12/12/2005 - While the spotlight is yet again falling on wrangles over agricultural subsidies, international trade negotiators are making quiet progress on another front: fishing subsidies.

Dealing with fishing subsidies is vital for eradicating poverty and delivering a more durable and stable environment. Many local people rely on fish for their livelihoods and as a key source of protein needed for health and well being. But, over-exploitation by foreign fishing fleets, fuelled by harmful subsidies, can drive these people into ever greater poverty as well as robbing the marine environment of a key link in the food chain upon which creatures like whales, dolphins and seals depend.

Fishing subsidies are contributing to an unprecedented crisis that is affecting the health of our oceans. It is estimated that more than three-quarters of the world’s fisheries are fished to their biological limits or beyond, with many marine ecosystems having been disrupted by the devastation of major species such as cod, tuna and swordfish. It is also estimated that 15% of small cetaceans such as dolphins and porpoises are at risk as a result of lack of food.

Fishermen, especially in developing countries, are also struggling, especially as bigger and more powerful foreign fleets access their waters and fish resources for the international market. With more than a billion people relying on fish as an important source of protein, and as many as 200 million dependent on fishing for their livelihoods, the exhaustion of the world’s fisheries is one of the defining environmental challenges of our time.

The causes of overfishing are complex. But harmful subsidies are a real part of the problem. The best available information indicates that fishing subsidies top US$15 billion per year — roughly 20% of fishing industry revenue worldwide. Many of these subsidies contribute to excess fishing capacity, overfishing, and illegal fishing activities.

The elimination of harmful subsidies was identified at the 2002 World Summit on Sustainable Development as a top global priority for establishing sustainable fisheries. It also needs to be a priority for the WTO as most fishing subsidies already fall under the rules of the international trade organization.

However, WTO rules only disallow fishing subsidies that interfere with efforts to export, and in most cases governments must mount elaborate proofs of sales distortions in specific markets. Subsidies that support unsustainable production are not currently subject to effective discipline. For fishermen — who must catch fish before they can sell them — such rules do little to prevent subsidies that lead to depleted stocks.

Moreover, existing WTO rules requiring disclosure of subsidy programmes have been ineffective. Repeated studies have concluded that governments underreport their fishing subsidies by nearly 90% — and the little information they provide is often too vague to be of use.

Fortunately, when trade ministers met in Doha in 2001 to launch the current WTO negotiating round, they mandated negotiators to “clarify and improve” WTO subsidies rules on fishing subsidies. In a ground-breaking move, the ministers also explicitly oriented the fishing subsidies talks towards improved environmental stewardship and sustainable development.

Progress at the negotiating table has been slow but steady. Under the leadership of a broad coalition, including New Zealand, Chile and the United States, the talks have moved into a substantive discussion over how new rules should work. Importantly, the concerns of developing countries have also received early attention, with Brazil playing a key role. Consensus is now emerging in favour of significant new rules, including an outright ban on the most dangerous kinds of fishing subsidies.

But it is not yet time to break out the champagne — the toughest talks lie ahead and new rules must still be defined, including for those subsidies falling outside a ban (such as “vessel buy-back” programmes which are considered environmentally positive subsidies). And, the special needs of developing countries, particularly vulnerable small island developing states, require solutions that do not exacerbate unsustainable practices, accommodating the needs of both fishing communities and the stocks upon which they depend.

Governments will need renewed resolve if WTO notification rules are to be given the teeth and the content they deserve. Perhaps most difficult, and necessary, will be integrating appropriate environmental considerations into the new rules without asking the WTO to step beyond the bounds of its trade-related mandate. This is particularly important as “environmental” and “economic” issues are inextricably intertwined where natural resource management is concerned. It is going to take careful drafting to craft criteria appropriate to the WTO in this area.

Trade ministers meeting in Hong Kong should review and strengthen the WTO negotiating mandate on fishing subsidies that contribute to excess capacity and over fishing. They should not the let the opportunity slip through the net of improving the health of our oceans and the livelihoods of fishermen in some of the world's poorest countries.

James Leape is Director General of WWF International. Klaus Toepfer is Executive Director of the United Nations Environment Programme.