Fishing boats sail out of a port in Dongshan County, Fujian province, on August 1, 2020, after a three-month fishing ban was lifted. Harmful subsidies encourage commercial fleets to overfish, depleting ocean life. Photo: Xinhua
Outside In
by David Dodwell
Outside In
by David Dodwell

Can the WTO finally end deeply damaging fishing subsidies after 20 years of gridlock?

  • Oceans are still overfished, global stocks are under acute pressure, illegal fishing is rampant and subsidies continue to be paid – but there is hope
  • Success would mean a reprieve for the world’s stressed oceans, and restore the WTO’s relevance as a global deal broker

It was in 2001 at the launch of the Doha Round of trade liberalisation negotiations that negotiators agreed to dig their teeth into the challenge of eliminating deeply harmful fisheries subsidies. Twenty years later, they are still digging.

Meanwhile, oceans continue to be overfished, global stocks continue under acute pressure, illegal fishing remains rampant, and subsidies continue to be paid, mainly to large commercial fleets.

As World Trade Organization director general Ngozi Okonjo-Iweala noted last week, if we take another 20 years, “there may be no marine fisheries left to subsidise – or artisanal fishing communities to support”.

But it seems, at last, there are glimmers of hope. As she closed a WTO ministerial meeting in Geneva last week aimed at pushing a fisheries subsidy agreement over the line by the December WTO Ministerial Summit, she was upbeat.

“I feel new hope this evening [...] In 20 years of negotiations, this is the closest we have ever come towards reaching [...] a high-quality outcome that would contribute to building a sustainable blue economy,” she said.

Progress has been especially hampered in the past five years, particularly dark times for the WTO (and many other multilateral organisations) as the United States prioritised politically expedient bilateral trade deals and actively undermined multilateral institutions and multilateral agreements of almost any kind.

Virtually all multilateral business spluttered, including the fisheries negotiations. Worst-hit was the WTO’s critically important role in settling international trade disputes.
Joe Biden’s election and the resurrection of civilised US engagement in multilateral trade diplomacy has nevertheless brought new life and hope to the WTO.

Negotiations towards a deal eliminating harmful fisheries subsidies have become critically important not just in themselves but as long-awaited evidence that the WTO can restore its relevance in international trade and deliver meaningful international deals again.


Ngozi Okonjo-Iweala becomes first African, first woman director general of WTO

Ngozi Okonjo-Iweala becomes first African, first woman director general of WTO

While fishing may for many people be out of sight and out of mind, it provides direct employment to nearly 60 million people, according to the Food and Agriculture Organisation’s (FAO) State of World Fisheries report.

Of these, 50 million are based in Asia, which gives us a lot of “skin in the game”. Of this 50 million, 30 million fish in the open oceans with 20 million in coastal or freshwater aquaculture.

In recent decades, as fish becomes increasingly popular as an important protein source (3.5 billion people rely on fish for 20 per cent or more of their protein, with per capita consumption up from an average of 6kg in 1952 to 20.5kg in 2018), so fish stocks have come under increasing pressure.

Of the 179 million tonnes of fish caught in 2018 (more than double the 1990 catch), 96.4 million tonnes came from the ocean, up just 14 per cent since 1990. Marine and freshwater aquaculture accounted for most of this growth, recording a more than sixfold increase, to over 80 million tonnes a year.


China imposes a 10-year fishing ban for Yangtze River to protect marine biodiversity

China imposes a 10-year fishing ban for Yangtze River to protect marine biodiversity

It has become steadily clearer that marine fish stocks are under stress. The FAO says that over a third of fish stocks are overfished, up from 10 per cent in 1990. And, as fish demand increases – the FAO predicts the catch in 2030 to reach 204 million tonnes, up 14 per cent from 2018 – the pressure is set to mount.

This pressure comes not from traditional small-scale fishers but from large commercial fishing fleets – a significant majority of them from China.

It is such large commercial vessels that account for the lion’s share of loss and waste of marine fish (an estimated 35 per cent of the global harvest) and much of the by-catch loss involves dolphins, turtles and other “commercially uninteresting” marine life.

These commercial fleets are strongly linked with illegal and unreported fishing worldwide, estimated to be worth up to US$23 billion a year, according to the International Institute for Sustainable Development.

And since small-scale coastal fishers are largely subsistence fishers feeding themselves or local markets, it is also these large fleets that account for most of the global trade of live fish, which in 2018 amounted to 67 million tonnes or around US$164 billion, says the FAO.

Inevitably, the fisheries subsidies, which amount to around US$35.4 billion a year, sit at the heart of this overexploitation of deep-sea fisheries.

Research by a large academic team based in the University of British Columbia in Vancouver reveals that the world’s five biggest subsidisers, accounting for 58 per cent, are China, the European Union, the US, South Korea and Japan. Around 80 per cent of subsidies go to the large commercial fleets.

Most subsidies are focused on fuel (22 per cent), fisheries management (19 per cent) and tax relief (15 per cent), and it is fuel subsidies above all that harm and distort the global fishing economy.

China, with subsidies amounting to more than US$6 billion a year, is the world’s largest subsidiser by far, enabling its large factory ships to stay at sea for sometimes years at a time. It is such fuel subsidies that enable China’s fleet to fish as far afield as the North Atlantic, off West Africa and the South Pacific.

As the WTO’s Ngozi noted, these subsidies keep at sea vessels which would otherwise be economically unviable.


China ends fishing ban in South China Sea, raising fear of potential conflicts among fishermen

China ends fishing ban in South China Sea, raising fear of potential conflicts among fishermen

Sylvia Earle, explorer-in-residence at the National Geographic, summarises the challenge succinctly: “Very few people benefit from harmful fish subsidies, but everyone pays and everyone suffers from the consequences of an ocean in trouble.

“It’s really simple: subsidies foster overfishing. Overfishing causes collapse of vital ocean systems, from coastal coral reefs to the high seas.”

It is this unsustainable reality that has confronted the WTO negotiators over two decades of gridlock. As Ngozi correctly argues, this is not an issue that can persist for a further two decades, so let’s hope that her new-found optimism is well founded. The health of our oceans depends on it. So too does the reputation and relevance of the WTO.

David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view