by Victor Menotti and Zeke Grader
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When trade ministers from 135 nations meet in Seattle for the Third Ministerial of the World Trade Organization (WTO) beginning on November 29th, a number of decisions will be made that could have historic implications for the future of fisheries worldwide. First, governments hope to finalize in Seattle a new set of new trade deals that could cause greater stress on fish stocks and fishing communities. They also plan to launch a new round of negotiations which could, among other things, enhance the capacities of large corporately owned fishing fleets while undermining the livelihoods of the owner-operator fishing fleet ("family fishermen") who make up the vast majority of the U.S. west coast's fish harvesting sector. Believe it or not, fishermen, and the entire fisheries conservation community, know next to nothing about these WTO initiatives.
Due to a number of factors, including the obscurity of the Geneva-based trade body, the shrouded secrecy of U.S. trade policy-making, and the general unfamiliarity of fisheries groups with international trade decision-making, the details of the WTO's Seattle agenda are only now coming to light. While there has been a fair amount of press in the Pacific Northwest regarding the timber issue in the WTO discussions, the media coverage of fisheries issues in the upcoming trade talks has been non-existent.
Given the current crisis in the Pacific Coast groundfish fishery and the numerous listings of Pacific salmon stocks under the Endangered Species Act, it is easy to understand how trade talks have slipped under our radar. Nevertheless, as we all know, trade policies are important to our industry. Prices paid fishermen for such west coast products as Alaska and California salmon, herring roe, squid, urchin and blackcod are more and more dependent on access to, and the health of, foreign markets. Moreover, rules regulating international trade, in addition to affecting access to foreign markets, can impact on measures to conserve fish stocks and our ability as U.S. fishermen to compete globally with fleets from other nations and with seafood imports from those countries into our domestic market.
The decisions made at the WTO summit in Seattle will be far-reaching. However, fishermen have never been given a seat at the table. We need to make our voices heard!
Where it All Started -- APEC
Some may remember that in November 1997, a meeting of the Asia Pacific Economic Community (APEC) was held in Vancouver. There, APEC leaders launched a "comprehensive program to open markets" in 15 key industrial sectors. APEC Ministers were then directed to finalize work in nine of those sectors last year. Those sectors included chemicals, medical equipment and scientific instruments, toys, gems and jewelry, telecommunications, energy, environmental goods and services, forest products, and fish. The U.S. is an APEC member, as are most Pacific Rim countries.
In November 1998, APEC completed an agreement to "lower tariffs and other trade barriers" in the those nine sectors (estimated to amount to $1.5 trillion in global trade). At the conclusion of that agreement, U.S. Trade Representative Charlene Barshefsky stated in an official press release (November 15, 1998) that, "This agreement reaffirms APEC's leadership role in shaping and advancing the global trade agenda. We agree to strive to conclude an agreement in the WTO by the end of 1999 on this nine sector package."
Well, it is now the end of 1999. Six items were part of the fisheries proposal between APEC nations, and some of those six items (listed below) are now being "booted" to the WTO for discussion at the Seattle Summit in an attempt to: 1) accelerate the finalization of new agreements (the APEC process is stagnating); 2) globalize the deals to include 134 nations (as opposed to the 30-some nations in APEC); and 3) bind signatory nations to WTO disciplines and enforcement penalties.
The six items in the APEC fish agreement expected to be part of the WTO discussions in Seattle are: 1) tariffs; 2) non-tariff measures (NTMS); 3) subsidies; 4) sanitary and phyto-sanitary measures; 5) economic and technical cooperation; and 6) international cooperation for fisheries management. International investment policies will also be on the table at the WTO Seattle Summit, but not via APEC. Under discussion for the latter item is the proposed investment agenda (MAI) which would restrict governments from regulating foreign investors.
The U.S. negotiator for fisheries, but limited to tariffs only, is Linda Chavez, Director of the National Marine Fisheries Service's Office of Industry & Trade. Some may remember Ms. Chavez when she worked in NMFS's Seattle office prior to going to Silver Spring. The "Official Advisor to the U.S. Trade Representative," meanwhile, is the National Fisheries Institute's Richard Gutting. Although NFI represents a few fishermen's organizations, it is principally an organization for the shoreside sector -- mainly importers and exporters, brokers, distributors and processors -- whose priorities and interests are often in conflict with those concerned for the well-being of American fishing men and women, our fishing communities and sustainable U.S. fisheries. There is simply no one representing fishermen themselves, nor fish conservationists, advising our U.S. Trade Representative.
