By Anja von Moltke, Head, Environment and Trade Unit, UN Environment
The WTO 11th ministerial conference is only 1 week away. As usual before such ministerials, we see busy diplomacy behind closed doors. Will there be a significant outcome that will bring us closer to meeting the Sustainable Development Goals agreed universally two years ago? The recent decision of a large country to decline their support for a draft declaration prepared ahead of the ministerial conference might make us sceptic. But what could the WTO actually do to change our development path towards one in line with sustainability, prosperity and wellbeing? Could it do something?
By highlighting trade as a key and cross-cutting means of implementation for all the Sustainable Development Goals (SDGs), the universally accepted 2030 Agenda marks a shift in thinking by the international community: rather than viewing trade - and growth in trade volumes - as an end in itself, the adoption of the Sustainable Development Goals makes clear that trade should be understood as a driver and a catalyst for sustainable development. As such, trade has to act as a vehicle for protecting the environment, for promoting sustainable consumption and production (SDG 12), for fighting climate change (SDG 13), for providing access to clean water and energy (6 and 7), to create healthy ecosystems (SDG14 and 15), and to protect our oceans.
However, to live up to this mandate, the current trading system is not fit for purpose. For trade to truly contribute addressing to the environmental problems of this world, we need a rule-based trading system that is fully aligned with our vision of sustainable development and environmental protection. This requires a new policy framework, new rules, in some cases amendments of old ones, but most of all it needs a rethinking of our main values.
With the 2030 Agenda, we have come from a formerly isolated view of environment, society, and the economy, to a recognition that those elements have to be interconnected but mutually reinforcing. UN Environment’s mission is to provide leadership in caring for the environment by enabling nations and peoples to improve their quality of life without compromising that of future generations. To fulfil this mandate, we have to make trade drive sustainable development – instead of competing with it. Our Environment and Trade Hub assists countries to negotiate and implement international trade agreements, policies and practices that drive environmental and climate improvements– rather than compete with these objectives.
Reform of fisheries subsidies is an entirely obvious example of an environment-society- economy-trade nexus that the WTO could so easily address and prove its relevance to the 2030 Agenda. No matter from which angle you argue the case. Fish is important for the environment, for the health of oceans, coasts and freshwater ecosystems. Relatedly, and some would argue more importantly, fish is important for people: Worldwide, more than 3 billion people depend on marine and coastal resources for their livelihoods. One fifth rely on fish as primary source of protein. Fish is also important for development and for economic prosperity. Did you know that employment opportunities and ecosystem services provided by the oceans are estimated at between 3-6 trillion US dollar per year? Fish is also important for trade. In fact, fish and fishery products are the most highly traded food commodity.
Fisheries subsidies basically provide an incentive to fish more than what makes environmental, social and economic sense. If we continue subsidizing the overfishing of our oceans, we will not have much fish left: FAO statistics show that, globally, the proportion of fully fished, overfished, or depleted fish stocks has increased from about half of all assessed fish stocks 30 years ago to currently almost 90 percent. Fisheries subsidies are in the order of USD 20-35 billion (depending who you ask). The great majority make use of taxpayers’ money to pay industrial boats to go further and deeper into the oceans, and contribute to its overexploitation.
Subsidies create an uneven playing field between large fleets and individual artisanal fishermen. At UN Environment we have worked with a number of countries to assess the impacts of subsidies. These studies have illustrated that the eventual costs of subsidization and overexploitation - in terms of loss of income for local fishermen, environmental damage and the depletion of native fish stocks - can far outweigh the short term financial gains generated by subsidies or fisheries access agreements.
By encouraging to fish more while catching less, fisheries subsidies do not make any short-term or long-term economic sense: The World Bank, in its 2017 report “the sunken billions revisited: Progress and Challenges in the Global Marine Fisheries”, estimated that the world’s currently unsustainable fisheries management practices have led to globally depleted fish stocks that produce $83 billion less in annual net benefits than would otherwise be the case. Fisheries subsidies also create trade distortions and fuel unfair competition between countries, foster inequality and increase the development gap.
This is where the WTO has to come in. Since the inception of the Doha Development Round in 2001, fishery subsidies have been on WTO agenda: members launched negotiations to clarify and improve WTO regulation on fisheries subsidies in Doha and agreed to strengthen these in Hong-Kong in 2005, including through the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and overfishing. We now have 2017 and are 1 away from the WTO Ministerial in Buenos Aires.
Through SDG target 14.6, States have already agreed to prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU fishing. An Agreement on new disciplines in Buenos Aires could give teeth to this commitment. The WTO has an opportunity to prove that it can deliver on a global commons issue.
Yet, a lot still has to happen before harvesting this “low hanging” fruit. The negotiation chairs “working text” ahead of the conference is still full of square brackets. Member States are streamlining the various proposals for subsidy prohibitions pertaining to illegal, unreported and unregulated (IUU) fishing, and overfished stocks. It might seem evident that subsidizing IUU Fishing, by its very definition, should not be taking place, let alone be subsidized. More significantly, members’ efforts to prohibit subsidies to overfished fish stocks address the heart of the problem and not only its margins. Similar progress on subsidies that contribute to overcapacity or overfishing, on transparency provisions, notifications and institutional arrangements are still needed. For subsidies that may not, for any reasons, be phased out at this stage, a stand-still clause should be agreed upon that has immediate effect. This should certainly include all fuel subsidies.
Also, special and differentiated treatment for developing countries, in particular the most vulnerable, will be indispensable: A well-designed differential treatment regime will make an Agreement more - not less –effective by helping countries to build capacity to prevent IUU fishing and put in place effective assessment systems to monitor overfished stocks. Exceptions that undermine the effectiveness of the Agreement itself however would result in a lose-lose situation – also for small-scale and artisanal fisheries that these exceptions might try to shield.
To move forward, it is necessary that we understand that restoring healthy marine ecosystems is not a trade-off to economic objectives. It is the very basis for economic activity, for livelihoods, for food security, for poverty alleviation and for protecting our planet. Applying the precautionary principle, to take action to safeguard natural resources, even if in the absence of sufficient scientific evidence, should therefore be integral to any decision affecting our natural environment.
We should not forget that countries have been negotiating fisheries subsidies for over 20 years. All Heads of States have universally agreed on the elimination of harmful fisheries subsidies by 2020. 2020 is just about two years away from now. Buenos Aires, will be the last chance to reach an Agreement if we are to meet the sustainable development goal. Just reiteration, or even watering down, of existing mandates will not be sufficient. Our oceans are running out of fish and we are running out of time. So let us act on this. Together.
