Fisheries subsidies: New zones of contention

• According to the Food and Agriculture Organization of the United Nations (FAO), about 87% of the world fish stocks have either been fully exploited, or over exploited. While a number of factors have contributed to the overexploitation, the role of fisheries subsidies is considered to be a major driver.
• China is trying to modify its category of subsidies but not ready to give it up immediately. It has made proposals that essentially would allow to them to keep all their subsidies or re-classify them under green box subsidy.
• India supports the overall proposal to curb harmful fisheries subsidies which totals more than $35 billion globally every year, it wants exemptions for developing countries and LDCs so that government programmes to support artisanal fishers can continue, in the form of S&DT (Special and Differential Treatment).
• Given that LDCs fishing fleets are still small, there is need for flexibility to allow for development of their fleets within sustainable levels through subsidies, while curtailing harmful subsidies in general that have led to overcapacity and depletion of fisheries resources globally.

The 12th WTO Ministerial Conference, which was earlier scheduled in the second week of June 2020 at Kazakhstan, is now suspended due to the COVID-19 outbreak till further notice. Now this has led to  a delay in a decision on the issue of fisheries subsidies, which was considered to be an important area for discussion. Nonetheless, the Chair of the Negotiating Group on Rules, which is responsible for the fisheries subsidy’s negotiations, has consulted WTO members last month on how best to continue work amid disruptions caused by the COVID-19 crisis.

Why the issue of fisheries subsidies is contentious?

Over the years, marine products and resources have been over-exploited, leading to germane questions about fish trade, ecological sustainability and consumption patterns. According to the Food and Agriculture Organization of the United Nations (FAO), about 87% of the world fish stocks have either been fully exploited, or over exploited. While a number of factors have contributed to the overexploitation of fish, the role of fisheries subsidies is considered to be a major driving factor contributing to excess usage and over depletion of the marine resources. According to Sustainable Development Goal (SDG) number 14.6, there has to be certain forms of prohibition by the end of 2020 on fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to Illegal, unregulated and unreported (IUU) fishing, and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiations.

First, let’s try and understand why WTO is still unable to prepare one common policy on marine subsidies for its 164 WTO member countries so far. Actually, there is a conflict of interest between top subsidy provider economies and other developing nations. China, the European Union (EU), US, South Korea, and Japan are the five WTO members, which account for 58% of all global fisheries subsidies. China is trying to modify its category of subsidies but not immediately ready to give it up. Basically, China is not obstructing the negotiation progress, but has made proposals that essentially would allow to them to keep all their subsidies or re-classify them under green box subsidy.

The other big subsidy-providing countries, too, have made similar proposals. On the other hand, WTO is keen to bring a binary policy, which will be different for developed and developing nations. But this approach is not supported by developed economies, as they demand the abeyance of marine subsidies for all economies without any differential treatment.

India’s stand

India supports the overall proposal to curb harmful fisheries subsidies, which totals more than $35 billion globally every year, it wants exemptions for developing countries and LDCs so that government programmes to support artisanal fishers can continue, in the form of S&DT (Special and Differential Treatment). India’s proposal has the support of a large number of developing countries and LDCs, including Africa, but the US, Australia and Brazil have opposed it. They want subsidy caps on countries with large fish stocks such as India and China, irrespective of their development status.

Developing countries such as India want to protect subsidies for low-income, resource-poor fishermen for whom it is a matter of livelihood and food security. It is important for developing countries and LDCs to understand the details of the agreement being drafted as all exceptions need to be factored in to ensure that they do not face any challenges in supporting poor fishers after the pact is in place.

In past five years, global marine exports surged from US$ 146.1 billion in 2015 to US$ 175.5 billion in 2019. Top exporters of marine products include China, Norway, Vietnam, Thailand, USA, Netherlands and India. On the other hand, the top importers are USA, Japan, China, Germany, Spain, France & UK.

Interests of Least Developed Countries

The fisheries sector is very important for many LDCs as well as small island countries with large exclusive economic zones, which derive livelihood from the sector and are dependent on it for food security and protein intake. Fisheries also contribute significantly to export earnings of many LDCs and therefore a vital source of income for national development efforts. LDCs would also need assistance to overcome the lack of capacity to monitor fish stocks towards improving sustainability in their territories. Given that LDC’s fishing fleets are still small, there is need for flexibility to allow for development of their fleets within sustainable levels through subsidies, while curtailing harmful subsidies in general that have led to overcapacity and depletion of fisheries resources globally.

The key to a breakthrough on the fisheries issue lies in bringing on board emerging economies like China that has a large fleet of distant water fishing vessels. This may require a carve out of concessions that would for instance allow them to maintain support of their small fleets, since they also have a sizeable population still faced with similar challenges to those in smaller developing countries and LDCs. Therefore, a complete curb on fisheries subsidy seems little daunting across all economies, but some cuts in the subsidies are definitely needed to squeeze the overutilization of the marine resources.