World Trade Organization Fisheries Subsidies Negotiations

World Trade Organization Fisheries Subsidies Negotiations

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Updated April 13, 2023
World Trade Organization Fisheries Subsidies Negotiations
On June 17, 2022, World Trade Organization (WTO)
2019, U.S. imports of fishery products totaled about 2.7
members finalized a limited agreement on long-running
million metric tons, valued at $22.2 billion. The United
negotiations aimed at curbing fisheries subsidies that lead to
States exported around 1.3 million metric tons, or $5.2
excess capacity and may contribute to overfishing (fishing
billion. The U.S. International Trade Commission estimated
at a rate that a species cannot replenish its population), and
that about $2.4 billion (or 11%) worth of U.S. seafood
those that support illegal, unreported, and unregulated
imports were products of IUU fishing in 2019.
(IUU) fishing. Subsidies are defined as a financial
contribution made by a government or any public body that
An empirical study estimated that around $35.4 billion in
confers a benefit, and are generally considered to be trade
subsidies were provided to fisheries globally in 2018.
distorting. They provide cost advantages to subsidized
Countries high on the U.N. Human Development Index
fisheries and disadvantage those unsubsidized.
(HDI) provided about 87% of total fisheries subsidies. It is
estimated that China, the European Union (EU), and the
The 2022 Agreement on Fisheries Subsidies prohibits
United States were the largest subsidizers (Figure 1).
subsidies to fisheries engaged in IUU fishing and fishing of
Indonesia, Vietnam, and Morocco were the largest
already overfished stocks. It does not address other key
subsidizing countries among low-HDI countries. About
issues laid out in the 2017 Ministerial Conference mandate
62.7% of global subsidies were capacity-enhancing.
(i.e., subsidies contributing to overcapacity and special and
Beneficial subsidies, which promote sustainable fisheries
differential treatment (SDT) for developing country
management, were roughly 29.9% of global subsidies.
members). The agreement would enter into force after two-
Ambiguous subsidies, which can be helpful or harmful,
thirds of WTO members ratify it. Members continue
were about 7.1%.
negotiations on outstanding issues in the run-up to the 13th
History of the Negotiations
Ministerial Conference (MC13, scheduled to be in February
2024). Notably, the new agreement includes a sunset
In the 1990s, multilateral organizations, such as the FAO,
provision and would automatically terminate if members
raised concerns about the economic and environmental
fail to agree on “comprehensive disciplines” within four
impact of fisheries subsidies contributing to overcapacity
years after entry into force. To date, four countries
and overfishing. Subsidies provide capital to fisheries to
(Seychelles, Singapore, Switzerland, and the United States)
expand fishing fleets and increase capacity to fish. Some
have formally accepted the agreement.
studies observed that subsidies lead to excess capacity in
fisheries, which may contribute to overfishing.
Global Fisheries Trade and Subsidies
In 2001, WTO members agreed to “clarify and improve
The United Nations’ (U.N.) Food and Agricultural
existing WTO disciplines on fisheries subsidies” in addition
Organization (FAO) estimated global total marine catches
to negotiating clarifications to the WTO Agreement on
to be about 84.4 million metric tons in 2018. The United
Subsidies and Countervailing Measures. The 2005 Hong
States was the fifth-largest producer of marine capture
Kong Declaration clarified goals of the negotiations,
seafood, producing roughly 4.7 million metric tons. In
specifically calling for the prohibition of certain subsidies.
Figure 1. Estimated Fisheries Subsidies, 2018 (in millions of U.S. $)

