South China Sea, Xinjiang muddy water of fishing subsidies debate as WTO faces ‘crucial test’
- The World Trade Organization (WTO) hopes to conclude negotiations over fishing subsidies by the end of 2021 after 20 years of deadlock
- Governments hand out around US$35 billion in environmentally damaging fisheries subsidies every year, with China doling out the most
Targeted import bans by the United States on seafood caught by Chinese owned vessels over forced labour claims, while reflecting Washington’s increasing pressure on Beijing over the hot button issue, show that US-China tensions have spread into an area that is crucial for the World Trade Organization (WTO) to restore its prestige.
Under growing scepticism and setbacks, the global trade body was hoping to strike a multilateral pact over fishing subsidies by the end of 2021 to bring at end to a two-decade deadlock.
However, the discord between the world’s two largest economies could now become a “flashpoint” that threatens the talks as they enter the final stretch, analysts have warned.
“The remaining effective time for negotiations is not enough, differences among major members are apparent, it is still very difficult to conclude the fisheries subsidies [talks] at an early date, many experts in Geneva are not optimistic,” said Lu Xiankun, a former senior Chinese trade negotiator at the WTO, at the end of July.
Securing a successful agreement is vital to the future of the institution, this is a crucial test of whether the WTO can function as an effective forum for the negotiation of global trade rules
The fisheries subsidies debate is currently the only active multilateral negotiation under way at the WTO, having been first discussed in 2001 as a part of the failed Doha Round of trade talks. It was also identified as an international priority by the United Nations in 2015 under sustainable development goals that aimed to prohibit harmful subsidies by 2020 that could lead to overfishing.
“Securing a successful agreement is vital to the future of the institution, this is a crucial test of whether the WTO can function as an effective forum for the negotiation of global trade rules,” said Kristan Hopewell, an associate professor at the University of British Columbia and a close observer of the WTO. “The future of the WTO hangs in the balance.”
“The world is watching,” said Okonjo-Iweala. “If we wait another 20 years, there may be no marine fisheries left to subsidise – or artisanal fishing communities to support.”
02:16
Philippine fishermen claim continued Chinese harassment on South China Sea
Commerce minister Wang Wentao told the meeting that China supported the desire to conclude the negotiations before the conference, which is the highest decision-making body of the WTO, while stating it would actively participate in the next stage of the talks.
US Trade Representative (USTR) Katherine Tai, though, offered more caution, arguing that the current eight-page draft text “does not yet contain the elements required for reaching conclusion”.
Tai also once urged WTO members to address the problem of forced labour on fishing vessels, following a proposal made by the USTR in May.
“The issue of ‘forced labour’ in the fishing sector raised by the US is quite sensitive when the US-China geopolitics remains tense, it may become the flashpoint for the failure of the negotiations,” Lu added.
“But the move will only complicate problems, it is no good for reaching a deal on fisheries subsidies nor US-China trade relations,” he said. “The US side should show its attitude and sincerity to support the negotiations.”
On the surface, the negotiations to implement global rules to limit environmentally damaging fishing subsidies could benefit all parties, but along with the issue of forced labour, they could also have a major bearing on another major geopolitical battlefield between the US and China involving disputed waters, especially in the South China Sea.
Subsidised fishing in controversial waters has often played an important role for various countries in promoting “sovereignty claims”, researchers argued.
There are potential overlaps and conflicts between the WTO’s fisheries subsidies pact and the maritime laws
“Due to its attributes, fishing involves territorial waters and maritime delimitation, in which the political sensitivities can be seen,” Gu Yuan, a member of China’s delegation to the WTO, wrote in Difficult Times – WTO and China 2018-2019, a book which was published in January.
“There are potential overlaps and conflicts between the WTO’s fisheries subsidies pact and the maritime laws,” added professor Chang.
“That may lead to clashes in the jurisdiction, legal application and interpretation among various nations when they are dealing with issues related to disputed waters.”
03:23
The South China Sea dispute explained
One solution, Chang argued, of excluding the application of any fisheries subsidies in disputed waters could help smooth the negotiations.
Based on data from the UN Food and Agriculture Organization, the proportion of world marine fish stocks that are within biologically sustainable levels declined from 90 per cent in 1974 to 65.8 per cent in 2017.
Each year, governments around the world hand out around US$35 billion in fisheries subsidies, two-thirds of which go to commercial fishers, according to the WTO.
Foreign studies showed that China has the world’s largest and farthest-ranging fishing operation, while it also provides the largest amount of fisheries subsidies. It is also likely to expand distant water fishing as the country’s seafood consumption outstrips domestic production by 2030.
“In the eyes of certain individual members [of the WTO], the main target they want to restrain is just China, and they always spare no efforts to limit China’s policy space,” Gu said.
Wang told the meeting in July that China “will assume international responsibilities in the negotiations commensurate with its level of development and capabilities” since it remains a developing country.
The US, though, objects to China’s self-declaration as a developing country which means that it does not have to assume its full obligations. Washington also objected to “a blanket approach with permanent carveouts” for developing countries.
The WTO recognised that the issue over how to extend “special and differential treatment” to developing and least developed countries was among the thorniest stumbling blocks.
To be frank, we need China to engage, China fishing-wise is not any more a developing country
“A key question is what role China will play in the negotiations in the coming months,” Hopewell said. “A meaningful, ambitious agreement is simply not possible unless China is willing to rein in its subsidies.”
China had 563,300 fishing vessels at the end of 2020, down nearly 23 per cent from a year earlier, according to the data of the Ministry of Agriculture and Rural Affairs. In China, the fish population in last year dropped by 5.9 per cent to 17.2 million, while the amount of fish caught fell by 5.3 per cent to 9.5 million tonnes, the ministry said.
“To be frank, we need China to engage, China fishing-wise is not any more a developing country,” Pascal Lamy, who was director general of the WTO from September 2005 to August 2013, said in a webinar held by the China and Globalisation Forum at the start of August.
“I know for the reason of principle, China will not recognise this … [but] this is about China accepting to join a system of disciplines which I think is really vital to preserve the fish resources for the future.”
