CANADA: paper of 1998 with some "prophecies" on WTO negotiations on fisheries subsidies

Scientific and academic research on fisheries subsidies is one of the areas that are of special relevance for the ongoing negotiations on fisheries subsidies at the WTO. Literature on that subject is not exuberantly abundant but with the inclusion of these subsidies under the "Rules" chapter of the WTO Doha negotiations has contributed to the their attractiveness as object of academic and scientific work. Though, there was life before the launch of the Doha Round in November 2001.

Here is an example of work of academia on fisheries subsidies prior to 2001. It concerns an article published by Gorazd Ruseski in the Journal of Environmental Economics and Management (Volume 36, Issue 1, July 1998) titled "International Fish Wars: The Strategic Roles for Fleet Licensing and Effort Subsidies" . I quote here from the conclusions of the article:

The effort subsidy and fleet licensing models developed in this article depend on the credibility of the strategic choices made by countries. Widespread evidence of excessive subsidization and licensing of large fleets makes it clear that these commitments are credible indeed. However, as discussed in a report prepared by the New Zealand Fishing Industry Board [20, p. 41], it is relatively much easier to consider subsidies as a strategic policy used to help a fishing industry, as opposed to other industries, because “The call for subsidies to the fishing community in North America (much of which is seen as a form of ‘disaster relief’) seems to engender an emotional response within the population and to be acceptable to both state and federal politicians.” Also, Shrank [22] note that many countries are unwilling to reduce the sizes of their fishing fleets, because fisheries are often thought of as an “employer of last resort” in many small coastal communities that depend on them.

20. Seafood Trade Access Study, N. Z. FIB, Wellington (1996).
22. W. E. Shrank, N. Roy, R. Ommer and B. Skoda, An inshore fishery: a commercially viable industry or an employer of last resort?. Ocean Develop. Internat. Law 23 (1992), pp. 335–367.

This paragraph is remarkable as it contains a number of elements directly pointing to what is now happening in the WTO negotiations:

1. The reference to New Zealand's industry report on "Seafood Trade Access" of 1996. Note that it is as early as 1997 that New Zealand started making submissions at the WTO on fisheries subsidies.

2. The notion of "disaster relief", which is being used (following a submission by the U.S.) in the draft negotiating text issued by the Chair in November 2007.

3. The quotation from a paper from Shrank in which he notes that many governments consider fisheries as an “employer of last resort” in many small coastal communities that depend on them. This seems to reverberate in the negotiations when discussing the need for more flexible disciplines for "artisanal - samll-scale - subsistance" fisheries.

As a final comment I would like to underline that Gorazd Ruseski is one of the offcials that testified in one of the hearings at the Canadian Parliament on the ongoing WTO negotiations on fisheries subsidies.

INDIA: subsidies to artisanal fisheries (2)

Plowing through news items on fisheries subsidies I came across an article published in “The Times of India” on 5 April 2009 titled 'Sea could become watery grave for fishing'.

The article is about the effects that an uncontrolled growth of the fishing can have on the sustainability of the industry. I quote a few extracts:

Scientists warn that the fishing industry in India faces a crisis, caused by overfishing. Around 4,000 trawlers prowl the coast off Maharashtra, their metallic jaws scraping the bottom of the seabed and destroying marine habitat.

"Costs are spiralling but the returns continue to diminish,'' says Moreshwar Patil of the Maharashtra Machhimar Kruti Samiti whose boats sail from Cuffe Parade. "Despite the diesel subsidy we receive, each week-long fishing trip can cost a large trawler up to Rs 1 lakh.'' The Kolis now venture further out and remain in mid-sea for a much longer period to catch a fraction of the fish they did in the 80s.

And the article ends as follows:

"Cheap diesel and loans to purchase trawlers only encourage more people to exploit the wealth of the sea. Subsidies may seem attractive in the short term but they could empty the ocean of fish,''

Here is the link to the article:
http://timesofindia.indiatimes.com/Mumbai/Sea-could-become-watery-grave-for-fishing/articleshow/4363329.cms

INDIA: artisanal fisheries and subsidies

As those familiar with the ongoing WTO fisheries subsidies negotiations know “artisanal fisheries” are one of the most contentious and debated issues in the negotiations.

