Latin America: Will WTO Agreement on Fishing Rein in China’s Illicit Practices?

by Mateus Ribeiro da Silva*

Chinese squid jiggers docked in Montevideo’s harbor / A. Davey / Flickr / Creative Commons license

China’s distant water fishing (DWF) fleet is the worst of various engaged in illegal, unreported, and unregulated (IUU) fishing along South American coasts, but Beijing may be shifting toward supporting a new World Trade Organization agreement that would limit such practices.

  • China has acknowledged having 3,000 ships in its DWF fleet, but studies by various experts, including the Stimson Center and the Overseas Development Institute (ODI), estimate the number to be between 10,000 and 16,000. China’s fleet accounts for about 38 percent of all fishing on the high seas and in other countries’ exclusive economic zones (EEZs). Ships from Taiwan are responsible for another 21.5 percent, and Japan, South Korea, and Spain each represent about 10 percent of DWF efforts. DWF ships usually hover outside EEZs but frequently turn off location devices to enter them undetected.
  • Although China’s most egregious IUU practices are around Africa and Southeast Asia, experts say the impact in Latin America is significant – an estimated $2.3 billion a year (see July 21 AULABLOG). Hundreds of Chinese fishing ships operate off the coasts of Central America, Ecuador, Peru, Chile, and Argentina practically year-round. DWF vessels fish for varieties of squid, tuna, shark, rays, and other species. Oceana, an ocean conservation NGO, says they fish along Argentina’s EEZ for the indigenous shortfin squid, a catch worth almost $600 million USD annually. In addition to turning off their Automatic Identification Systems (AIS) to operate clandestinely in EEZs, the vessels fish close to protected areas, such as near the Galapagos Islands, and capture – on purpose or in bycatch – endangered species, such as certain sharks, dolphins, sea turtles, and billfish. In 2020, a large Chinese fishing armada just off the Galapagos clocked a combined 70,000 hours of fishing in one month.

Because implementation of existing agreements has been chronically weak, the World Trade Organization (WTO) negotiated an innovative trade-based agreement to reduce subsidies to DWF fleets that are causing such economic and environmental harm. Approved in June after 20 years of effort, the Agreement on Fisheries prohibits certain subsidies to IUU fishing, further depletion of current overfished stocks, and fishing outside a member’s regional fisheries organization jurisdiction.

  • Critics are concerned about loopholes that could allow developed nations (including China) to continue current practices, but environmental NGOs hailed the arrangement as a significant first step towards a more sustainable blue economy. It will enter into force when two-thirds of WTO members deposit their instruments of acceptance.
  • In addition to attacking subsidies, the agreement bars fishers from operating outside their own EEZ or in areas overseen by a Regional Fishery Management Organization (RFMO) in which their port state or flag state is not a member. For their vessels to operate in South American waters, for example, national governments would need either local-access agreements, in the case of national EEZs, or to be members of regional RFMOs. This may encourage countries to join more RFMOs and could, optimistically, contribute to more consensual, negotiated regulation of fishing on the high seas. Governments will have recourse to WTO dispute settlement procedures when harmed by IUU practices.

Chinese support for the WTO agreement and faithful implementation would be major steps toward reducing IUU fishing and providing relief to Latin American coastal countries. Beijing provides its DWF fleets with the greatest subsidies – estimated by Oceana in 2018 to reach $5.9 billion a year (amounting to 38 percent of subsidies provided by the “big ten” subsidizing countries).

  • After years of reservations with the agreement – insisting that it should enjoy the benefits available to developing countries – Beijing now seems to be supporting it. Shortly before WTO approval in June, Commerce Minister Wang Wentao said, “China has taken a constructive part in fisheries subsidies negotiations and supports an early agreement so as to implement the United Nations’ 2030 Agenda for Sustainable Development.”
  • If China does sign, confidence that it will comply with the agreement will be initially weak. Observers are concerned that the opaque web of relationships between government and business in China will make detecting subsidies difficult. Practices that China has relied on in the past, such as fuel tax supports, are still permissible under the agreement. Shedding its scofflaw image will take time. In early July, just weeks after the WTO agreement was announced, Uruguayan authorities seized a Chinese vessel carrying more than 11 tons of hidden squid, a clear indication of IUU fishing. Although probably not fished after the accord was announced, the squid illustrate that it is still an open question whether China will break old habits and curb the predatory practices of its voracious DWF fleet.

August 30, 2022

*Mateus Ribeiro da Silva recently completed his Master’s in Global Governance, Politics, and Security in the School of International Service. This article draws on research he performed as a Research Assistant for a CLALS project on Illegal, Unreported, and Unregulated (IUU) fishing in nine Latin American and Caribbean countries.

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