The Home Page on the Internet for the U.S. Trade Representative is and contains a wealth of WTO and related trade position documents for further research, though they often take careful reading to see the implications. Seattle Summit Will Have Serious Implications So what is likely to be at stake for fisheries at the Seattle Summit? Four items are before the WTO that will require particular attention from the fishing community. They are: Tariffs. On the table for finalization in Seattle is a proposal ("The Advanced Tariff Liberalization, or ATL Package") to eliminate all tariffs on fish and fish products by 2005. At first glance, this may seem like a good deal for many U.S.fisheries that export abroad. But before jumping in and endorsing this measure, fishermen need to carefully consider to what extent foreign tariffs really are impeding access to overseas markets (thereby lowering ex-vessel prices to fishermen or at least providing processors an excuse for holding down prices). Has it been tariffs, import quotas and other trade barriers or simply sick Asian economies that are, in fact, the root of problems in marketing our fish abroad? True, China has imposed some high tariffs on U.S. west coast squid, as well as import quotas. However, there is a question whether this is a long-term problem or merely part of a ploy (bargaining chip) by the Chinese government to gain WTO membership. Norway is one of the principle nations, along with the U.S., in pushing tariff reductions. In a 19 May, 1999 communique from that nation, it stated: "The upcoming round [WTO] should....include traditional market access negotiations. These negotiations should comprise all tariff lines on industrial goods, including fish and fish products. To ensure that the negotiations lead to real market access, due consideration should also be given to non-tariff barriers and trade facilitation." Remember that the down side of trade liberalization is that cheap foreign fish imports into the U.S. market, including farmed salmon, clearly hurt our domestic fisheries. At risk from a flood of imports could be our ability to provide fishing men and women prices adequate to make a decent living, the economic viability of the shoreside processors who depend on domesticallyharvested products, and the health of our fishing communities. Keep in mind, the cost of living in the U.S. is much higher than in many of those nations importing fish into our markets. U.S. fishermen are also subject to generally much higher conservation, health and safety standards. Cheap fish imports, therefore, could impoverish our fishermen -- driving many out of business -- and could create pressure to lower our existing (necessary, and sometimes not even adequate) conservation, health and safety standards. Two additional concerns with the tariff reduction issue have been raised by conservation organizations and Third-World fishermen. Those have to do with: 1) whether lower fish prices in the U.S. and other developed nations couldstimulate consumption of already collapsing fisheries; and 2) potentially driving up the cost of food to residents of fish producing Third World nations. Also, there is the question whether the foreign exchange generated by fish exports from Third World nations to wealthy nations will ever actually get to their local fishermen and fishing communities? Finally, for the U.S., there is the question of what becomes of SaltonstallKennedy Act (S-K) funding. This fund, which was established to foster fisheries development and research, is derived from a tariff on fish and fish products. If there were no tariffs, would S-K go away? Tariffs on fish and other food stuffs could become a moot issue in the future, regardless of WTO action, as governments scramble to feed their growing populations and to hold down domestic food costs. Indeed, it may be better for individual nations to lower tariffs on fish and farm products on a unilateral basis. This would allow each country to tailor access for its own citizens to the most affordable food sources while still protecting sectors of its own economy that are important to that nation for social and cultural reasons (protecting family farms and fisheries, for example), not merely being driven purely by global economics. Allowing nations to individually adjust tariffs on food stuffs, including fish, therefore, could be preferable to the WTO's "one size fits all" type of formula. All of this is to say that the tariff issue is not as simple as it appears at first glance. Tariff policies can have enormous social impacts. They must be carefully studied to determine whether, in fact, tariff reductions will help or hurt family fishing men and women and our fishing communities. International tariff talks require the presence of fishing men and women, and should not be left solely in the hands of free trade theorists, politicians and fish importers. Non-Tariff Measures. NTMs, as they are known in trade circles, include any sort of government policy, practice, law, or measure that supposedly "distorts free trade." This rubric has already been used to include residency requirements, licensing fees that favor local vessels, limits on fleet size, or even conservation measures imposed by a nation to protect its own biological resources. The latter -- conservation measures -- could include those similar to the U.S. attempt a few years ago to limit shrimp imports to those shrimp taken only with nets utilizing turtle excluder devices (TEDs). Such measures are designed to achieve a conservation objective while maintaining a level playing field for domestic fishermen who are subject to these kinds of conservation regulations. After being formally identified by governments, elimination of NTMs could be part of the new round of trade talks being launched from Seattle, to be concluded in three years. As is the situation with tariffs, NTMs need to be carefully considered by our fishing fleet, including what the implications may be from a blanket removal of some of these so-called "barriers." Elimination could, on one hand, undercut sound conservation measures needed to assure sustainable fisheries or to eliminate needless waste or bycatch. On the other hand, keeping them could put west coast and other