'Friends Of Fish' Call For Reducing Harmful Subsidies

WTO Members continued negotiations on fisheries subsidies at the second formal meeting of the WTO Negotiating Group on Rules on 6 May. Discussions focused on a joint communication tabled by New Zealand and other fish exporting countries that aimed to address developmentally and ecologically harmful fisheries subsidies.

At the Fourth WTO Ministerial Conference in Doha, Qatar in November last year, Members agreed to conduct negotiations on clarifying and improving WTO disciplines on fisheries subsidies "in the context of" negotiations on 'WTO Rules' (i.e. anti-dumping, subsidies and regional trade agreements). Reference to negotiations on fisheries subsidies is also included in the Trade and Environment section (para. 31) of the Doha Declaration. The decision to include fisheries subsidies as a separate negotiating item marks a significant change from the previous WTO mandate that had restricted discussions on this issue to the WTO Committee on Trade and Environment (CTE), which prior to Doha did not function as a negotiating forum. Fisheries subsidies are being discussed as a sub-item under the general "subsidies" topic in the Group on Rules, which was established at the Fourth WTO Ministerial Conference in November last year as one of seven negotiating bodies (see BRIDGES Trade BioRes, 7 March 2002).

Fisheries subsidies distort both trade and production, 'friends of the fish' say

The so-called 'Friends of Fish' -- Australia, Chile, Ecuador, Iceland, New Zealand, Peru, Philippines and the US -- put forward a communication at the Rules meeting aimed at "providing some early direction to discussions" on fisheries subsidies. The paper was also supported by Norway, Barbados, Mexico, Malaysia and Thailand. Stating that government transfers to the fisheries industry were boosting the "race for fish" in the fisheries sector, the submission asserted that overcapacity and trade distortions resulting from fisheries subsidisation would "impede the sustainable development of many countries with significant fisheries resources".

The group of countries further argued that fisheries subsidies, unlike subsidised production in other sectors, would not only distort the competitiveness of traders in markets, but would also distort "access to shared fish stocks" and limit "productive access by other participants by depleting an exhaustible resource." As another damaging consequence, competition from subsidised distant-water fishing fleets would act as a disincentive for developing countries to establish their own fishing industries. As the current provisions on subsidies and countervailing measures (SCM) were mainly concerned with the effects of subsidies in markets but not with the trade and production distortions that subsidies in the fisheries sector can generate, the paper concluded that the WTO SCM Agreement needed to be improved.

As anticipated by trade sources, Japan and Korea vehemently rejected the 'Friends of Fish' paper, questioning whether the WTO was the appropriate forum to address fisheries. Japan said the group was overstating the problem as 95 percent of fish were caught in national waters, and only 5 percent caught on the high seas. This 5 percent, it said, should be tackled by the UN Convention of the Law of the Sea, and not by the WTO. One trade source said the EC occupied a middle ground position, as it took note of the points put forward but cautioned that Members needed to see how far the raised issues could really be tackled within the SCM framework. Canada objected to a 'sectoral' approach of discussing fisheries subsidies as a separate item, which it said could fragmentise the SCM Agreement.

While expressing disappointment with the lack of progress in the meeting, the environmental NGO WWF commended the 'Friends of Fish' submission for highlighting the link between fisheries subsidies and the resulting harm to the marine production base, rather than focusing only on the trade distorting effects. WWF also questioned the validity of Japan's 5 percent estimate, stressing that fishing in international waters will also affect domestic stocks of migratory fish. WWF has repeatedly highlighted the damaging consequences of fisheries subsidies, calling on governments to consider substantial new WTO language dealing specifically and separately with fishing subsidies in an effort to eliminate environmentally-harmful subsidies while taking into account the needs of developing countries and the environmentally- beneficial types of subsidies.

The next meeting of the Group on Rules is currently scheduled for 8-9 July.

Country positions on fisheries subsidies

The elimination of environmentally-harmful and trade-distorting fisheries subsidies is widely regarded as a "win-win-win" situation, i.e. beneficial for trade, the environment and development. This position is most strongly advocated by the so-called 'Friends of Fish' which in addition to the above mentioned countries also includes Argentina, Bangladesh, Colombia, India, Indonesia, Malaysia, Mexico, Singapore, Thailand and Venezuela. While acknowledging that some fisheries subsidies might have beneficial effects for the environment and development, these countries see a clear role for the WTO to address subsidies that can lead to overcapacity (and consequently to overfishing) and trade distortions.

In contrast, Japan and Korea have so far resisted discussions on fisheries subsidies at the WTO, arguing that they should be addressed in other fora, including the UN Food and Agriculture Organization. They advocate a broader approach that looks at the various factors influencing overexploitation, such as illegal fishing, and also takes into account socio-economic aspects.

The EC has traditionally occupied a middle ground, stressing that only some fisheries subsidies lead to overcapacity while others do not, but instead support R&D and help the industry to downsize. While not opposed to discussions on this issue at the WTO, the EU stresses the need for a mandate "that makes sense", and that negotiations should take into account the importance of the sector to developing countries, the role of international fishery conventions and work underway in other relevant international fora (see http://europa.eu.int/comm/trade/miti/envir/doha.htm). Within the EU the self-declared 'friends of fishing' -- made up of France, Greece, Ireland, Italy, Portugal, and Spain -- have been most reluctant to address fisheries subsidies.

Additional Resources

The following documents are searchable at http://docsonline.wto.org/ using the document symbol:

'Friends of the Fish' submission to the WTO Group on Rules, TN/RL/W/3, 2002.

"Environmental benefits of removing trade restrictions and distortions," CTE Secretariat, WT/CTE/W/67, 1997.