China confronts subsidy limit on reflagged vessels

China’s Commerce Ministry is circulating an explanation of the World Trade Organization agreement limiting harmful fishery subsidies.

The circular issued by the Chinese Commerce Ministry, issued to provincial government offices overseeing distant-water fleets, urges them to “exercis[e] restraint in subsidizing fishing activities for flag-changing vessels and fish with unknown population status.”

The WTO deal will have particular implications for the nature of China’s fleet, as around the globe, Chinese fishing companies have located vessels in distant-water bases, with the backing of the Chinese government, and numerous Chinese vessels fly the flag of third countries – including a significant fleet based in and flagged to Ghana.

The WTO agreement sets new rules forbidding subsidies for vessels flying flags of convenience, regardless of the flag or registry of any vessel involved or the nationality of the recipient of the subsidy.

However, the WTO agreement does not include language covering the contentious issue of preferential treatment for developing nations, including fisheries subsidies that contribute to overcapacity and overfishing, and special and differential treatment for developing countries, which requested carve-outs for least-developed countries, countries that fall under a “de minimis” level (countries that individually account for less than 0.8 percent of global marine capture), and artisanal fishing.

“Since the two issues are closely linked, members will likely negotiate them at the same time,” Ernesto Fernandez Monge, a senior officer at The Pew Charitable Trusts, told SeafoodSource. “[The] WTO agreement was a key turning point, and members now have a second chance to set rules curbing additional harmful fisheries subsidies, which would go even further toward tackling one of the key drivers of overfishing.”

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