Implications of the WTO's Agreement to Reduce Fishery Subsidies

The World Trade Organisation (WTO) has reached its first legally binding Agreement on Fisheries Subsidies after 25 years of negotiations.

Following ratification by two-thirds of WTO members, the agreement aims to mitigate the adverse effects of fisheries subsidies, which can lead to market distortions, unequal competition, and ecological harm through overcapacity and overfishing.

WTO discussions on fisheries subsidies commenced in 2001 due to declining fish populations, with 38% of stocks overfished and 50% fully exploited.

Government subsidies for industrial fishing have exacerbated overfishing and jeopardised fish availability, affecting food security and livelihoods in low-income coastal communities. The agreement highlighted is a crucial step toward ensuring ocean health and fostering a fair ocean economy for these communities.

The Agreement's Scope & Relevance

WTO members initially addressed harmful fisheries subsidies at the 2001 Doha Conference, but significant progress was delayed until the 2015 adoption of the United Nations Sustainable Development Goals (SDGs).

Target 14.6 of the SDGs clearly requires the WTO to:

Negotiations were revitalised by a call to prohibit fisheries subsidies that encourage overcapacity, overfishing, and illegal fishing, leading to the adoption of a subsidies agreement at the WTO’s 12th Ministerial Conference in 2022.

The agreement contains three important prohibitions aimed at the worst types of subsidies. First, ratifying WTO members must cease subsidising illegal, unreported, and unregulated fishing (Article 3).

Second, they must discontinue subsidies for vessels targeting overfished stocks unless they can show that appropriate management mechanisms are in place to replenish such populations (Article 4). Third, subsidies for fishing on the high seas are prohibited (Article 5).

These policies target some of the more egregious types of financial support, but they do not address all subsidies that lead to overcapacity.

Article 8 of the agreement enhances transparency and accountability by requiring members to submit detailed annual information on fish stocks, conservation measures, fleet capacity, and the names of subsidised vessels. This initiative addresses historical issues of incomplete fisheries subsidies data, enabling better identification of beneficiaries and alignment with sustainability goals.

Notably, the agreement aids developing and least developed countries by granting them two extra years for subsidy prohibitions and access to the WTO Fish Fund for technical

support. While not fully equalising conditions, it requires major subsidisers to assume the most significant responsibilities.

Gaps, Obstacles, and Future Directions

Despite its strengths, the agreement addresses only a small portion of the estimated $22 billion in harmful fisheries subsidies, with fuel subsidies remaining largely unaffected.

Additionally, it applies only to countries that have ratified it, and key subsidisers like Indonesia and Thailand have not yet done so.

In a 2021 Oceana report, it was indicated that 10 countries account for 64% of harmful global subsidies. Despite a recent agreement, issues with participation, transparency, and data disclosure persist, largely due to unclear reporting guidelines.

Effective implementation relies on self-reporting and peer accountability, highlighting the necessity for the WTO to establish standardised reporting frameworks.

Further, the success of the fisheries subsidies agreement relies on WTO members' implementation and accountability, coupled with industry and civil society pressure. It starts a four-year negotiation period aimed at removing harmful subsidies that benefit foreign fleets and contribute to overcapacity, raising ecological and equity concerns.

Eventually, the agreement's entry into force advances the achievement of SDG Target 14.6 by eliminating billions in fishing subsidies, which would enhance fish stocks, support coastal communities, and improve ocean health; however, further work is needed.

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