WORLD TRADE
ORGANIZATIONWT/CTE/W/226
24 April 2003
(03-2169)
Committee on Trade and Environment Original:  English
ANALYSIS ON THE RELATIONSHIP BETWEEN
FISHERIES SUBSIDIES AND OVER-EXPLOITATION OF FISHERIES RESOURCES
Submission by Japan
I. INTRODUCTION
1. Japan stated in its submission (WT/CTE/W/222, TN/MA/W/15/Add.1) last December that the
fisheries subsidies issue was being discussed at the Rules Negotiating Group in terms of tradedistortion, however, this issue should also be discussed at the Regular Session of the Committee on
Trade and Environment for the purpose of solving IUU fishing and over-capacity issues, taking into
account the work of other organizations such as FAO and OECD.  This paper is to reflect on the
above-mentioned argument and to provide some analyses on the relationship between fisheries
subsidies and over-exploitation, taking into account discussions in international organizations as wellas those taking place within WTO.  It aims at deepening understanding of members on this issue, and
does not prejudice Japan’s position in WTO.
II. DISCUSSIONS IN INTERNATIONAL BODIES
2. The relationship between fisheries subsidies and over-exploitation has been analyzed by
several international bodies.  For example, the OECD conducted an analysis on possible effects of
subsidies on resources as part of “Transition to Responsible Fisheries” in 2000.  One of the main
outcomes from the study is that possible negative effects of subsidies could be minimized if coherence
is maintained between fishery management policies and transfer policies.  This means, for example,
that when a subsidy for vessel construction is provid ed to fishing vessels engaged in a certain fishery,
it is necessary to restrict the total fishing capac ity of the fishery by regulating the number of the
vessels, the tonnage as well as the horse power of each fishing vessel, and so on.  These regulatorymeasures can prevent over-exploitation from happening even with a subsidy for vessel construction.
In other words, if a new vessel is built with subsidies, another vessel must be scrapped whose fishing
capacity is equivalent to that of the new one.
3. The OECD also analyzed the impacts of subsidies on resources in the Fisheries Market
Liberalization Study completed in 2002.  This concludes that effects of subsidies on resources differ,
depending on status of resources and management.  This means, for example, that subsidies are least
likely to affect resources adversely when the resources are under-utilized and proper fishery
management exists, whereas they are most likely to affect resources when the resources are over-
utilized under poor management.  It also means that when the resources are under-utilized, subsidiesmay not cause negative impacts in a short term even when fishery management is not necessarily
good.
4. APEC conducted a study on fisheries subsidies in 1999.  It says that the impacts of
subsidies are closely related to fishery management regimes, and therefore the impacts of subsidiescannot be discussed in isolation.  The FAO also confirms that effects of subsidies on resources
depend on fishery management and subsidies do not harm resources when fishery management is
properly established.WT/CTE/W/226
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5. These theoretical analyses suggest that there is a common understanding that "effects of
subsidies on resources vary, depending on status of resources and fishery management".
III. EXISTENCE OF SUBSIDIES TO BE LISTED IN THE RED CATEGORY
6. One WTO member recently indicated the expansion of prohibited subsidies as a possible
means of strengthening disciplines on fisheries subsidies.  A question is, however, whether there isany “red” subsidy from the standpoint of their resource impacts in the fishery sector.  Based on the
common understanding above, the answer to this ques tion should hardly be “Yes”.  This is because
“effects of subsidies on resources vary, depending on status of resources and fishery management”
and there would be no subsidy that causes negative impacts on resources, regardless of status of
resources and fishery management.
7. It is assumed that the establishment of “red” fisheries subsidies in terms of their impacts on
resources is based on the premise that the stock status exploited by the fishery receiving the
subsidies is bad and that the fishery management is also inappropriate.  However, it should be noted
that the stock status, fishery management regime, as well as impacts of fishery subsidies, differ among
various types of  fisheries.  Furthermore, over-exploitation or over-capacity can happen even without
subsidies when the fishery lacks an appropriate management scheme.
IV. CONCRETE CASES
8. A case of skipjack tuna can be  one of the examples showing how the effects of subsidies
change owing to  the status of stocks or management.  The production of skipjack tuna used to be
less than 200 thousand metric tons in 1950s, which has increased and reached 1.89 million metrictons in 2000 (please see the attached figure).  Regional fishery management organizations such as
ICCAT (International Commission for the Conservation of Atlantic Tunas), IATTC (Inter-American
Tropical Tuna Commission) and IOTC (Indian Ocean Tuna Commission) report that the stock status
of skipjack tuna is fairly good with high reproduction potential and that production can be further
increased.  These facts indicate that the reproduction capacity of skipjack tuna is sufficiently strongthat it is possible to even increase the production, while the limited demand is suppressing the
production.  Assuming that there is no substantial change in the current supply-demand situation
and the oceanographic condition, which may affect the reproduction, skipjack tuna can be regarded
as a case referred to by OECD and others, i.e., fisheries subsidies are unlikely to cause over-
exploitation when the stock is in a healthy condition.
9. Next, a case of the purse seine fishery in the Eastern Pacific Ocean (EPO) can be given as an
example of over-capacity or over-exploitation ev en without subsidies when there is not good
management.  The IATTC has been implementing conservation measures on yellowfin tuna and
bigeye tuna in EPO.  The IATTC has been concerned about the over-capacity in the purse seine
fishery since 1998.  The IATTC secretariat confirms that the current fishing capacity of the purse
seine fishery, measured in the total fish hold capacity of purse seine fishing vessels, is 210 thousandcubic meters, well surpassing the recommended level, i.e., 158 thousand cubic meters.
V. CONCLUSION
10. As these cases indicate, the possible effects of subsidies on resources change between
different resource status and fishery management regimes.  Also, lack of effective fisherymanagement brings over-capacity even without subsidies.  From the standpoint of responsible
fishing countries, it would be unfair that these varying situations are ignored and certain fisheries
subsidies are automatically prohibited.  Japan wishes to know if there is any subsidy which causes
damage on resources under any condition regardless of resource status and fishery management.
Also, it is important for the Members who demand more discipline on fisheries subsidies to presentWT/CTE/W/226
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and scrutinize cases of over-exploitation and investigate whether the main cause of the over-
exploitation is subsidies.
11. Japan considers it important for CTE to continue discussion on possible impacts of fisheries
subsidies on resources, taking into account the work of the FAO and OECD.
Production of Skipjack Tuna
14001500160017001800190020002100
1993 94 95 96 97 98 99 00
YearProduction(1000 M
Production
Source: FAO statistics on fishery production and commodities
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