*Sankari B
I. Introduction
Recently, the World Trade Organization’s (“WTO”) Agreement on Fisheries Subsidies (“AFS”) was adopted during the 12th Ministerial Conference in 2022. Being the first multilateral agreement to achieve the Sustainable Development Goal (“SDG”), AFS was considered a milestone in environmental objectives and ocean sustainability. The AFS primarily deals with eliminating fisheries subsidies to regulate illegal, unreported and unregulated fishing (“IUU Fishing”), which is contained within SDG 14.6.
Fisheries subsidies are considered to have damaging effects on “trade, environment and sustainable development” according to Chen in Fisheries Subsidies under International Law. They create competitive disadvantages and restrict market access for non-subsidized fish and fish products. Further, they incentivize overfishing, which has a direct impact on ocean sustainability. The latest data on fisheries subsidies indicate that USD 35.4 billion was spent on fisheries subsidies across the globe, with China, the US, and the Republic of Korea, paying the highest on them. This issue has caught attention since the 2001 Doha Ministerial Conference. It has finally culminated in the AFS, which offers a skeletal framework for removing fisheries subsidies. However, as evident from Article 12, the AFS is still being negotiated, and the current agreement would stand terminated if comprehensive disciplines are not adopted within four years since the AFS entered into force.
Despite the pernicious nature of fisheries subsidies, developing and least-developed countries (“LDCs”) (collectively, the “Global South”) have raised several concerns ranging from the livelihoods of small-scale fishermen to food security issues in countries, which are heavily reliant on fish for nutrition. While the existing literature on AFS discusses its potential benefits, its impact on indigenous communities and the nature, scope and implications of the agreement, there is a limited understanding of how the Global South shaped (or did not shape) the formulation of the AFS.
In this context, this perspective seeks to examine the AFS through the Third World Perspectives on International Law (“TWAIL”) and unpack the voices of the Global South in the negotiations and formulation of the AFS. It argues that the AFS significantly suppressed these voices and could have drastic implications on small-scale and artisanal fishing communities in the Global South.
II. Unpacking TWAIL in the Context of Trade and Environment
BS Chimni, in his Critical Theory and International Economic Law: Third World Approach to International Law (TWAIL ) Perspective, argued how mainstream international economic law perceives international economic law as “ahistorical,” ignoring the relationship between countries arising from colonialism, neo-colonialism and global imperialism. In the same vein, sustainable development also ignores the intrinsic link between capitalism, imperialism, and nature. The concept can be manipulated by powerful nations and corporations to promote their interests and fails to acknowledge the historical relationship between imperialism and prevalent environmental challenges. Thus, it is argued that neoliberal definitions of international economic law do not ensure sustainability.
The WTO’s Agreement on Agriculture (“AoA”) illustrates the TWAIL perspective concerning the intersection of trade and environment. The implied promise of agricultural trade liberalization under the AoA is to ensure market access to developing countries and to remove subsidies contributing to the over-exploitation of land through the indiscriminate use of fertilizers and pesticides. However, none of these objectives were truly achieved with the developed nations (collectively, the “Global North”), which employed liberalization, development, and environmental justice to cement their hegemony.
First, the AoA led to an increase in food imports, along with a decrease in food production, adversely impacting food security, poverty, development and the environment. Such an increase in imports had a domino effect on the Global South, including a threat to key agricultural sectors crucial for food supply, employment, poverty alleviation and economic development, and environmental damage in developing countries due to chemical-intensive and monocultural modes of agricultural production.
Second, the AoA has institutionalized power imbalances between the Global North and the Global South. It permits past users (the Global North) to maintain export subsidies (subject to minimal reductions) while prohibiting the introduction of new subsidies by developing countries. It has unfairly deprived the Global South of the policy tool to build their agro-export revenue from domestic food production and made the countries therein increasingly import subsidized goods.
