This study deals with fisheries and trade, focusing on developing countries. Fish is globally traded, and for many developing countries, it is an important net export good. In most of these countries, fisheries are often characterized by poorly defined property rights, accompanied by overcapitalization where too many vessels and fishermen catch too few fish from too small stocks. Management is often de facto open access, where vessels with or without permission to fish land as much as they can catch due to limited monitoring and enforcement activities. Even in developed countries, many fisheries are poorly managed, and recent studies indicate that marine ecosystems are in global decline.
While trade generally is beneficial for growth and welfare, the combination of pure open access and trade liberalization may both reduce welfare and stocks for a country—an outcome that can be reinforced by the common use of bad subsidies. However, trade liberalization may have an additional positive impact by promoting the development of property rights in response to increased fish exploitation.
The WTO can play a role by adopting a broader classification of subsidies to help eliminate bad subsidies, such as like public support of vessel construction, fuel subsidies, or fishing rights outside developing coastal countries provided at limited or zero cost. The WTO can also ssist by distinguishing good subsidies (e.g., improving fisheries management or improving monitoring and enforcement), which are desirable targets when rich countries allocate aid resource to developing countries.