China has a golden opportunity to show global leadership, with a WTO fisheries deal

China is a fishing superpower. If Beijing is truly committed to a rules-based multilateral trading system, it must show leadership in securing a meaningful WTO agreement to tackle global fishing subsidies and curb overfishing

Kristen Hopewell

Published: 1:30am, 29 Oct 2020

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States will gather at the World Trade Organization in Geneva next week for intensive negotiations to establish new international rules restricting fisheries subsidies. Reaching a successful agreement is seen as essential to demonstrating the continued relevance of the WTO and its system of global trade rules. The big question on everyone’s minds, however, is what role China will play.

With the WTO under assault from the Trump administration, China has sought to position itself as a defender of free trade and the liberal trading order. President Xi Jinping has frequently contrasted President Donald Trump’s “America first” agenda with China’s commitment to multilateralism and a rules-based trading system, while signalling China’s intention to assume a more significant leadership role on the international stage.

It is not enough, however, to simply assert that one is a leader – such claims need to be backed by action. If China is truly interested in preserving the multilateral trading system, it should show leadership in securing a meaningful, ambitious WTO agreement to tackle global fisheries subsidies.

The UN Sustainable Development Goals include an urgent target: a WTO agreement on eliminating harmful fisheries subsidies has been listed as an international priority, and states have been tasked with securing such an agreement by the end of this year. As one of the active areas of multilateral trade negotiation, this is viewed as a crucial test of whether the WTO has a future. The goal is to achieve a triple win – an outcome that is positive for trade, development and the environment.

The world is in the midst of an escalating fisheries crisis. Overfishing has led to the rapid depletion of fish stocks, causing the productivity of fishing harvests to plummet. The UN Food and Agriculture Organization estimates that 90 per cent of global fish stocks are already fully exploited and almost a third are being fished at biologically unsustainable levels.

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Subsidies have played a major role in the current crisis by fuelling overcapacity and overfishing (too many vessels chasing too few fish, in other words). An estimated US$35 billion in fisheries subsidies are provided annually, with the vast majority going to large-scale, industrial fishing operations.

Subsidies allow fleets to intensify and broaden the scope of their fishing, building and operating larger boats that can travel greater distances and remain at sea for longer periods.

It is estimated that more than half of current global fishing activity in the high seas would not exist without subsidies. Overcapacity fuelled by subsidies has also resulted in high rates of illegal fishing by foreign fleets in distant waters.

Propelled by subsidies, overfishing causes severe damage to fragile marine ecosystems and undermines the sustainability of global fisheries. But this is not just an environmental issue. It is also a critical issue for global poverty and development.

Many developing countries depend heavily on fisheries for food security, employment and livelihoods, and are acutely vulnerable to plummeting fish harvests. The harmful effects of subsidies are felt most keenly in these poor countries, where competition from subsidised foreign fishing fleets has been devastating.

Subsidies have enabled countries with large industrial fishing fleets to exploit resources far beyond their own waters – including off the coasts of Africa, Central and South America, and the South Pacific – at the expense of local fishing communities.

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West Africa, for example, has some of the world’s richest fishing grounds, but its fish stocks are rapidly being depleted by heavily subsidised foreign ships. Locals fishing from hand-hewn canoes are competing against industrial mega trawlers with mile-long nets that scoop up everything from the seabed to the surface.

Declining fish stocks have resulted in falling incomes for local fisherfolk – many of whom live in conditions of poverty and severe hardship – along with reduced domestic food supply.

Given the immense harm caused by fisheries subsidies, there is a pressing need for new WTO rules to restrict such subsidies. But in the absence of strong leadership, the WTO negotiations have stalled. Many negotiators fear there is little hope of reaching an agreement by the end of this year.

As experience has repeatedly shown, WTO negotiations need strong leadership. In the past, it was typically the United States that played this role, using its political and economic clout to cajole other countries and steer negotiations towards a successful conclusion. With the Trump administration’s threatened retreat from the WTO, however, the absence of US leadership has left a vacuum that desperately needs filling.

This is an area where China has the opportunity to play a decisive leadership role. China dominates the global fishing industry: it has the world’s largest and farthest-ranging industrial fishing fleet, which accounts for 42 per cent of global fishing activity – outstripping the next 10 biggest countries combined.

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China has become the world’s largest fisheries producer, consumer, importer and exporter. Most importantly, China is now also the world’s biggest subsidiser.

A meaningful agreement is simply not possible unless Beijing is willing to rein in its subsidies. As the dominant player in this sector, China’s support for an ambitious WTO fisheries deal is crucial to unlocking an agreement.

A true commitment to a rules-based multilateral trading system means not only enjoying the benefits of trade but also being willing to shoulder the responsibility for maintaining that system and ensuring that it brings benefits to all.

If China is seeking to increase its clout by showing itself to be a responsible player on the international stage – in contrast to the reckless, antisocial behaviour of the Trump administration – this is a prime opportunity.

China should demonstrate its commitment to the liberal trading order by playing a leading role in securing a WTO agreement to eliminate harmful fisheries subsidies.

Kristen Hopewell is Canada Research Chair in Global Policy at the University of British Columbia and the author of Clash of Powers: US-China Rivalry in Global Trade Governance

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