Source: CRS analysis of Sumaila et al., “Updated Estimates and Analysis of Global Fisheries Subsidies,” Marine Policy, vol. 109 (November 2019).
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World Trade Organization Fisheries Subsidies Negotiations
and establishment of SDT for developing country members.
relief). Some developing-country members argue that
Lack of consensus on certain issues (e.g., SDT provisions),
sustainability exceptions would disproportionately benefit
the general scope of prohibited subsidies, and the broader
developed economies who are already large subsidizers,
stalemate among members that impeded progress in the
such as the EU and the United States.
Doha round of trade talks reportedly slowed down
U.S. Position
negotiations from 2010-2015.
On April 11, 2023, the USTR signed the U.S. instrument of
The negotiations gained momentum after countries adopted
acceptance of the agreement, becoming the fourth WTO
the U.N. Sustainable Development Goals in 2015. Goal
member to do so. The U.S. Trade Representative (USTR)
14.6 aims to, among other things, prohibit subsidies
commended the agreement for its provisions prohibiting
contributing to overcapacity, overfishing, and IUU fishing.
subsidies that support the most harmful activities depleting
Recent Developments
fish stocks, as well as “robust transparency provisions.” The
USTR also committed to continuing negotiations on
On June 17, 2022, WTO members reached an agreement to
outstanding issues, including pursuing enhanced
prohibit certain fisheries subsidies and agreed to continue
transparency requirements with respect to forced labor. The
negotiations on outstanding issues, including long-debated
USTR previously submitted a proposal to the WTO that
disagreements on the extent of flexibilities offered in SDT
would address the use of forced labor on fishing vessels,
provisions and the scope of exceptions to certain subsidies.
which is often linked to IUU fishing. The proposal included
Key Provisions of the Agreement
(1) recognition of the use of forced labor on fishing vessels;
(2) rules on subsidies for fishing activities associated with
The Agreement on Fisheries Subsidies prohibits subsidies
the use of forced labor; and (3) reporting requirements for
contributing to (1) IUU fishing, (2) already overfished
members to notify the WTO of any vessels and operators
stocks, and (3) fishing and related activities located outside
suspected of forced labor. This proposal reflects the Biden
a member or regional fisheries management organization’s
Administration’s “worker-centric” trade policy agenda.
jurisdiction. It establishes a voluntary funding mechanism
Some WTO members, such as Canada and the EU, have
to provide technical assistance and capacity building to
expressed support for addressing forced labor.
developing country members and a Committee on Fisheries
Subsidies to implement the agreement. Members will also
With regard to SDT, the United States supports some
be required to adhere to notification and transparency
flexibilities for developing economies (including LDCs),
requirements. The commitments in the agreement are
but does not support broad and permanent exceptions in the
subject to the WTO dispute settlement process.
fisheries agreement. U.S. trade officials and some Members
of Congress have raised concerns that allowing member
Outstanding Issues
countries to self-designate as developing economies in the
WTO members disagreed on key areas in the negotiations
WTO provides unfair advantages, particularly for countries
leading up to the 2022 Ministerial Conference and much of
with large, more advanced economies, such as China, that
these remain outstanding. Members agreed to continue talks
may not warrant SDT flexibilities but continue to use them.
on such issues, and the entire agreement may hinge on the
conclusion of new disciplines within four years.
Outlook and Issues for Congress
The Agreement on Fisheries Subsidies is the first new
Special and Differential Treatment. Developing
multilateral deal successfully negotiated under the WTO
economies are afforded flexibilities to implementing their
since the 2013 Trade Facilitation Agreement. Though some
WTO commitments through SDT under WTO agreements.
environmental groups welcomed the agreement as a start in
Such flexibilities can include a longer implementation
curbing harmful subsidies, critics argued that it did not do
period, technical assistance and capacity building,
enough, specifically noting the absence of rules related to
exceptions, and special provisions for least-developed
overcapacity and overfishing. Some issues Congress may
country (LDC) members. SDT has been a major area of
consider before the agreement enters into force and
disagreement in the fisheries subsidies negotiations.
outstanding issues continue to be negotiated include
Members aim to address this issue by MC13. Although

WTO members generally agree that developing countries
USTR stated that the National Oceanic and Atmospheric
should be afforded some flexibility, some members,
Administration (NOAA) will be the lead agency in
including the U.S. argue that flexibilities should be more
making necessary administrative changes to existing
limited and targeted to the specific needs of the developing
U.S. programs to comply with the deal. How can
country, and should not contain permanent exceptions. On
Congress provide oversight of the implementation
the other hand, developing country members, such as India,
process? What role can Congress play in ongoing
support broader SDT provisions, arguing that more
negotiations at the WTO?
flexibilities are necessary to support low-income, resource-
 Did the WTO demonstrate its continued relevance as an
poor fishing industries in developing countries.
forum for countries to complete new multilateral trade
deals addressing global trade policy challenges?
Exceptions for Certain Subsidies. The agreement did not
 As WTO members continue to address outstanding
address subsidies that contribute to overcapacity and
issues, should the United States continue to pursue U.S.
overfishing and exceptions for certain subsidies. Some
negotiating priorities on forced labor and limiting SDT?
WTO members advocate limiting the exceptions to
subsidies, while others say that it should be expanded to
Liana Wong, Analyst in International Trade and Finance
include other nonsubsidy measures (e.g., tax incentives for
sustainable fisheries management programs and fuel tax
IF11929
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World Trade Organization Fisheries Subsidies Negotiations

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https://crsreports.congress.gov | IF11929 · VERSION 5 · UPDATED