One of the major questions as far as fisheries and the Multilateral Agreement on Investment is concerned, is the matter of licensing of fishing vessels. The basic regulation for the Common Fisheries Policies[87] states that in order to contribute to an improved regulation of exploitation of resources and to a higher degree of transparancy, a general Community system of administrative fishing licences should be introduced. The relevant rules for that system are outlined in a specific regulation[88]. It is, inter alia, established that all fishing vessels in the Community shall have licences attached to them and that the Member States shall issue and manage fishing licences for those fishing vessels flying its flag.

  Hence, Member States may determine national criteria for the distribution to vessels flying their flag of the fishing opportunities available to them, provided that the criteria employed are compatible with community law.

  As for the United Kingdom, the issue of vessels from other Member States obtaining a UK fishing vessel licence, thus getting access to UK fishing opportunities, without making any substantial contribution to the UK fisheries industry, has been a matter of great concern to UK fishermen and the UK has long since striven to find a reasonable solution to the situation.

  The UK Government in July 1998 announced its revised rules on the licensing of fishing vessels and maintaining economic links with the fishing communities of the United Kingdom, to enter into force on 1 January 1999. This implies that from 1 January 2001, the issue of fishing licences to vessels (over 10 metres) catching quota stocks will depend on an economic link having been maintained by the vessel owner in the last but one licence year.

4.  STRUCTURAL AND REGIONAL AID

  Another important issue that the Agreement touches upon is that of economic assistance programmes. The European Union operates an extensive regime of structural and regional aid within a range of different funds and objectives. Individual programmes are set up for each country. The present programmes are in force until 31 December 1999. The subsequent regime is presently subject to negotiations within the European Union but is likely to retain many of the features of the present programmes. A basic characteristic is the co-financing of projects between the EU and the Member State.

  As for the fisheries industry in the UK, it can benefit from the funding available in several ways. There are schemes directly aimed at the industry, involving for example grants for investments in processing plants, aquaculture sites, fishing harbours as well as security improvements on board fishing vessels. However, the fisheries industry can also benefit from the more general geographically classified programmes, involving eg infrastructure investments (such as fishing harbours) and training.

  As regards fishing vessels, the decisive factor for what Member State's programme an investment will draw funding from is where the vessel is registered, not in what waters it operates. For more immobile activities, such as aquaculture and processing plants, it is the location of the physical facilities that is determinant.

5.  IMPLICATIONS OF THE MULTILATERAL AGREEMENT ON INVESTMENT

  The MAI would place limits on so-called performance requirements (eg minimum levels of domestic employment). What these limits would be will have to be investigated in depth, but they may restrict the room for manoeuvre for EU Member States to maintain any economic link criteria for fishing vessels flying their flag.

  Furthermore, in those countries that operate a system of Individual Quotas (IQs) or allocation of quota based on a track record, it may become possible under the agreement for any company from any state to establish a subsidiary in an EU Member State and then claim the right to buy quota in that, or another, Member State.

  It follows from the above that the Agreement may affect the European Union's management of fisheries stocks. With companies from non-EU Member States which have access to EU fishing opportunities, enforcement of quotas and by-catches becomes more difficult, since the vessels may well land their catches outwith the Community or even process the catch on board. However, part of the solution might be found in having EU inspectors on board the vessels.

  In addition to the conservation aspects, a development towards more foreign-owned companies may have adverse effects on coastal villages and their employment. It is likely that foreign ownership would imply fewer and bigger companies and that these would either concentrate their landings to fewer UK ports or divert landings to other countries. It would thus potentially affect both the domestic catching sector and the on-shore sector.

  The MAI also suggests that it will prevent governments from providing more favourable conditions for their domestic companies than for others. For example, it should not be legitimate to maintain economic assistance programmes that benefit only domestic companies. As for the EU grants schemes, it may not make a significant difference for immobile activities such as aquaculture, since it is already the location of the facility rather than the ownership that determines the right to claim a potential grant. However, as for fishing vessels, it may have implications in that all vessels flying the UK flag are in a position to gain access to that Member State's EU co-financed aid schemes.

  Nevertheless, it should be said that all the above potential implications would have reciprocal effects, in that UK companies could exploit fishing opportunities outwith the European Union framework. However, it is not likely that these opportunities would be taken up to any greater extent, since the UK fisheries companies are in general too small to take advantage of them.

  Finally, one should bear in mind that the Common Fisheries Policy is not a static framework but is continuously developing. A complete review will be held in view of the year 2002. The Multilateral Agreement for Investment is proposed to operate within a very long time frame, which may put unwanted constraints on the development of the future CFP.

6.  CONCLUSIONS

  The above issues are questions rather than statements about what effects the Multilateral Agreement on Investment may have on the fisheries sector and they require further study. The present situation is very unclear. However, if the Agreement proves to have potential serious adverse effects for the UK fisheries sector, it may be wise to argue that the fisheries sector should be permanently excluded from full implementation of the MAI. According to the proposed Agreement, parties may take exceptions for particular sectors where they wish to retain the right to control or restrict foreign investment, or maintain and possibly introduce new discriminatory measures.

  Alternatively, key provisions on the protection of certain economic sectors, such as fisheries, and on the compatibility of the MAI with the EU's structural and fisheries management policies, could be incorporated in the text of the agreement.

28 October 1998

88   Council Regulation (EC) No. 3690/93 of 20 December 1993 establishing a Community system laying down rules for the minimum information to be contained in fishing licences. Back