TRADE: Pressure at WTO to Eliminate Fishing Subsidies

By Gustavo Capdevila Reprint | | Print |

Gustavo Capdevila

GENEVA, May 7 2002 (IPS) - The World Trade Organisation (WTO) is debating the subsidies industrialised countries grant to their fishing industries, a practice that developing nations and environmentalists complain are distorting international markets and pushing some species towards extinction.

Fourteen billion to 20.5 billion dollars are spent worldwide each year to shore up inefficient fisheries operations, the equivalent of 20 to 25 percent of the industry’s global revenues.

Subsidies create an excess of capacity among the subsidised producers, who then engage in over-fishing and thus limit the access to fish catches for other fishing operations that do not receive government support.

A group of eight countries, led by Australia, asked the WTO this week to review and improve its rules in order to eliminate the harmful effects of fisheries subsidies.

The group, known as Friends of the Fish, consists of Australia, Chile, Ecuador, Iceland, New Zealand, Peru, Philippines and United States. Another five countries – Barbados, Malaysia, Mexico, Norway and Thailand – expressed support for the Friends’ proposal.

But the delegations from Japan and South Korea stated that the subsidy problem has been exaggerated and they called for debate in other international arenas besides the WTO.

Seoul’s representatives said the WTO “is not the best forum” because fishing issues are covered already by numerous multilateral or regional systems.

The European Union (EU), which is home to the leading fisheries subsidising countries as well as others that oppose such protectionist practices, opted to approach the matter from the angle of fish resource management.

Although the WTO rigorously excludes them, non-governmental organisations (NGOs) specialising in environmental protection are participating in the debate, including the Worldwide Fund for Nature (WWF, also known as World Wildlife Fund), based in the Swiss city of Gland, and Greenpeace International, based in Amsterdam.

Claudia Saladin, director of the WWF sustainable trade programme, said “improved discipline (in WTO rules) should explicitly require governments to eliminate harmful subsidies, which contribute to the export of excess capacity and to over- fishing.”

Greenpeace, meanwhile, is urging a debate about the essence of the fishing industry itself, pointing out that “the biggest threat to marine diversity today is over-fishing.”

“Instead of coming to grips with the need for dramatic cuts, nations argue over who will get how much of what remains of dwindling fish stocks,” according to the environmental organisation’s Fisheries Campaign.

Greenpeace shares the interpretation of some legal experts that governments are in fact conferring a subsidy when they “permit private businesses to remove a natural resource from the public domain at little or no cost to the producer.”

The WTO debate is heading down paths that head towards determining the influence of subsidies on the fishing industry as an economic policy tool.

Among the different negotiations approved by the WTO ministerial conference held in November 2001 in Doha, Qatar, is one aimed at clarifying and improving the disciplines of the multilateral trade system with regards to fishing industry subsidies.

The Friends of the Fish pointed out that the mandate of the WTO’s 144 member nations reflects their concern about the potentially harmful effects that fishing subsidies could have on trade, development and the environment.

The concerns of the trade ministers expressed in Doha are aimed particularly at developing countries, which stand to benefit most from the more rigorous WTO disciplines, say the Friends.

At this week’s session of the Negotiation Group on Rules, which encompasses other matters in addition to fishing industry subsidies, the Iceland delegation – which is not a developing country – posed the problem as one of survival.

Half of Iceland’s annual foreign revenues come from fish exports.

Representatives from Ecuador and Peru stated that subsidies granted in wealthy countries have serious consequences for developing nations that depend heavily on revenues from fish exports.

Friends of the Fish announced that it would present specific proposals during the next sessions of the Negotiation Group on Rules.

According to WWF, improved WTO disciplines on subsidies for the fishing industry should take into full account the importance of the issue to developing countries.

The environmental organisation also underscored the need for “special and differential treatment of developing countries within the WTO rule system.”

It must be taken into consideration that “some types of fishing subsidies can play an important role in the transition to sustainable fisheries and responsible fishing practices,” commented WWF expert Saladin.