The WTO originally planned to reach a fisheries pact by the end of 2020, but that deadline passed without agreement. Sharp divisions among countries and a lack of leadership have hampered negotiations.
Fisheries subsidies is one of the few active areas of multilateral negotiations within the WTO, and many experts see securing an agreement as a key test of the organization’s ability to deliver new global trade rules.
What is at stake?
The world’s fisheries are in a perilous state. Fishing subsidies have helped fuel overcapacity and overfishing, leading to the rapid depletion of fish stocks — in short, too many boats chasing too few fish. By U.N. estimates, 90 percent of global fish stocks are already fully exploited and almost a third are being fished at a biologically unsustainable level.
Governments provide approximately $35 billion in fisheries subsidies annually, with the vast majority going to large-scale, industrial fishing fleets. Subsidies for inputs like fuel and larger boats allow fleets to expand and intensify their operations.
Countries that have depleted their own fish stocks are using these subsidies to allow their fleets to travel vast distances to exploit fisheries resources in distant waters. By some estimates, more than half of all fishing activity in the high seas would not exist without subsidies.
The collapse of global fisheries isn’t just an environmental issue; it also has significant implications for global development and food security. Nearly 40 million people around the world depend on fishing for their livelihoods, and nearly half of the world’s population relies on fish as a significant source of protein.
Vulnerable fishing communities in Africa, Central and South America, and the South Pacific are being forced to compete with heavily subsidized foreign fleets — and declining fish stocks are reducing local incomes and food supply. West Africa, for instance, has some of the world’s richest fishing grounds, but its fish stocks are being rapidly depleted by foreign ships. Local fisherfolk in hand-made canoes are competing against industrial mega-trawlers using mile-long nets to scoop up everything from seabed to surface.
How did this conflict develop?
Most countries agree that new WTO rules are needed to restrict harmful fisheries subsidies. Yet the negotiations have been beset by repeated conflict over the question of how major developing countries with large fishing sectors, including China and India, should be treated under any new rules.
Under WTO rules, developing countries typically receive “special and differential treatment” — this gives them greater scope to use subsidies, tariffs and other trade measures to foster economic growth and development. China, India and other large emerging economies are therefore seeking exemptions that would allow them to continue subsidizing their fishing fleets. The challenge, however, is that many of these countries have significant fishing industries.
China, for instance, has the world’s largest and furthest-ranging industrial fishing fleet and is now the world’s largest fisheries subsidizer. China spends more than twice what the next largest subsidizer — the E.U. — spends on harmful fisheries subsides. With Chinese fish stocks depleted due to overfishing, subsidies have enabled Chinese fleets to expand across the world’s oceans. China alone now accounts for an astonishing 42 percent of global fishing activity — outstripping the next 10 biggest countries combined.
Experts argue that allowing large fishing countries like China to exempt their subsidies from new WTO rules would contravene the very purpose of constructing such disciplines in the first place — and negatively impact the many developing countries that rely on ocean fisheries for their economic welfare.
Where does the U.S. stand?
A fisheries pact would be a big win for the U.S. fishing industry, which receives far lower volumes of environmentally harmful subsidies than its competitors.
The U.S. has traditionally been a key leader in the fisheries negotiations. U.S. negotiators first put this issue on the agenda at the WTO and played a major role in advancing the early stages of the negotiations.But in recent years, progress towards a global fisheries agreement has been hampered by a lack of leadership. For the past four years, the U.S. has been missing in action at the WTO. President Trump waged a sustained assault on the global trade organization — repeatedly threatening to withdraw from the WTO, undermining its mechanism for settling disputes and blatantly violating its rules. Trump’s withdrawal from the Paris climate agreement cast the U.S. as a similarly unreliable partner on the environment.
WTO negotiations have often required the leadership of a powerful country willing to use its political and economic clout to cajole other countries towards a common goal, and steer negotiations towards a successful conclusion. The global fisheries negotiations are in particular need of strong leadership, and the Biden administration has indicated its support for strict rules to eliminate harmful subsidies.
With President Biden stressing his intention to recommit to multilateral institutions and international cooperation, what’s ahead on the fisheries front? Whether an agreement on fisheries is reached likely depends on whether the U.S. is willing to take the lead.
For the Biden administration, playing a leading role in efforts to secure an ambitious WTO agreement to combat global fisheries subsidies could prove an important means to signal its commitment to multilateralism and a rules-based global trading system.
Kristen Hopewell is an associate professor in the School of Public Policy and Global Affairs at the University of British Columbia and the author of Clash of Powers: US-China Rivalry in Global Trade Governance (Cambridge University Press, 2021).