Development & Aid, Economy & Trade, Environment, Global, Global Geopolitics, Headlines, Latin America & the Caribbean

TRADE: Friends of the Fish Try to Sink Subsidies

Marcela Valente

BUENOS AIRES, Nov 7 2003 (IPS) - An informal group of nations calling themselves the “Friends of the Fish” are attempting to sink fishing industry subsidies, charging that they distort the international market – as do farm subsidies – and contribute to the degradation of the world’s marine resources.

The pro-fish group, which comprises countries with major fishing resources, was able to put the sector’s subsidies on the agenda of the World Trade Organisation (WTO) as of the 2001 ministerial conference in Doha, and have made advances in achieving agreements aimed at eliminating or sharply reducing such assistance.

The Friends of the Fish, a group founded by Australia, Chile, Iceland, New Zealand, Peru, Philippines and the United States, have fought alongside environmentalists for four years to get the subsidies issue on the table, targeting the European Union, Asian countries and others.

But the focus of the WTO debate continues to be farm subsidies.

At the WTO ministerial meet in the Qatari capital in November 2001, Argentina, Bangladesh, Ecuador, India, Malaysia, Mexico, Morocco, Senegal, South Africa and Thailand joined the Friends.

The group thus had greater presence at the Fifth WTO Ministerial Conference, Sep. 10-14 in the Mexican resort of Cancun, where they presented a proposal for reducing or definitively eliminating fishing industry subsidies.

But the inability of the WTO member states to produce any agreements on agricultural trade led to the failure of the Cancun meet, and the “Doha Development Round” negotiations have ground to a halt.

Now work is only being carried out in informal settings on some of the central trade topics, but none include fishing, an Argentine diplomatic source told IPS.

Worldwide, fishing subsidies total an estimated 15 to 20 billion dollars annually, relatively little compared to the 350 billion the industrialised world gives its farmers. But in the fishing context there is the added factor of the dramatic deterioration of ocean resources.

The Worldwide Fund for Nature (WWF, also known as World Wildlife Fund) calculates that governmental assistance to the fishing industry is equal to 20 percent of the value of annual catches worldwide. WWF warns that 75 percent of ocean fisheries are over-exploited, or are recovering from a period of extreme depletion of species.

Beginning with the Doha Round, the Friends of the Fish found that there was willingness in the European Union (EU) to negotiate, as the bloc was already engaged in reforming its common fisheries policy.

But Japan and South Korea are a different story, as they do not admit there is a relation between subsidies and over-fishing.

Furthermore, the countries that subsidise production for domestic consumption argue that the debate on the matter should be taking place under the auspices of the United Nations Food and Agriculture Organisation (FAO), not in the WTO.

In Latin America, the countries most concerned about the effects of subsidies on their fisheries are Argentina, Chile, Mexico and Peru, says Ernesto Godelman, of the Argentine non-governmental organisation CeDePesca, which participated in the informal talks on the issue in Cancun.

Ecuador also holds its weight in production, and Brazil and Venezuela to a lesser extent, he said. CeDePesca is based in Mar del Plata, 400 km south of Buenos Aires.

Over the past two decades, Latin American countries, as well as African and Asian nations, have suffered the effects of the industrialised world’s fishing activities, largely because of subsidies, which have encouraged the over-exploitation of the territorial waters of developing countries, said the expert.

Assistance for the fishing industry has its unique characteristics that make it difficult for a trade body like the WTO to monitor. It is not a problem of price competition between those who subsidise and those who do not, but rather a problem, fundamentally, resource management, he said.

In this sense, a CeDePesca study presented in Cancun outlines the harmful effects of the process of transferring the EU’s fishing capacity to Argentina’s exclusive economic zone in the 1990s, a cooperation programme that proved detrimental to Argentine producers and pushed marine resources into crisis.

The sustainability of hake (merluza) fishing, the staple of Argentina’s fisheries, has been threatened since the fishing agreement was signed with the EU, as its large vessels – otherwise destined for shipbreaking due to the exhaustion of fish supplies in the North Atlantic – were transferred to Argentina.

The European government provided low-interest loans for the destruction or transfer of large fishing vessels to other countries so that the fleet would continue to operate, but in fisheries outside the bloc’s exclusive economic zone, where the principal resources were on the verge of extinction.

Mixed firms – mostly Spanish-Argentine – were then formed for hake fishing, and tariff-free imports were permitted. To the extent that the fisheries of the North were reduced, pressure on those of the South increased, with a more numerous fleet and larger fishing vessels.

“Between 1992 and 1996, the EU fishing policy was efficient in the reduction of the capacity of its fleet,” but the costs implied for other countries, like Argentina, were evident, Godelman says in his report.

Just as occurred in the early 1990s in Namibia, whose hake fisheries were depleted as the result of a similar capacity transfer programme, the fishing agreement between the EU and Argentina meant a 10-fold increase in the volume of hake catches in the South Atlantic.

The population levels of this highly prized species have remained below critical levels since 1998. The annual hake-fishing season was cut back as a result, and only last year did the hake recovery begin.

Developing countries are particularly affected by the fishing over-capacity that rich countries export from their own reduced fisheries, warns the WWF in documents it presented in informal meetings in Cancun.

“The Argentine case is a regrettable mirror, one in which those who are tempted to sign fishing capacity transfer agreements should take a look at themselves,” says Godelman’s text, in agreement with the scenario laid out by the WWF.

Given this panorama, the Friends of the Fish proposed in Cancun that the WTO reaffirm its commitment to reducing fishing subsidies, banning the most harmful ones while allowing those that are aimed at protecting marine resources and at supporting development in the poorest countries.

The group established that the new rules should ensure that the lifting of subsidies in one country does not imply increased fishing capacity in another, and should establish a clear work programme by the end of the Doha Round, slated for January 2005.

The WWF stated at the ministerial meet in Mexico that the fishing subsidies issue gave the WTO a great opportunity to prove that it is capable of establishing clear rules for trade in a framework of sustainable development, just as the Doha Round demands.

But for now, the negotiations remain frozen, and it remains to be seen if the WTO General Council will be able to kick-start the talks when it meets in Geneva in December.

And the Friends of the Fish will gather once again in the shadow of the great debate on agricultural subsidies.