Trade distorting and environmentally damaging subsidies

 

 

 

Promoting sustainable development by eliminating trade distorting and environmentally damaging fisheries subsidies

  1. Australia, Iceland, New Zealand, the Philippines and the United States welcome the opportunity provided by the High Level Symposia on Trade and Development and Trade and Environment to highlight the beneficial contribution that the elimination of environmentally-damaging and trade-distorting subsidization of the fisheries sector would make to the conservation and sustainable use of fish stocks and the promotion of sustainable development.
  2. Today, one year after the International Year of Oceans, and as we approach the twentieth anniversary of the adoption of the 1982 United Nations Convention of the Law of the Sea, it is alarming that the progress of sustainable fisheries continues to be seriously undermined by trade-distorting and restrictive fisheries practices. This situation continues despite international efforts to develop new conservation rules for the sustainable utilization of fish stocks over recent years
  3. Overcapacity of the global fishing fleet is, along with inadequate management regimes, the predominant cause of the depletion of fish stocks in many regions. It is generally recognized that government subsidies and other market distortions are primary factors in causing this overcapacity. A recent study published by the World Bank estimates that a total of US$14-20 billion of environmentally harmful subsidies are being granted each year to the global fisheries sector. This amounts to 20 to 25 per cent of world fisheries first sale revenues. It has been noted that many of the subsidies granted to the fisheries sector may be actionable under the WTO Subsidies Agreement in view of the serious prejudice they cause to the interests of other member countries - yet these subsidies still persist.
  4. The billions of dollars wasted on subsidizing environmentally damaging activities could easily be transformed into expenditures that would make a positive difference in a world plagued by sustainable development challenges.
  5. The encouragement of the use of fisheries resources beyond normal economic rates of exploitation also creates supply distortions that place downward pressures on world seafood prices and this affects the ability of all countries, but particularly developing countries, to achieve adequate economic returns from their fisheries resources.
  6. In summary, subsidizing fishing activities impedes sustainable development, and seriously undermines the possibilities for effective conservation and sustainable utilization of fish stocks.
  7. The issue of overcapacity and resulting overfishing of fish stocks has been the subject of increasing attention in various international fora. In the FAO, Governments have recently adopted a Plan of Action for the Management of Fishing Capacity, which calls for action "to reduce and eliminate all factors, including subsidies, that contribute directly or indirectly, to the build-up of excess fishing capacity thereby undermining the sustainability of marine living resources, giving due regard to the needs of artisanal fisheries". In the WTO Committee on Trade and Environment, there has also been a detailed discussion of the positive relationship between subsidies reform and fisheries conservation and there is a growing recognition of the need for governments to make a positive contribution in this regard.
  8. We therefore urge Governments to make an early commitment to progressively eliminate fisheries subsides that contribute to fisheries overcapacity, in view of their environmentally-damaging and trade-distorting effects, and to pursue work in the WTO aimed at achieving the reduction and elimination of such subsidies. Progress in this area would represent a clear "win-win" achievement in the area of trade, environment, and sustainable development.

 

Prepared by Ulf Wijkstrom
Development Planning Service

 

reference source

Extracted from Annex 1, part of a paper received by the WTO from the delegation of New Zealand to the WTO with the request that it be circulated to Members of the Committee on Trade and Environment for its meeting held on 29-30 June 1999. The title of the whole submission is "Benefits of eliminating trade distorting and environmentally damaging subsidies in the fisheries sector"

 

Top

 

Subsidizing fishing activities can impede sustainable development
Courtesy of NOAA/J.Cort

links

WTO agreements
Subsidies and trade distortion

further information

World Trade Organization
Committee on Trade and Environment meeting (June 1999)

reference source