Analysis of the Fisheries Subsidies Issue

Fisheries are one of the oldest economic activities and millions of people around the world depend on it as a source of income, food protein supply and employment.12 According to the UN FAO in 2018, fish provided over 20% of their animal protein intake for 3 billion people worldwide and more than 50% in some less developed countries.3 However, over-exploitation and rising ocean temperatures undermine fisheries role in food security and the ability to sustain.234 For example, the average annual increase in human fish consumption outpaced fish population growth by 100% between 1961 and 2016.3 Trade liberalization and subsidies are significant factors contributing to over-exploitation.156 Research confirmed that a small increase in the fishing effort due to subsidies will negatively impact on the underlying fish stock.2 This brief will draw on the power of China's fishing activities' impact on the global fish stock and the fisheries subsidies effect on trade and sustainable development to argue the importance of the subsidiaries reform to avoid the tragedy of the commons and safeguard the crucial source of nutrition.

Doha conference and China on Fisheries subsidies

The issue of fisheries subsidies were included in the Doha Development Agenda to elaborate and enhance the WTO disciplines on fisheries subsidies.3678 Current negotiation call for the banning of certain fisheries subsidies that lead to overfishing, overcapacity and IUU fishing and to withhold from introducing new subsidies while considering the proper and constructive SDT for developing and LDC.69 The current negotiations has reached an impasse, as the scope and coverage of the subsidies ban, the provision on SDT or the structure of fisheries subsidies regulation are yet to be compromise.6 10 As the Chinese economy experienced massive expansion over the last few decades, the growing numbers of middle-class consumers lead to a steady growth rate of 4-5% in China’s fisheries sectors.7 10 In addition, fishery subsidy, a common practice in current governance around the world, is used to further develop fishing industries leading to critical condition of the global fish stock. China, as the largest fish products producer, has an enormous environmental, economic and food security implication on the sustainable management of international fisheries.347810 Statistics has revealed an alarming increase in fully exploited or overexploited global fish stock from 61% in 1974 to 93% in 2015.3 China, as the rise of new power11, should further enhance their position and image as a responsible country by taking the initiative of eliminating the harmful subsidies and breaking the deadlock in negotiation. The impact of the decreasing fish stock outweigh the short-term term competitive advantage for subsidies that increase production.2

Fisheries subsidies on Developing Countries

The effect of subsidies on trade will depend on the management scheme established that affect the total catch. Prices and trade flows can be affected if the financial support enables the fishing fleet to increase their supply in fish.2 The global subsidies are estimated at 30 – 40% of the total gross revenue in the fisheries industry, at US$35 billion.1 Fisheries subsidies can be divided to eight categories, such as subsidies to capital cost, fuel or gear, access to foreign waters, infrastructure, income support, price support, vessel decommission or management service and research.2 Studies has concluded that only subsidies for fisheries management service and research are not destructive to the marine fish stock.2 According to FAO, around 86 % of the 2.8 million marine fishing vessels are classify as small-scale and over 90% located in LDC and developing countries.3 6 Research reveal that SSF received only around 16% of the total subsidy.1 Fuel subsidies are the biggest subsidies subtype and 96% is distributed to the large-scale fisheries sector.1 8 On the other hand, the highest amount provided to small-scale fisheries(SSF) is the management and monitoring beneficial subsidies, which accounted for 25.7% of the total subsidies to SSF.1 The contrast in subsidy distribution will further increase the large-scale fisheries’ competitive advantage. Thus, reducing the capacity-enhancing subsidies, such as fuel subsidies, will have a slightest negative impact on SSF.1 Alternatively, this can enhance SSF economically and counterbalance the inequality while further stimulate the sustainability of fisheries.

Reforming Fisheries Subsidies 

Fisheries play a fundamental role in LDC and developing countries. Korea has highlighted that some subsidies have a positive role in the environment and is beneficial on socio-economic aspects for the fishing community.5 It is important to consider the issues associated with these countries when regulating fisheries subsidies. China should recommend a ban on all capacity-enhancing subsidies, especially fuel subsidies, for all countries. At the same time, moderate SDT should be provided for developing countries and significant SDT for LCD and SIDS. In moderate SDT provision, developing countries should be allowed to provide else forbidden subsidies that are within sustainable levels. As such, subsidies in the form of income support should be allowed under some constraints. For example, providing unemployment support for the fishing employee if it is dissociated with fishing activity and possibly provide re-training scheme to other industries. Furthermore, most developing countries lack the effective knowledge and techniques on running fishery output control system, such as the “total allowable and maximum sustainable catch mechanism”.7 Thus, it is required for developed countries to unambiguously transfer fisheries technology and knowledge to strengthen developing countries’ competency. For LDC and SIDS, in addition to above, financial and technical assistance should be provided. Lastly, research on the sustainability fishery management have emphasizes the importance of encouraging civic engagement in transformative learning to increase the uniformity views between different fishing communities in LDC and developing countries.12 13 To speed up the implementation of the fisheries subsidies reform, civic engagement in communicate is required to enhance coordination, increase publicity of the fisheries laws and regulation and provide adequate training to the enforcement officers.

Conclusion

The magnitude of the fisheries subsidies issue has been probed. Moreover, it can affect trade, the environment and sustainable development negatively. Fish, as a renewable natural resource, should be provided with adequate protection to ensure their sustainability. With over 90% of the fish stocks over-explored,3 it is one of the top priorities for China to push for the legislate and enforcement of the subsidiary reform under WTO to prevent the extinction of certain species that could link to the damage of those dependent fishing communities. Since fish is a common good, global governments must work together to effectively control fisheries subsidies. Moreover, strengthening public consciousness on sustainability and enforcement practices is required to prevent the over-exploration of fisheries for the long term.