Fisheries Subsidies and Developing Countries

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Fisheries Subsidies and Developing Countries

• Sebastian Mathew
• International Collective in Support of
  Fishworkers (ICSF)

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Importance of fisheries to developing countries

• An important source of employment, income, food
  security and foreign exchange
• 36 million workers in the fisheries and
  aquaculture sector (ILO), worldwide, of which 95
  are in developing countries
• Over 60 of global fish production and more than
  50 of global fish exports originate from
  developing countries (FAO)

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Doha Declaration, November 2001

• Clarify and improve WTO disciplines on fisheries
  subsidies taking into account the importance of
  this sector to developing countries.

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Ongoing debate at the WTO Negotiating Group on
Rules

• What should be the scope of fisheries subsidies
  to be negotiated at the WTO? Should SCM Rules
  address negative trade, environment and
  development impacts of fisheries subsidies in
  addition to market distortions?

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Fisheries Subsidies in Developing Countries

• Welfare of fishing community (housing,
  sanitation, electricity, drinking water)
• Income support to fishers (allowance for lean
  season/closed season/training period, insurance
  premia)
• Tax preferences (rebates on fuel and other inputs
  into fishing)
• Subsidization of capital costs (e.g.
  Mechanization/acquisition of fishing craft, gear,
  engine and other inputs)

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Fisheries Subsidies in Developing Countries 2

• Subsidies to fisheries infrastructure (fishing
  harbours quality control, etc)
• Subsidies to fisheries conservation and
  management (resource assessment, resource
  enhancement, habitat protection, protection of
  endangered species, MCS, etc)

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Potential capacity/effort-enhancing Subsidies

• Tax preferences (often recurring)
• Subsidies to capital costs
• Subsidies to fisheries infrastructure

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Disciplining capacity/effort-enhancing subsidies
at WTO

• Amending existing notification procedure in SCM
  Agreement to report on all fisheries subsidies
• Linkage between potential capacity/effort-enhancin
  g subsidies, fishing capacity, fishing effort and
  overfishing
• Burden of proof on Complaining Member vis-à-vis
  LDCs and designated developing countries
• Burden of proof on Subsidizing Member vis-à-vis
  other countries (developed and advanced
  developing countries)

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Disciplining capacity/effort-enhancing subsidies
at WTO-2

• De minimis for capacity-enhancing subsidies for
  LDCs and designated developing countries at a
  level higher than the de minimis for other
  countries
• Negotiate different time-frames to phase out
  fisheries subsidies that are proved to be
  capacity-enhancing for the above two categories
  of countries

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Reintroducing non-actionable subsidies

• Non-actionable subsidies could include
  retraining fishers fleet diversification
  improving safety and working conditions
  switching over to more selective fishing gear and
  practices assistance during natural calamities
  scrapping of vessels and withdrawal of capacity
  improving product quality (EU proposal)
  assistance during stock decline due to natural
  factors fisheries conservation and management
  energy-efficient propulsion techniques etc.

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Proposed scope of disciplining fisheries
subsidies at WTO

• Should be confined only to production and trade
  distorting subsidies
• Financial contribution that does not lead to
  production and trade distortions and where the
  benefits accrue to human development or the
  well-being of fishers and fishing communities
  could be removed from the scope of fisheries
  subsidies

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A caveat for consideration

• Disciplining production distorting subsidies
  would broaden the scope of SCM Agreement to look
  not only at fish and fish products but also at
  fishing methods with several implications
  including link up with MEAs in fisheries

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In conclusion

• Given the complexity of marine fisheries, a red
  box category of fisheries subsidies may not be
  advised
• Amber box-- both dark amber and light
  amber and Green box categories should be
  considered in fisheries
• Financial contribution to human development of
  fishers and fishing communities, especially in
  developing countries, even if it is specific,
  should not be regarded as subsidies

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Thank you