Subsidies WTO (Negotiations, Regular Work, Leadership)

WTO Fisheries Subsidies Negotiations: Main Issues and Interests of Least Developed Countries

Over-exploitation of the world’s marine resources has long raised concerns over unsustainable fish trade. In particular, fisheries subsidies have been criticised both for their environmental and trade-distorting impacts, to the detriment of the developing world and more so the small island developing and Least Developed Countries (LDCs). While WTO talks over disciplining such subsidies have dragged on, renewed momentum following the adoption of the UN Sustainable Development Goals (SDGs) has spurred hopes to see negotiations concluded in the near future. In this context, this study identifies key negotiating issues for a development-friendly outcome, highlighting the interests of LDCs.

Fish is important to every country for a number of reasons. It is critical to food security and nutritional intake for a large number of people globally. As of 2013, fish accounted for about 20 percent of the total animal protein consumed by humans and 6.7 percent of all the protein consumed worldwide. In Small Island and some Least Developed Countries (LDCs) including Bangladesh, it represents over 50 percent of animal protein intake.1 It is established that even consumption of small quantities of fish can significantly impact on plant based diets, which are the staple for most LDCs as well as low income food deficient countries (LIFDs). 2 Importantly, fish supports livelihoods, both directly and indirectly, for about 10-12 percent of global population and critically important for the food security and development of the LDCs with sea zones and small island developing countries (SIDS).

However, over the years, the marine resources have been over-exploited, leading to pertinent questions about fish trade, ecological sustainability and consumption patterns. According to the Food and Agriculture Organization of the United Nations (FAO), about 87 percent of the world fish stocks have either been fully exploited, or over exploited. 3 While a number of factors have contributed to the overexploitation of fish, the role of fisheries subsidies cannot be emphasised enough. Although data on subsidies is contested, it has been estimated that fisheries subsidies ranged between USD 15-35 billion in 2009, of which USD 20 billion were categorised as capacity enhancing, and therefore directly contributing to over fishing.

The global debate on fisheries subsidies was first prompted by the FAO in the early 1990s, leading to the Conference on Responsible Fishing in Mexico in 1992. The central argument was that subsidies are a major factor in the creation and promotion of excess fishing capacity. Furthermore, economic theory demonstrates the market-distorting effect of subsidies and as such fisheries that do not receive subsidies, face a disadvantage in the world market. Developing and LDCs may be additionally disadvantaged as their governments may not have the financial capability to provide subsidies.

In the light of these concerns, the members of the World Trade Organization (WTO) decided to find a solution within the framework of international trade rules to tackle fisheries subsidies. Consequently, the WTO Doha Ministerial Conference launched negotiations to improve disciplines on fisheries subsidies. The subsequent WTO Hong Kong Ministerial Conference of 2005 reaffirmed the need to strengthen such disciplines through prohibition of certain forms of fisheries subsidies that contribute to overcapacity and over fishing. Since then, the Negotiating Group on Rules has been extensively discussing the scope of subsidies and ways to regulate them. However, there has not been a breakthrough at the WTO due to differences in opinion among member countries.

The WTO negotiations on fisheries disciplines have been quite challenging, the main issue being on how to balance important policy concerns of WTO Members, more especially developing countries and LDCs.6 There have also been concerns regarding the kind of harmful subsidies, the magnitude of such subsidies, and the development dimension of subsidies that support nutrition and local income, and the management system for the potential disciplines that may be imposed. At the same time, it is well recognised that the cost of inaction will be detrimental to the livelihoods of the coastal dwellers and countries dependent on fish for income generation and food security.

Since the adoption of the United Nations Sustainable Development Goals (SDGs), there has been a renewed momentum at the multilateral level to address unsustainable practices in the fisheries sector. Goal 14.6 specifically aims to, “by 2020 prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, eliminate subsidies that contribute to illegal, unreported and unregulated 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 World Trade Organization fisheries subsidies negotiation.” From the foregoing, this study seeks to identify the main issues of importance with regard to WTO Fisheries Subsidies disciplines, specifically with regard to the LDCs. The aim is to make a contribution to development-friendly negotiations by highlighting concrete negotiations issues of importance to these countries.