WORLD TRADE
ORGANIZATIONWT/CTE/W/205
8 May 2002
(02-2597)
Committee on Trade and Environment Original:  English
UNEP WORKSHOP ON THE IMPACTS OF TRADE-RELATED POLICIES
ON FISHERIES AND MEASURES REQUIRED FOR THEIR
SUSTAINABLE MANAGEMENT
15 MARCH 2002, GENEVA
CHAIRMAN’S SUMMARY
Contribution by UNEP
I. INTRODUCTION
1. Overfishing of the world’s marine resources is widely recognized as a growing threat to the
sustainable management of the world’s fisheries.  According to the FAO report on The State of World
Fisheries (2000), 50 per cent of world fishery resources are fully exploited, 15-18 per cent are
overexploited and 9-10 per cent of stocks have been  depleted or are recovering from depletion. Major
interventions are required to restore stable stocks.
2. The fisheries sector is of high importance to developing countries. Fish is a highly traded
commodity: about one third of world production of fish is subject to trade. Trade liberalization in the
fisheries sector, which increases the level of trade in fish and fish products, could be harmful to fishstocks in many areas. This is particularly the case if it occurs without compensating reforms in
fisheries management systems to remove the perverse incentive of open access, common pool
fisheries and without strengthening systems of monitoring and enforcement aimed at conserving fish
stocks.  If perverse incentives are removed, trade liberalization can result in gains in economic welfare
and development.
3. In major fishing states, subsidies for new capacity (vessels and equipment) as well as
operating support and access agreements to foreign fishing grounds secured by government paymentshave supported fishing efforts at levels significantly exceeding the reproductive capacity of local fish
stocks. In the absence of appropriate management regimes, excessive government support policies
and especially subsidies to the fishing industry ha ve been shown to have a direct causal relationship
with establishment or maintenance of overcapacity and depletion of fish stocks.
II. AIMS OF THE WORKSHOP
4. The workshop organized by UNEP, in consultation with the WTO, FAO and OECD
Secretariats, provided an open forum for participants from governments, intergovernmental and non-
governmental organizations to address the impacts of trade-related policies on fisheries and discuss
measures for sustainable fisheries management.
5. The objectives of the workshop were to create a better understanding of the economic,
environmental and related social effects of trade-related policies, including fisheries subsidies, and to
explore approaches to reform current policies in order to contribute to the sustainable management of
fisheries world-wide.
6. The aim of the workshop was also to enable the transfer of substantive analysis and related
discussions to the negotiations on fisheries subs idies that will take place in the WTO NegotiatingWT/CTE/W/205
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Group on Rules. As specified in the Doha Ministerial Declaration these negotiations are an integral
part of the overall mandate, and should be concluded by January 2005.
7. About 80 participants, including 55 national trade and environment officials, representatives
from intergovernmental organisations (WTO , OECD, FAO, UNCTAD APEC), the European
Commission and about 20 NGOs, attended the workshop.
III. NATIONAL EXPERIENCES
8. UNEP has conducted a number of country studies assessing the effects of trade and trade-
related policies on specific sectors. Recent studies focused on the fisheries sector in Argentina and
Senegal. The studies revealed that developing countries, which open their waters to foreign fishing
fleets, might lose more than they gain. Country research indicated clearly that the eventual costs, in
terms of loss of income for local fishermen, environmental damage and the depletion of native fish
stocks can substantially outweigh the short-term financial gains generated from fishing agreementsand foreign governments. In 2001, UNEP commissioned two more studies on the economic,
environmental and related social effects of trade liberalization and trade-related policies, including
fisheries subsidies, in Mauritania and Bangladesh. The objective of these projects is to help design
reforms of current policies and to develop policy packages that contribute to the sustainable
management of fisheries. The following results were presented:
• The presentation of the case study on Mauritania revealed that following trade liberalization,
increasing exports, primarily of octopus and shrimp, were channelled to European and Japanesemarkets, with the fishing sector  accounting for around 54 per cent of foreign exchange inflows.