Some WTO Members have been very vocal in asking for broad exemptions to the so called artisanal fisheries. In particular India (with the support of China and Indonesia) have been making submissions to ensure that what they consider as “artisanal” or small-scale or subsistence fisheries is not subject to any new rule on subsidies for the fisheries sector.

India’s submission (TN/RL/W/203 of 6 March 2006) sets out what artisanal fisheries should cover:

“Based on the broad elements that have been advanced by international rganizations such as FAO, the World Bank, Asian Development Bank and ICCAT and Members’ submissions thus far, India believes that the common characteristics for developing an understanding of small-scale, artisanal fisheries may be based on a recognition of the following:

• They are traditional fisheries involving fishing households or small groups of fishworkers.


• The fishing vessel could vary from gleaning or a one-man canoe to up to 20 m, including trawlers, seiners or long-liners.


• They use relatively small fishing vessels, which may be non-motorized or use small out board engines (say up to 10 bhp).


• The fishing is confined to close to the shoreline.


• Use of fishing gear such as beach seine and gill nets, hook and line, and traps.


• Use of labour-intensive technologies.


• Artisanal fisheries can be both subsistence or commercial, providing for local consumption or export as well.”

At the same time other WTO Members insist very much on the fact that “no blank check” should be given to developing countries in the name of “artisanal fisheries”. This has been was clearly stated by a number of countries, developed and developing, throughout the negotiations. As an illustration I quote from a submission by Australia, New Zealand and the U.S. tabled as a reaction to another submission by India, China and Indonesia.

“Developing countries have seen first hand how uncontrolled fishing in their coastal waters can lead to stock depletion and threats to livelihoods, and how subsidies have distorted production and trade patterns. Thus, there is general consensus that there should be no "blank check" to develop fisheries in a way that undermines their long-term sustainability.”

In another submission (TN/RL/W/234 of 17 July 2008) by Argentina, Chile, Colombia,Ecuador, Mexico and Peru also stated that flexibilites for developing countries in the context of Specal and Differential Treatment are not tantamount to a "blank check":

In Hong Kong, our Ministers recognized the importance of the fisheries sector for development priorities, poverty reduction, and livelihood and food security concerns. If well managed, fishing can continue to be a significant source of food and income for a large part of the population in developing countries, as well as an instrument for reorientation from less productive activities. That is why a central element of future disciplines will be the flexibilities given to developing countries to support fishing activities. However, scientific information on the status of marine resources and countries' own experiences in the exploitation of fishery resources show that such flexibility cannot be a blank cheque.

BLOG: features added to this blog

You will notice that the blog includes now a number of new “gadgets”.

To make the blog more lively there are now a couple of “feeds”. One is from the blog “WorldTradeLaw.net” and shows the five first headlines of its news page. The other new gadgets are feeds from international academic journals specialising in international trade issues.

CANADA: Parliament and subsidies negotiations at the WTO

The Standing Committee on Fisheries and Oceans of the Canadian House of Commons has conducted a number of hearings on the negotiations at the WTO regarding subsidies to the fishing industry.

Lawmakers heard evidence from Canadian negotiators, academia and from the Minister in charge of International Trade.

The hearings took place on June 10, March 6 and February 28 and 26 2008.

At the February 28 hearing the Committee invited Dr. Marc Bénitah, Professor, Université du Québec à Rimouski, an expert in international trade law, and Dr. Rashid Sumaila, Professor, University of British Columbia, who has published numerous works on fisheries subsidies.

Hereunder is the link to the webpage of the Standing Committee on Fisheries and Oceans with the hearings. Please note that for some of the hearings you can listen to the recorded version of the meeting:

http://www2.parl.gc.ca/committeebusiness/CommitteeMeetings.aspx?Cmte=FOPO&Language=E&Mode=1&Parl=39&Ses=2

CANADA : subsidies for lobster fishermen

Lobster fishermen in Prince Edward Island are facing very depressed prices for their produce. The situation is so serious that politicians in that Canadian province, but also at federal level, are scrambling to help fishermen wheather the storm.

According to the Canadian media the plan, worked out by the Province government looks as follows:

- Province will buy surplus canners (lobster one pound and under) for storage and later sale.
- Province will extend low-interest loan plan.
- Joint federal-provincial marketing promotion worth CAD 4 million (USD 3.5 million).
- Changes to Employment Insurance rules.
- Reduction in number of lobster licences by way of a buy-back programme.

