Contradictions block the way to a WTO deal on ending fishing subsidies

There are very different and contradictory ambitions motivating the key players in the current World Trade Organization negotiations on a deal that would end harmful fisheries subsidies.

Those differences will have to be squared before any deal emerges out of the talks, which have been held over more than 20 years, and which are set to resume on 18 January, 2021.

While all member states at the WTO say they’re committed to a deal on ending capacity-enhancing subsidies, China and Russia are simultaneously ramping up fleet enhancement initiatives that stand in contrast to the goals of the negotiations.

Chinese state-owned fishery firm CNFC Overseas Fishery Co. Ltd. – which has relied on subsidies to turn a profit in recent years – has this month sought to raise cash on the Shenzhen Stock Exchange via a private stock offering, with the goal of building or enlarging 11 vessels to expand its squid and tuna catch.

Meanwhile, the city of Fuzhou in Fujian – one of the strongholds of the Chinese distant-water sector – is building the Fuzhou Lianjiang National Ocean Fishery Base during the period of China’s 14th Five-Year Plan (2021 to 2025), and has set ambitious targets for the quantity and value of the products it plans to unload from distant-water vessels and process at the 80,000-square-meter site. Fuzhou claims to have handled nearly three million tons of catch in 2019. A local fishing company, Fujian Zhong Hong Fishing Co., last month announced plans to build what it describes as a “comprehensive multifunctional fishery industrial park” in Papua New Guinea.

Russia, meanwhile, is paying 30 percent of the cost of 43 large vessels to be built between now and 2025 as part of a fleet modernization program launched in 2018.

“Most of them are large ships of over 65 meters in length, including vessels exceeding 108 meters in length,” Daniel Voces de Onaíndi, the managing director of Europêche, a lobbying group for the European Union’s fishing firms, told SeafoodSource.

Such major capacity expansions seem to go against the spirit of any global effort to halt the expansion of fleets, Voces de Onaíndi said. By contrast, the number of E.U. vessels has fallen from 103,834 in 1996 to 81,664 in 2018.

“We in the E.U. have done our homework already 16 years ago, and from that date, the financial aid measures granted by the E.U. to fishing fleets are the most sustainable and transparent in the world,” he said.

However, the E.U.’s subsidy regime, which supports Europêche members, has also been criticized as harmful for increasing capacity indirectly. Andrea Ripol, fisheries policy officer at NGO Seas at Risk, claims the E.U.’s new EUR 6 billion (USD 7.3 billion) European Maritime Fisheries and Aquaculture Fund (EMFAF) package continues harmful practices like payments for temporary cessation of fishing.

“We recently did a study where we show how these subsidies can turn out to be harmful as the safeguards attached to them are not sufficient or properly applied and enforced,” Ripol told SeafoodSource. “[We] did a study with Birdlife showing that temporary cessation subsidies are not only an ineffective management tool for reducing fishing effort, but also ineffective in supporting marine conservation efforts. Cessation payments maintain fishing overcapacity, which drives overfishing.”

Voces de Onaíndi said the EMFAF is “fully in line with WTO negotiations” and that his organization “regrets that the E.U. funding system is being questioned by countries that may not have a proper fleet register or are exponentially increasing their fishing fleets with public money.”

“Most WTO countries do not have capacity ceilings, entry exit schemes [balancing new vessels by withdrawing a vessel of similar capacity] nor an effective fisheries management system in place,” Voces de Onaíndi said.

Ripol’s biggest gripe with the new EMFAF, which covers the period 2021 to 2027, is the lack of funds for conservation efforts – an E.U. Parliament request for 25 percent ring fencing for marine conservation projects was whittled down to six percent in the final draft agreement – a fraction of the figure paid to fleet maintenance. Seas at Risk, which receives funding from the E.U. Commission, has called for a 20 percent reduction in fishing efforts in the Mediterranean to address overfishing there.

As home to the world’s largest distant-water fleet, China faces growing international scrutiny, particularly from the U.S. government, which has engaged in a broad campaign against perceived Chinese international misbehavior. As part of that effort, the United States recently revoked the travel visas of some Chinese seafood executives allegedly involved in illegal, unreported and unregulated (IUU) fishing.

Even if a WTO deal is signed, moves like those by CNFC suggest that China may struggle to rein in the ambitious expansion plans of its distant-water fishing companies – if the country’s leaders are serious about implement such a deal in the first place.

But action at the market level may concentrate minds. A key market of Chinese seafood firms like CNFC, Japan has passed a law – enforceable in two years – that will make entry of product from IUU catches more difficult, effectively rendering subsidies for vessel expansion less useful.

Sally Yozell, director of the environmental security program at the Washington, D.C., U.S.A.-based Stimson Center told SeafoodSource she sees Japan aligning with the E.U. and U.S. to weed out IUU globally.

“When the three markets – the U.S., Japan, and Europe – come together, they comprise over 50 percent of the world market, and that is a powerful purchasing block,” she said. “It sends a big signal to China and other states in East Asia: If they want to access half the global seafood market, they will need to adopt a similar traceability regime.”

Isabel Jarrett, manager of the reducing harmful fisheries subsidies program at The Pew Charitable Trusts, told SeafoodSource said that despite missing this year’s deadline, WTO members are “closer than ever before to reaching an agreement. However, she told SeafoodSource there is still much to be done to reach an agreement.

“Particularly an ambitious one that does not include loopholes that undermine sustainability goals,” Jarrett said.

WTO members “must guard against writing flexibilities into the agreement that allow the status quo to continue,” Jarrett said.

“Developing nations should only receive flexibilities for an interim period of time to help them transition away from their harmful fishing subsidies, and developed nations should not benefit from exceptions that would allow them to continue harmful subsidization even with management measures in place,” she said.

Photo courtesy of Konstantin Baidin/Shutterstock