Increased trade and overfishing have significantly depleted octopus and serranid stocks, which
have significantly fallen in the past 15 years, while sawfish have disappeared.  Local direct
employment in the artisanal octopus fishery dropped from nearly 5,000 to some 1,800 between1996 and 2001. The study pointed to international fishing agreements being one of the primary
causes.  For instance, in the shrimp fishery, these agreements have given foreign fleets the
possibility of using more fishery intensive equipment (e.g. smaller mesh size) and are directly
competing for fish and markets for fish products with Mauritanian producers. The study
concludes that strict safeguards must be in place before fishing activities and access for foreignfleets are increased.
• The case study of Bangladesh revealed that trade liberalization has resulted in significant fisheries
production and export growth, accounting for 3.3 per cent of GDP in 1999 and that production in
2001 provided employment to over 917,000 people.  An assessment of the Bangladesh fishing
sector showed that subsidies to fisheries produc tion are negligible, and that current production is
below the estimated sustainable yield, suggesting the sector is not overexploited and that there isstrong potential for additional investment and development that would benefit public welfare.
The study, however, warned that failure to provide an effective, complementary management
system along with increased production could easily result in unsustainable fishing practices and
rapidly declining fish stocks.
• The Uganda case study demonstrated that exports from fisheries has grown from a value of
US$1.4 million in 1990 to US$78 million in 2001, employing over 1 million people in fisheriesand other down stream sectors. While the annual average of 220,000 million tonnes of harvested
fish is below Uganda’s estimated marginal sustainable yield of 330,000 million tonnes, somenegative effects of trade liberalization and inadequate government policies are becoming
increasingly apparent in terms of decrease of catches, diminished food supply for local
populations, decline in biodiversity, as well as increased water pollution due to untreated effluents
by the fish processing and other industries.  Recent developments to establish sustainable fisheriesWT/CTE/W/205
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management systems by implementing policy recommendations developed in the earlier UNEP
project completed in 1999, coupled with certain government sponsored projects, have laid the
groundwork for the establishment of effective conservation measures.  Their long-term success,
however, will depend on adequate funding and effective government enforcement.
• A study presented by Japan compared the case of bluefin tuna catches in the Western Atlantic
Ocean, which are effectively regulated through the International Commission for the
Conservation of Atlantic Tuna (ICCAT) quotas, and the case of bigeye tuna catches in the Indian
Ocean. It revealed that the decrease in stocks of bigeye tuna is primarily a result of increasing
catches made by non-members of the Indian Ocea n Tuna Commission (IOTC).  The rise in catch
was a result of increased demand for bigeye tuna on the Japanese market; the increased prices in
dollars due to the appreciation of the yen; and stable domestic tuna prices as a result of the yen
appreciation.  In order to curb increasing tuna catches, it was seen as necessary to regulate non-
members.  However, given the difficulty in enforcement, trade measures against non-membersmay be required to address the problem.
IV. ROLE OF INTERNATIONAL ORGANISATIONS
9. The WTO Secretariat explained that following the Fourth WTO Ministerial Conference in
Doha, Qatar, fisheries subsidies have for the first time been explicitly included in the negotiating
agenda. Paragraph 28 of the Ministerial Declaration, which refers to negotiations in the area of WTORules, provides that “In the context of these nego tiations participants shall also aim to clarify and
improve WTO disciplines on fisheries subsidies, taki ng into account the importance of this sector to
developing countries.”  Fisheries subsidies will be discussed in the negotiating sub-group, but it is too
early to speculate on precisely the form these negotiations will take. Fishery products may also figure
in the market access negotiations that include all non-agricultural products.
10. The FAO reported that the Committee on Fisheries (COFI) at its 24
th session had
recommended that FAO work on subsidies for fisheries be closely coordinated with, and
complementary to, the work being carried out by other IGOs, and that FAO should take a lead role in
promoting such cooperation.  Accordingly, a meeting of IGOs, organized by FAO in May 2001,
identified opportunities for further collaboration.  A follow-up meeting could possibly take place laterthis year.  The 2
nd Expert Consultations on the use of fishery subsidies will take place, tentatively,
from 3 to 6 December 2002, and will be followed by a Government Technical Consultation. FAO is
of the opinion that the work on disciplining the use of subsidies would benefit from a better empirical
understanding of the magnitude and exact nature of the impacts of subsidies.
