WTO deal on fishing subsidies received with mixture of praise and criticism

Representatives of ocean-focused non-governmental organizations have issued a mix of praise and criticism of an agreement struck at the World Trade Organization to prohibit subsidy support for illegal, unreported, and unregulated (IUU) fishing and limiting fishing of overfished stocks.

The accord, agreed to on 14 June, ditched several parts of the draft text presented to ministers and was characterized by WTO Director-General Ngozi Okonjo-Iweala as a “first but significant step forward” to curbing fleet overcapacity by ending subsidies for fishing on the unregulated high seas. Okonjo-Iweala said the reporting requirements included in the deal will “finally shed light on the actual level of subsidies going to fishing.”

Several campaign groups welcomed the deal, including the Pew Charitable Trusts. Isabel Jarrett, manager of The Pew Charitable Trusts’ reducing harmful fisheries subsidies project, said all 164 WTO member governments will have to disclose the extent of their fishery subsidies.

“Countries agreed to continue negotiating rules that would curb subsidies that contribute to fishing in other countries’ waters and to overfishing and overcapacity – which is a fleet’s ability to harvest more fish than is sustainable – within a nation’s own waters,” she said.

The Environmental Justice Foundation, which has extensively tracked the consequences of IUU fishing and overfishing in West Africa, also backed the deal.

"For far too long, harmful fisheries subsidies have facilitated the devastation of marine wildlife, local livelihoods, and food security around the world,” EJF CEO and Founder Steve Trent said in a press statement. “The use of these subsidies has meant that wealthy countries have been able to hand out funds that have directly destroyed livelihoods in poorer nations. Today, thanks to this progressive decision, we are a significant step closer to ending that deep injustice,”

Under the deal, WTO members cannot grant or maintain subsidies to ships and operators engaged in IUU fishing activities. Nor can WTO members offer subsidies for fishing or fishing-related activities in the high seas outside the jurisdiction of a relevant regional fisheries management organization (RFMO).

However, not all agree the deal was worth the effort. Oceana CEO Andrew Sharpless criticized “a weak agreement that fails to eliminate harmful fisheries subsidies that lead to overfishing.”

“The WTO has failed again to eliminate subsidized overfishing, and in turn, is allowing countries to pillage the world’s oceans,” he said.

The failure to secure a better deal meant the WTO is losing its credibility, according to Sharpless.

“[WTO] member-states are way overdue in adopting strict rules that eliminate harmful subsidies,” he said. “This meager agreement falls demonstrably short of this target. While the possibility remains that future revisitations could yield improvement, the past 20 years have shown that time does not increase ambition.”

Rashid Sumaila, a professor at the Institute for the Oceans and Fisheries and the School of Public Policy and Global Affairs at the University of British Columbia, termed the deal “a good start.” He said he is happy to see that fisheries subsidies is on the agenda for the 2023 WTO ministerial meeting.

“Hopefully, they can begin to fix the weaknesses in the agreement,” Sumaila said. “For example, they have no restrictions on providing subsidies that to lead to overcapacity and overfishing.”

While the deal prevents WTO members from granting or maintaining subsidies for “fishing or fishing-related activities regarding an overfished stock,” Sumaila said he would in particular like to see a ban on subsidies that can lead to overcapacity and overfishing. While WTO agreements are binding, he said he would have liked to have had a more-detailed text “naming specific types of subsidies that are known to be particularly harmful.”

“A lot depends on the willingness of citizens and countries to be willing and able to hold each other accountable,” said Sumaila.

Daniel Voces, managing director at European fisheries industry lobby Europêche, also said the agreement lacks specificity.

“We note that subsidies [that lead to] overcapacity and overfishing have not yet agreed upon and will have to be negotiated at a later stage. We hope an agreement can be reached in the near future,” he also told SeafoodSource.

While welcoming the agreement, Voces said he believes it hurts European distant-water fleets more their Asian counterparts.

“[It] will have an impact on a small but relevant part of the E.U. distant-water fleet, who are extremely well-regulated and -monitored by the E.U. but operating in the Southwest Atlantic Ocean – an area that for political issues over the territorial jurisdiction of the waters, an RFMO cannot be set up,” he said. “This fleet will pay for the sins of Asian vessels operating in the same area, with little control from their governments.”

While the deal was primarily geared toward improving the environmental sustainability of the fishing sector, some observers believe it will also level the seafood playing field commercially. American and European fishing representatives have long complained that Chinese fisheries operate at an unfair advantage, with lower standards and less transparency around subsidies.

“The provisions are not as ambitious as the funding rules in the E.U., but will certainly contribute to have an international level playing field and prevent granting funding to law offenders, as is already the case in the E.U,” Voces said.

While suggesting that the deal eliminates harmful subsidies, “similarly to what [was] done in the E.U. in the early 2000s,” Voces said his organization was relieved the text of the deal didn’t extend to barring fuel tax relief schemes. Voces said the current global surge in energy costs means fishermen would face issues without relief. 

“The taxation of fuel for fishing would have created an unprecedented large-scale bankruptcy for many fishing companies, since they all depend on fuel and currently there is a lack of technological alternatives,” he said. “We remind that, in the case of the E.U., fuel tax relief schemes have not contributed to overcapacity nor overfishing – quite the opposite.”

The WTO deal establishes a voluntary funding mechanism geared toward providing technical assistance and capacity-building to developing countries, which have borne the brunt of illegal fishing by subsidized distant-water fleets from larger fishing nations. But the loophole of distant-water vessels operating under the flags of third countries, often developing African nations, is a key issue raised in negotiations that remained unsettled in the final agreement, according to Duncan Copeland, executive director of TM Tracking, which collects data on the movement of suspect distant-water vessels.

“Any vessel that has been flagged to another country should be completely barred from receiving any kind of subsidy from the country where its ownership sits,” he said.

Copeland said a failure to address issues of vessel flagging will inhibit the agreement’s effectiveness at curbing overfishing and illegal fishing.

“We fairly often find indications that distant-water fishing vessel operational structures have been set up to benefit from subsidy structures in their ownership country, which of course creates an unfair playing field,” he told SeafoodSource. “If a trawler operating under a West African state’s flag is benefiting from an Asian state fuel subsidy, no truly locally owned vessel will ever be able to compete. This is certainly contributing to the situation where the mass majority of vessels flagged and operating in developing coastal states are foreign-owned.”

Photo courtesy of WTO/Jay Louvion