Global Fishing Index

Case StudY

Eliminating harmful fishing subsidies: lessons from regional trade agreements

By University Killam Professor U. Rashid Sumaila, Institute for the Oceans and Fisheries, University of British Columbia.

Harmful subsidies are a major driver of overfishing globally – they help build more boats and provide access to cheaper fuel, enabling fishers to travel farther and catch more fish. Unsurprisingly, there have been many attempts to remove these harmful subsidies, including the 2010 Aichi Biodiversity target 3 and the 2015 United Nation’s Sustainability Development Goals, target 14.6.

Since 2001, the 160 or so countries that form the World Trade Organization (WTO) have tried to negotiate an international, legally-binding agreement that eliminates harmful fishing subsidies. Yet, twenty years on, this effort continues.1

So, the question remains – what is preventing an agreement from being reached?

One of the key challenges faced by the WTO is negotiating “special and differential treatment” for developing and least developed countries (LDC). Special and differential treatments are an important component of all WTO agreements as they support developing countries and LDCs with capacity-building and ensure that the required technical support to enable the full implementation of WTO agreements is available.

Some believe that developing countries and LDCs should be exempt from any new restrictions on harmful fisheries subsidies, as they are considered necessary for alleviating poverty and enabling developing countries to compete with large fishing countries. In reality, however, harmful subsidies are not effective for competing with large fishing nations and can worsen poverty in the medium to long term.2

Additionally, WTO members continue to disagree over how to define a country’s eligibility for such exemptions. Several fishing entities, including the European Union and the United States, strongly oppose the inclusion of terms in the WTO agreement that state that any developing country is exempt from removing harmful subsidies, regardless of their contribution to global fisheries subsidies. On the other hand, China – one of the largest contributors to global fisheries subsidies – opposes this view and wishes to be included under such exemptions.

So, if the WTO is unable to come to an agreement, what are the alternatives?

One promising approach has come through regional trade agreements that include reasonably strong commitments to eliminating harmful subsidies – the 2018 Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the 2020 United States-Mexico-Canada Agreement (USMCA).

Despite being ‘simply’ trade agreements, the CPTTP and the USMCA have started to drive advances in ocean sustainability. Member nations are required to use science-based management systems to prevent overfishing and overcapacity. They must implement port controls to combat illegal fishing and prohibit the provision of subsidies for vessels engaged in illegal fishing or that further threaten overfished stocks.

At face value, trade agreements may seem like an unusual avenue for saving the planet. But they increasingly require all members to align their national environmental legislations with ‘best practice’, in exchange for market access between member states – not necessarily for the health of the planet, but because unequal policies create an unequal economic playing field, giving countries with less effective governance a competitive advantage.3 Both the CPTPP and the USMCA have extensive and binding environmental standards that countries negotiate and commit to as part of the deal.

These trade agreements also offer an enviable approach to transparency and cooperation. Both agreements outline that all laws, regulations, procedures and administrative rulings must be made publicly available, so anyone can comment on them.4 Operationalising such open transparency comes with its challenges, however it remains a core provision of both agreements. The CPTPP also places emphasis on cooperation between its members to identify areas where further support is required to ensure all its provisions are implemented successfully.

Together, the twelve countries that have signed up to the CPTTP and the USMCA – including Australia, Japan, New Zealand, Peru, Singapore and the United States – account for 22 per cent of global fishing subsidies, or almost US$4,912 million annually.5 These two agreements alone mean we are well on the way to tackling a considerable proportion of the problem.

The recently appointed Director-General of the WTO, Dr. Okonjo-Iweala – the first female and first African in the role – noted that “there is an increasing loss of confidence in the ability of the WTO to produce results,” and that there is a need for the WTO to change their approach “from debate and rounds of questions to delivering results” in order to achieve success. On July 15, 2021, Dr Okonjo-Iweala secured members commitment to a draft text as a basis for negotiations, raising hopes that a final deal can be struck this year.

The success of these agreements sends an important message to WTO negotiators ahead of the next critical Ministerial Conference from 30 November to 3 December 2021 – reaching an agreement on harmful subsidies is indeed possible. However, the twelve countries that make up these agreements recognise that without an overarching international agreement to manage the one global ocean, their efforts may not amount to much.6 Success at an international level is critical for transforming our ocean.

References

  1. World Trade Organization (2021). WTO members hold February cluster of meetings for fisheries subsidies negotiations. https://www.wto.org/english/news_e/news21_e/fish_24feb21_e.htm [5 March 2021]
  2. Cisneros-Montemayor, A.M. and Sumaila, U.R. (2019). Busting myths that hinder an agreement to end harmful fisheries subsidies, Marine Policy 109, p. 103699, https://doi.org/10.1016/j.marpol.2019.103699 [6 October 2020]
  3. George, C. (2014). Environment and Regional Trade Agreements: Emerging Trends and Policy Drivers, OECD Trade and Environment Working Papers, pp. 1-29. [22 February 2021]
  4. Australian Government Department of Foreign Affairs and Trade (2021). Outcomes: Transparency. https://www.dfat.gov.au/trade/agreements/not-yet-in-force/tpp/Pages/outcomes-transparency [22 February 2021]
  5. Sumaila, U.R., Ebrahim, N., Schuhbauer, A., Skerritt, D., Li, Y., Kim, H.S., Mallory, T.G., Lam, V.W.L. and Pauly, D. (2019). Updated estimates and analysis of global fisheries subsidies, Marine Policy 109, https://doi.org/10.1016/j.marpol.2019.103695 [6 October 2020]
  6. Sumaila, U.R. and Pauly, D. (2007). All fishing nations must unite to cut subsidies, Nature 450, p. 945, https://doi.org/10.1038/450945a [20 March 2020]
Rashid-Sumaila-squareRashid-Sumaila-square

Rashid Sumaila
Professor and Canada Research Chair (Tier 1) in Interdisciplinary Ocean and Fisheries Economics at the Institute for the Oceans and Fisheries, and the School of Public Policy and Global Affairs, University of British Columbia.

Rashid Sumaila’s research focuses on bioeconomics, marine ecosystem valuation and the analysis of global issues such as fisheries subsidies, marine protected areas, illegal fishing, climate change, marine plastic pollution, and oil spills. Rashid has experience working in fisheries and natural resource projects in Norway, Canada and the North Atlantic region, Namibia and the Southern African region, Ghana and the West African region and Hong Kong and the South China Sea. Dr. Sumaila received his Ph.D. (Economics) from the University of Bergen and his B.Sc. (Quantity Surveying) from the Ahmadu Bello University. He won the 2017 Volvo Environment Prize and was named a Fellow of the Royal Society of Canada in 2019.