11. The OECD presented, as its main data sources for financial transfers, the Review of Fisheries
in OECD countries  (published every second year), the OECD study Transition to Responsible
Fisheries: Economic and Policy Implications  (published in 2000), and an ongoing study on market
liberalization. Whereas revenue-enhancing transfers from government budgets, cost-reducing
transfers and general services (fisheries infrastructure, management and research cost) are included as
categories of financial transfers, regional and local transfers, non-budgeted transfers (through
provisions in the tax law) and market price support are not covered. OECD presented a theoretical
framework for analyzing the effects of trade a nd market measures according to the type of
management regime on the resource supply.
12. ICTSD (International Centre for Trade and Sustainable Development) emphasized the
potential “win-win-win” scenarios of addressing fishery subsidies and the possible need for a
differentiated treatment of subsidies in developed and developing countries, as well as other areas that
need to be explored in the context of development needs. Other trade-related issues also offeredconsiderable potential for both development and the environment, especially those related to marketWT/CTE/W/205
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access.  Intensified NGO-IGO cooperation would be especially important given the potentially narrow
negotiating mandate and short time frame for agreement at the WTO.
13. WWF called for an integrated and innovative approach to the negotiations, urging that the
fishery negotiations under the WTO treat environment and development as primary objectives. An
overly narrow focus on “trade distortions” would work against securing “win-win-win” outcomes.
WWF emphasized that some fishery subsidies can be positive from environmental and development
perspectives. The challenge is thus to separate “good” from “bad” subsidies in terms of their impact
on sustainable resource management and sustainable development. Recalling the cross reference to
the negotiations on fisheries subsidies (paragraph 28 of the Rules section) under paragraph 31 of the
Trade and Environment section of the Doha Ministerial Declaration, the need for more transparency
was also underscored by WWF.
14. In the following discussion, it was recommended that future activities in advancing toward
international agreement on reforms of trade-related aspects of fisheries management policies should
be based on enhanced collaboration between releva nt international institutions, such as the FAO,
OECD, WTO, UNEP and the regional fisheries management organizations, in accordance with their
relevant mandates, ongoing work programmes and expertise.
V. ADDRESSING KEY CONCERNS
A. WORKING DEFINITION OF THE TERM “SUBSIDY ” IN THE FISHERY SECTOR
15. An important aspect of sustainable fisheries management is the issue of fisheries subsidies.
Reaching an agreement on a working definition of “subsidies” is a necessary step toward disciplining
them for both environmental and trade purposes.  The workshop discussion highlighted the following
considerations relating to the term “subsidy”:
• It is necessary to identify ways in which gove rnments can provide more transparent information
on the financial transfers they provide to the fisheries sector. WTO notification of subsidies isvery patchy and incomplete, for both developed and developing countries. This is in part due to
the absence of a clear definition of subsidies. Agreement on a working definition would improve
transparency of subsidies by clarifying what categories of subsidies governments must report on.
• The possibility of using the existing definition of “subsidy“ in the WTO Agreement on Subsidies
and Countervailing Measures (SCM) was discussed.  The SCM Agreement defines a subsidy in
specific terms as a "financial contribution provided by, or at the direction of, a government" that
confers a "benefit" (WTO, 1995).  It further specifies that, in order to be considered a subsidy,
such a contribution has to involve one of the following: (i) direct transfer of funds or potential
direct transfer of funds or liabilities; (ii) forgone or uncollected revenues that would otherwise be
owed the government; (iii) provision of a good or service to a firm or industry other than generalinfrastructure; or (iv) any type of income or price support.
