Written evidence submission from Professor Stephanie Rickard, Professor, London School of Economics (TPP0012)
- My name is Stephanie Rickard. I am a Professor at the London School of Economics. I am submitting evidence in this instance because of my expertise in international trade and subsidies.
- The CPTPP agreement includes restrictions on certain types of subsidies. Article 20.16 seeks to limit subsidies with potentially damaging environmental consequences. It focuses specifically on government-funded subsidies for the fishing industry.
- Many countries subsidize their fishing industry. Total subsidies to the fishing industry amount to more than 30 billion pounds annually. Two-thirds of these subsidies contribute to over-fishing – that is, the removal of fish at a rate that cannot be replenished naturally. They do so by reducing the costs of doing business thereby making possible fishing beyond environmentally sustainable limits.
- Article 20.16 of the CPTPP provides both opportunities and challenges for the UK. It stipulates that Parties to the agreement shall not grant or maintain subsidies for fishing that negatively affect fish stocks that are in an overfished condition. Nor shall they subsidize illegal, unreported or unregulated fishing.
- Subsidies currently supporting fishing that negatively affect fish stocks that are in an overfished condition must be brought into conformity as soon as possible by Parties to the CPTPP and no later than three years of the date of entry into force of this Agreement for that Party.
- As a signatory to the CPTPP, the UK would have to comply with these rules on fisheries subsidies articulated in Article 20.16. The UK, like other CPTPP Parties, would also be required to provide information about the UK’s subsidies including: the catch data by species in the fishery for which the subsidy is provided; the status of the fish stocks in the fishery for which the subsidy is provided (for example, overexploited, depleted, fully exploited, recovering or underexploited); fleet capacity in the fishery for which the subsidy is provided; conservation and management measures in place for the relevant fish stock; and total imports and exports per species. The UK would also be expected to provide information on fuel subsidies for the fishing industry.
- Some of the obligations stipulated by Article 20.16 are required by the WTO’s new Agreement on Fisheries Subsidies. Before the WTO Agreement comes into force, however, 109 WTO member countries have to ratify it, which has yet to happen. But even if the WTO agreement comes into force, the CPTPP goes further. The WTO agreement does not include a prohibition on subsidies for overfishing, while the CPTPP does.
- The CPTPP rules present an opportunity for the UK to ensure that their fisheries subsidies promote the conservation and sustainable management of fish stocks. By agreeing to these rules, the UK can (further) commit to individual and collective action to address the problems of overfishing and unsustainable utilization of fisheries resources.
- Some countries currently spend more of their fisheries subsidy budget on environmentally-sustainable programs than others, as I report in my 2022 research study. New Zealand, for example, allocates virtually all of their general fisheries subsidies to sustainable programs, including subsidies that help to offset the costs of determining sustainable catch limits, for example. In Norway, approximately 90 percent of general fisheries subsidies go to environmentally-sustainable programs, including, for example, a vessel buyback program designed to reduce the capacity of the country’s fishing fleet.
- In contrast, the UK spends relatively less of its general fisheries subsidy budget on environmentally-sustainable programs, according to data from the OECD. Many UK subsidies seek to reduce the costs of doing business. While these subsidies benefit fishers, they may encourage more fishing than would otherwise occur and could subsequently result in over-fishing - that is, the removal of fish at a rate that cannot be replenished naturally.
- The CPTPP’s Article 20.16 provides an opportunity for the UK to ensure that their fisheries subsidies promote the conservation and sustainable management of fish stocks. In my research, I find evidence that the CPTPP has influenced Parties’ fisheries subsidies. Countries that are signatories to the CPTPP tend to have more environmentally-friendly fisheries subsidies than non-signatories. On average, CPTPP Parties spend nearly 22 percentage points more of their fisheries subsidy budget on environmentally-friendly subsidies than non-members, all else equal.
- While the CPTPP’s fisheries subsidies rules deliver opportunities for the UK, they may also present challenges. For example, some UK fisheries subsidy programs may need to be reformed in order to ensure compliance with Article 20.16. Reforming subsidies may entail costs in the short term. Fishers may see a reduction in the amount of direct support they receive from the government. The government must therefore strive to ensure that reforms balance compliance with the UK’s international obligations, environmental sustainability and fishers’ material well-being.