Fisheries, International Trade and Sustainable Development

Abstract

EXECUTIVE SUMMARY The Food and Agriculture Organization of the United Nations (FAO) estimates that 75 percent of fisheries is significantly depleted, over-exploited or fully exploited (FAO, 2004a). A number of factors have contributed to these trends. Poor fisheries management and inappropriately designed subsidies to fishing industries have been widely recognised as key drivers of over-exploitation of fisheries resources by contributing to significant overcapacities of fishing fleets, particularly in developed countries. At the same time, the demand for fish and fishery products continues to rise. Consumption of fish has doubled since 1973 and production has soared accordingly to meet the burgeoning demand (Delgado et al., 2003). Developing countries account for a large part of both consumption and production, producing nearly three times as much fish as developed countries. Much of the growth has come from aquaculture production, which now accounts for almost a third of total production by weight (FAO, 2004a), while production from wild fisheries has slowed or stagnated despite growing investment in fishing capacity. As a result – and in contrast to most animal-origin foods – real prices of most fish and fishery products (not produced through aquaculture) have risen over the past 60 years. Fish are also one of the world’s most highly traded commodities. Almost 40 percent of fish output by value is traded internationally – primarily from developing to developed countries – with an export value of US$ 63 billion in 2003 (Emerson, 2005). Seafood is now one of the most traded commodities in the world (FAO, 2004a). In the developing world, exports of fishery products make up 20 percent of their agricultural and food-processing exports – more than tropical beverages, nuts, spices, cotton, sugar and confectionary combined (World Bank, 2004). Expected increases in prices for fish and fishery products could have potentially significant ramifications for the availability of fish for food use as well as fishmeal, which provides an important source of livestock feed in some countries. International fisheries trade can play an important role in the development strategies of many developing countries, and it is the cornerstone of many fishing communities throughout the world. For developing countries, the fisheries sector is a major source of export revenue, a key dietary input and an important provider of local livelihoods. Nearly a billion people worldwide depend on fish as their primary source of dietary protein (Schorr, 2004). Further, small-scale fisheries form a significant part of the fisheries sector (though their actual contribution to total capture fishery products remains difficult to estimate) (FAO, 2004b). In the past several decades, bilateral fisheries access agreements between developed and developing countries have emerged as a critical part of traderelations between developed and developing countries. While these agreements have the potential to help build capacities in developing countries and maintain fishing communities in developing countries, they can also fuel over-exploitation of fisheries resources in developing country national waters by distant water fleets that are provided access under the agreement while reducing the competitiveness of the local industry. The fisheries sectors in many of the poorest countries often face serious obstacles to expanding their participation in international trade and diversifying production and exports towards value-added processed products. These barriers include tariff escalation, stringent standards, countervailing measures and rules of origin requirements in export markets as well as domestic supply-side capacity constraints. In addition, fisheries subsidies in developed countries have contributed to market distortions, reducing developing countries’ ability to compete with subsidised fleets and often making it economically unviable for poor countries to build up their own fisheries industries. Trade liberalisation in the form of subsidy cuts and reduced tariff escalation may promote more efficient use of fisheries resources, reduce trade distortions, enhance market access for developing countries (particularly for processed fishery products) and thus increase incomes and employment opportunities. On the other hand, while some countries may gain from expanding fisheries trade, some portion of their populations, or other countries, may not reap any benefits, or indeed, may be made worse off. There are fishing communities that fear the impact of expanded trade on their livelihoods, culture, local development and food security. Alongside these considerations exists a debate about the environmental impacts of expanding fisheries trade. On the one hand, expanding international trade may further strain the sustainability of fish stocks and the marine environment where resources are not effectively managed or regulated. Moreover, some trade laws and policies may impede efforts to reduce pressures that drive overfishing. The global market does not currently contain feedback loops that ensure that environmental costs and sustainability concerns are recognised and internalised. There is, for example, no automatic mechanism within the trade system for constraining trade at points where it is clear that the scale of trade and production are out of proportion to the availability of the fisheries resources. Some argue that growth in aquaculture production and trade could mitigate some of the pressures on the resources and provide opportunities for expanding domestic industry. To be sustainable, however, the sector will need to address livelihood considerations, including the likelihood of market concentration at the expense of small-scale industries and the environmental impacts, such as pollution from aquaculture pens or the use of wild fish as fishmeal and oil for use as feed in aquaculture production. On the other hand, the opportunity to generate profits and foreign exchange from increased trade could be one way to focus the minds of some countries on the need to ensure sustainability as a way to safeguard long-term economic opportunities. In some instances, trade measures have been proposed as possible avenues to address some of the drivers of fish stock depletion, including the use of import controls, traceability systems and labelling schemes which take into account developing countries’ capacity constraints to implement and comply with such measures. Purpose and outline of this Policy Discussion Paper Fish stocks, the marine environment, and the fishing communities and industries that rely upon them, face unprecedented challenges. Despite the enormous economic and environmental issues at stake, the linkages between international trade, fisheries sustainability, environmental protection and socio-economic development remain poorly understood and inadequately addressed. At present, international discussions of the challenges that arise at the nexus of trade, fisheries and sustainability are spread across a vast array of international organisations, international and regional agreements on environment, trade and fisheries, regional fisheries management organisations and other international processes. This policy discussion paper identifies three broad public policy objectives relevant to policy-making in the fisheries sector: (i) profitability and the generation of export revenue; (ii) resource sustainability and environmental protection; and (iii) socioeconomic development, including employment, livelihood and food security and coastal development. When engaging in discussion of trade policy, it is vital that policy-makers recognise and address the interplay of these three sets of objectives. While opportunities for synergy may arise, there may also be times when compromise and trade-offs must be accepted. To advance towards better outcomes for sustainable development, this policy discussion paper aims to provide policy-makers, scientists, advocates, journalists and those engaged in the fishing industry with an overview of the key linkages, tensions and policy debates at the intersection of fisheries and international trade. The paper does not advocate a particular perspective or make recommendations; rather it endeavours to highlight different views and options for policy-making. It should be seen as a starting point for debate that provides a conceptual framework for further in-depth analysis on specific policy areas and how they should be addressed in particular country and fishery contexts. The paper proceeds in two parts. Organised around the three broad public policy objectives outlined above, Part One reviews the key economic, environmental and social factors that influence the management, harvest, production and trade of fisheries resources, calling attention to emerging trade trends and the precarious state of fisheries resources. Part Two reviews the key trade-related areas of international policy debate relevant to the fisheries sector: tariff liberalisation; safeguards and anti-dumping; standards and other non-tariff barriers; ecolabelling; subsidies; access agreements; and trade-related measures to promote fisheries management and environmental protection. Each of these chapters follows a similar format, identifying the policy issue at hand, the relevant background, the key policy debates and tensions, and the relevant international processes. The paper concludes with a summary of the linkages between trade policy issues and sustainable development priorities, and a set of proposals for further research.