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PPI’s Trade Fact of the Week: 55 countries have ratified the WTO’s 2022 fishery subsidies agreement. They need 55 more by late February.

• January 17, 2024
• Ed Gresser

FACT: 55 countries have ratified the WTO’s 2022 fishery subsidies agreement. They need 55 more by late February.

THE NUMBERS: ‘Capture fisheries’ annual tonnage by country, 2021 –

* Represents itself and the 27 member states.
** Among countries and territories outside the WTO, top capture fisheries include Iran at 0.8 million tons, Micronesia 0.2 million tons, North Korea 0.2 million tons (World Bank’s estimate), Marshall Islands 0.10 million, Nauru 0.1 million tons, and a group of smaller fisheries countries – Ethiopia, South Sudan, Somalia, Tuvalu, Kiribati, Bahamas – collectively at about 0.3 million tons.

WHAT THEY MEAN:

It’s been sadly difficult to get countries to agree on good things in this century, but as the 164 members of the World Trade Organization prepare for their 13th Ministerial Conference at the end of February, they have a chance.  It has to do with fish:

Fish, Boats, and Money: The world’s fishing fleet — 45,000 big factory-style vessels and 4.1 million small boats — hauls in 80 million tons of “capture” on the high seas and off the world’s seacoasts, and 10 million tons from lakes and rivers. To put this figure in context, all humans put together weigh about 500 million tons (~60 kilos per person x 8 billion people). Various gloomy studies report the consequences: About 100 million sharks are taken each year, declines of up to 90% in counts of large fish, and more than a third of the world’s fishing grounds are unsustainably depleted.

What to Do? In a world of 8 billion humans and their need for protein, shrinking forests and land habitat, and limited new farmland options, no single solution for pressure on marine life seems likely. Aquaculture, limits on particular species, bycatch reduction, bans on especially destructive fishing technologies, etc. all have their part. For the last 25 years, though, the WTO members have been circling around a partial solution, which at least in principle is among the simplest and easiest of all: stop paying people to fish more than they should.

Subsidies: One reason fish counts fall is that governments are paying fishing fleets to get bigger and catch more of them. A widely used count of world subsidies to fishing fleets, done in 2019 by a group of academics at the University of British Columbia (Sumaila et al), yields a figure of $35.4 billion. This is about a tenth of the world’s $400 billion annual fishing industry, and a quarter of the $150 billion in annual fish trade. About $28 billion goes to large boats — pretty easily identified as the least needy recipients; by purpose, $22 billion goes to make fishing fleets larger, and another $7 billion to give them cheap fuel.  By region and top eight countries (counting the EU as a single economy), their rundown of subsidies looks like this:

The WTO: The WTO is well-placed to do something about this, given its mission and since its members includes 49 of the world’s top 50 capture fishery countries, and account for about 97% of world fishing. (The one big fishing country not in the WTO is Iran, whose fisheries account for 0.8 million tons annually or 1% of the total.)  Having debated fishery subsidy controls since 1998, they took a big first step at the 12th Ministerial Conference in June 2022, which “prohibits support for illegal, unreported and unregulated (IUU) fishing, bans support for fishing overfished stocks, and ends subsidies for fishing on the unregulated high seas,” and now have two opportunities this February:

(a) Bring the 2022 agreement into force. So far, this remains an agreement on paper rather than something that is actually starting to bring down subsidies.  Its entry into force requires ratification by two-thirds of the WTO’s 164 members, or 110 in total.  As of mid-January, 55 have done so. Another 109 — including five of the world’s ten largest fishery countries – have not. Five of the top ten capture fishery countries including the U.S., China, EU, Japan, and Peru have ratified; the other five so far have not. India, Vietnam, Russia, Norway, and Indonesia — and a bit further down the scale, the Philippines, Bangladesh, Thailand, and others — you have 40 days left before the Ministerial.

(b) Finish the work left incomplete last year: The 2022 agreement did not include limits on subsidies contributing to “overcapacity” in national shipping fleets, or to overfishing.  The WTO members (or at least the right-minded ones) hope to complete this by the Ministerial conference in February, working from a text that requires members (with exceptions for least-developed countries and countries such as small islands whose fishing tonnage is very low) to abandon eight kinds of subsidies contributing to overcapacity — ship construction; machinery and technology purchases; fuel, ice, and bait; subsidies for required benefits; salaries and income support for crew; fish prices; at-sea support; and vessel loss or damage — and regular notifications to the WTO of all subsidies with justification for sustainability.

As a final exclamation point, the 2022 agreement — if actually brought into force — lasts only four years and self-terminates if the WTO members can’t agree on the overcapacity limit. If successful, the fisheries subsidy agreements will be something people remember quite a long time into the future, as an example of governments willing to make modest political sacrifices for the general good. If not, well, that would also be something to remember about this generation of political leaders.

FURTHER READING

The WTO:

The WTO’s 2022 agreement on fishery subsidies reduction.

… Director-General Ngozi Okonjo-Iweala takes recent ratifications from the U.K. and Gambia.

… and Fisheries Committee Chairman Gunnarsson updates on progress toward a broader agreement.

Subsidy counts:

Rashid Sumaila et al. in Science Direct tabulate a worldwide $35.4 billion in fishery subsidies by region, purpose, large vs. small ships, and more.

… while NGO Oceana reports that $5.4 billion worth of subsidies, or a fifth of the world total, goes to support fleets operating in other countries’ water, and $800 million for high-seas operations.

… and UNCTAD looks at subsidies and sustainability.

Fish & boats:

The World Bank has ‘capture’ fishery totals by country, in tons.

The UN Food and Agricultural Organization’s State of World Fisheries and Aquaculture 2022 reports on fish take, fleets and employment, sustainability, and more.  The 80 million tons of ocean capture looks like this:

*    67 million tons of fish, led by anchovies, Alaska pollock, and skipjack tuna;
*    5.6 million tons of crustaceans, mostly varieties of shrimp and crab;
*    5.9 million tons of mollusks, topped by squid;
*    0.5 million tons of edible jellyfish, sea urchins, sea cucumbers, and miscellaneous other sea life.

It concludes that “the fraction of fishery stocks within biologically sustainable levels decreased to 64.6% in 2019” from nearly 90% in 1974, and that 35.4% of world fisheries are overfished — take the dead Atlantic cod grounds off New England and Canada as an example — while 57.3% are at “maximum yield” and only 7.2% are “underfished.”

UNCTAD’s World Maritime Review 2023 tracks the world’s merchant fleet.

ABOUT ED

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI.

Ed returns to PPI after working for the think tank from 2001-2011. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR). In this position, he led USTR’s economic research unit from 2015-2021, and chaired the 21-agency Trade Policy Staff Committee.

Ed began his career on Capitol Hill before serving USTR as Policy Advisor to USTR Charlene Barshefsky from 1998 to 2001. He then led PPI’s Trade and Global Markets Project from 2001 to 2011. After PPI, he co-founded and directed the independent think tank ProgressiveEconomy until rejoining USTR in 2015. In 2013, the Washington International Trade Association presented him with its Lighthouse Award, awarded annually to an individual or group for significant contributions to trade policy.

Ed is the author of Freedom from Want: American Liberalism and the Global Economy (2007). He has published in a variety of journals and newspapers, and his research has been cited by leading academics and international organizations including the WTO, World Bank, and International Monetary Fund. He is a graduate of Stanford University and holds a Master’s Degree in International Affairs from Columbia Universities and a certificate from the Averell Harriman Institute for Advanced Study of the Soviet Union.

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