III. Uncovering the Global South Voice in the AFS Negotiations
During the AFS negotiations, the Global South had a host of concerns that were brought up during the negotiations. First, the Special and Differential Treatment (“SDT”) for the Global South. SDT was especially highlighted in the Hong Kong Ministerial Conference, wherein it stressed the vitality of the fisheries sector for the Global South, especially for poverty alleviation, livelihood, and food security concerns. Small and vulnerable economies have called for an expansive understanding of SDT, including flexibilities for industrial and semi-industrial fishing, length of time to implement the agreement, greater opportunity to consult before any Dispute Settlement Body cases, and technical assistance and capacity building.
Second, non-actionable subsidies. It was contended that some subsidies that do not adversely impact trade and sustainability (“non-actionable subsidies”) should not be removed, like subsidies involving infrastructural development, the prevention and protection against diseases, scientific research and training, or any other rehabilitative facilities for fishermen. Others include subsidies for conservation and regional development and social security, such as subsidies for natural disasters at sea, subsidies for the off-season, unemployment fees, early retirement funds and subsidies for fishermen’s re-education, re-training and alternative employment assistance.
Third, the capacity to develop fishing resources. It was argued that the prohibition of measures increasing fishing in a more sustainable way would unduly impede the ability of the Global South to use their fisheries resources for food security, poverty alleviation, and sustainable development. Further, there has been some skepticism regarding the link between subsidies and fisheries depletion, since the evidence has been based on data from the Global North with large-scale industrial fleets.
Fourth, the protection of small and vulnerable coastal states and artisanal fishing. There have been calls to exclude subsidies to artisanal and small-scale fishing from the definition of fisheries subsidies while providing small and vulnerable coastal states with SDT or classifying such activities as non-actionable subsidies. Small and vulnerable coastal states proposed to exclude subsidies granted to assist their development from the purview of discussion.
Fifth, addressing the harms of non-specific fuel subsidies. There have been contentions surrounding the reduction of non-specific fuel subsidies. It has been argued that fuel subsidies constitute twenty-two percent of the fisheries subsidies provided, and largely cover non-specific fuel subsidies. This obscurity of non-specific fuel subsidies is detrimental to ocean sustainability, because it continues to incentivize unsustainable fishing practices.
Sixth, sufficient transition period. Developing countries like India have also requested a twenty-five-year moratorium imposed on Distant Water Fishing Nations to provide any subsidy for fishing or fishing-related activities beyond their Exclusive Economic Zones (“EEZ”). Further, it was argued that subsidies should not be prohibited for developing nations and LDCs during this period. This would allow the nascent fisheries sectors in these countries to thrive.
Seventh, unequal comparison of subsidies between developed and developing nations. The Global South argued that the comparison of subsidies should be based on “per-fisher subsidy.” Given the larger fishing population in the Global South vis-à-vis the same in the Global North, the per-fisher subsidies are much lower in the Global South vis-à-vis those in the Global North. To illustrate this, in India, the per-fisher subsidy is estimated to be $15 per fisher, while the Global North countries, such as Denmark, provide per-fisher subsidies as high as $75,000. Thus, without considering per-fisher subsidies, the comparison between the Global South and Global North has been unfair.
IV. Assessing the AFS through a TWAIL Perspective: The Case Study on India’s Fisheries Sector
This section analyzes AFS through a TWAIL perspective, keeping in mind the seven blocks of concern examined in Part III. This analysis is performed with the Indian fisheries sector as the case study. The reason behind contextually analyzing a country is to demonstrate the needs and concerns of one nation distinct from others. This offers a larger critique of the AFS for homogenizing countries, without understanding the unique concerns of the Global South.
i. Contextual Analysis of India’s Fisheries Sector
Fisheries is a crucial sector for India socio-economically; it contributes 1 percent of India’s Gross Domestic Product and exports INR 46,662.85 worth of crore, while providing food security and securing livelihood for around 3.77 million people. Of the fishing-dependent population, about 67 percent of the families are under the Below the Poverty Line (“BPL”) category, around 16 percent belong to marginalized backgrounds and 48.7 percent are women. Only 25.8 percent of Indian fishing vessels are mechanized, while the rest are non-mechanized or motorized fishing crafts.
