turning  back  to the latest  Philippine  proposal  in RD/TN/RL/131  that is before  us today,  the 
Philippines  seek to provide  another  option  to the Chair's circulated  five options  to address  the issue 
of territoriality  or maritime  jurisdiction  in the context  of WTO dispute  settlement.  The proposal  
contains  two sentences  and a footnote  that works  as follows:  
The first addresses  the legal status  of an IUU determination  concerning  disputed  waters.  This 
provision  states  that an IUU determination  made  by any of the Members  disputing  
sovereignty/jurisdiction  over the relevant  waters  would  trigger  the subsidy  prohibition  under  the IUU 
provision.  The second  provides  that any WTO determination  regarding  an IUU determination  
involving  disputed  waters  would  have no legal consequences  for the territoriality  issue.  
What would  the first sentence  mean  in practical  terms? Imagine  the following  scenario:  
• Member  A is the flag State  of vessel  X; 
• Vessel  X is fishing  in waters  disputed  by Members  A and Z; 
• Member  Z makes  an IUU determination  with respect  to the fishing  activities  of vessel  X in 
the disputed  waters;  
• Member  Z (or any other  Member)  requests  Member  A to remove  any subsidies  to vessel  X 
on the grounds  that it has engaged  in IUU activities  as determined  by Member  Z; 
• Member  A refuses  to withdraw  the subsidy  because  it considers  that Member  Z has no 
jurisdiction  over the disputed  waters  and, therefore,  its IUU determination  against  vessel  X 
is not valid;  
• Member  Z brings  a WTO dispute  against  Member  A arguing  that the latter has refused  to 
withdraw  a subsidy  despite  the fact that there is an IUU determination  against  vessel  X; and 
• Member  A argues,  in response,  that Member  Z's IUU determination  has been inappropriately  
made  because  it had no jurisdiction  over these  waters  and, therefore,  the obligation  to 
withdraw  the subsidy  from vessel  X has not been triggered.  
What would  be expected  of a WTO panel  in this scenario?  Under  the first sentence  of the draft 
provision,  the panel  would  have to find; (1) whether  the waters  under  which  the IUU determination  
was made  are disputed  (in accordance  with the footnote  – a mere claim  of a disputed  jurisdiction  
is not sufficient  to be considered  as such in the context  of the WTO,  unless  the claim  is not 
frivolous  and is properly  substantiat ed in accordance  with international  law); and 
(2) whether  the IUU determination  was made  by one of the Members  involved  in the 
territorial/maritime  dispute.  If the answer  to these  questions  is yes, the panel  would  then assess  
whether  that IUU determination  meets  the requirements  of positive  evidence;  fair, transparent  and 
non-discriminatory  procedures;  and notification  of the initiation  of the investigation  (paragraph  3.3 
in the Chair's  text of June 2020).  If the answer  to this is also yes, the IUU determin ation would  then 
trigger  the obligation  to withdraw  the subsidy.  Accordingly,  under  this draft  provision,  a panel  
would  not have  to address  the issue  of whether  the Member  making  the IUU determination  
has jurisdiction  over those  waters.  
The second  sentence  of the draft  provision  has the same  intended  effect  as Option  4 of 
the Chair's  proposed  options,  with some  changes  for clarity . It states  that the 
recommendations  of the WTO dispute  settlement  bodies  (panels,  the Appellate  Body and the Dispute  
Settlement  Body)  must not have any legal effects  on territorial  or maritime  disputes.  
Finally,  the Philippines  look forward  to Members ' constructive  engagement  as well as the opportunity  
to discuss  and, if necessary,  improve  our proposal  with them with a view to make  it workable  for 
everyone.  
Thank  you. 
__________  