How can new World Trade Organization (WTO) rules on fisheries subsidies benefit our ocean and fishing communities and what are the key concerns negotiators should keep in mind as they strive to finalize a deal? Speakers grappled with these questions at a virtual event during the WTO Public Forum 2021 on 29 September, highlighting the importance of reaching an ambitious agreement.

The session was co-organized by the International Institute for Sustainable Development (IISD) and The Pew Charitable Trusts. Alice Tipping, IISD’s Lead on Sustainable Trade and Fisheries Subsidies, moderated the event.

Disciplining fisheries subsidies: Why does it matter?

Chris Costello, Co-director of the Sustainable Fisheries Group, University of California, Santa Barbara, opened the discussion, explaining that fisheries subsidies often incentivize fishing beyond sustainable levels. In a context where 34% of assessed global fish stocks are already overexploited, such subsidies contribute to the depletion of fish stocks and negatively affect the socioeconomic well-being of communities who rely on fishing for livelihoods and nutrition.

“Subsidies that encourage overfishing end up harming the very people that they were supposed to help,” Costello warned.

Richard Damania, Chief Economist, Sustainable Development Practice Group, World Bank, concurred, saying that on top of their negative environmental impacts, many fisheries subsidies also tend to be socially regressive, benefitting mostly large-scale fishers, and economically inefficient. He gave the example of fuel subsidies, which are disproportionately captured by industrial fishing boats with bigger engines, and increase the competitiveness of outdated and polluting technologies.

Beyond the various concrete benefits that new rules on fisheries subsidies could have, speakers also suggested that an agreement would have systemic importance, both from a trade and fisheries management perspective. Guilherme Leivas Leite, Permanent Mission of Brazil to the WTO, explained that a deal would send a strong signal on the WTO’s ability to tackle sustainability issues. “It’s about demonstrating that trade and sustainability are complementary,” he said.

At a time of growing environmental pressure on fish stocks, in particular due to overfishing and climate change, the need for global cooperation for the sustainable management of marine resources has never been stronger, Costello emphasized. From that perspective, a WTO agreement to curb harmful fisheries subsidies would be a crucial step in the right direction, he added.

The need for ambition

Sebastian Matthew, Executive Director, International Collective in Support of Fishworkers, said that if all countries were to cut capacity-enhancing subsidies, overfishing could be reduced in many places. Speakers agreed that for this to happen, WTO members would need to ensure that the rules they negotiate are meaningful.

“It’s important to have an ambitious agreement, not only any agreement,” insisted Leivas Leite.

Based on recent research conducted by Costello’s team, an ambitious agreement could lead to an increase of 12% of the total biomass of fish stocks globally, which, he explained, is very significant. He also argued that while the current “parameters” in the negotiations are the right ones, WTO members need to push for ambition.

Speakers also addressed the questions of special and differential treatment (S&DT) for developing country members under possible new rules on fisheries subsidies, including the sensitive question of possible exemptions from the disciplines.

“Having some exemptions makes a lot of sense from a livelihoods perspective, in particular for artisanal fishing. But the more exceptions, the more diluted the agreement becomes, and the less of an impact it will have,” Costello warned.

Leivas Leite indicated that Brazil is not in favor of “blanket” exemptions for all developing country members, in particular in light of the fact that some of the world’s largest fishing fleets are from developing countries. ”We cannot have overly broad exemptions. We want something that is time-bound, geographically-bound, and needs-based,” he said.

On the question of possible exemptions for artisanal fishing, Matthew said that while he agreed with the principle, he felt that the language in the current negotiating text was “too loose” and could lead to some circumvention of the disciplines. Another approach, he said, could be to limit the exemption to small fishing boats that are using non-towed gear.

Keep supporting fishers, but sustainably

Thinking about what implementation of a new WTO deal on fisheries subsidies could mean in practice, speakers all highlighted that crafting reform strategies carefully will be essential.

Damania drew lessons from past experience in reforming subsidies to other sectors, indicating that key elements for successful reform include: (1) measuring and analyzing existing subsidies; (2) understanding the political economy of the sector; and (3) ensuring a just transition, in particular for vulnerable groups.

He also highlighted that in many cases, the right strategy would not consist of taking support away from communities, but rather supporting them in another, more sustainable way instead. “It’s always easier to repurpose a subsidy than to eliminate a subsidy. For fisheries subsidies, you can think of de-linking them from fishing capacity and effort,” he said.

All speakers agreed with that general idea. “Nobody says that you should not subsidize fishers. We only say that it does not make sense to subsidize them in a way that incentivizes overfishing,” Costello noted.  One way subsidies can be reoriented is by supporting better management of fisheries, he said, which can have multiple benefits for the marine environment and fishing communities.

Other sessions

Two other Public Forum events focused specifically on the issue of fisheries subsidies negotiations. At the session titled, ‘Building Ocean Resilience Beyond COVID: Global Call for Collective Action on Fisheries Subsidies,’ organized by Friends of Ocean Action on 28 September, speakers emphasized that a WTO agreement to tackle harmful fisheries subsidies is essential for curbing overfishing, but could also help address related challenges such as human rights abuses aboard fishing boats and social equity. Fisheries subsidies, they underlined, often favor larger-scale fishing fleets over artisanal fishers, with one speaker giving the example of India. Speakers also agreed that the EU, as a key player with clearly stated sustainability objectives, should take a more active role in leading the charge against harmful fisheries subsidies, including by setting an example through unilateral actions at the EU scale.

In the session themed, ‘Catching Development – Acting Together for Sustainable Fisheries Trade,” which was organized by the Pacific Network on Globalisation (PANG) on 30 September, experts and government officials mostly focused on the question of S&DT, highlighting developing countries’ needs for flexibility and the fact that most of them have not contributed to the global challenge of overfishing. Speakers placed particular emphasis on the need to protect artisanal fishers, whose role in supporting livelihoods and food security is essential from a development perspective. The current negotiating text, they argued, leaves too much flexibility for the large industrial fishing fleets who are the most responsible for overfishing, which risks to significantly undermine effectiveness of the disciplines. [SDG Knowledge Hub Sources] [WTO Public Forum 2021]