\n
<\/div><\/p>\n Researchers in 2016 pegged total annual fishing subsidies<\/a> at US$35 billion (in 2009 dollars). They categorised US$20 billion of those incentives as harmful with as much as 85% of that money going to industrial fishing operations. A 2018 study<\/a> found that in the absence of US$4.2 billion in subsidies, more than half of high seas fishing would be unprofitable. Furthermore, China, Taiwan, Japan, South Korea, Indonesia and Spain account for 80% of fishing outside territorial waters. Researchers estimate that China alone was responsible for 21% of high seas fishing in 2014 and nearly 19% of global fish catch averaged between 2014 and 2016.<\/p>\n In 2001, the WTO formally recognised the need to reform fishing subsidies<\/a> and member nations four years later called for the abolition of incentives that contribute to overfishing. Negotiations languished for a decade but took on new urgency in 2015 after the UN adopted a set of 17 Sustainable Development Goals<\/a> (SDG). Among them was SDG 14.6, which calls for the prohibition by 2020 of subsidies that contribute to overcapacity, overfishing and illegal, unreported and unregulated (IUU) fishing. Still, WTO\u2019s last biennial meeting in December 2017 ended without an agreement on fishing subsidies. However, the 164 WTO member states, which must approve decisions by consensus, did agree to redouble efforts to reach an agreement by the end of 2019.<\/p>\n This year, negotiators have been meeting monthly at WTO headquarters in Geneva to try to break the stalemate. An agreement to ban fishing subsidies would have a profound impact on ocean health and national economies. Unlike other international agreements, such as the Paris accord on climate change, WTO actions are binding and carry the weight of law.<\/p>\n \u201cThe WTO is a body that really has teeth behind it, which makes negotiations hard and complicated,\u201d said Isabel Jarrett<\/a>, manager of the Pew Charitable Trusts program to reduce harmful fishing subsidies.<\/p>\n China has so far kept a low profile in the talks, according to observers, and has not publicly revealed its negotiating position. Yet a new proposal from China to cap fisheries subsidies, and a review of the country\u2019s shifting policies, government reports and interviews with close followers of its fishing practices offers insights into how it might respond to a WTO agreement on subsidies and the impact on its fisheries. \u201cChina is a leader in many ways on certain environmental issues and they have expressed their willingness to be part of other global environmental efforts, such as the Convention on Biological Diversity<\/a>,\u201d said Jarrett. \u201cThere\u2019s a domestic policy in China to reduce fuel subsidies for domestic fishing and it\u2019s important for China to take forward some of these commitments they have made domestically to the international stage.\u201d<\/p>\n From a few trawlers dispatched to fish off the coast of Africa in 1985, China\u2019s overseas fleet has grown to 3,000 vessels (more than 2,400 of which were at sea in the first half of 2017, according to a United States government analysis<\/a>). A report issued by China\u2019s Ministry of Agriculture and Rural Affairs in July 2016 noted that the country\u2019s fishing fleet operated in the territorial waters of 40 countries as well as on the high seas in the Atlantic, Indian, Pacific and Southern oceans.<\/p>\n \u201cMore than 100 overseas representative offices and joint ventures were established, more than 30 overseas bases were built, and a number of processing logistics bases and trading markets were established in China,\u201d stated the report celebrating the success of the 12th<\/sup> Five Year Plan (2011-2015) for its offshore fisheries.<\/p>\n Billions of dollars in subsidies fuelled that expansion. Tabitha Grace Mallory<\/a>, an affiliate professor at the University of Washington who specialises in China fishing policy, calculated in a paper<\/a> that the country spent 40.4 billion yuan (US$6.5 billion) on subsidies in 2013. About 94% of those subsidies were for fuel, according to her study based on Chinese government reports and other Chinese sources.<\/p>\n Mallory is currently updating those numbers and has preliminarily estimated that fuel subsidies in 2016 fell to just under 8 billion yuan (US$1.2 billion). \u201cThat\u2019s a huge decrease, which looks great,\u201d said Mallory, who also serves as chief executive of the China Ocean Institute<\/a>, a Seattle-based consultancy. \u201cMy suspicion, which is confirmed by conversations with experts in China, is that they\u2019re definitely rolling back subsidies for the domestic fleet<\/a> but a lot of subsidies will remain in place for the distant-water fleet.