WTO Misses Deadline on Deal to End Harmful Fishing Subsidies

chinese fishing vessels
File image courtesy U.S. Coast Guard

Published Dec 19, 2020 11:38 AM by China Dialogue Ocean

After more than two decades of negotiations, the World Trade Organization (WTO) has announced it will miss its 2020 deadline to reach an agreement on eliminating harmful fishing subsidies. Countries will resume talks in January, trying to resolve the disputed passages in the consolidated draft document.

Negotiators had been tasked with eliminating subsidies for illegal, unreported and unregulated (IUU) fishing and prohibiting certain subsidies that contribute to overcapacity and overfishing. But talks were delayed this year due to Covid-19 restrictions and the U.S. presidential elections.

Subsidies paid to the global fishing industry amount to around $35 billion per year. Of this, $20 billion is given in forms that enhance the capacity of large fishing fleets, such as fuel subsidies and tax exemption programmes, according to the European Parliament’s Committee on Fisheries.

“Members had mixed views on the timeline for 2020 in light of Covid-19 disruptions but all are determined to deliver a meaningful outcome,” Santiago Wills, chair of the negotiations, wrote in a statement. He said he was disappointed to miss the deadline but not discouraged, claiming an agreement could come early next year.

Earlier this month, Peter Thomson, the UN special envoy for the ocean and a long-standing supporter of the campaign to end harmful subsidies, told China Dialogue Ocean that he wasn’t worried by the deadline. “I know that the [talks] are progressing in a positive way but I’m not hung up on dates – it’s whether we’re making progress and I believe we are.”

The termination of harmful subsidies, which is embedded in the UN Sustainable Development Goals (SDGs), is seen as a key bit of progress on ocean sustainability ahead of next year’s UN biodiversity conference in Kunming and the COP26 climate summit in Glasgow.

While talks have been going on since 2001, progress has gained new urgency as the world’s fish populations have continued to fall below sustainable levels. Around 60% of assessed stocks are fully exploited and 30% are overexploited, according to the latest figures from the UN Food and Agriculture Organization.

Recent research from the Marine Stewardship Council shows that during the 20 years of WTO talks on harmful subsidies, overfished stocks have increased from 27 percent to 34 percent, in part enabled by those subsidies.

Experts argue that subsidies distort global fishing markets and contribute to the depletion of resources. This month, an OECD review of fisheries also criticized subsidies, and warned that current fisheries policies are continuing to contribute towards overexploitation.

COVID disruption

In March, while preparations for a draft consolidated text were underway, in-person meetings in the WTO were suspended due to the pandemic. The WTO’s Ministerial Conference, originally scheduled for June in Kazakhstan, was postponed and has not yet been rescheduled. Countries used online meetings to continue the negotiations in the meantime.

In June, Wills circulated a first draft of a consolidated text for the agreement, which was revised in early November. The current version has several paragraphs, phrases and words in brackets, to indicate where countries do not all agree. Still, Wills and observers agree much progress has been made throughout the year.

“We are disappointed that members missed the deadline and there’s a lot of work that still has to be done,” said Isabel Jarrett, manager of the Pew Charitable Trusts’ project to end harmful fisheries subsidies. “Still, there has been progress. For the first time we had all members negotiating on the same single text.”

Remaining challenges

Despite this year’s progress, obstacles remain to an agreement being reached in 2021, including discussions over whether there are “good” subsidies and “bad” subsidies. European countries want a ban on subsidies except when they have a positive impact, while others believe all subsidies are bad and should be removed.

Asked about this at a press conference, Wills said developing countries’ positions at the talks “diverge according to what [issue] is on the table.” They are “all fighting their own battle” with flexibility to bridge gaps dependent on each country’s stage of development, he added.

China has sought to be categorised as a developing nation even though it is the world’s biggest provider of subsidies and operates the largest distant-water fleet. In 2018, it allocated $7.2 billion in subsidies – 21 percent of the global total – $5.8 of which was considered harmful because it expanded capacity. Its stance and policies at the talks are seen as crucial to unlocking an agreement.

“It will be important for WTO members to ensure that the text of a fisheries subsidies agreement does not include loopholes that would undermine its conservation goals and allow the status quo to continue,” said Jarrett. “Any flexibilities granted must be restricted to helping developing nations transition away from their harmful fishing subsidies.”

Observers have also argued that the United States’ decision to block the appointment of a new director-general at the WTO has affected the negotiations. Nigeria’s ex-finance minister Ngozi Okonjo-Iweala is considered the main candidate for the post. Joe Biden’s confirmation as new U.S. president could help move this process forward.

Remi Parmentier, director of environmental consultancy the Varda Group, said the remaining technical hurdles have long been discussed between negotiators and that it’s now time for an actual political commitment.

“Fishing subsidies negotiations have turned into a masked ball in recent years. Since delegates are now wearing their Covid-19 masks, they should take off the political ones and close a meaningful agreement,” Parmentier said. “The momentum has never been so favourable.”

Annabelle Bladon, a researcher on the blue economy at the International Institute for Environment and Development, said: “Missing this deadline jeopardises the livelihoods of millions of women, children and men who depend on the ocean in developing countries, and billions more who rely on it for their primary source of protein. It is vital the WTO uses this extra time to achieve an agreement that is effective both in protecting these people and the health of the ocean. There is no more time to lose.”

Fermín Koop is an Argentine journalist, specialising in the environment with experience across diverse publications such as the Buenos Aires Herald, Clarín, Ámbito Financiero, Buena Salud and Notio Noticias.

Jessica Aldred is special projects editor for China Dialogue, focusing on globally important environment themes including the ocean and biodiversity. She spent 10 years as deputy environment editor at the Guardian, and has nearly 20 years' experience working in the newsrooms of major media organisations in London, Sydney and Melbourne. 

This article appears courtesy of China Dialogue Ocean and may be found in its original form here.

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.