WTO deal on fishing subsidies could transform global seafood trade

China’s distant-water fishing industry has “glorious achievements” to be proud of, according to the head of the state-sponsored lobby group representing the sector.

Speaking at the China International Fishery Cooperation Summit in Guangzhou recently, China Distant-Water Fishing Association Secretary General Huang Bao Shan said the development of the sector “has been orderly” and that it has invested in equipment upgrades that have modernized the fleet.

Huang has been seeking to influence China’s 14th Five-Year Plan so that further encouragement is given to the distant-water sector.

“We endured many hardships,” he said.

Also speaking at the event was Huang Fu Xiong, secretary general of the Guangdong Association of Distant-Water Fishing, who announced his city’s intention to further expand its distant-water fleet in order to develop a world-leading tuna processing hub.

China’s distant-water sector – which now has the world’s largest fleet – has much to celebrate after a decade of broad expansion and profit-making, thanks in part to generous subsidies from the central government. But it has also faced increasingly sharp criticism of its practices in adhering to international law by fishing inside the exclusive economic zones of countries from Ecuador to Ghana.

The future of the Chinese distant-water fishing effort may likely be decided at the World Trade Organization headquarters in Geneva this winter, where there has been a resumption in discussions on a deal on eliminating harmful fishing subsidies. There has been “constructive engagement” from members on a text prepared by the chair of the talks, according to Ernesto Fernandez Monge, officer for The Pew Charitable Trusts’ program to end harmful fisheries subsidies.

“The chair focused the discussions around the overfishing and overcapacity (OFOC) pillar of the text, on transparency issues, and on special and differential treatment,” Fernandez Monge told SeafoodSource. “These important elements, particularly the prohibition on OFOC, will be crucial to set the level of ambition of the agreement.”

Negotiators will convene again later this month in Geneva for more talks, framed by the backdrop of a recent U.N. assessment on the state of global biodiversity, which pinpoints harmful fisheries subsidies as one of the main drivers of the ecological collapse of marine biodiversity.

But while firmly entrenched as the scapegoat for engaging in damaging fishing practices, China isn’t the only WTO participant being accused of paying harmful subsidies to its fleet. The European Union has been criticized for weaknesses in its fishery management system. And a new report co-authored by Seas at Risk and BirdLife Europe has highlighted divisions between the E.U. executive body and certain member-state governments as negotiations on the next seven years of the European Maritime Fisheries Fund enters the final stages of negotiations. The report suggests the E.U. subsidies paid to fishermen for temporary fishing cessations are in fact a “fake solution” that encourages overfishing.

“The evidence is crystal clear: Temporary cessation of fishing activities is a harmful subsidy, and has no place in the future [European Maritime Fisheries Fund],” Seas at Risk Fisheries Policy Officer Andrea Ripol said.

In a statement to SeafoodSource, the European Commission said “temporary cessation of fishing activities has not been an efficient tool for fisheries conservation and has generated compensation dependency in the sector.”

“This is why the E.U. should only compensate exceptional and significant events, and not recurrent and predictable closures,” it said. “The commission’s proposal for the future EMFF reflects this line.”

In the ongoing interinstitutional negotiations at the E.U., the European Commission “will continue to defend its line against the introduction of harmful subsidies that would increase fishing capacity,” according to the statement.

“Under the conditions outline above, EMFF 2021-2027 temporary cessation programs will be in line with the commitments to U.N. Sustainable Development Goal 14.6 to prohibit harmful subsidies,” it said.

However, the European Commission statement left the door open to cessation payments that are put in place for periods of six months or less.

“Temporary cessation in case of conservation measures should be linked to scientifically justified closures and to a reduction of fishing effort,” it said.

It is unclear whether the E.U. has differentiated its subsidy programs from those of China, which has claimed it deserves preferential treatment as a developing country.

With more than 40 percent of the fish stocks in the Northeast Atlantic and 80 percent in the Mediterranean considered overfished, the E.U. must change its ways and support projects that restore the marine environment and help fishers improve adopt more sustainable practices, BirdLife Europe Senior Marine Policy Officer Bruna Campos told SeafoodSource.

“[The E.U. has been] squandering tax-payers’ money for years without hesitation, funding the slow death of our seas,” Campos said.

A successful outcome to the WTO talks may also depend on agreement on rules on enforcement, according to Anne Mette Baek, president of IFFO, a body representing the fishmeal and fish oil industries. However, that will require better data collection in regions where alleged overfishing is taking place. One of those regions is West Africa, where a number of Chinese fishing firms have pushed to develop fishmeal processing hubs, to the chagrin of some local NGOs and representative bodies of the largely artisanal local fishing sector.

“A key challenge in this region is that there is little data available and gathering more information on the ground is critical,” Baek told SeafoodSource. “IFFO is committed to determining a way forward in collaborating with the most important stakeholders in the West African region where we can help support positive change.”

In partnership with the Global Aquaculture Alliance, IFFO has commissioned a study focusing on West Africa’s fishmeal and fish oil industry.

“These two industry representative organizations want to gain a balanced assessment of the operations of the factories [doing] supply and processing,” Baek said, adding that IFFO is supportive of the ongoing small pelagics fishery improvement project in Mauritania and has the ambition of addressing issues of illegal, unreported, and unregulated fishing through further cooperation and multi-stakeholder initiatives.

While the IFFO is not directly taking part in the ongoing negotiations in Geneva, Baek said her organization supports the WTO’s aim of reaching an agreement to end subsidies for IUU fishing and “prohibiting certain forms of fisheries subsidies that contribute to overcapacity and overfishing.”

A WTO deal curtailing fishing subsidies could ultimately reshape the global seafood trade by driving a sharp rise in China’s demand for imported seafood, particularly if curtailment of subsidies reduces illegal fishing, according to Stephen O’Sullivan, an Asia-based seafood marketing consultant and the founding CEO of Catchatrade Ltd., which has developed a seafood trading app of the same name.

“I think if there was a global concerted effort to bring an end to illegal fishing, it would result in increased legal seafood imports to China,” O’Sullivan said. “Illegally-caught food that no longer enters the China market could in the short-term boost exports into China, as the shortfall due to reduced illegal seafood imports would require imports to meet demand and combat inflation. A squeeze on IUU fishing would also push China to make a strategic decision to invest more into inland and offshore aquaculture. An area where the West has a lot of knowledge and areas where co-development of [intellectual property] can enhance not just the China market, but every market.”

Hope is still high that WTO negotiators can still reach an agreement by the end of the year, according to Pew’s Fernandez Monge.

“Political will is essential, but even more important is to translate that political will into tradeoffs and solutions to achieve consensus,” Fernandez Monge said. “Members should aim high in ambition while addressing their concerns. Sustainable fishing is attainable, and flexibilities should not undermine that goal.” 

Photo courtesy of Igor Grochev/Shutterstock