Under the traditional freedom of the sea regime which had survived until the mid-twentieth century, large fishing fleets could fish distant waters netting sea life that was abundant, but that would otherwise remain unexploited by the nearest, but poorer, coastal states.
Those coastal fishermen who did not have technology and capital to engage in efficient large-scale fishing operations watched enviously from shore a foreign state's large factory vessel processing the catch just several miles off the coastline.
It was thought that such poorer coastal states could in any event benefit from the exploitation of the maritime resources by more powerful and more efficient foreign fishing vessels, as fish would be caught and brought out in the local market more cheaply and more efficiently through free trade.
Nonetheless, there had been various demands for expanding the area of internal waters and thus increasing the total water area over which coastal states could exercise their power.
The Norwegians first applied straight baselines following the general direction of the coast to draw the boundary of the area of internal waters to protect the livelihood of coastal inhabitants who were dependent upon coastal fishing against a large number of British trawlers equipped with improved and more powerful gear.
The World Court sanctioned the Norwegian claim to the use of such straight baseline in the Anglo-Norwegian Fisheries case of 1951 in consideration of "certain economic interests peculiar to a regime, the reality and importance of which are clearly evidenced by a long usage."
By far the most audacious demands for expanding the area of the territorial sea were those relating to the exclusive exploitation of maritime resources by coastal states. Iceland extended its "fishing zone" in the 1950s and in the 1970s, purportedly for conservation purposes, claiming "preferential rights for the coastal State in a situation of special dependence on coastal fisheries." In 1972, Iceland extended its fisheries jurisdiction from 12 to 50 miles, and in 1975 from 50 to 200 miles.
Iceland 's unilateral extension of fisheries jurisdiction led to the so-called Cod Wars with the United Kingdom in Icelandic waters in which British vessels had been fishing for centuries. In the Fisheries Jurisdiction case of 1974, the Court recognised that "the preferential rights are a function of the exceptional dependence of such a coastal State on the fisheries in adjacent waters and . . . a coastal State's exceptional dependence on fisheries may relate not only to the livelihood of its people but to its economic development."
Thus, the development of the exclusive economic zone (EEZ) under the United Nations Convention on the Law of the Sea of 1982 reflects, at last, the efforts of the less powerful coastal states over 350 years to safeguard and preserve their resources. The EEZ is a control mechanism to carve out "an area beyond and adjacent to the territorial sea" and restricts the freedom of the sea. It does not extend beyond 200 nautical miles from the baseline from which the breadth of the territorial sea is measured.
The Chilean concept of the Mar Presencial is a claim for control by coastal states of the fisheries beyond their EEZ. To this category also belongs Canada 's Coastal Fisheries Protection Act which prohibits fishing for certain straddling stocks in the North Atlantic beyond Canada 's EEZ.
Historically, control mechanisms were fashioned with a view to safeguarding the economic interest of the state that was threatened by foreign powers. Consider, for example, the trail of the failed efforts of newly independent states in the Third World , which consciously sought to secure and to buttress their exclusive territorial bases, to establish a New International Economic Order (NIEO).
In 1974 the United Nations General Assembly adopted two resolutions on a Declaration, and a Program of Action, on the Establishment of a NIEO. A few months later the General Assembly also adopted the Charter of Economic Rights and Duties of States in conjunction with the two NIEO resolutions.
The NIEO was designed to expand the competence of states in economic activities through promotion of the concept of "permanent sovereignty over natural resources". It called for competence of states in nationalisation or transfer of ownership of their economic institutions to their nationals, regulation and supervision of the activities of transnational corporations.
The NIEO sought to establish a "just and equitable relationship between the prices of raw materials, primary products, manufactured and semi-manufactured goods exported by developing countries and the price of raw materials, primary commodities, manufactures, capital goods and equipment imported by them with the aim of bringing about sustained improvement in their unsatisfactory terms of trade and the expansion of the world economy".
In particular, the NIEO demanded preferential and nonreciprocal treatment for developing countries. Such demand of the NIEO, however, ran directly in conflict with one of the cornerstones of the General Agreement on Tariffs and Trade (GATT), Most Favoured National Treatment and the principle of national treatment. The developing countries' campaign for the preferences was therefore carried out largely outside the GATT regime.
In 1971 the GATT introduced a waiver to Article I, the Most Favoured Nation (MFN) clause, to "permit developed contracting parties . . . to accord preferential tariff treatment to products originating in developing countries and territories".
The development of the preferential treatment regime is rooted in the recognition that the principle of equality of all states does not reflect equality in fact and that today's international economic relations are essentially governed by the duality of norms, ie, one set of rules governing economic relations among developed countries and another set of rules governing economic relations between developed countries and developing countries.
The adoption in the Tokyo Round in 1979 of the so-called "enabling clause" (Decision on a Differential and More Favourable Treatment, Reciprocity and Fuller Participation for Developing Countries) attests to the need for a separate regime even within the current WTO regime.
Despite the NIEO's declaration to be "one of the most important bases of economic relations between all peoples and all nations", the absence of the effective institutional framework for its implementation rendered the NIEO ineffective.
Today no one speaks of the NIEO or the Charter of Economic Rights and Duties of States, even though a study of the NIEO "would at least challenge the dominance of late capitalism in our thinking about international law." Instead, "the NIEO is most often disparaged as irrelevant and anachronistic."
The draft Code of Conduct for Transnational Corporations was not even adopted. Where have the aspirations of developing countries to achieve a "just and equitable relationship" between developed and developing countries gone? We must design future developmental constructs by re-configuring control mechanisms as a necessary complement to the freedom of trade.
FOR THAT, THE FOLLOWING TWO CONCEPTUAL TRANSFORMATIONS ARE NECESSARY:
(a) The myth about the "single undertaking" of the WTO regime must be deconstructed first by recognising that every member has different needs and levels of capacity; and;
(b) Above all, it must be acknowledged that throughout the history of competition, control mechanisms are necessary features of competition.
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