August 2004 Trade Forum

“Nobody claims to know the precise numbers, but it is obvious that government subsidies are causing economic and environmental harm.”

The respective international trade agendas of environmentalists and the seafood industry frequently — and naturally — conflict. The greens want to protect as many fish in the seas as they can, while commercial fishermen profit from catching as many as possible. But on one key issue, the World Wildlife Fund and the National Fisheries Institute see a common danger to both the environment and commerce.

That danger comes from government subsidies that distort global trade flows and threaten sustainable fisheries. A few governments, notably Japan, China, Korea, Taiwan and the European Union, have heavily subsidized their commercial fishing fleets, by an estimated $15 billion to $20 billion annually.

Now, the Geneva-based World Trade Organization, which sets the rules of international commerce for its 147 member nations, is engaged in negotiations to bring the subsidies under control and eliminate the worst of them. If the effort is successful, the future of presently threatened big-money fish stocks like South Atlantic hake and Pacific tuna will be brighter.

The negotiations are being pressed by a group of countries that call themselves the Friends of Fish, including the United States, Australia, Chile, Iceland, New Zealand, the Philippines, Ecuador and Peru. The Friends of Fish, whose domestic subsidies to their own fleets are miniscule compared to those of the Asians and Europeans, are seeking the proverbial “level playing field.”

U.S. fishing subsidies, for example, are generally thought to be in the $25 million range, compared to more than $750 million for Japan. Nobody claims to know the precise numbers, but it is obvious that subsidies are causing economic and environmental harm.

“These subsidies often allow fleets to operate where it would otherwise be unprofitable to do so and can lead directly to overfishing and other unsustainable fishing practices,” charges a 178-page WWF position paper, “Healthy Fisheries, Sustainable Trade,” that was released in June.

Justin LeBlanc, vice president for government relations at the National Fisheries Institute, agrees.

“We support the elimination of subsidies that contribute to excess fishing capacity,” LeBlanc says. “By subsidizing the construction and, in some cases, the operational expenses of fishing vessels, certain nations essentially lower the operating costs for their industry, giving them a competitive advantage.”

Unlike international bodies like the United Nations Food and Agriculture Organization, which are charged with addressing complex global fisheries policy issues, the WTO’s core mission has nothing to do with fishery management. But while the FAO’s code of conduct on sustainable fishing practices is voluntary, the WTO has the authority to discipline subsidies — assuming that its 147 member countries agree on which subsidies threaten sustainable fishing and which do not.

The Friends of Fish worked successfully to put fisheries subsidies on the negotiating agenda for the WTO’s current round of trade-liberalizing talks, known as the Doha Round, launched November 2001 in Doha, Qatar.

The Doha negotiations probably won’t be wrapped up until late 2006, if then. But there are at least small signs of progress. The EU agrees that its Common Fisheries Policy needs reform, and the Japanese now agree there is a problem the WTO rules need to address.

For all friends of fish, the sooner these massive fishing subsidies are brought under control, the better.

Greg Rushford is editor and publisher of the Rushford Report, a Washington monthly newsletter on trade politics at www.RushfordReport.com