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A Global Deal to End Harmful Fisheries Subsidies

Billions of dollars in harmful government subsidies to commercial fleets drive overfishing around the world, but that could be ending soon

December 14, 2022 By: John Briley Read time:

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A Global Deal to End Harmful Fisheries Subsidies

In the high seas of the South Atlantic Ocean, more than 200 miles off the coast of Argentina, lies one of the world’s largest fisheries. Hundreds of vessels from around the globe amass there to fish for Argentine shortfin squid, which feed along the edge of the Continental Shelf; the catch is sold worldwide, including in many U.S. restaurants as calamari. The vessels use powerful lights to lure squid toward the surface before snagging them with jigging lines—lights so bright and plentiful that they appear clearly on satellite photographs of the Earth at night.

One might assume that the revenue from fishing would cover these vessels’ costs, with some left over for profit, and that everything is working as it should from a fisheries management perspective. But that’s not the whole story. The four fleets catching most of that squid—from China, South Korea, Spain, and Taiwan—receive hundreds of millions of dollars in annual subsidies from their governments, an infusion that funds extremely heavy fishing of shortfin squid.

The payments are part of the $35.4 billion that governments around the world dole out yearly to their fishing industries—money used for vessel construction and repair, fuel, and other expenses. And although some subsidies are necessary to help keep smaller-scale fishers in business during lean times, a 2019 Pew-commissioned study found that an estimated $22 billion of the $35.4 billion in payments qualify as harmful subsidies—that is, funding for industrial fleets that don’t need the money and are using it to accelerate overfishing.

Finally, though, that stream of harmful fishing subsidies may soon be cut off. Last June, the 164 member countries of the World Trade Organization (WTO) agreed to end many of the payments. The agreement specifically prohibits three broad categories of subsidies: those known to aid fishing on overfished stocks; those that support illegal, unreported, and unregulated (IUU) fishing; and those that abet fishing in areas of the high seas that are outside the purview of regional fishery management organizations.

“This is a big deal,” says Ernesto Fernandez Monge, who leads Pew’s work to end harmful fishing subsidies. “The agreement covers a lot and, once it’s in force, it could give a lot of fish populations that have been under growing pressure a chance to recover.”

Harmful subsidies to large commercial fleets hurt small, local fishers such as these in India, who often must travel farther from shore and stay at sea longer to catch enough fish to feed their communities.
Amit Pasricha IndiaPicture/Universal Images Group via Getty Images

Pew put significant resources into advocating for the WTO agreement, including facilitating a groundbreaking global estimate of what governments spend on harmful fisheries subsidies each year. That study, published in the journal Marine Policy, found that the top five subsidizing political entities—China, the European Union, the U.S., South Korea, and Japan—account for 58% ($20.5 billion) of the $35.4 billion spent worldwide. Pew also funded two lines of research at the University of California, Santa Barbara: One, published in 2021, found that ending all harmful fisheries subsidies would yield a 12.5% increase in fish biomass worldwide by 2050—nearly 35 million metric tons of fish. The other produced an interactive tool that visualizes the magnitude—and distribution—of subsidies that prop up fishing in other countries’ waters, also known as distant-water fishing. The five entities providing the most harmful subsidies for such fishing are China, the E.U., Japan, South Korea, and Taiwan.

More than one-third of fish stocks worldwide are exploited beyond sustainable levels, according to the Food and Agriculture Organization of the United Nations. That’s up from 10% in 1974 and about 25% in 1990. The government subsidies that help drive this overfishing go primarily to industrial fishing fleets, and they artificially lower fuel and vessel construction costs—allowing large vessels to catch more fish than is sustainable by fishing farther out to sea and for longer periods, essentially increasing each vessel’s capacity.

And many industrial fleets wouldn’t be profitable without government assistance. These include a large European electric trawl fleet that targets plaice and other bottom-feeding flatfish; industrial tuna fishing boats in the western and central Pacific; and even some vessels known by authorities to routinely engage in illegal fishing.

Greatly reducing overfishing is important not only to sustain populations of the targeted species but to protect the balance of the entire ocean ecosystem. Depletion of one species—say, tuna—will have ripple effects on that animal’s predators and prey, and, in some cases, on entire ecosystems. Harmful subsidies to large commercial fleets also hurt small, local fishers worldwide, many of whom must travel farther from shore and stay at sea longer to catch enough fish to feed their communities.

Under the new WTO agreement, countries will also need to consider the current state of fish populations when granting subsidies—a provision that should help prevent future overfishing, improve ocean health, and protect livelihoods in coastal communities. Of course, as with most multilateral treaties, agreeing to adopt a deal is only the first step toward implementation. In the case of the fisheries subsidies deal, two-thirds of the WTO—that is, 109 members—must ratify the agreement for it to take effect, and getting to that number could take some work, says Rashid Sumaila, professor of interdisciplinary ocean and fisheries economics at the University of British Columbia’s Institute for the Oceans and Fisheries.

