Overview Paper

Fishing for the Future: Trends and Issues in Global Fisheries Trade

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This paper provides an overview of the intersection between oceans and fisheries issues, and trade policy. It surveys the current state and major trends in global fisheries and trade in fishery products; the environmental and social dimensions of fisheries; and explains how the international community has tried to meet the policy challenges of oceans and fisheries using both resource management and trade policy tools. The paper forms the basis of a work programme by the E15Initiative Expert Group on Oceans, Fisheries and the Trade System to develop policy options for the global trading system.

Oceans and fisheries serve a host of crucial social and environmental functions. Oceans provide half the planet’s oxygen and fix a quarter of the world’s carbon dioxide. Fisheries provide three billion people with up to 15 percent of the animal protein they consume, and provide employment to at least 140 million. The ability of oceans and fisheries to continue to provide these functions depends on their sustainable use.

Global wild fisheries production is dominated by anchoveta, tunas, and other pelagic species, with catch values distributed relatively evenly between large and small fishing nations. Many fish stocks are overfished, however, and are producing less than they could at healthy levels. Despite a hugely over-capitalised global fishing fleet, catch levels are expected to remain almost stagnant over the next 10 to 20 years. This inefficiency represents a net economic loss to the global economy of around US$50 billion per year. With the world’s oceans fished to their apparent limit, growing demand for fishery products will have to be met by aquaculture, which will remain dominated by producers in Asia, particularly in China. Increasing reliance on aquaculture production means the price of farmed fish is likely to have a greater influence on the overall price of fishery products, which could lead to greater volatility in the price of this essential food source. This could also lead to many developing countries being forced to use their limited foreign currency to import fish and fishery products. The rapid expansion of aquaculture has also raised concerns about its environmental impact.

Overfishing, along with other stressors, has seriously damaged marine ecosystems and exacerbated the challenges faced by small-scale fishing. In particular, the exploitation of natural resources in and around the ocean can have a significant impact on ocean ecosystems. To the extent that these activities also have an impact on the health of fish stocks, they present an additional dimension to the challenge of sustainable fisheries. Attempts by the global community to address challenges of sustainable production by improving the governance and management of fisheries resources range from national management of fisheries resources, to regional fisheries management organisations (RFMOs) for international fisheries stocks. These attempts have not, by and large, successfully met the challenge of balancing current and future use of fisheries. The prioritisation of short-term gains over long-term sustainable use; the lack of precautionary and ecosystem-based management; and the weakness of enforcement mechanisms often lead to stocks being overfished. Overfishing reduces the amount of fish caught in the medium term (quickly eroding short-term gains) and, if continued, risks eliminating the resource. In addition, climate change is already affecting the distribution of fish stocks, and thus have an impact on the populations that depend on them.

Trade in fish and fishery products is extensive, and shapes the global production of fish. It is particularly important to developing countries, some of which are major players in the sector as a result of their integration into the global value chains of fisheries production. While a lot of developing country exports currently go to wealthy countries, South-South trade is likely to become increasingly important in the medium term. Least developed countries (LDCs) and small island developing states (SIDS) are often particularly reliant on exports of fishery products. For some, compensation under agreements granting access to their fishing resources is an important source of national revenue, although this compensation often represents only a small percentage of the value of the resource, and concerns have been raised about the sustainability of the level of fishing taking place.

A variety of trade policy tools, including tariffs and subsidies, and public and private trade measures, such as food safety and sustainability standards, are used to shape fisheries production and trade. Tariffs are, overall, low and falling, although they remain relatively high in developing countries, and on processed fishery products imported into developed countries. Reform of tariff levels presents two policy tensions. First, tariff “escalation” has raised concerns about its impact on development prospects, but so has the trend towards liberalisation, which erodes the tariff preferences enjoyed by some developing countries. Second, the impact of tariff liberalisation on fisheries stocks is ambiguous and depends on the management and governance systems in place.

Fisheries subsidies present a further policy tension. The impact of subsidies on fisheries resources depends on how they are designed, and how the underlying resource is managed. Some, such as support for monitoring or managing fisheries, support investment in the resource. In the absence of perfectly enforced management (which is very rarely achieved), there is strong evidence that the provision of other subsidies, which enhance fishing capacity, tends to lead to negative impacts on the sustainability of fish stocks. Capacity-enhancing subsidies can also create competitive distortions between fishing nations. On the other hand, reforming subsidies is politically and economically difficult, particularly for vulnerable communities that depend on subsidised fishing, and because many large fishing enterprises are able to exert disproportionate political power.

Dissatisfaction with public fisheries management efforts has led to the emergence of private sustainability labels, driven by the demand of large food retailers in the United States (US) and European Union (EU) for verifiable assurances of sustainably sourced product. Non-governmental organisations (NGOs) have been instrumental in building demand for improved traceability and verified sustainability of fishery products. Many large retailers now impose food safety and traceability requirements in addition to public standards, as well as sustainability requirements, “down” their supply chains. While the impact of these standards on development and the sustainability of fisheries resources is debated, governments are becoming increasingly involved in verifying not only the food safety of fishery products, but also their traceability and sustainability.

The international community has attempted to discipline the use of trade policy tools to address the economic, environmental, and development policy challenges around sustainable use of fisheries resources. Negotiations in the WTO around market access for fishery products take development concerns into account, but have not yet reached a conclusion. In the absence of progress in WTO negotiations on fisheries subsidies, some Members are moving to include these disciplines, as well as measures addressing IUU fishing, in their regional trade agreements, for example, in the Trans-Pacific Partnership Agreement (TPP). Plurilateral subsidy disciplines would be a significant development, a signal that some governments prioritise the benefits of fisheries subsidy reform over concerns that economies that are not a part of the agreement will benefit (as free-riders) from that reform. Large fish importers, the EU and the US, also appear to have had some success in using unilateral import bans (or the threat thereof) to motivate exporting countries to address their vessels’ IUU fishing.

This overview paper is designed to inform the development of conclusions and policy options for the global trading system by the E15Initiative Expert Group on Oceans, Fisheries and the Trade System. Its presentation of the issues reveals a number of policy tensions that could shape these options, including around the price volatility implications of increasing reliance on farmed fish from Asia; the impacts of tariff liberalisation; the need to reform subsidies; and the role of the private and public sectors in establishing food safety and sustainability standards for fishery products. The most significant tension is between current and future use of fisheries resources, and, by extension, between current and future economic benefits and jobs. The nature of fisheries means that resolving this tension will require coherent use of trade policy together with effective fisheries management and governance tools.

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