WTO deal offers lifeline to marine fisheries development in BD

| Updated: January 10, 2023 21:18:34

WTO deal offers lifeline to marine fisheries development in BD

Marine overfishing is a crucial issue around the world. Overfishing can ultimately reduce global fish production if higher reproduction rates are not in place. Thus the contribution of this sector to global food and nutrition security may be seriously affected.

Overfishing occurs due to providing some harmful subsidies to lower the cost of fishing operations which encourage illegal, unreported, & unregulated (IUU) fishing, and fishing in high seas (the open ocean, especially that not within any country's jurisdiction).

Following several years of talks at different World Trade Organisation (WTO) Ministerial Conferences (MCs), the UN General Assembly (2015) provided an additional impetus for the elimination of harmful subsidies taking into account the importance of this sector to development priorities, poverty reduction, and food security concerns for developing and least-developed countries (LDCs). Despite intense negotiations, members were unable to reach an Agreement at the 11th WTO MC in 2017. Instead, ministers mandated prolonged discussions based on emerging consolidated texts and set a deadline for the talks to be completed by the next MC. Finally, after huge textual proposals, in 2022 at the 12th MC, for the first time, WTO reached at a multilateral Agreement providing new rules and prohibitions on some harmful fisheries subsidies. But as a special and differential treatment (S&DT), developing and least-developed countries will be exempted for two years. The key provisions of the Agreement are as follows:

The first one is the prohibition on subsidy to a vessel or operator engaged in illegal, unreported, and unregulated (IUU) fishing or fishing-related activities mentioned in Article 3. The second, mentioned in article 4, prohibits subsidies for fishing or fishing-related activities regarding overfished stocks, and the third one mentioned in article 5, states that WTO members shall not grant or maintain any subsidy for fishing in the unregulated high seas.

Now, the question is how an LDC like Bangladesh will be benefited or be hampered by the WTO fisheries subsidies Agreement.

Before investigating we need a brief understanding of the fisheries sector in Bangladesh. Fisheries and aquaculture play a key role in the economy of Bangladesh directly and indirectly by reducing poverty and improving livelihoods and contributing to food security, employment, and economic empowerment. It contributes 3.57 per cent to GDP, accounting for 26.50 per cent of agricultural GDP, and 12 per cent of national employment. According to the Department of Fisheries (DoF), the fisheries sector is divided into three sub-groups-- inland aquaculture, inland capture, and marine capture. Marine aquaculture is underdeveloped in Bangladesh. Marine capture currently contributes only 15 per cent of the total fish production in Bangladesh and 1 per cent of the total world marine production, which is far behind the other top-producing countries (Figure 1).

Marine Policy-- an international peer-reviewed leading journal on ocean policy published several studies on fisheries subsidies which show that the top-producing countries have allegedly reached their level by enjoying subsidies (see Figure 2) on fuel cost, vessel construction, illegal and unregulated vessels, and price support to keep market prices artificially high.

On the other hand, insufficient subsidies in Bangladesh are not capable to purchase modern technologies (i.e., modern fleets, boats, and trawlers) that can sustainably harvest a lot from the Exclusive Economic Zone (EEZ) and high sea. It is evident from Figure 2 that the government of Bangladesh provides no special assistance to the sector (only 161 million dollars).

In Bangladesh, the only tangible incentive provided to the sector is a value-added tax refund from fuel at a rate of 15 per cent  per liter or US$ 0.04, following fish export (based on 1998 diesel prices of taka 12.67 per litre). The sector benefits from general export-industry incentives such as duty-free import of capital machinery and raw materials, fiscal incentives for export, income tax rebates, expedited customs clearance, and subsidised credit.

The WTO Agreement puts an embargo on some harmful fisheries subsidies such as illegal, unreported, and unregulated (IUU), fishing or fishing-related activities involving an overfished stock, and fishing in high seas that will decrease the more subsidised country's production tremendously. As a result, they will not be capable to meet the import demand for fish and fishery products. As for Bangladesh, under the S&DT provision of WTO, the country is allowed to continue subsidies up to 200 nautical miles for the next two years under an EEZ. This opportunity should be seized by Bangladesh, particularly in the case of industrial fishing (large-scale commercial fishing). Because Bangladesh is far behind in industrial fishing (17 per cent of total marine production) than artisanal (small-scale traditional fishing) fishing (83 per cent of total marine production).

That is to say, there is a huge scope to explore industrial fishing in Bangladesh. More fish could be harvested sustainably if the Bangladesh government provides more subsidies on fuel costs, boats, and fleets that are capable of fishing from the EEZ and high seas, as in other countries.

If we can do it, contribution of marine fisheries will be enhanced in the country's total production. No doubt, Bangladesh will be capable of earning more foreign currency than it earns currently ($405.21million) from exporting quality fish and fishery products (frozen fish, frozen shrimp, chilled fish, dried fish, and salted fish), mostly to the EU markets. 

However, the concern is that subsidies can be given for only two years as a special and differential treatment. Therefore, something different, such as non-subsidised measures (e.g., low-cost loans, duty-free import of marine fishing trawlers etc.) need to be taken. 

The writer is Senior Research Associate, Policy Research Institute of Bangladesh (PRI). [email protected]



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