Trade and fisheries subsidies

Abstract

World Trade Organization members included fishery subsidies in the Doha round of trade negotiations, which subsequently stalled. This paper develops a simple model to show why prospects for a deal on fisheries subsidies may be difficult. Typically international spillover effects create incentives among exporters to negotiate reductions in subsidies: one country's subsidy worsens other exporters' terms of trade. These incentives may not exist in fisheries for 3 reasons. First, if fisheries are severely depleted, one country's subsidy reduces its long run supply of fish, raising prices and benefiting other fish exporting countries. Second, if governments use other policies to manage fish stocks, then changes in subsidies may not affect harvests and hence may not generate international spillover effects. And third, even if governments were compelled to reduce fishery subsidies, there may be little real effect because governments would be motivated to weaken other regulations targeting the fish sector.

Ambitious subsidy reform by the WTO presents opportunities for ocean health restoration

“…When one country removes its subsidies, other countries benefit from the resulting stock recovery (Bayramoglu et al 2018). This is made apparent in our analysis presented above where a great deal of industrial fishing effort occurs outside of the flag nation's EEZ.…”

Fishery subsidies: the interaction between science and policy

“…In contrast to Ruseski (1998), Bayramoglu et al (2018) incorporate the Grossman-Helpman lobbying model in an international trade model to explain why it is difficult to remove domestic fishery subsidies. They provide three explanations for this.…”

SubsidyExplorer: A decision-support tool to improve our understanding of the ecological and economic effects of reforming fisheries subsidies

“…While delegates from each WTO Member country (“negotiators”) have identified a set of potential reforms to consider, negotiations have been hampered by the unwillingness of some Members to take actions that might negatively affect their respective fishing sectors. Fisheries are a sensitive issue for many countries because of their socio-economic (e.g., employment, production of food, maintenance of traditional livelihoods) and geopolitical (e.g., avoidance of conflict, regional influence) importance [ 7 , 8 ]. Uncertainty around which countries and fishing sectors would be affected by reforms and how big the effects would actually be has only exacerbated such insecurities.…”