India provides INR 2225 crore approximately towards supporting fisheries as of FY 2019. Fuel subsidies are the most significant support, amounting to 32 percent of the subsidies provided, and are rapidly increasing with a growth rate of 142 percent. The second most key category of subsidies is those promoting deep-sea fishing, mariculture and vessel modernization. The third most crucial type of support is relief from disaster and other social security nets.
Existing studies and accounts demonstrate the flawed structure and distribution of fisheries subsidies in India. Firstly, these subsidies may not truly benefit the most vulnerable fishermen as they predominantly aid the better-off fishermen. Further, there are additional developmental needs (such as safety in the sea) that remain unaddressed through these support programs. The Indian experience with fuel subsidies has demonstrated that they are inefficient in transferring benefits, prone to leakages and manipulated by middlemen, who resell the fuel at higher prices. Secondly, most of the subsidies are focused towards fuel, modern fishing gear, ice plants, and marketing since India is promoting aquaculture. For instance, in Karnataka, of the eighteen subsidies listed in 2018-19, only two were dedicated towards welfare, and thirteen focused on marketing and inland fisheries development and aquaculture. This does not provide any incentive or support for small-scale and vulnerable fishing communities. Thirdly, a study conducted in Southern Karnataka shows that only select fisherfolk receive welfare subsidies on a first-come-first-served basis. Further, many fishers are not aware of the schemes available to them. Thus, the fisheries subsidies in India require reformation.
ii. TWAIL Critique of AFS and the Implications on India’s Fisheries Sector
This segment presents a TWAIL critique of AFS and analyzes the implications on the Indian fisheries sector, offering recommendations to India and other developing nations and LDCs.
1. The AFS under-regulates subsidies harmful to ocean sustainability. They are used to subsidize vessels’ increased fishing capacity and fishers’ fishing expenses, such as fishing gears, capital costs, and fuel subsidies. These subsidies account for 60 percent of the global fisheries subsidies and are constantly increasing, most of which are provided by the developed countries. India pointed out the lack of recognition of non-specific fuel subsidies. This suggestion was rejected by the majority of the members.
Recommendation: The AFS negotiations should identify subsidies that are detrimental to achieving ocean sustainability. Article 5 should accordingly contain guidance regarding identifying “harmful” subsidies.
2. The categories of “developed” and “developing” countries are obsolete. The self-declaratory mechanism to recognize developing status allows some large economies to maintain the footing of developing nations. In the context of fisheries subsidies, this is more problematic. Specifically, China dominates distant-water fishing with large and modernized vessels but continues to enjoy SDT benefits as a developing nation.
Recommendation: To address over-generalization of developing nations, the self-declaratory mechanism must be transformed. There should be further classification within developing nations, based on fishing fleet size, mechanization or catch capacity to fairly distribute SDT benefits.
3. The de minimis requirement was notified as an explanatory note in December 2023. Reading this requirement along with Article 4.3 of the AFS carries adverse implications for the Global South. The note specified that while the twenty largest subsidy providers would be subject to the strictest scrutiny, LDCs and developing countries with a global share of marine catch not greater than 0.8 percent would be excluded from the prohibition on fisheries subsidies. Countries not within these categories are mandated to demonstrate sustainability as per Article 4.3. This is fallacious because the Global North with large industrial fleets have the capacity and the regulatory regime to show compliance. This would then incentivize them to provide prohibited subsidies to their historically large industrial fleets. In contrast, developing countries like India, which fall under neither of the categories, lack the capacity to engage with onerous requirements and paperwork to demonstrate sustainable fishing and cannot provide the necessary support for their nascent fisheries sectors to grow.