U.S. fishermen at a competitive disadvantage with products from nation's whose fishing fleets do not abide by strongconservation standards. Subsidies. The U.S. trade negotiators also want a commitment in Seattle to put fisheries subsidies on the official agenda of the WTO's new round of negotiations and to establish new binding principles on fisheries subsidies. The WTO has been notified of 84 different types of subsidies for fisheries; 51 of them affecting the harvesting sector. There is disagreement between governments about giving this new power to the WTO. Some governments prefer to do it via the United Nation's Food & Agriculture Organization (FAO) instead. All agree on the need for adjusting current overcapacity by peeling back subsidies, but the question is how -- and who benefits? In the past, when the WTO dropped the sanctions axe on subsidies, as in agriculture, it was always the small producer that got hurt while larger global corporations benefitted at their expense. Like eliminating tariffs, the idea of getting rid of international fishery subsidies probably sounds good to most U.S. fishermen. After all, the U.S. government offers few, if any, benefits that could be considered subsidies to the small or individual and family owner-operators in its own fishing industry. There are no grants, and government loan guarantees are a thing of the past. About all there is today is the Capital Construction Fund (CCF), which is little more than a means of putting money away tax free for a period of time, much like a pension. The CCF is no more a subsidy than a retirement program is. On the other hand U.S. fishermen have to compete in foreign markets with heavily subsidized foreign fleets and government supported aquaculture operations. Eliminating subsidies would thus appear to have little direct impact on U.S. fishermen and would actually help them compete with fish products from other nations. Eliminating subsidies could also help address the fleet overcapacity problem. In many nations government subsidies have fueled the growth of newer and larger vessels with harvesting capacities far in excess of the fish available for take on a sustainable basis. Much of the push for eliminating subsidies is aimed at reducing harvesting capacity. This push has been fueled by a paper prepared recently by the World Bank and, in the U.S., the newly completed findings in the Federal Fisheries Investment Task Force Report to Congress just released in October that was funded by the U.S. Department of Commerce (see NOAA Press Release at: ). With subsidies, however, the devil is always in the details. The devil here is how a "subsidy" is defined. While we tend to think of a subsidy as either a cash grant, low interest loan or loan guarantee to buy or build a new vessel or equipment, subsidies are being defined by others, including the World Bank, in far broader ways. Some examples of what some trade negotiators are calling "subsidies" include: * Government funded programs to restore or enhance fishery resources. (These are bad??) * Government fleet buy-back programs (also aimed at reducing harvesting overcapacity). * Government funded programs to assist fishermen to develop new or alternative gear that is either more selective, reduces bycatch, or prevents harm to the marine environment. * "Low-cost" access by fishing fleets to fish stocks. What is particularly troubling is that the U.S. apparently agrees with the World Bank's last definition above that "low-cost" access to fish stocks amounts to a government subsidy. The U.S. trade position is in fact that any access to fish stocks that does not involve an auction amounts to a subsidy. This position gives
us an idea of the direction Commerce and the National Marine Fisheries Service may be heading: placing all fisheries under Individual Transferable Quota (ITQ) systems, and then auctioning off the quotas to the highest bidder -- effectively putting our fisheries in the hands of large multinational corporations and turning working fishing men and women into sharecroppers! Although we know of no instance currently where fish quotas are up for auction in the U.S., the fact is that many U.S. fishermen, particularly on the west coast, pay high permit and license fees to fund fishery management, research and enforcement. In some instances, such as California's Commercial Salmon Stamp program, fishermen are actually paying out of their own pockets to fix the habitat damage done by others. It is hard to argue therefore that U.S. fishermen are being subsidized -- unless of course you are some World Bank free market theorist or an inside-the- Beltway type. Interestingly, the U.S. position on fishery subsidies is in direct conflict with NMFS's own draft aquaculture policy, which calls for massive federal investment in research and development to foster private aquaculture operations. The U.S. also has yet to reconcile its position on what little help it provides its fishing industry with the massive subsidies it provides other industries -- often the same industries responsible for fish and fish habitat destruction. These include: subsidized water deliveries in the west to irrigate corporate farms; subsidized hydro-electric power in the Pacific Northwest; subsidized navigation (including dams and locks) on the Columbia and other river systems for tug and barge operations; subsidies for logging road construction in national forests; and oil and gas leases to the oil industry that fail to collect royalties on the true market value of the oil or gas produced from a public resource. If the U.S. Trade Representative is going to push for elimination of fish subsidies, will she also push for elimination of subsidies to U.S. agribusiness, aquaculture, timber industry, oil industry or Northwest utilities? The fact is, in many instances it has been subsidies to other industries that have done much more to harm U.S. fish resources than any U.S. subsidies to its fishing fleet for vessel construction. But don't expect much help with any of these egregious give-aways of taxpayer monies and public resources in the upcoming Seattle Summit. The Japanese apparently are among the most vocal dissenters to this expansive definition of "subsidies" being advanced