\u201d<\/p>\n In response to a collapse of fish stocks<\/a> in its territorial waters, China has imposed restrictions on its domestic fishing fleet, cracked down on illegal fishing and boosted aquaculture production<\/a>. China\u2019s State Ocean Administration reported that in the first nine months of 2017, captures of wild fish in domestic waters declined 11.9% over the previous year while captures outside the country grew 14.2%. China\u2019s total wild fish captures declined 7.7% in 2017. Mallory says that statistics on China\u2019s fishing industry are increasingly hard to obtain. \u201cSince my 2016 paper, there\u2019s been a huge decline in transparency in reporting on subsidies,\u201d she said, noting China is far from alone in its secrecy about subsidies. \u201cMaybe the increased scrutiny has caused them to pull back or maybe in the lead up to the WTO negotiations, there\u2019s some hesitancy while they figure out what they\u2019re doing.\u201d<\/p>\n Adding to the confusion, Mallory says, is that China has combined data on subsidies that are beneficial \u2013 such as those that finance the decommissioning of boats to reduce fishing capacity \u2013 with those that are destructive, like payments for the renovation or construction of vessels. She said data from 2018 she has obtained shows that 59% of those subsidies are going to China\u2019s distant-water fishing fleet. \u201cThe data indicates that there is still a lot of support for distant-water fishing but it conflates disposal of vessels with construction,\u201d Mallory said.<\/p>\n What is clear is that China has signalled a change in fishing policy<\/a> over the past few years. The country has pledged to reduce fuel subsidies for domestic fishing by 40% and cap its overseas fleet at 3,000 vessels by 2020. It has also joined other nations in agreeing to ban the capture of krill<\/a> in \u201cecologically vulnerable\u201d waters off Antarctica (though China and Russia have blocked the expansion of marine reserves<\/a> in the region).<\/p>\n And absent in China\u2019s latest Five Year Plan (2016-2020) is the triumphal tone of the previous plan.<\/p>\n \u201cMajor changes are taking place in the management of international marine fisheries,\u201d the Ministry of Agriculture said in an August 2017 statement about the 13th Five Year Plan for National Ocean Fishery Development. \u201cThe traditional development model of offshore fisheries needs to be changed. The further development of offshore fisheries faces a series of severe challenges. The \u2018Thirteenth Five-Year Plan\u2019 is a key transition period for China\u2019s transition from a large offshore fishing country to a strong offshore fishing industry.\u201d<\/p>\n In its 2018 \u201cState of World Fisheries and Aquaculture\u201d report<\/a>, the FAO noted that: \u201cIf the plan and additional reforms are fully implemented and the goals are achieved, it is expected that the growth rate of China\u2019s aquaculture production will slow and its capture fisheries production will be substantially reduced.\u201d <\/div><\/p>\n Unknown at the moment is what a comprehensive WTO accord would look like. China presented a proposal<\/a> at the organisation\u2019s June meeting that would cap subsidies and reduce them over time.<\/p>\n \u201cWith the deadline approaching, key issues in the negotiations remain unresolved,\u201d the proposal states. \u201cMembers\u2019 positions regarding subsidies that may contribute to overcapacity and overfishing are still far apart. Compared with other approaches, a cap-based approach could be a relatively practical way forward, because it accommodates constraints as well as flexibilities of the [regulations], and strikes a balance between the need for sustainable fisheries and the need for policy space for sustainable social and economic development.\u201d<\/p>\n Under China\u2019s plan, member states could choose one of three caps:<\/p>\n The caps would not apply to subsidies that promote sustainable fisheries. And least developed countries would be exempt from the caps and reduction commitments.<\/p>\n The other main proposal on the table<\/a> is one released in March by Australia and the US that would divide member nations into three categories and impose caps on fishing subsidies that would be reduced over time.<\/p>\n The 28 countries that account for either 0.7% or more of global wild fish capture or 0.7% of global seafood exports would be classified as \u201cTier 1\u201d nations. They would negotiate among themselves to establish individual national caps as well as a timetable for reducing those subsidies. Tier 2 nations \u2013 the 51 countries with more than 0.05% of the global market but less than 0.7% \u2013 could also negotiate caps or accept a default annual subsidy cap of US$5 million. Finally, the 57 Tier 3 countries with less than 0.05% of market share would not be subject to caps. Under the proposal, nations would have to report up-to-date information on subsidies and provide notification of any changes. The plan\u2019s timetable is tight. Countries would disclose their subsidies now and over the next few months, Tier 1 and 2 nations would negotiate to establish caps and subsidy reduction commitments with a final deal to be in place by year\u2019s end.