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Globalized Trade and the Macroeconomics of Capture Fisheries

February 22, 2007 // 11:00am1:00pm
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Unless the steep decline of commercial fisheries is corrected, the world could run out of fish for consumption by 2048, said a team of researchers led by Borris Worm in Science magazine in November. This prediction may not come to pass, but it does not change the present reality: fisheries around the world are overharvested, in decline, and poorly managed. Repairing them, then, requires tackling the inequities created by problematic international trade laws and practices, said speakers at the Woodrow Wilson Center on February 22, 2007. The fourth in the Environmental Change and Security Program's seven-part series on fisheries, the meeting examined the forces behind increasing demand for and trade of fisheries products, and identified the key trends in trade law, subsidies, tariffs, and other marketplace measures that are negatively impacting global fish stocks, developing world economies, and the environment.

According to Rashid Sumaila, director of the Fisheries Economics Research Unit at the University of British Columbia's Fisheries Centre, globalization ideally leads to a "less parochial world" by increasing flows of money, materials, information, and people across national boundaries. While globalization is touted for its ability to produce economic gains, it also has negative effects: greater global production and consumption, for example, can increase the depletion of natural resources, he pointed out. Additionally, the full costs of increased trade are not borne only by the countries that benefit; for example, the effects of carbon dioxide emissions from greater traffic are shared by the world.

Something Fishy: Globalization and International Trade Law

It is easy to pick the winners and losers in the global fish trade. Wealthy countries with large fishing fleets get the most money and the best fish, while developing countries are in "a race to the bottom," remarked Sumaila. As demand rises, territorial waters of developing countries are increasingly overfished, mostly by fleets from wealthy, developed nations. The developing countries are left with the remains: depleted fish stocks, degraded environments, and diminished economic opportunities. The balance is thrown further askew by economic supports, said Sumaila: "Countries get [an] unfair advantage if they are given money by the government." Subsidies, in particular, are a problem: "They are recognized worldwide as contributing to overfishing by driving down price and leading to more demand, and therefore more fishing."

Determination of ownership is crucial: duty officers must be able to easily determine country of origin to apply appropriate tariffs. "Normally, anything produced in a country would be yours," said David Schorr, an independent consultant and fellow at the World Wildlife Fund. But when it comes to fish, the regular rules of origin do not apply. The United Nations Convention on the Law of the Sea states that a country has absolute sovereignty over the fish within its territorial waters 12 nautical miles from shore. The area between 12 and 200 nautical miles is the country's exclusive economic zone (EEZ); and within the EEZ, the rules of fish ownership become murky, said Schorr: "You have the right to enjoy the benefits of those fish, but you don't totally own them. You also have the obligation to let others come fish if you can't, and you have the obligation to manage the area sustainably." International fish law nearsightedly focuses on ownership rather than management responsibilities, he added.

Since multiple countries are allowed to fish within a single EEZ, ownership is determined by the flag state rule. "The nationality of a fish belongs to the country whose flag flies over the vessel that catches it," said Schorr. "Wherever that may be in the world…if you go into somebody else's EEZ and you catch a fish, it belongs to your nation." This has a large, but often unnoticed, impact on trade figures: if a fleet from distant waters catches fish in another country's EEZ, then brings the catch back to its own country for consumption, the fish never enter international trade. Further, if a fishing vessel from a country in the European Union (EU) catches fish in Senegalese waters, then sells them back to Senegal, the transaction is recorded as an export from the EU country to Senegal. Thus, "EEZs belong to those who mine them, not those who own them," he said. The countries that mine the EEZs are overwhelmingly those with the most and best resources—Norway, Iceland, Japan, and the United States, to name a few—and are, by and large, not developing countries.

Fixing the System

"Fisheries are still the Wild West," said Schorr. "This is why governance is so important."International laws should be amended to put ownership back in the hands of those countries that own the EEZs, he said. The international community should also adjust current regulations that do little but raise barriers to entry for poorer nations. Safety standards in the United States and the EU, for example, lead to inequitable trade. Pointing to a photograph of piles of fish in white plastic bags next to fish in baskets in Senegal, Greenpeace's Karen Sack explained the dubious nature of most health standards, "The fish in the bags had been scraped off the deck. It was the same fish [as the fish in the cages]. It had come from the same place. It had been sitting in the sun the same amount of time, but one was being reported as meeting those sanitary standards and the other wasn't."

Sack called for establishing more protected areas where fishing is banned. "This is the only way we are going to be able to protect fish and have fish for food in the future." Greenpeace advocates a global network of marine areas totaling 40 percent of the world's oceans. "Some people think [this figure] is pretty extreme, but we think it is more extreme not to have any fish in our oceans by 2048," she said. She also proposed more effective enforcement mechanisms along the entire fishing continuum—from the time a fish leaves the water until it arrives in the store or market. Monitoring, surveillance, and enforcement programs are needed to provide a foundation for good and sustainable management, she added. Recommending the creation of an Interpol-like agency, she said that fishing laws will have no meaning if there is no way to prosecute countries or parties that break them.

Governance, however, cannot tackle all problems. Growing demand for fish has raised prices, so many poor fishers cannot afford to buy what they sell. Fairer export/import rules would help boost a country's GNP, but the impacts would not necessarily trickle down to the local level. In fact, liberalized trade may even perpetuate local-level economic and environmental problems, noted Sack: "A country may be earning foreign exchange [through exports] but their food security is compromised, their environment is compromised, their future ability to feed their population is compromised. It is a lose-lose situation."

Sumaila agreed that growing demand is driving the current pressure on fisheries: "My solution: reduce demand. One way is to reduce consumption per capita, and another way is to reduce the per capita—the people." One audience member asked if aquaculture could meet demand, but Sumaila was hesitant: "Aquaculture has a role to play, but you also have to watch out because a lot of aqua production is producing fish that eat fish." He noted new research that shows aquaculture is actually a net loss, as it produces less fish by weight than they were fed. Instead, he advocates education and skills training to help wean people off fishing: "Education is really crucial. Improving the knowledge base will help reduce pressure and also increase quality of life and protect the environment."

Drafted by Alison Williams.

 
Event Speakers List: 
  • Associate Professor and Director of the Fisheries Economics Research Unit, University of British Columbia Fisheries Centre
  • Senior Fellow, World Wildlife Fund
  • Senior Director, International Oceans, The Pew Charitable Trusts
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