China faces big decision on WTO reform deal

The pressure is on this month as negotiators seek to find common ground and to advance the cause of a World Trade Organization agreement on fishery subsidies by the end of the year. 

The WTO Director-General Roberto Azevêdo has said subsidies by member states for fuel have contributed to overfishing, and illegal and unregulated fishing. He called it "one of the important issues of our time.” 

An estimated USD 20 billion (EUR 17.8 billion) is paid out annually to subsidize the cost of fuel that allows vessels to operate thousands of miles from home. The bulk of the subsidies are paid out by a handful of nations, and around 85 percent of the figure goes to large-scale industrial fleets, rather than smaller near-shore artisanal fisheries. 

The pressure was ramped up in 2015 when all United Nations member states agreed Sustainable Development Goal 14.6 to eliminate or prohibit harmful fishery subsidies by 2020. The goal was a priority for developing countries depending on the sea for protein.

There are some reasons for optimism – the WTO director general told a WTO plenary in February that progress had been made in the negotiations among the technocrats. But he said now is time for high-level political commitment to get the deal done. 

While there may be commitment to a deal, there are many interpretations of what a deal could look like. The lines appear to be drawn between developing nations (who make up the bulk of the major fishery nations both in terms of catch volume and subsidies paid) who want concessions and between nations keen for a deal that cuts subsidies.

India, for instance, wants “differential treatment” as a developing country that allows it to continue supports to small-scale domestic fisheries. For its part, China has been remarkably quiet in publicizing its position internationally. At home, there’s been minimal public debate or reportage. 

It’s difficult to find coherent sets of figures for China’s national subsidies paid to its fleet, as it requires culling a patchwork of regional reports with obfuscating and confusing ranges of codings and categories, as well as incomplete data-sets. But what China does say about subsidies and overfishing is just as confusing. There has been very little talk in China to prepare fishery firms for a phase-out of subsidies for distant-water vessels. Rather, the talk has been of expansion and of overhauling and modernizing vessels.

Yes, China has stated it will cap the size of its fleet at 3,000 vessels – hence it has 500 more to add – but hasn’t stated what this means in tonnage and capacity terms. 

President Xi Jinping and his top officials talk about a battle for conservation and rehabilitation of Chinese waterways and shorelines. Yet at the same time, they present a huge enthusiasm for expansion of the country’s distant-water fishing efforts.  “Overseas bases” and “cooperation” have become buzzwords for leading officials who promote the fisheries sector at national and regional level. The government openly supports Chinese fishing companies who have built bases in Africa, the Indian Ocean, and the Pacific and operated out of those bases, landing and processing their catch.

That’s already happening in Mauritania, Ghana, and Fiji, with similar deals in the offing with other nations. Bureaucrats from Papua New Guinea recently visited Fujian, China, to visit leading international fishery firm Hong Dong to discuss such a base. 

Meanwhile, the boss of Hong Dong reminded delegates and the press on the sidelines of the annual National People’s Congress that president Xi Jinping had masterminded the internationalization of the Fujian fishing fleet when he served as regional Communist Party boss earlier in his career. 

That suggests continued political support for China’s (subsidized) distant-water fleet despite the increasing signs that it has reached its sustainable limit. 

There are key questions that need answering as to how a new WTO deal on fishery subsidies would play in practice. 

China’s stated strategy is to move much of its aquaculture and fishery operations to other developing countries in Africa and South Asia. Does that mean that China’s catch will be counted under other nation’s flags or quotas, given many of its fishing firms are de facto African enterprises, even if profits (and often catches) are remitted back to China? 

How will new WTO rules be applied if China’s goal is to internationalize its fishing fleet with flaggings and ownership based in countries which in many cases aren’t members of the WTO?

Will the serious overcapacity in the global fishing fleet be eliminated if much of the capacity is shifted “off the books” to smaller developing nations with much slacker laws or lesser enforcement of laws on conservation?

China is keen to restore and regulate its own waterways and seas, and to be credited with becoming a more environmentally responsible nation. But while it has set a much higher standard for regulation of its own waters, it thus far has not treated the fish stocks and marine environments in Africa or the Pacific Islands as worthy of the same protection. The country often says it is “abiding by local laws,” but that means little in many cases, with local laws non-existent or inadequate in protecting fisheries and their environments. 

The Chinese fishery sector has no rational independent industry voice to speak for the country’s fisheries companies and seafood sector. There are no debates on the financial repercussions of a WTO deal. The industry bodies that do exist are funded and sponsored by the state. 

It remains to be seen whether China’s negotiators will be bringing to the WTO negotiations the kind of zeal for sustainability that they’ve been showing at home recently, but if they do, it would represent a significant shift in approach to its national seafood industry and its global environmental responsibilities.


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