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WTO fisheries subsidy negotiations being used to undermine sovereignty and development

The precarious conditions for small-scale fishers place them in an especially vulnerable situation in regard to the ongoing WTO negotiations on fisheries subsidies. Negotiating proposals will have a disproportionate impact on these communities if they undermine the ability of fishers to receive government support to enable them to fish.

Adam Wolfenden


THIS year the World Trade Organisation (WTO) is aiming to conclude negotiating new rules for fishing subsidies that will impact conservation measures, sustainable development and the livelihoods of fishing communities around the world, especially in developing countries and least developed countries (LDCs). Those nations with already subsidised and expansive fleets are looking to ensure that strict prohibitions will undermine any future challenges to their existing market dominance.

While the WTO has attempted to negotiate rules on fisheries subsidies for many years now, the United Nations Sustainable Development Goal (SDG) 14.6 provided a boost to securing an outcome that will ‘by 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to illegal, unreported and unregulated [IUU] fishing...’ as well as provide ‘appropriate and effective special and differential treatment’ for developing and least developed countries.

The negotiations have largely been discussed in three substantive pillars: IUU fishing, overfished stocks, and overfishing and overcapacity. The IUU fishing pillar sets out to determine how to deal with a vessel(s) that receives subsidies but has been determined to have engaged in IUU fishing. The overfished stocks pillar discusses how to address any subsidies going to the fishing of stocks that are declared to be overfished. The overfishing and overcapacity pillar aims to prohibit subsidies that reduce the capital or operating costs of vessels that support them to fish for longer and with greater capacity.

The importance of small-scale fisherfolk

It is widely recognised that global fish stocks are struggling. The United Nations Food and Agriculture Organisation (FAO) reports1 that almost 60% of assessed stocks are fully exploited and 34% are fished at unsustainable levels. The global levels of subsidies to the fishing sector have been estimated to be as much as $3.4 billion.2 While subsidies contribute to the overfishing of stocks, the issue varies depending on the size and scope of the fishing being subsidised and who is benefiting.

According to the World Bank,3 approximately 120 million workers rely on commercial capture fishery value chains for livelihoods, with 97% of these people living in developing countries. Over half of the catch in developing countries is done by small-scale fishers, with 90-95% of small-scale landings going to human consumption. It is estimated that 5.8 million fishers in the world earn less than $1 per day.

The case of small-scale fishers must be looked at uniquely. As FAO reports,4 small-scale fishing contributes significantly to nutrition from animal protein (especially in developing countries, small island states and isolated communities), supports over 234 million people globally, and plays a crucial role in preventing people descending into poverty. Further, many small-scale fishers engage in fishing that would be categorised as ‘unreported’. Pew Charitable Trusts5 highlighted recently how nearly all of Indonesia’s small-scale fishing – which comprised approximately 95% of the nation’s fishing sector – was unreported.

The precarious conditions for small-scale fishers place them in an especially vulnerable situation in regard to the WTO negotiations. Negotiating proposals will have a disproportionate impact on these communities if they undermine the ability of fishers to receive government support to enable them to fish.

The Chair’s text

Despite the postponement of this year’s WTO Ministerial Conference due to COVID-19, there is a push to secure an outcome on fisheries subsidies by year’s end without a Ministerial. The current Chair of the negotiations, Ambassador Santiago Wills from Colombia, issued a Chair’s text in June in an attempt to provide a roadmap for an outcome. This comes as previous proposals for online negotiations during the start of the COVID-19 pandemic were rejected by developing-country WTO members and civil society groups for ignoring the ongoing burden for developing and least developed countries in dealing with the pandemic.

The Chair’s text contains proposals that will see the undermining of existing international agreements on areas of national sovereignty. Under the United Nations Convention on the Law of the Sea (UNCLOS), a nation has sovereign rights and responsibilities to manage and conserve the natural resources in its 200-nautical-mile Exclusive Economic Zone (EEZ). Current proposals in the Chair’s text allow for the exclusion of only the 12 nautical miles of a WTO member state’s territorial waters from the prohibitions, capturing the majority of a sovereign nation’s EEZ.