“It’s going to be a big effort to get countries to sign on. Even in developed countries, like here in Canada, we don’t know the status of every fish stock because every stock isn’t assessed,” Sumaila says. “Every country needs to have their assessments and have an idea of how much illegal fishing there is.”

A Pew-commissioned study found that $22 billion of the $35.4 billion in payments qualify as harmful subsidies—funding for industrial fleets that don’t need the money and are using it to accelerate overfishing.

If the deal isn’t finalized by 2028, it would lapse, although Pew’s Fernandez Monge says he expects finalization of the agreement. And, he adds, the deal will improve transparency and accountability related to how governments support their fishing sector.

The deal requires WTO members to report whether the fish populations for which they’re providing subsidies are overfished, maximally sustainably fished, or underfished; they’ll also need to supply the scientific reference points used to make those judgments. Members will also have to state if conservation and management measures are in place for the relevant fish stock, as well as listing the fleet capacity in the fishery; catch data by species or group of species; the names and identification numbers of vessels benefiting from subsidies; and any boats known to have engaged in IUU fishing.

As part of the agreement, trade ministers also committed to continue negotiations on some outstanding issues related to overfishing and overcapacity—which is a fleet’s ability to harvest more fish than is sustainable. The agreement also sets up a mechanism for wealthier WTO members to voluntarily contribute funding to help developing countries implement the deal, with negotiations ongoing on how best to help developing countries meet the requirements of the agreement.

“Having everyone following the same rules around the world will go a long way toward reducing overfishing,” Fernandez Monge says.

To understand how momentous this deal could be, it’s helpful to look at some past successes and failures in the fight against overfishing.

Government subsidies to industrial fishing fleets began in earnest in the years following World War II. And until the 1980s, almost none of the major fishing nations around the world even acknowledged the threat of overfishing. The prevailing opinion seemed to be that the ocean was a bottomless source of fish, one that could give humanity all that we wanted to take.

A fishing boat pursues cod in the Arctic Ocean. Increased attention to government subsidies began two decades ago as catch data showed that the populations of fish that people most love to eat—cod, tuna, salmon, herring, and more—were plummeting in many places.
piola666 Getty Images

One notable exception to this attitude were the Indigenous communities of the South Pacific, many of which had practiced sustainable fishing for centuries—mostly by imposing moratoriums on fishing whenever they noticed stocks might be under too much pressure. Some cultures would pause fishing proactively to allow stocks to recover in advance of a celebration or other event that necessitated catching a lot of fish.

Unfortunately, larger, more industrialized nations took no such precautions. The U.S., Spain, Japan, China, and many others not only worked to optimize their efficiency for fishing in their own waters, but they also began to build distant-water fleets that could roam both the high seas and other countries’ territorial waters in the quest to fill their nets.

By the late 1980s, catch data revealed a predictable outcome: Populations of the fish that people most loved to eat—cod, tuna, salmon, herring, and more—were plummeting in many places.

And as scientific knowledge about the ocean grew, the focus on subsidies increased. In 2001, the U.N. started discussions on the payments.

And in 2003, researchers at Dalhousie University in Halifax, Nova Scotia, began looking beyond studies of individual fish stocks to take a broader view of the ocean, plotting the harvest throughout the world from the 1950s as subsidies began to transform industrial fishing. Their study concluded that the development of industrial fishing after the war was responsible for removing up to 90% of the cod, halibut, tuna, swordfish, marlin, and other large fish in the ocean.

In 2015, the U.N., in its sustainable development goals, tasked the WTO with reaching an agreement to prohibit certain forms of harmful fisheries subsidies by 2020. Although the COVID-19 pandemic and other global crises caused WTO members to miss that deadline, they persisted and ultimately struck the deal adopted in June.

The prevailing opinion seemed to be that the ocean was a bottomless source of fish, one that could give humanity all that we wanted to take.

For some observers, the action was decades in the making. The United States was among the first governments to meet the overfishing challenge head on, and it did so by strengthening its primary federal fishing law, the Magnuson-Stevens Act. Although the U.S. has not yet totally solved the issue of domestic overfishing, it has made significant progress, mainly by setting and enforcing science-based catch limits and other fisheries policies, to the point where scientists consider more than 90% of commercial stocks in U.S. waters to be at sustainable levels.

Other countries, including Iceland, Norway, the Philippines, and South Korea, also manage their fisheries well.

But the broader trend is worrisome for the ocean—and for all who depend on it for food and livelihoods.

That’s what makes the WTO agreement so significant. Although the deal by itself won’t mean the end of overfishing, it could go a long way toward helping reverse decades of damage and allowing the ocean to provide for humanity far into the future.

“This agreement could mark the turning point when humanity corrected course on overfishing of our ocean,” Fernandez Monge says. “We have more work to do, but by ending this volume of harmful subsidies, the WTO brought us decades forward in our goal of achieving fisheries sustainability around the world.”

John Briley is a staff writer for Trust.

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