The Provincial authorities are putting CAD 8 million (USD 7 million) into the plan, but it needs agreement from the federal government for changes to the Employment Insurance program for fishermen, to allow buyback of lobster licences and take part in a jointly funded marketing promotion.

Here is the link to the CBC's website giving the news:

http://www.cbc.ca/canada/prince-edward-island/story/2009/05/14/pei-lobster-plan.html

Interesting to note is that the Federal Fisheries Minister, Ms Gail Shea, was very reluctant to provide federal support to lobster fishermen ("no federal price subsidies, no federal buying of lobster"). She was also quoted as saying that "providing Maritimes lobster fishermen with subsidies in this time of low prices would violate Canada's trade agreement with the United States".

And the links on Minister Shea's statements:

http://www.cbc.ca/canada/prince-edward-island/story/2009/05/06/pei-lobster-shea.html

http://www.cbc.ca/canada/new-brunswick/story/2009/05/17/nb-lobster-crisis.html

WTO: Director General Pascal Lamy on Fisheries Subsidies (4) in New Zealand!

Here is an extract from another speech that Director General Lamy gave in New Zealand (the champion of the "Friends of Fish"). Fisheries subsdies could not possibly be left out, as one of the main reason to conclude the Doha Round.

As an island nation with important marine resources, New Zealand is very active in working for stronger disciplines on fisheries subsidies, an area where economic and environmental concerns can be clearly complementary. Here too the WTO negotiations provide the only effective means of securing legally enforceable international agreement. This is another important New Zealand -and global — interest that would be threatened by failure to conclude the Round.

The speech was delivered on 6 March 2009 to the Auckland Chamber of Commerce. Also note that the extract concerns the "prepared text" as mentioned in the WTO website. Here is the link to the text:

http://www.wto.org/english/news_e/sppl_e/sppl120_e.htm

WTO: fisheries subsidies negotiations at the 2009 Forum of the North American Association of Fisheries Economists (2)

Going once more through the programme of this conference I noticed that another session of the conference included a presentation of a paper related to fisheries subsidies.


Here is the session:

Wednesday, May 20 10:30 am – 11:30 am
Bioeconomic Modeling II
Chair: Emi Uchida
Patricia Arceo and Bianka Perez-Saavedra, Effects of Subsidies in the Multispecies Fisheries off Veracruz, México: a Conceptual Model
Naomi Foley, Viktoria Kahui and Claire Armstrong, The Production Function Approach – Estimating Linkages between Redfish and Cold Water Coral on the Norwegian Coast
Monica Galligan, A Computable General Equilibrium Model to Illustrate Economic Effects Of Fishery Conservation and Management Measures
Min-Yang Lee and Richard Brazee, The Effects of Rigidity and Limited Information on Optimal Fisheries Policy

NORWAY: still more subsidies for (cod?) fishermen

In what seems to be a subsidy spree, the Norwegian Fisheries and Coastal Affairs Minister, Ms Helga Pedersen, announced on 15 May 2009 an additional subsidy of NOK 19 million (USD 3 million) for the transport and the marketing of Norwegian fish products.

It appears that this move has been promted by the very bad situation of the market for cod products in Norway.

The official press release can be found here:

http://www.regjeringen.no/nb/dep/fkd/pressesenter/pressemeldinger/2009/19-millioner-til-foringstilskudd-og-mark.html?id=561949

WTO: fisheries subsidies negotiations at the 2009 Forum of the North American Association of Fisheries Economists

You have noticed that one of the economist's associations with a link in my blog is NAAFE, the North American Association of Fisheries Economists.

This association will be holding its fifth biennal forum from 17 to May 2009 in Newport, Rhode Island.

One of the special sessions will be devoted to the ongoing negotiations on fisheries subsidies at the WTO. Courtney Sakai, from Oceana, will chair the session. Here is the detail:

Tuesday, May 19, 3:30 pm – 5:00 pm:
Special Session: Key Questions on the Road to a WTO agreement
Chair: Courtney Sakai
Introduction describing the current state of talks on fisheries subsidies at the WTO, including the issues and questions raised by the WTO Chair. Panelists will discuss their recent work and respond to these issues and questions.
Courtney Sakai, Senior Campaign Director, Oceana
Leslie Delagran, Economist, Oceana
Anthony Cox, Senior Economist, Fisheries Policy Division, OECD
Rashid Sumaila, Director of the Fisheries Economics Research Unit, Fisheries Centre, University of British Columbia
Anthony Charles, St. Mary’s University, Halifax


Here is the link to the conference:

http://www.uri.edu/meeturi/naafe/index.html

NORWAY: government guarantees for credits to the fishing indusry

In a previous post (2 February 2009) I was referring to the fund that the Norwegian government had set-up through "Innovasjon Norge" to guarantee "first hand" sales of fish.