While there is some scope in the proposals for exclusions to apply to the full EEZ of LDCs and some developing countries which meet a number of criteria (per capita national income, level of fish production, distant water fishing and more), such sovereign rights shouldn’t be up for negotiation in the first place. Excluding the EEZs from the prohibitions would allow developing countries, and LDCs especially, the ability now and into the future to have government support for the capacity of the domestic fishing industry, leading to greater value addition of sovereign resources for communities. It also isn’t a stretch to believe that the undermining of the existing rights under UNCLOS in the WTO will set a precedent in other fora.

It is unsurprising that the negotiations on a complex issue like fisheries subsidies will deal with matters addressed by other mechanisms and institutions involved in managing fisheries, such as national authorities and regional fisheries management organisations (RFMOs). The WTO must ensure, however, that any commitments in these negotiations do not undermine the existing frameworks for fisheries management, including procedures on determining IUU fishing, managing resources, etc.

The proposals that have been included in the Chair’s text however take a ‘sustainable’ management-based approach to curbing subsidies, allowing subsidies if the fisheries are being managed properly. The Chair’s text allows for some subsidies on overfished stocks provided that there are ‘appropriate measures’ in place to ensure the rebuilding of the fish stock. This is problematic as it invites the WTO, a body with no expertise in fisheries management, to determine whether or not the national sustainable management of fisheries is appropriate – a term that is not defined.

In the negotiations on overfishing and overcapacity, again the Chair’s text allows such subsidies provided that a country can demonstrate it has policies in place to ensure the stocks remain at a sustainable level. This once again raises issues around the WTO making decisions on the management measures of countries without any relevant expertise. Allowing the WTO to make determinations regarding the management measures of members will draw it into conflict with not only a member’s right under UNCLOS but also other decisions determined by the very bodies whose remit it is to make such decisions. Fisheries management doesn’t need the WTO to undermine what are already incredibly complex processes.

The Chair’s text also fails to specifically target large-scale, industrial fishing, the type of fishing most responsible for the plunder of fishing stocks. Currently the prohibitions on subsidies for overfishing and overcapacity apply to all vessels provided they aren’t covered by the exemptions. While the exemptions are important, they don’t address the historic role of those vessels and fleets most responsible for the depletion of fisheries stocks. The prohibition on subsidies for capacity or operations for fishing beyond a member’s EEZ would go a considerable way to addressing those large-scale vessels fishing in the high seas.

The Chair’s text currently contains a placeholder in the section on overfishing and overcapacity to address the issue of ‘capping’. There have been a number of proposals from the United States, China and others that seek a formula for countries to establish a subsidies cap based on a variety of metrics including the percentage of global marine capture. This is a highly problematic approach as it risks repeating the mistakes of the WTO’s Agreement on Agriculture, allowing those who have historically subsidised their producers to remove that support slowly while those who haven’t been in a position to provide such subsidies may never be able to. This only enshrines the dominant market position of the existing heavy subsidisers.

Special and differential treatment

Despite being a key component of the SDG mandate for the fisheries subsidies negotiations, ‘special and differential treatment’ (SDT) is frequently framed as a problematic part of the discussions – an impediment to an outcome for the US and others. The current proposals on SDT mostly relate to exclusion from prohibitions for developing countries within their territorial waters and, in other cases, potentially out to the EEZ of a member. What is currently proposed in the Chair’s text is a start but doesn’t go nearly far enough, yet already countries like the US are saying what is being proposed goes too far.

If SDT is to be ‘appropriate and effective’ like the SDG mandated, a good place to start would be to ensure that the entire EEZ of developing-country and LDC members is excluded. This would allow those members to manage and conserve their resources as per their obligations under UNCLOS without the WTO making determinations on management measures, as well as enable these nations to support fishing of their own resources without relying on outside capacity. Such an approach would provide development flexibility and conservation integrity, be easier to administer as well as focus efforts on curbing subsidies in the high seas or other members’ EEZs.

Another issue for SDT to address is the need to provide adequate technical assistance and capacity building. In many developing countries, regulating and/or enforcing regulations across remote areas can be challenging. This means that any hard commitments tied to the regulation of fishing could see vulnerable communities punished for a lack of national capacity (also a management issue that needs to be resolved outside the WTO). Compliance with many of the proposals would require administrative effort and capacity, something that is notoriously difficult for many developing countries and LDCs. For these members, their commitments should be relative to their level of capacity and contingent on the provision of assistance. This will ensure that developing countries are better able to engage in their fisheries and WTO obligations, a win for all involved.