<\/p>\n \u201cIt has certainly got discussions going,\u201d said Pew\u2019s Jarrett of the Australia-US proposal. \u201cIt\u2019s not necessarily going to be a silver bullet, but it\u2019s advancing negotiations. That level of policy reform can\u2019t happen overnight. I don\u2019t think anybody thinks that come Jan. 1, 2020, that you flip a switch and all subsidies are removed.\u201d<\/p>\n China has not taken a public position on the Australia-US proposal and officials at the Ministry of Agriculture and Rural Affairs could not be reached for comment. However, in a May 2019 paper<\/a> filed with the WTO, China signalled its support for reaching an agreement on fishing subsides. \u201cSwift conclusion of the negotiations is important,\u201d the paper states. \u201cThe agreement to be reached should provide comprehensive and effective [regulations] to prohibit certain forms of fisheries subsidies contributing to overcapacity and overfishing and to eliminate subsidies contributing to illegal, unreported and unregulated (IUU) fishing.\u201d<\/p>\n Given that fuel subsidies underwrite the operation of distant-water fishing, any cap potentially would hit China the hardest.<\/p>\n But perhaps the biggest question, and one particularly pertinent to China, is whether countries would be able to sidestep any subsidy agreement by disguising ownership of overseas fishing operations.<\/p>\n A current WTO working document<\/a> on fishing subsidies proposes that a subsidy would be attributable to the nation that grants it regardless of the flag a vessel flies. That, of course, relies on member states accurately reporting subsidies and vessel ownership to the WTO.<\/p>\n For instance, in 2018, the Environmental Justice Foundation, a London-based nonprofit, released the results of an investigation into China\u2019s influence in the African fishing industry. Titled \u201cChina\u2019s Hidden Fleet in West Africa,\u201d the report found that 90% of Ghana\u2019s industrial trawlers<\/a> have ties to Chinese ownership.<\/p>\n Mallory notes that China has expanded its overseas fishing operations by financing foreign fleets and striking joint venture agreements with other countries and corporations to build seafood processing plants. And China has extensive fishing operations and financial interests in countries with little capacity to supervise compliance with national and international law.<\/p>\n \u201cIs that a way they\u2019re getting around the subsidy issue?\u201d she asked. \u201cBy basing processing facilities overseas, you\u2019re giving support to the industry. A Chinese company is proposing to build a processing centre<\/a> in Uruguay. Will that be counted on the books as Uruguay\u2019s support for the industry or China\u2019s?\u201d<\/p>\n Another issue: If China decommissions industrial trawlers, will those boats be sold to other countries and put back in service?<\/p>\n Said Jarrett: \u201cOf course there is a concern, as there always is in international fishing governance, about vessels being flagged under different countries. That\u2019s being discussed. But we have to recognise that the WTO is not a fishing management organisation. The important thing for the WTO is to ensure that they create effective [regulations] for subsidies, which is obviously in their purview. You want to ensure there aren\u2019t significant loopholes.\u201d Despite nearly 20 years of failure to reach a fishing subsidies agreement, the WTO faces mounting pressure internally and externally to meet the 2019 deadline and prove it\u2019s an effective multilateral organisation, especially since it has postponed its next biennial meeting until 2020.<\/p>\n \u201cLet\u2019s be honest, the politics of the WTO are extremely difficult at the moment with the trade war that has been triggered by the Trump administration,\u201d said R\u00e9mi\u00a0Parmentier, director of Madrid-based consultancy the\u00a0Varda Group<\/a>\u00a0and a longtime observer of the\u00a0WTO. \u201cIn everybody\u2019s head, the reform of the WTO is at the top of the agenda at the next ministerial meeting.\u201d<\/p>\n \u201cWe know we all have other fish to fry, so it\u2019s even more important that an agreement on fishing subsidies is reached by the end of the year,\u201d he added.<\/p>\n![\"Overfishing](\"https:\/\/dialogue.earth\/content\/uploads\/2019\/11\/1a_IUU_overfishing-logo.png\"){kind=logo}
<\/a><\/p>\n
\n![\"Half](\"https:\/\/dialogue.earth\/content\/uploads\/2019\/07\/2a_IUU_nations-logo.png\"){kind=logo}
<\/div><\/p>\nThe making of a fishing superpower<\/h2>\n
\n![\"The](\"https:\/\/dialogue.earth\/content\/uploads\/2019\/07\/6a_IUU_chinas_fleet-logo.png\"){kind=logo}
<\/div><\/p>\nShifting policies<\/h2>\n
\n![\"Three](\"https:\/\/dialogue.earth\/content\/uploads\/2019\/07\/4a_IUU_subsidies_examples-logo.png\"){kind=logo}
<\/p>\nOne possible fishing subsidies agreement<\/h2>\n
\n
\n![\"Global](\"https:\/\/dialogue.earth\/content\/uploads\/2019\/07\/3a_IUU_subsidies_chart-logo.png\"){kind=logo}
<\/div><\/p>\nEvasive action<\/h2>\n
\n![\"UN](\"https:\/\/dialogue.earth\/content\/uploads\/2019\/07\/5a_IUU_2020goal-logo.png\"){kind=logo}
<\/p>\nWhat\u2019s next at the WTO<\/h2>\n