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Context: The WTO Agreement on Fisheries Subsidies, adopted in June 2022, is a significant step towards promoting sustainable fishing practices and protecting fish stocks globally

Details

• The WTO Agreement on Fisheries Subsidies is a groundbreaking achievement that focuses on environmental sustainability. It establishes a set of binding prohibitions and rules to ensure that government support for the fishing sector does not undermine the sustainability of marine resources.

Content of the Agreement

• The Agreement on Fisheries Subsidies (AFS) consists of twelve articles, each addressing specific aspects of fisheries subsidies.
• It focuses on tackling subsidies contributing to illegal, unreported, and unregulated fishing (IUU fishing), subsidies linked to overfished stocks, and other harmful fisheries subsidies. However, it excludes subsidies related to aquaculture or inland freshwater fisheries.

Categories of Fisheries Subsidies

• Beneficial subsidies: These are investments that promote the conservation and management of fishery resources.
• Capacity-enhancing subsidies: These programs encourage fishing capacity to a level where it exceeds sustainable yield, leading to overexploitation.
• Ambiguous subsidies: These subsidies have the potential to either contribute to sustainable management or result in overexploitation of the fishery resource.

Challenges in Fisheries Sector

• The fisheries sector faces challenges such as overfishing and overcapacity. Inefficiencies in value chains contribute to significant losses in global fisheries and aquaculture production.
• Despite global overcapacity, the fisheries subsidies amounted to $35.4 billion in 2018, with about 60% considered capacity-enhancing subsidies.

Addressing Overfishing and Overcapacity

• Need to address overfishing and overcapacity, suggesting that limiting or even prohibiting capacity-enhancing subsidies is essential for promoting sustainable practices.
• The proposed solutions include a cap-based approach, which involves dividing WTO Members into tiers based on their contribution to global marine capture production. Members in each tier negotiate subsidy caps or adhere to a default annual cap.

IUU Fishing and Overfished Stocks

• Combating illegal, unreported and unregulated (IUU) fishing is crucial, accounting for over 30% of all fishing activities globally. The agreement calls for reinforcing monitoring, control, and surveillance (MCS) mechanisms to address IUU fishing. Overfished stocks are determined based on the best available scientific evidence.

WTO Agreement on Fisheries Subsidies
Key Provision	Explanation	Challenges and Potential Improvements
Prohibition of Subsidies for IUU Fishing	Subsidies contributing to illegal, unreported, or unregulated fishing activities by any vessel are prohibited.	Enforcement: Relies heavily on individual countries to detect and report IUU fishing violations. More comprehensive monitoring systems and international cooperation are needed.
Prohibition of Subsidies for Fishing Overfished Stocks	Members cannot provide subsidies for fishing vessels targeting stocks that are already overfished.	Defining "overfished": The Agreement lacks a clear, universal definition of "overfished," which weakens effective implementation. A globally recognized definition (such as the Maximum Sustainable Yield concept) would be helpful.
Prohibition of Subsidies for Fishing on the Unregulated High Seas	Subsidies for fishing vessels operating on high seas that aren't regulated by Regional Fisheries Management Organizations (RFMOs) are prohibited.	Enforcement in unregulated areas: Challenging to accurately assess and enforce this rule in unregulated high seas areas. International monitoring systems and better regulations might be needed.
Special and Differential Treatment (SDT)	Recognizes the unique needs of developing countries and provides flexibility in implementing the Agreement.	Defining "developing country": No clear definition exists, potentially leading to disputes. Explicit criteria would help ensure fair implementation.
Transparency and Notifications	Requires members to submit information about their fisheries subsidies to the WTO.	Quality and consistency of data: Making sure submitted data is complete and accurate can be a challenge. Standardized reporting mechanisms might be beneficial.
Technical Assistance and Capacity Building	Aims to provide support to developing countries to implement the Agreement effectively.	Funding and Coordination: Ensuring adequate funding and coordination for capacity-building programs is essential for their success.

Conclusion

• The WTO Agreement on Fisheries Subsidies prohibits certain forms of harmful subsidies while also requiring governments to report on how they support their fishing sectors. It covers marine wild capture fishing and related activities carried out at sea, such as packaging and processing. This historic achievement represents a major milestone in ocean sustainability and sets a positive precedent for future multilateral agreements focused on environmental conservation.

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PRACTICE QUESTION Q. The WTO Agreement on Fisheries Subsidies prohibits certain harmful subsidies. How can a fair and effective approach be developed to address these subsidies, balancing the need to reduce overcapacity with recognizing the legitimate development needs of member states, particularly developing countries?