• Despite limitations of the existing definition, some participants suggested establishing sector-
specific clarifications on this definition, e.g. by including indirect but explicit subsidies. Others
felt that it will be difficult to establish such a clarification and referred to the failure at the
Uruguay Round to reach a plurilateral agreement on sectoral definitions of subsidies. The focus
should, however, be on subsidies that are identifiable. The options to include in the definition, the
failure to charge the costs of fisheries management services to the fishing industry, or the failure
by governments to enforce adequately sustainable fishing practices were considered by themajority of participants to be impractical.WT/CTE/W/205
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B. LINKAGES BETWEEN SUBSIDIES , CONDITIONS OF MANAGEMENT AND FISH STOCKS
16. Appropriate criteria and methodologies for establishing linkages between subsidies,
overcapacity and overfishing are necessary to determine which subsidies are harmful to fisheries
resources and which are not. There is general agreement on the importance of establishing a
categorization of subsidies that reflects differences in their effects, taking into account that somegovernment support measures can have positive social impacts. The following considerations
regarding linkages were discussed:
• There is benefit in establishing parameters that include whether the fishery is open access,
whether property rights have been allocated to fishers and the type of catch control that exists.The theoretical framework presented by the OECD Secretariat analyses the effects of trade and
market measures according to the type of management regime on the resource supply.
• It was emphasized that subsidies are not the only cause of overfishing. Appropriate fisheries
management regimes are also necessary to address this problem.
• Some participants expressed the view that explicit but indirect subsidies are often embedded in
international fishing agreements which provide financial compensation for access of distant water
fishing fleets of the country. Analysis of such agreements suggests that they could encourage and
facilitate overfishing in the waters of developing countries. These subsidies are among those that
might be prioritised for reform by the international community.
• Whereas identifying the linkages between subsidies, management and fish stocks will provide
valuable general information, case-by-case approaches will be required in order to develop
applicable local solutions.
• The difficulty of disentangling the impacts of subsidies and the impacts of management
conditions, especially for an open-access resource, was highlighted. Questions were raised on theneed to, and the feasibility of, quantifying the effects of subsidies, as there is already quite
conclusive research indicating that there are negative impacts that need to be addressed. More
work should go into policy application questions rather than technical methodological work.
• It was emphasized that the discussion on fishery subsidies should not be limited to the
negotiations in the WTO. Membership of, and compliance with, international and regional
fisheries management agreements are equally important.
C. S
PECIAL TREATMENT OF DEVELOPING COUNTRIES
17. The particular conditions, needs and priorities of developing countries, and small-scale
fisheries within them, must be taken into account in policy development.  The following issues were
addressed regarding special treatment of developing countries:
• Developing countries, and especially LDCs, need to be given special treatment with regard to
subsidy reduction or elimination. This could take the form of allowing a multi-year phase outperiod for developing countries and a temporary a nd/or conditional exemption from disciplines on
certain types of fisheries subsidies.
• It is important to distinguish between those fisheries and sectors that already suffer from
overcapacity and those that could sustain greater exploitation. Developing countries with fishing
zones having still under-exploited fish stocks should be exempt from disciplines on fisheriessubsidies that contribute to overcapacity, as long as the necessary policies for sustainable
management and regular review of such exemptions are in place.WT/CTE/W/205
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• Certain types of subsidies in developing countries to small-scale, inshore or artisanal fishing fleets
should be permitted.  Subsidies oriented towards health, safety, food security and environmentalobjectives of local communities in developing countries can make important contributions to their
attaining social objectives and sustainable development more generally.
• Programmes of capacity building for developing countries, in particular for artisanal fishing,
would be very useful. Too often local fishing communities are both unaware of efficient practices
as well as established  “codes of conduct”.
• A redirection of those financial support measures that lead to over-exploitation of fish stocks in
developed countries towards fisheries infrastructure in developing countries, and especiallyLDCs, could enable them to exploit their valuable marine resources in a sustainable way.
• Donor funds must also be more closely tracked to ensure that they are appropriately channelled to
enhance capacity for the sustainable management of fisheries, including better fishing practices,marketing, processing and complementary associated industries.
