US authorities mull new fisheries subsidies

5 November 2014

US fisheries authorities may introduce new rules expanding state support for the American fishing industry, sources say. 

According to an advance notice issued over the summer by the National Marine Fisheries Service (NMFS), a sub-division of the US Department of Commerce, fisheries officials are considering the impacts of new rules that would allow support programmes to finance the construction of new vessels and projects that add to the existing fleet’s harvesting capacity.  

Starting from the 2014 financial year, the US Congress removed a restriction on these payments from the “Fisheries Financing Programme” (FFP) – a long-term direct lending scheme – and boosted its loan capacity from US$59 million to US$100 million.

The move has left regulators trying to square the circle of providing loans that could increase US fishing capacity without contributing to overfishing, a global challenge the US has committed itself to tackling in various international forums.

According to UN estimates, around 29 percent of marine fish stocks are harvested at a rate beyond biologically sustainable levels, while 61 percent are harvested at sustainable levels. Part of the reason for this depletion may be the fact that, according to the World Bank and the FAO, the world’s annual fisheries harvest could be caught with just half the current level of fishing effort.  

Public comments split

The NMFS advance notice invited public comment on the potential changes and called for suggestions on ways to move forward.

Comments submitted following the notice reveal the different perspectives at play as well as the domestic and international implications of the move.

Those from domestic industry, predominantly representing fisheries of the US Pacific Northwest, underlined the potential economic benefits of the subsidy.

The Port of Seattle, an authority managing international trade and travel for the coastal city, said in a written submission that new vessel construction and upgrades could generate between US$7 and US$14 billion in domestic economic activity and thousands of new jobs in Washington state.

The group argues that the fishing industry requires new, safer vessels and that private commercial markets do not correctly evaluate the risk associated with the capital needs of the fishing industry.

The Freezer Longline Coalition, representing part of the Alaskan cod fishing fleet, in a separate submission said that the number of fishing vessels and capacity, had little bearing on overfishing “as long as accountability measures are in place to keep the total catch under a biologically sustainable ACL [annual catch limit].”

Meanwhile some environmental groups have spoken out against the potential lifting of the vessel finance restrictions, strongly disagreeing both with the rationale for expanded subsidies, and the claim that increased capacity would not impact on the health of fish stocks. 

Marine conservation group Oceana said the removal of the limits on new capacity ran the risk of creating an environmentally harmful subsidy given that increased vessel capacity can contribute to overfishing.

The group’s submission letter also stressed that despite Congress’ removal of the restriction the NMFS is not obligated to change its policies around funding additional fishing capacity.

The group further maintained that there was no clear market failure that required a public subsidy intervention.

“Especially in limited access fisheries, if it were economically viable to increase capacity while modernising the fleet, then vessel owners would have already done so.  If the vessel owners are already fishing at capacity, then there is no reason to increase their capacity unless catch limits are going to be raised,” the marine group said in its submission letter.

Conservation organisation WWF-US  also argued that the expanded financing programme could end up undermining fisheries management and the US’ ability to keep harvests at a sustainable level.  

There was “significant evidence,” they said, “that increased capacity undermines fisheries management by creating additional pressure on managers and scientists to increase fishing quotas.”  Undermining the health of fish stocks would eventually result in reduced employment in the fisheries industry, the conservation group claimed in their written submission.

International commitments

The potential change could also have international policy implications.  In their submissions, both WWF-US and Oceana pointed out that the new policy runs counter to the current Obama Administration’s stance and the country’s historically strong position against harmful fisheries subsidies in international negotiations.

Shortly before the NMFS issued the notice inviting comment on the possible lifting of restrictions, US President Barack Obama announced new executive actions aimed at tackling illegal fishing, and confirmed plans to establish the world’s largest marine sanctuary in the Pacific.

The Obama Administration has also confirmed that it was aiming to include a series of environmental commitments in two major ongoing trade initiatives. These include the Trans-Pacific Partnership Agreement (TPP) and the Transatlantic Trade and Investment Partnership (TTIP) both currently under negotiation. (See BioRes, 19 June 2014)

At the regional level the 21-nation Asia Pacific Economic Cooperation (APEC) alliance, which the US is part of, at the end of August outlined a new non-binding framework for closer collaboration on ocean-related challenges.

The declaration calls for improved transparency and reporting on existing fisheries support programmes to the WTO, as well as the eventual elimination of harmful fisheries subsidies, and an abstention from introducing new ones. This new framework is due to be considered at the gathering of APEC leaders in Beijing, China later this month. (See BioRes, 5 September 2014)

At the multilateral level, the WTO’s Doha Development Agenda mandate also calls for the curbing of harmful fisheries subsidies. These negotiations have nevertheless been stalled for several years. However, at the latest ministerial conference held last December in Bali, Indonesia, the US and a group of 12 other WTO members pledged to “refrain from introducing new fisheries subsidies that contribute to overfishing or overcapacity or extend or enhance existing such subsidies.”

The next iteration of the proposed new regulation is expected to be released this month, followed by another round of comments before the rule is finalised and implemented.  This next version will likely provide further insight as to the approach US regulators will adopt in this area.

ICTSD reporting.

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