Restriction over fisheries subsidies: What is the policy of Bangladesh?

The Commerce Ministers of WTO members in a meeting from 15 th July 2021 over draft agreement for withdrawal of subsidies on fishing with some few exceptions. Bangladesh's fisheries represent almost 7% of the world's inland fish production. The fisheries sector accounts for 4.4% of national Gross Domestic Product (GDP), contributes about 22% to the agricultural GDP, and slightly less than 3% to foreign exchange earnings through the export of fish products. About 1.4 million people have full-time employment in the fisheries sector, and another 12 million are employed part- time. The national policy of Bangladesh was hardly discussed over the WTO agreement to be concluded by end of this year at 12th Ministerial Conference in Switzerland. The negotiation is crucial for Bangladesh.

Fisheries are a crucial source of animal protein, livelihoods and export earnings as well as much-needed employment and income for many developing countries, including several least developed countries. Fish is not only an important part of 950 million people of world, also a source of employment for about 200 million people directly depending on ocean fishing for their livelihoods. Widespread overfishing is widely recognized as a growing threat to the sustainable management of the world's fisheries. This issue of fishery subsidies received heightened attention in international forums, including the Fourth WTO Ministerial meeting held in November 2001 in Doha.

At last after long discussion, on May 11, 2021, a draft agreement was made public--the first since 2007. However, the text remains negotiable and must be agreed to by all 164 ministers at talks on July 15. The forthcoming Ministerial Conference in Switzerland towards the end of the year will consider to have an agreement. The Chair of the WTO Ministerial Conference, 2021 (MC12) drafted a consolidated draft on May 11, 2021, on the fisheries subsidy's agreement (i.e., May Text), which is in online discussion by the trade ministers.
Fishers subsidies that contribute to overcapacity or overfishing include:(a) subsidies to construction, acquisition, modernisation, renovation or upgrading of vessels; (b) subsidies to the purchase of machines and equipment for vessels (including fishing gear and engine, fish-processing machinery, fish-finding technology, refrigerators, or machinery for sorting or cleaning fish); (c) subsidies to the purchase/costs of fuel, ice, or bait; (d) subsidies to costs of personnel, social charges, or insurance; (e) income support of vessels or operators or the workers they employ; (f) price support of fish caught; (g) subsidies to at-sea support; and (h) subsidies covering operating losses of vessels or fishing or fishing related activities.

The text primarily has three main pillars pertaining to the prohibition of subsidies for (a) Illegal, unreported and unregulated (IUU) fishing, (b) Overfished Stocks, and (c) Overcapacity and Overfishing and (d) several other crosscutting issues like provisions for LDCs, institutional mechanism, dispute settlement, etc. Additionally, there are general provisions for the Member countries that would allow them to continue fisheries subsidies if the countries can demonstrate that the subsidies are being used to maintain the biological sustainable level of fisheries stock.

IUU fishing refers to activities set out in the International Plan of Action to Prevent, Deter and Eliminate Illegal, Unreported and Unregulated Fishing adopted by the UN Food and Agriculture Organization (FAO) in 2001, where applicable, as implemented under national fisheries laws and regulations, or under relevant Regional Fisheries Management Organization or Arrangement (RFMO/A) management and conservation rules and procedures. Illegal, unreported and unregulated fishing threatens the sustainable management of marine resources, and represents about 20 per cent of annual catches. The first law of Bangladesh is The Territorial Waters and Maritime Zones Act 1974 (Act no XXVI of 1974) is law to regulate Territorial rights on waters and maritime zones. The marine fishery in Bangladesh does not receive any special benefit package from the government except subsidy of fuel.

The negotiations began in 2001, with vague aims of "clarifying and improving" existing rules on subsidies. However, no meaningful progress was made--except on defining fisheries subsidies--until efforts were reinvigorated in 2015, when the SDGs specifically targeted the elimination of harmful subsidies, through the conclusion of the WTO negotiations. The newly appointed Director General of WTO Ms Ngozi Okonjo-Iweala, an economist and former government minister in Nigeria, was appointed as WTO director-general in February 2021. She said she would 'unblock' languishing talks on curbing harmful fisheries subsidies.

The draft dealing with overfished stocks may have a greater impact. It is covering overcapacity and overfishing could truly end harmful fisheries subsidies. In its current state it includes a promising list of subsidy types to be prohibited. But it also includes a loophole that allows subsidies if measures are in place to keep stocks sustainable. It is unclear what measures would qualify or where the burden of proof would lie.

The most challenge of negotiation is consensus on IUU and overfished stocks, overcapacity and overfishing. The agreement hopefully will contain special treatment for developing nations. However, such exemptions must not be perpetual or extended to include industrial fisheries. And as even small subsidies can be harmful, developing nations must fund fleet development in ways that don't undermine sustainability.

The agreement must include new rules of monitoring and enforcement. Future battles will revolve around issues of transparent reporting and the measured effectiveness of the agreement. Moreover, some conservation-focused subsidies may still be beneficial. For example, subsidies may be used to restore depleted stocks by releasing cultured fish or to finance the adoption of more benign fishing methods.

It may be noted that the largest vessels receive the greatest share of the subsidies. Many of these vessels originate from rich countries but fish in the waters of poorer countries, transferring the risk of overfishing to those that can least afford it. One study estimates that a third of the subsidies provided by the largest fishing nations go towards fishing in other countries' waters.

The agreement will hopefully improve the monitoring, control and surveillance of fishing activity - both by domestic and foreign fleets - within their exclusive economic zone could help LDCs to implement an IUU subsidy rule more comprehensively. LDCs may also find it useful to establish the state of their most economically valuable fish stocks - using either data-intensive or data-poor methods. Then, where those stocks are overfished, determine how subsidies for the fleets that fish them could be reformed. These issues are sensitive and complex. A long-term sustainability is only achievable if all nations have autonomy over their resources. Currently many developing nations enter unfavourable agreements where rich nations catch fish that host nations are unable to. Subsidies may be necessary for some nations to develop their fisheries.

Marine capture fisheries currently account for about 20 per cent of the total fish production in Bangladesh. The remaining amount is inland capture and culture fisheries. Hopefully with greater certainty, aquaculture and inland fisheries are excluded from the scope of this instrument.

The WTO talks require a balance between appeasing the diverse interests of members and ensuring rules are effective and practical. The argument for stop of subsidy has three broad arguments support subsidies: to address social equity issues and conservation concerns, and to incentivize economic growth. Bangladesh may approve the draft with special provision for developing countries but keeping the aquaculture and inland fisheries out of preview of the agreement.
M S Siddiqui, Legal Economist