A coalition of WTO members dubbed the "Friends of Fish" called for work to begin on identifying different subsidy programmes with the aim of getting an agreement under the current Doha Round overall trade liberalisation negotiations.

Members of the coalition - ranging from Norway and Iceland to Chile and Peru - said their fishermen were being driven out of world markets by huge and heavily subsidised fleets.

Their proposals were submitted to the Round's negotiating group on rules it is discussing on how to improve current free trade regulations and open goods markets wider to competition.

After pressure from environmental groups, as well as from fishermen in countries with minimal or no subsidies, ministers at the November 2001 WTO conference in Qatar agreed that fishing subsidies should be part of its agenda.

But the wording of their declaration left open exactly how they should be dealt with.

JAPAN'S PAPER

In its own paper presented to a session of the WTO rules group this week, Japan argued that there was nothing special about fishing subsidies and that they should be discussed as part of overall negotiations on all subsidies.

Any discussion of over-fishing and its effect on stocks should take place in the WTO's committee on trade and environment, the paper argued.

Australia, a member of the "Friends of Fish" grouping, accused Japan of trying to sink the issue by dispersing it among committees, trade sources said, while Peru argued for early action to save fish stocks.

Iceland said it had made major efforts to manage fish stocks within its own waters only to see them devastated by factory fleets operating in North Atlantic waters.

The 15-nation EU, which in the past had been more aligned with the Japanese position but recently agreed a major reduction in fishing quotas because of declining stocks, said it was reserving its position.

An EU official said Brussels would bring its ideas to the WTO in a few weeks, adding, according to the sources, that although the Union was not sure of the "Friends of Fish" approach was the best one, Japan appeared to be "moving in all directions."

A U.S. envoy told the session that the Japanese position, supported by South Korea, was out of line with the mandate for talks agreed in Qatar, and that constructive engagement was needed to get real talks under way.

Recent scientific reports say some 50 per cent of marine fisheries are already fully exploited, while 20 percent are over-exploited.

While the "Friends of Fish" and the United States argue that this is largely a result of subsidies, which in some countries amount to 25 percent of fishermen's incomes, Japan and South Korea say declining stocks are caused by bad management.