Can the World Trade Organisation finally spring the subsidy trap?

June 10, 2022 by Kaija Barisa and Tom Horan


On Sunday, the 12th Ministerial Conference of the World Trade Organisation (WTO) will gather in Geneva. In the battle to stop the industrialised overfishing that is destroying the world’s fish stocks, the meeting could mark a turning point.

It’s a debate that has dragged on in the WTO for two decades, but finally its 164 member countries may be about to tackle the thorny problem of fishing subsidies.

Since the ‘peak’ of industrialised fishing in 1996 — when 90 million tonnes of fish were caught in one year* — yields from the oceans of the world have stagnated or declined. Ninety per cent of stocks are now deemed overfished or fished to the maximum. Each of the ten largest species of fish is at just one tenth of its pre-industrial levels.

Overfishing is also catastrophic for the industry itself. The volume of catch no longer increases with growing fishing effort: fisheries have been managed unsustainably, leading to years of declining productivity.

The subsidy trap

If global fishing effort was reduced by just five per cent over 10 years, it would allow stocks to recover within about 30 years. But one of the major roadblocks in the way of recovery is government subsidies.

Subsidies contribute to overfishing, and are unequally distributed between industrial and small-scale fleets. They were first introduced to increase economic growth, promote social equity, and support conservation. Today these aims are being entirely negated.

Governments supply the global fishing industry with over $35 billion a year, of which $22 billion is directly linked to harmful capacity-enhancing programmes which foster overfishing.

Low yields on the high seas

Some of the most heavily subsidised fisheries are those that operate on the high seas. As well as being hugely destructive, they are among the least profitable. A recent study found that without subsidies more than half would make a loss. For fleets that do make a profit, it is usually relatively small, and the subsidies are often disproportionately high.

High-seas fisheries are supported by an estimated $4.2 billion per year in subsidies — double the total estimated value of high-seas catch. Without subsidies, some of world’s largest fishing fleets would be unprofitable, including those of China, Taiwan and Russia, which account for over half of the total high seas catch.

There are vast differences between small-scale and large-scale fishing. Small-scale employs more than 90 per cent of the world’s fishers, and supplies about a third of its seafood. Yet they only receive a quarter of global subsidies.

To make matters worse, about a third of harmful subsidies go towards fishing in other countries’ Exclusive Economic Zones (EEZs) and come from the top ten subsidising nations: China, Japan, Korean Republic, Russia, USA, Thailand, Taiwan, Spain, Indonesia and Norway. These countries provide $5.3 billion a year in harmful subsidies to vessels fishing within 116 foreign EEZs.

What the WTO might do

A draft WTO agreement made public last year proposes to prohibit three different types of subsidies. Those that:

•  Support illegal, unreported, and unregulated (IUU) fishing,
•  Have negative impacts on stocks in areas that are already being exploited,
•  Encourage overfishing and overcapacity in fisheries.

Negotiating exemptions for Least Developed Countries and small-scale fisheries is a priority, but if the daft is agreed it will mark a tectonic shift away from harmful subsidies.

So where should all that money go?

The first step to curbing overfishing is to stop rewarding those who do it. Subsidy money needs to be gradually redirected towards

•  Scaling sustainable aquaculture,
•  Rebuilding fish stocks by creating Marine Protected Areas,
•  Leaving the high seas alone,
•  Moving to alternative proteins like lab-grown or plant-based fish,
• Bringing population growth into the global debate on sustainable food security.

Governments need to direct their support away from large-scale fisheries to the small-scale, and help them adopt sustainable practices. Not only would this ensure employment and food security for millions in coastal communities, it would promote the recovery of biomass in the oceans to pre-industrial levels, and help regulate climate.

Almost 90 per cent of capacity-enhancing subsidies go to industrial fisheries, so cutting them would have little to no negative impact on the small-scale. Redistributing funds can help improve the inequality gap, promote sustainable fishing, and stimulate the economic viability of the small-scale fishery.

For the sake of our oceans, let’s hope the WTO can come up with a Geneva convention of its own.

* REF: Food and Agriculture Organization of the United Nations. 

Image: Jo-anne Mcarthur, Unsplash

More news