D. O
THER TRADE -RELATED ISSUES
18. Trade liberalization could result in overfish ing if inefficient or ineffective fisheries
management systems are in place.  Regarding this issue, the following considerations were made:
• Addressing fisheries subsidies was emphasized as an area that could yield “win-win-win”
scenarios (for trade, environment and development).
• It was emphasized that a holistic, integrated approach should be adopted in assessing the impacts
of current policies of trade and fishing agreements on fisheries.
• There is a need to consider the local impacts of trade liberalization on developing countries and
their national producers, which are frequently unable to compete in international markets and to
better understand and recognize the effects of international trade and other macroeconomic
factors, e.g. exchange rates, on fishers. It was emphasized that the benefits of trade accrue often to
exporters and are not always passed on to fishers.
• Improved access of developing country processed fish products to developed country markets
would contribute to the conservation of resources, reducing spoilage and waste of fresh fish
products.
• While great value is derived from individual country studies, there remains a need to understand
them in a global context taking into account varying levels of welfare and development.
• It was suggested that sustainable fisheries management and subsidies issues should also be looked
at through the frameworks of multilateral environmental agreements, e.g. CITES.
VI. OPTIONS TO MOVE FORWARD
19. Policy reforms should integrate environmental, social, economic and trade objectives to
ensure long-term sustainability of entire fisheries resources and marine ecosystems, while minimizing
negative social and economic impacts.
20. The Fourth WTO Ministerial Conference held in Doha in November 2001 gave new impetus
to this discussion by agreeing to clarify and improve disciplines on fisheries subsidies in the new
round of negotiations. It is however important to recognize that the discussion and negotiations willWT/CTE/W/205
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benefit from the processes in other fora, including FAO, OECD and UNEP, as well as work of NGOs
and civil society.
21. It was generally agreed that UNEP’s workshops provided an important forum to discuss trade
and subsidies, and their environmental, economic and social effects, while also offering policy
recommendations that together could provide input into intergovernmental discussions. UNEP wasencouraged to continue such work.
22. Further work addressing the linkages between tr ade, fisheries subsidies and fisheries resource
sustainability would be useful to guide progress towards a potential reform of fisheries policies world-
wide.
23. It was suggested to bring in WTO officials responsible for administering the SCM Agreement
together with fishery economists and environmental and social scientists to discuss, in particular,
definitional difficulties with fishery subsidies. Regional work, bringing together trade negotiators toform positions on fisheries, was also proposed.  In regard to trade-related issues in sustainable
fisheries management, including fisheries subsidies, the need for further country studies and best-
practice documents for impact assessments and development of policy packages was highlighted.
24. It was suggested that future studies in the fisheries sector should prioritise subsidies that are
applied to open-access, unregulated and/or over-exploited fish stocks, which are considered to bemore susceptible to negative effects from fisheries subsidies and have a clear effect on trade,
resources supplies as well as the social and environmental side.
25. Future work, in both the form of case studies an d further analytical work, will need to address
the experiences of communities dependent on artisanal fishing, which in many countries are crucial
elements of the local economy and culture, and have achieved sustainability.  Differences betweensubsidies that have clear negative impacts on trade and sustainability and those that provide for local
livelihoods and possibly have positive environmental and social impacts need to be clearly
recognized.  An international forum or workshop focusing on formulating international policy for
fisheries subsidy reform in developing countries would be helpful.
VII. FINAL REMARKS
26. The Chairman explained that despite the obvious relevance of the topic, UNEP does not have
observer status in the WTO General Council, or to the Special Sessions of the WTO Rules
Negotiating Group, in which negotiations on fishery subsidies are taking place. He also raised the
issue of additional funding that will be required if UNEP is to continue its work on fishery subsidies.
27. The meeting concluded with an expression of thanks to all participants and by acknowledging
the financial support of the Packard Foundation and the Japan Seafood Import Consultative Group,
which also enabled broader developing country participation in the meeting.
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