Conclusion

The WTO currently appears set to fail to deliver on its SDG mandate. The Chair’s text is bringing in proposals that will undermine the development prospects of developing countries, the resource holders of the remaining fish stocks. The SDG mandate is clear on the need for appropriate and effective SDT, yet that is not what is being proposed.

The problem of overfishing needs to be addressed and curbing subsidies is one part of broader efforts to do that. What is currently being proposed at the WTO by many industrial fishing nations, however, will only lock in their existing competitive advantage and capacity, undermine the management measures of countries by allowing the WTO to rule on whether or not they are appropriate, and work against greater value addition for fishing communities.

It is possible to have an agreement that supports conservation and development, but the rush to seal an outcome within this year is coming at the expense of the substance of the outcome. Fishing communities, developing countries and the global community deserve better.       

Adam Wolfenden is the Trade Justice Campaigner for the Pacific Network on Globalisation (PANG), a regional watchdog promoting Pacific peoples’ right to be self-determining.

Notes

1   https://doi.org/10.4060/ca9229en

2   https://www.sciencedirect.com/science/article/pii/S2352340919310613

3   http://documents1.worldbank.org/curated/en/515701468152718292
/pdf/664690ESW0P1210120HiddenHarvest0web.pdf

4   http://www.fao.org/3/a0237e/A0237E07.htm#ref14

5   https://www.pewtrusts.org/en/research-and-analysis/articles/2019/11/12/indonesias-small-scale-fisheries-yield-big-catches-but-little-data

The fisheries sector in the Pacific

Fisheries are crucially important in the Pacific for both governments and communities. In the Pacific Islands, fishing provides 40-80% of animal protein intake in urban centres and 50-90% in rural areas, with most of the fish eaten by rural people coming from subsistence fishing. Fisheries are also a key driver of developing economies, with fish and fish-related products generating a higher export value than coffee, bananas, cocoa, tea, sugar and tobacco combined. In 2016, government revenue from fisheries access agreements for Pacific Island Parties to the Nauru Agreement (PNA) was approximately $400 million, a huge increase from $60 million in 2011.

While only six Pacific Island countries (Papua New Guinea, Fiji, Solomon Islands, Vanuatu, Samoa and Tonga) are members of the WTO, the fallout from a bad deal will extend to the non-member Pacific Island states, including PNA countries. The incorporation of proposals that invite into the WTO decisions on whether or not conservation and management measures are appropriate risks having a body without sufficient expertise making such determinations. This will impact the mechanisms not only at national levels but also within regional fisheries management organisations (RFMOs) as there will be a push to adopt an internationally standard approach. For those non-WTO members, this can result in them having to conform to an outcome that they had no part in negotiating. Furthermore, RFMOs provide the forum for fishing nations to negotiate conservation and management measures for fisheries; agreeing on a set of rules would be a shift of institutional powers from RFMOs to the WTO, which does not have expertise in fisheries resource management.


Indian small-scale fishers

As discussed in this article, small-scale fishers are in an incredibly precarious and vulnerable situation. The proposals contained in the Chair’s text fail to sufficiently protect small-scale fishers and highlight the potential impacts for these communities. The proposals pertaining to IUU fishing raise many questions for small communities and their ability to meet any strict commitments that are made in the WTO.

A recent letter (https://smallscalefishworkers.org/wp-content/uploads/2020/10/NPSSFW-letter-on-WTO-_-04.10.2020.pdf) sent by the Indian National Platform for Small Scale Fishworkers to the Indian government and the Chair of the fisheries subsidies negotiations highlighted the widespread lack of regulation, reporting and frameworks to support small-scale fishing in meeting any such requirements, potentially leaving all these reliant communities vulnerable to having their government support removed. The letter also called for the WTO to stick to its mandate to address subsidies and not include management issues and undermine the existing sovereignty that nations have over their EEZ.

The voices of small-scale fishers must be heard within the negotiations; otherwise, critical government support for some of the most vulnerable communities will be at risk of removal. This would not only increase hardship in these communities but also represent a failure to meet the objectives of the SDGs.

*Third World Resurgence No. 345/346, 2020, pp 82-85


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