Now the Fisheries Minister, Ms Pedersen, is proposing to allocate between NOK 135 and 190 million to guarantee credits granted to individual companies in the fishing industry.

Here is the link to the official press release:

http://www.regjeringen.no/nb/dep/fkd/pressesenter/pressemeldinger/2009/forslag-om-garantiar-for-driftskreditt-t.html?id=560311

NORWAY: communal subsidies to aquaculture

Fish famers in North Norway are experiencing difficulties in getting the money needed to purchase licenses for farming salmon. The price for such a license is NOK 8 million, except in Finmark , where the price for a license is NOK 3 million (see my post of 30 November 2009).

In the commune of Ballanagen, the local authorities have decide to grant a “soft loan” (interest free) amounting to NOK 400.000 to Ballangen Sjøfarm. The reimbursement of the loan will start after two years after the payment to Ballangen Sjøfarm with 5 years to effect the reimbursement.

Here is a link to a press article on this (in Norwegian):

http://www.fremover.no/lokale_nyheter/article4270381.ece

USA: more subsidies for catfish farmers

The U.S. press is reporting about stimulus and recovery funds being provided to the embattled U.S. catfish fish farmers.

In the framework the American Recovery and Reinvestment Act of 2009, USD 50 million has been earmarked to subsidise aquaculture. Baitfish growers and catfish farmers are eligible if their 2008 feed costs were at least 25 percent of their total operating cost. They also are eligible if their feed costs are 25 percent above the average cost of feed from 2003-2007.

Here is a link to an article in the "Arkansas News":

http://arkansasnews.com/2009/05/06/stimulus-money-available-for-catfish-industry/

And here is a link to the Act (see Sec. 102. Agricultural Disaster Assistance Transition. (d) 2008 Aquaculture Assistance):

http://en.wikisource.org/wiki/American_Recovery_and_Reinvestment_Act_of_2009/Division_A/Title_I

WTO: Director General Pascal Lamy on Fisheries Subsidies (3)

Fisheries subsidies is becoming of the preferred marketing tools to promote the Doha Round. Director General Lamy is of those that mentions this negotiating subject as one of the main reasons why the Doha Round deserves to be concluded.

I copy here an extract of his speech, delivered to the Peterson Institute for International Economics in Washington D.C. on 24 April 2009.

"Let me be very frank with you: I have been puzzled by such comments. But many WTO members have been angered.

Take the African cotton producers who are awaiting the conclusion of the Doha Round to see cuts in trade distorting cotton subsidies. Or those who are awaiting the elimination of current export subsidies on dairy.

Take also the negotiations on climate-friendly goods and services which is part of the Doha Round. Here is a chapter with a huge economic but also job creating potential. The Obama administration has committed itself to reducing US greenhouse gas emissions and to making the United States a leader on climate change. A successful Doha Round could deliver a package of open markets for environmental goods and services. A more open trade in this sector will increase the availability, and lower the cost, of climate-friendly goods, services and technologies. This outcome would complement a much-needed climate change agreement at Copenhagen later this year.

Take also fishery subsidies where the Doha Round could create the first international agreement aimed at reducing wasteful government support for activities that deplete the world’s oceans of one of its vital resources.

Not to mention regional trade agreements or rules of origin, already there since the Tokyo Round, which are part of the Doha menu and which are often quoted by economic operators as necessitating clearer WTO rules."

What I miss in this speech is a reference to the fact that a number of WTO Members, albeit for different reasons, consider that new rules on anti-dumping (a subject under the "Rules" chapter) are also a key negotiating issue in the ongoing round.

Here are the links with Mr Lamy's speech:

http://www.wto.org/english/news_e/sppl_e/sppl122_e.htm

http://www.iie.com/events/event_detail.cfm?EventID=113