What next for the WTO Fisheries Subsidies Agreement?
In 2022, to much fanfare, the membership of the World Trade Organisation reached an historic Agreement to discipline certain types of fisheries subsidies to achieve environmental aims linked to the Sustainable Development Goals. However, the WTO Agreement on Fisheries Subsidies (AFS) has not yet reached the required number of ratifications to enter into force. Perhaps more significantly, the WTO AFS is also incomplete; it does not provide a comprehensive set of regulatory disciplines for fisheries subsidies. While more comprehensive disciplines were meant to have been agreed by WTO Members at the 13th WTO Ministerial Conference (Abu Dhabi, 26-29 February 2024), these talks did not succeed. In this blog post, we reflect on why the WTO AFS is incomplete, before offering some suggestions for the way forward.
The current framework of the WTO Agreement on Fisheries Subsidies
It is no secret that fish stocks are in global decline with the grant of certain forms of fisheries subsidies highly interconnected to such declines. Subsidies are financial help granted by countries to help the fishing industry meet costs. While not all subsidies in the fisheries sector are ‘bad’, those that promote overcapacity and overfishing have pushed many fish stocks around the world close to the brink of collapse, risking the food security of millions around the world who rely upon fish as an important source of protein. Coastal communities are particularly at risk, with fish making up 80% of animal protein consumed in such communities. As we have argued elsewhere, overexploitation of global fish stocks hence poses a risk to a myriad of human rights such as the right to life, food, culture, health, and a healthy and sustainable environment. Simply put, fisheries subsidies are a human rights issue. Indeed, the UN Special Rapporteur on the Right to Food, who notably cited Hub research on the links between fisheries subsides and human rights, argues that WTO disciplines in this area must be designed with the right to food, particularly on the part of small-scale fishers, at the forefront.
At present, the WTO AFS, prohibits subsidies on 1) illegal, unreported and unregulated fishing; 2) the fishing of overexploited stocks and 3) fisheries on the high seas outwith the control of regional fisheries management organisations. Notably, within these substantive provisions, the WTO AFS does not give any explicit recognition to the rights of small-scale fisheries or human rights concerns. Indeed, more generally, human rights language was largely absent from WTO debates on this issue. The purpose of the WTO AFS is instead generally conceived of as ‘environmental’, though notably it does not contain any preambular language on its aim.
Given the environmental focus of the WTO AFS, two other types of subsidies which may have a particularly deleterious impact on fish stocks, namely subsidies liable to promote overcapacity or overfishing, were meant to have been included in the final Agreement. However, at present, these types of subsidies remain outside the scope of the WTO Agreement. The ‘plan’ had been for disciplines on these types of subsidies to be added to the AFS after the 2024 WTO Ministerial Conference earlier this year. However, at this meeting, Members were unable to agree to new disciplines on such subsidies, with the result the WTO AFS is still incomplete.
The missing bits
Subsidies liable to promote overcapacity and overfishing may include, ‘subsidies to construction, acquisition, maintenance, modernisation, renovation or upgrading of vessels’ as well as, subsidies to the purchase/costs of fuel, ice, or bait.’ Such subsidies have significant potential to promote overexploitation of fish stocks and it seems axiomatic that we would want to discipline such financial contributions to the fisheries industry. As we have noted elsewhere, however, there is an important development dimension to such discussions.
Developing countries may wish to increase their capacity to pursue development objectives. In short, ‘for many developing Members (development priorities may) include building larger fleets to exploit national and high seas fisheries.’ This needs, however, to be balanced against legitimate concerns such as food security and livelihood concerns, both of which are reflected in the WTO negotiating mandate on fisheries subsidies. However, further complexity is added to the issue in that the developing world is far from homogenous, with some countries’ fishing fleets composed predominantly of small scale fishers and artisanal fleets, while others are composed of large scale industrial fleets capable of distant water fishing.
Previous drafts of the Fisheries Subsidies text had attempted to deal with this issue by adopting a hybrid approach, establishing a general prohibition on subsidies liable to promote overcapacity and overfishing but accompanied by an exception should measures be in place to ensure stock levels remain at biologically sustainable levels. Previous drafts also made specific provision for developing countries where certain circumstances prevailed.
Discussions in the run up to the February 2024 Ministerial meeting focused on the careful balance to be struck in adopting such a hybrid approach, with further refinements proposed such as the introduction of a ‘two-tier’ system to the proposed hybrid approach. According to the Chair of the negotiations, under this two-tier hybrid approach, certain Members would be subject to stricter requirements based on the extent to which they were engaged in distant water fishing, their level of subsidisation, as well as their developmental status. The draft text circulated by the Chair to negotiations in the lead up to the February 2024 ministerial also made provision for special and differential treatment, particularly for least developed countries. Notably, provision was also made in that draft text for special treatment of, ‘small scale and artisanal fishing or fishing related activities that are primarily low income, resource poor or livelihood in nature as operationally defined by a Member,’ in certain developing country member where relevant criteria apply. Ultimately, however, agreement could not be reached on these complex issues, and the 13th Ministerial Conference concluded without agreement on how to ‘complete’ the existing WTO AFS.
Where Next?
The search for a solution to the problem of disciplining subsidies liable to promote overcapacity and overfishing continues, albeit one with a sword of Damocles swinging overhead as the AFS directs that the entire agreement will be terminated if ‘comprehensive disciplines are not adopted within four years of the entry into force of this Agreement, and unless otherwise decided by the General Council’.
Undoubtedly, the solution lies in the adoption of a hybrid approach, but one that is carefully calibrated to reflect country circumstances, and the needs of developing countries. This will require careful delineation of commitments and consideration of classes of fishers such as small-scale fishers and artisanal fishers that are not given explicit recognition in the existing AFS text. Such consideration should be done from a human rights perspective.
In that connection, the UN Special Rapporteur’s direction is very timely that Members, ‘should use future Agreement negotiations as an opportunity to reintroduce language that explicitly enables States to support small-scale fisheries more readily by repurposing subsidies away from large-scale operations that have overfished, thereby meeting the State obligation to progressively realize the right to food.’
As we have argued elsewhere, ‘The absence (from the existing text of the AFS) of clear provisions addressing the specific needs of small-scale fishers, together with the construction of special and differential treatment as country specific, with non-LDC developing country entitlement largely based on the principle of self-selection, is hence inherently problematic as it does not recognize that fisheries subsidies have significant human rights impacts for these particular communities.’
Related SDGs:
