State of World Fisheries and Aquaculture 2004 - Library

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The State of World Fisheries and Aquaculture 2004
Fisheries subsidies
INTRODUCTION
Fishery subsidies were recognized by FAO as a stimulus to overcapacity and overfishing
in Marine fisheries and the law of the sea: a decade of change. 82 That 1992 document
helped to focus attention on the depleted state of many of the world’s major
commercial marine fish stocks. The most shocking aspect of the report was its emphasis
on the substantial deterioration of the situation since the halcyon days when, having
reached agreement at the Third United Nations Conference on the Law of the Sea,
most coastal states assumed control over fisheries to 200 nautical miles from their
shores. The report concluded that the existence of subsidies had negated the desired,
and anticipated, role of extended fisheries jurisdiction in developing and maintaining
sustainable fisheries.
Interest in fishery subsidies has grown during the last dozen years, with such
intergovernmental agencies as the World Bank, the Organisation for Economic
Co-operation and Development (OECD), the United Nations Environment Programme
(UNEP) and FAO 83 focusing on fishery subsidies and publishing documents to bring
the problem to the attention of the public. The Fourth Ministerial Meeting of the
WTO, held in Doha in 2001, resulted in an explicit directive to the negotiators in the
subsequent round of international trade talks to improve WTO discipline to control
fishery subsidies. The Plan of Implementation of the 2002 World Summit on Sustainable
Development, held in Johannesburg, re-emphasized the Doha Declaration’s call for the
WTO to act with respect to fishery subsidies.
DEFINITION
But what are fishery subsidies? They can be defined as narrowly as government
financial transfers to the industry and as broadly as any government action that
modifies the potential profits earned by the firm in the short, medium or long term.
Regardless of the definition used, subsidies can alter the actions of firms in ways
that interfere with international trade and affect fishing effort and, ultimately,
the sustainability of the fish stock. They are introduced for presumably socially
beneficial reasons and are not inherently evil. Those that violate the conditions of
the international Agreement on Subsidies and Countervailing Measures are clearly
actionable under current WTO rules and are inherently in violation of international
standards. But not all subsidies fall into this class. The problems of non-actionable
subsidies arise when the context in which they were implemented has changed to
the extent that they become a threat to stock sustainability. For instance, with the
extension of fisheries jurisdiction to the 200-mile limit, a coastal state might have
wanted to replace a foreign distant-water fleet with a domestic fleet which, among
other things, it would find easier to control for purposes of fishery management.
Society might view favourably a subsidy with that objective. Over time, however,
the subsidy might become so embedded in the thinking of the operators of fishing
enterprises that it becomes difficult to eliminate it once the goal, in this case the
development of a domestic fleet, has been reached. Pursuing the example a little
further, because the subsidy encourages the building of domestic vessels, if it is not
removed at the appropriate time, boatbuilding will embed excess capacity in the
industry and the existence of that excess capacity will lead to overfishing.
After the declaration of the 200-mile limit in the United States and Canada,
for instance, government policies (subsidies) were adopted that encouraged the
82
FAO. 1992. Marine fisheries and the law of the sea: a decade of change. Special Chapter of The State of Food and
Agriculture 1992. FAO Fisheries Circular No. 853. Rome.
83
FAO. 2003. Introducing fisheries subsidies, by W.E. Schrank. FAO Fisheries Technical Paper. No. 437. Rome.