Recommendation: The requirements of sustainability under Article 4.3 must be defined in a manner that allows for contextual interpretation based on the needs of the Global South.
4. The twenty-five-year transition period sought was rejected and would have detrimental implications on livelihood and food security. Given the socioeconomic background of Indian fishing communities and food security concerns, there is a pressing need to address these issues before phasing out subsidies. Appallingly, the AFS provides merely two years to transition for the Global South. However, this is not the case in other WTO agreements. For instance, the AoA has a transition period of ten years. Short transition puts the livelihoods of fishing communities and the food security of developing countries like India at risk.
Recommendation: In further negotiations, there must be a strong push for extending the transition period and providing more robust SDT provisions that impose concrete obligations on developed nations.
5. There exists no definition for artisanal and small-scale fishing, which are the most vulnerable groups within the fisheries sector. Without such a definition, the AFS cannot proceed in carving out exceptions for them. The lack of a sufficient transition period coupled with the absence of any exceptions for BPL-fishers would further push them into poverty. Thus, the interests of vulnerable communities in the Global South have been compromised, despite the incessant demands to meet their interests during the negotiations.
Recommendation: There must be a push for defining and protecting small and vulnerable coastal states and traditional and artisanal fishers. The prohibitions on subsidies must be lifted for these categories.
6. Article 7, which provides for a voluntary funding mechanism for developing countries, is inadequate because it does not obligate developed nations to provide income support or offer technical know-how to develop sustainable fishing practices. Further, the fund excludes other crucial disciplines, including poverty reduction, disaster recovery, alternative employment for fishers and technology transfer. All these requirements were put forth during the negotiations by the Global South but were neglected in the AFS.
Recommendation: The voluntary fund mechanism should be made mandatory for a specific number of years to assist the Global South during their transition phase. There must also be a call for more technological transfers that would aid the Global South to develop sustainable fishing practices.
7. The use of sustainability to institutionalize Global North hegemony is evident in the AFS and its negotiations. There is a complete lack of historical responsibility by the Global North with large industrial fleets, who have contributed to the current overfishing crisis. They have employed the United Nations Convention on the Law of Seas (“UNCLOS”) to exploit deep-sea fishing beyond the EEZs, the common heritage of mankind. This was effectively achieved through Fisheries Access Agreements (“FAAs”), drawn up by the EU, the US, Russia and Japan. The FAAs, along with the UNCLOS, affected small and traditional fishers and provided incentives to larger corporations to fish beyond limits. Thus, the institutionalized sustainable objectives may stifle the growth of fisheries in the Global South by denying them a reasonable way of providing income and rehabilitative support to vulnerable fishers.
Recommendation: The Global North must acknowledge its responsibility for the overfishing crisis. Suitable amendments also must be made to the FAAs to incorporate ocean sustainability and SDT provisions for the Global South.
These recommendations must be supplemented with reforms in India’s (and other developing countries’ and LDCs’) subsidies distributive mechanisms. India must phase out fuel subsidies, given its link to unsustainable fishing and instead redistribute such harmful subsidies in a positive manner. This includes support for traditional fishing practices, sustainable fishing, research and development, fisheries management, social security nets, disaster relief, and poverty alleviation.
The article unpacks the complexities of approaching the issue of fisheries subsidies and ocean sustainability. A one-size-fits-all approach, as in the case of the AFS, is grounded in institutionalizing power imbalances between the Global North and the Global South. This negatively impacts the latter and their small-scale, nascent and vulnerable fishing sector. Further, the AFS is not efficacious in achieving ocean sustainability since it does not dismantle the root causes of overfishing: non-specific fuel subsidies and FAAs. Thus, going forward, the Global South must push for measures that protect their fisheries sector and ameliorate ocean sustainability concerns.
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* Sankari B is a final year undergraduate student studying at the National Law School of India University, Bangalore (NLSIU).
