Chinese subsidies test the value of new WTO deal

World Trade Organization members will soon elect a new chair to handle the next phase of talks to end harmful fisheries subsidies with an informal meeting of delegates on October 10, where participants will chart a way forward. for the negotiations.

Santiago Wills, Ambassador of Colombia to the WTO, chaired the negotiations on the historic agreement reached in June 2022, which prohibited subsidies for illegal, unreported and unregulated (IUU) fishing and restricted fishing of overexploited stocks. In a statement at the end of September, Wills urged WTO members to deposit their instruments of acceptance of the agreement as soon as possible in order to allow it to enter into force. He said work would continue to “advance negotiations” ahead of the next conference of trade ministers in December 2023.

With a low-key leadership style, Wills earned credit for steering the June deal through to approval because, in addition to limiting grants, he added transparency requirements on grant payments and created a fund to enable capacity building in least developed countries to implement the agreement. But the deal has also been criticized for failing to end subsidies that have led to fleet overcapacity and overfishing.

Eduardo Pucci, director of the Argentinean fisheries conservation body Organización para la Protección de los Recursos Pesqueros en el Atlántico Sur (OPRAS), was one of many representatives of coastal countries to call for improvements to the agreement.

“I think the agreement reached at the WTO is insufficient and lacks the necessary sanctions that do not depend on the relationship between the flag state itself and its vessels,” Pucci told SeafoodSource. “However, it is a conceptual step forward. Distance fishing on straddling species, [illegal, unreported, unregulated] fishing or fish without rules on the high seas will continue.

Europêche Director General Daniel Voces, representing the fishing industry in Europe, specifically called on the incentives recently offered by provincial and local governments in China for the construction of fishing vessels and for transporting catches to distant waters to their home ports. Zhangzhou, Xiamen and Fuzhou each provides generous grants to local deep-sea fishing businessesand in September, the city of Shenzhen in southern China began offering generous subsidies for tuna boat purchases and the return of catches.

“We are concerned about how China uses subsidies,” Voces said. “This appears to be encouraging overcapacity and overfishing, rather than promoting sustainable fishing and the conservation of marine resources.”

As it has done previously, Voces defended the subsidies granted to European shipowners for their exploitation.

“These [Chinese] the incentives or subsidies have nothing to do with those offered to EU fleets,” he said. “Indeed, under Article 13 of the new European Maritime, Fisheries and Aquaculture Fund, the construction, acquisition or import of new fishing vessels are not eligible for public funding. In addition, investments and fleet compensation in the EU are very restrictive – especially for vessels over 12 meters – and strictly conditional on their consistency with common policy conservation objectives. EU fisheries.

By contrast, explained Voces, “fishing vessels operating under EU fisheries agreements with third countries are normally required to land at least part of the catch in the fishing ports of the third country and a part of the catches is directly marketed in this region and not in Europe.

China’s subsidies have gained more weight as freight rates for frozen reefers double between 2020 and 2021, says a veteran of the tuna industry in Asia and the United States

“Freight rates have been remarkably slow to come down, despite the slight drop in fuel prices. Earnings reports from shipping companies show their rewards. Also, the containers were hard to get, and in some places they still are.

The payments offered by Shenzhen are “subsidies that increase capacity in nature, reducing the investment and operating costs of vessels, especially those fishing beyond Chinese territorial waters”, explained Ernesto Fernández Monge, who works on reducing harmful fishing subsidies from The Pew Charitable Trusts. project.

“It could lead to overfishing on the high seas and in other countries’ exclusive economic zones,” he told SeafoodSource. “That’s why it’s important that the WTO Fisheries Subsidies Agreement enters into force as soon as possible so that members have to think about the sustainability of resources when providing subsidies. .”

Negotiators should aim their next round of talks at improving the deal so that it effectively limits payments that lead to fleet overcapacity and overfishing. However, subsidies for transporting catches to China might not even be covered by an improved WTO fisheries subsidies agreement, according to Monge.

“There are different types of subsidies under these programs, including vessel construction, fish transportation and tax incentives that could fall under the definition of the new WTO agreement as long as they relate to fishing and activities related to sea fishing,” said Monge. . “There are others, such as air cargo and inland infrastructure, which may fall outside the scope of the WTO Fisheries Subsidies Agreement – however, it is important to note that the current Agreement on Subsidies and Countervailing Measures could apply to them.”

Photo courtesy of the World Trade Organization

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