by the World Bank, the U.S. and others. Japan, a fishing nation as well as one heavily dependent on fish imports, has given the subsidy issue considerable thought in its position statement. "Japan is of the view that the issue of over-exploitation should be solved urgently," said that nation's trade representative outlining its position on fish subsidies. "However, Japan does not accept the argument to single-out the elimination of subsidies or the abolishment of import tariffs, without taking up all the factors which are at the cause of the issue, as this could create problems in the reasoning thereof and in the effectiveness from the viewpoint of a sustainable utilisation of fishery resources......Japan is proposing that, with respect to forestry and fishery products, which are exhaustible natural resources, it is indispensable to establish a separate group to examine all the relevant factors in a comprehensive manner, giving due consideration to the global environmental issues and the resource conservation and management issues, in order to ensure a sustainable utilisation of resources." If the WTO is given in Seattle the new mandate to impose disciplines (remember, under the U.S. Constitution, treaties with foreign nations override U.S. statutory laws, such as Magnuson and the Clean Water Act) on government subsidies for fisheries, small fishermen could face the same fate small farmers have suffered since the WTO took on eliminating agricultural subsidies. By reducing supports for small farmers while allowing an increase in export subsidies for large producers, the WTO has helped worsen the food security of nations, individuals and small farmers. As with tariffs and non-tariff measures, fishing men and women must make their voices heard on fish subsidies at the Seattle Summit or they could simply be put out of business and the resource itself damaged. Investment. Current WTO rules apply mostly to trade. However, if governments give the WTO the new mandate (as some nations are proposing) to expand its powers to limit what governments can do to regulate foreign investment, a number of policies that encourage sustainable fisheries practices could be at risk of elimination as "barriers to investment." Moreover, some proposed definitions for what constitutes an "expropriation" of foreign investment could allow foreign corporations to sue governments for enacting measures that reduce their profits -- like reducing foreign fleet fishing quotas! Making Difficult Matters Worse The broader WTO agenda also threatens to exacerbate three of the overarching problems that fishermen face worldwide: industrial aquaculture, corporate factory fishing fleets, and pollution. In July 1999, some 50 members of Congress signed on a letter to President Clinton, prepared by California Congressman George Miller -- one of the fishing industry's best friends in the House -- strenuously objecting to the U.S. position going into the WTO meeting in Seattle regarding wood products. Many of the same concerns for wood products are true for fish. Signatories to that letter included west coast representatives Nancy Pelosi, Peter DeFazio, Anna Eshoo, Pete Stark, Lynn Woolsey, Tom Lantos, Lucille Roybal-Allard, David Wu, Barbara Lee, Sam Farr and Julian Dixon. In the letter to the President, the Congressional members wrote to "express our concern with your Administration's leadership in negotiations on a trade liberalization agreement........at the World Trade Organization (WTO). We oppose these negotiations for four reasons: (1) the environmental impacts of rapid tariff elimination; (2) the threat to the environment, labor and domestic sovereignty from a reduction in non-tariff measures; (3) the lack of an environmental impact statement consistent with the Council on Environmental Quality's (CEQ) regulations for the National Environmental Protection Act (NEPA); (4) the lack of transparency in negotiations. We ask that the administration withdraw from these negotiations until each of our concerns have been satisfied." "To date," the letter continued, "the concerns of environmental organizations have not been reflected in the Administration's handling of these negotiations. Such a process is inconsistent with your own desire for inclusiveness in trade debates.......In addition, as Members of Congress, we would have remained unaware of these negotiations if civil society groups had not brought it to our attention. We cannot support a process that does not include greater input from elected officials and civil society." The November, 1999 Seattle WTO Summit is only the latest incarnation of an ongoing problem. The trade negotiations process must include fishermen and those working for fish conservation, not merely a handful of academic free trade theorists and a representative of fish importers. We must have input to the WTO at the Seattle Summit and afterwards. In the meantime, fishing men and women need to begin demanding, through letters to their Congressional representatives, the Secretary of Commerce and the U.S. Trade Representative, that they have input into trade negotiations that could radically change the face of our industry and fishing communities for decades to come.
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Victor Menotti, is an international trade specialist and a consultant to the Institute for Fisheries Resources (IFR) in international trade issues. Zeke Grader is a lawyer as well as the Executive Director of the Pacific Coast Federation of Fishermen's Associations (PCFFA) and the Institute for Fisheries Resources.
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PCFFA is the west coast's largest organization of commercial fishermen. PCFFA's Southwest Regional Office can be reached at: PO Box 29370, San Francisco, CA 94129-0370 and by phone (415)561-5080. PCFFA's Northwest Regional Office can be reached at: PO Box 11170, Eugene, OR 97440-3370 and by phone (541)689-2000. PCFFA's Internet Home Page is at or PCFFA can be reached by email at . The Institute for Fisheries Resources is independent of, but affiliated with, PCFFA and can be reached at the same postal and email addresses. The Institute's Internet Home Page is at: . reprinted from http://www.pcffa.org/fn-nov99.htm |
