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Fisheries Subsidies Ministerial statement on behalf of Argentina, Australia, Chile, Colombia, Ecuador, New Zealand, Norway, Peru, United States
On Friday 16 December 2011 New Zealand brought Friends of Fish countries together to highlight the urgent issue of fisheries subsidies and their contribution to the worsening state of global fish stocks. Hosted by Minister Tim Groser, the Ministerial event took place in the margins of the WTO Ministerial Conference (MC8) in Geneva. A joint statement was released on behalf of Argentina, Australia, Chile, Colombia, Ecuador, New Zealand, Norway, Peru and the United States.
WTO: New Zealand pushes ambitious reform of global fisheries subsidies
At the most recent fisheries subsidies negotiations in Geneva in April 2011, New Zealand, speaking on behalf of a number of countries, again highlighted the urgency and importance of reaching global agreement on reform and elimination of fisheries subsidies, given their contribution to overfishing, and to creation of excess capacity in global fishing fleets.
A copy of the statement delivered by New Zealand can be found here.
The statement, and the compelling trade and environment case for reform, has been picked up in the international media, including Foreign Policy. [External link] and the Huffington Post. [External Link]
Global fisheries are a classic case of the “tragedy of the commons”, and face both environmental and economic challenges. According to the Food and Agriculture Organization of the United Nations (FAO)’s 2008 State of the World’s Fisheries and Aquaculture report, 80% of the world’s commercial fisheries are over-exploited, fully exploited, significantly depleted or recovering.
Over-fishing has reduced stocks of the highest-value species at the top of the food chain (like tuna) to a fraction of their original biomass.
Subsidies reduce the marginal costs faced in the fishing industry and inflate earnings beyond their real economic level. This creates perverse incentives for fishing fleets to spend more time at sea, catching more fish, even though many of their target fisheries are on the point of collapse. A recent report estimates global fisheries subsidies at US$24-$30 billion per year.
The World Bank’s 2008 ‘Sunken Billions’ report estimates that, as a result of overcapacity, inefficiency and subsidisation, the world’s fishing industry creates a net drain on the global fishing resource of around $50 billion per year.
What can be done?
Effective international rules on subsidies to the fishing industry will help to reduce overcapacity and overfishing of the world’s oceans. The WTO is the right place for these new rules to be negotiated, as an extension of existing WTO rules on general subsidies.
Subsidy rules alone will not provide a magic bullet, however. Improved international management of common marine resources, such as through Regional Fisheries Management Organisations, will also be essential to the restoration of global fisheries, as will stronger action against illegal and unregulated fishing activity.
Fishery subsidies in the Doha Round
In 2001, in recognition of the link between subsidies and overexploitation of global fisheries resources, WTO Ministers mandated negotiations to “clarify and improve WTO disciplines on fisheries subsidies” in the Doha Round [external link].
At the December 2005 WTO Ministerial in Hong Kong [external link], Ministers agreed that there should be strengthened “disciplines on subsidies in the fisheries sector, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and overfishing”. Ministers also agreed that “appropriate and effective special and differential treatment for developing and least-developed countries should be an integral part of the fisheries subsidies negotiations…”.
In November 2007, a first draft text was issued by the Chairman of the negotiations. The text provides for a range of prohibitions on subsidies to boat building and modernisation, as well as on operating costs (such as fuel). It also provides for special and differential treatment for developing countries as well as establishing fisheries management as a prerequisite for granting of subsidies.
Most countries have accepted the text as a ‘basis’ for ongoing negotiations. Progress in the negotiations has however slowed in 2009/10, consistent with limited progress evident in other parts of the Doha round.
A wide range of countries have participated actively in these negotiations. NewZealand, Argentina, Australia, Chile, Iceland, Norway, Peru, the Philippines, Colombia, the United States of America and other countries have argued for a broad prohibition on all fisheries subsidies, with only limited exceptions.
Brazil has largely shared this approach, but more recently has also argued, along with China, India and Mexico, that there should be significant exemptions from the disciplines for developing countries. The challenge in designing appropriate rules for developing countries is that these countries now account for more than 70% of global marine fish production.
Chinese Taipei, the European Union, Japan and South Korea – WTO members with substantial subsidy programmes - have argued that additional disciplines on fisheries subsidies are not necessary if fisheries are well-managed.
New Zealand position
For many years, New Zealand has been a leading proponent of stricter disciplines on a broad range of subsidies that promote overcapacity in the fishing industry and lead to an increase in fishing effort.
New Zealand is coordinator of the ‘Friends of Fish’ in WTO negotiations, a group of countries committed to a high ambition outcome.
New Zealand has also supported appropriate exceptions from the disciplines for developing countries to ensure they are able to exploit and develop their fisheries resources in a sustainable way.
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