WTO Fisheries Subsidies Agreement and Global Marine Sustainability

The WTO Agreement on Fisheries Subsidies, known as ‘Fish 1’, came into force on 15 September 2025. It aims to curb harmful government subsidies that drive overfishing and threaten marine biodiversity. This agreement addresses illegal, unreported, and unregulated (IUU) fishing and fishing of overfished stocks. However, it is only a partial solution with a sunset clause. If a broader pact called ‘Fish 2’ is not agreed upon within four years, ‘Fish 1’ will lapse. This creates urgency for WTO members to resolve complex issues surrounding fisheries subsidies.

Background and Objectives

‘Fish 1’ targets subsidies that directly encourage illegal or unsustainable fishing. Governments worldwide spend tens of billions of dollars annually on subsidies. These funds reduce costs for fuel, vessel building, and fishing gear. As a result, fishing fleets grow larger and fish longer, causing overcapacity and depletion of fish stocks. The agreement legally binds members to stop subsidies that support IUU fishing and overfishing on the high seas.

Limitations and the Sunset Clause

The agreement is limited in scope. It does not regulate all subsidies that contribute to overcapacity. The sunset clause means that if ‘Fish 2’, a more comprehensive deal, is not finalised by 2029, ‘Fish 1’ will end automatically. This deadline puts pressure on WTO members to negotiate further rules to cover broader subsidy categories that fuel overfishing.

Challenges in Negotiations

Negotiations on ‘Fish 2’ have been deadlocked for years. The main hurdle is economic disparity between developed and developing countries. Developing nations argue that the rules should not penalise small-scale fishers who rely on subsidies for subsistence. They demand special and differential treatment (S&DT) to protect their livelihoods and food security. India proposes a 25-year transition period for developing countries to adjust.

Positions of Key Players

Developed countries like the US and EU insist on comprehensive rules covering all large subsidies. They argue excluding any major subsidisers will weaken environmental goals. Defining exemptions for small-scale fishers is difficult. Some developing nations have large fleets that blur the line between artisanal and industrial fishing. The debate over criteria such as fleet size and fishing area remains unresolved.

Political and Administrative Obstacles

Domestic political pressure from fishing industries complicates negotiations. Many developing and least-developed countries lack the monitoring capacity and scientific data to prove their subsidies are non-harmful. This limits their ability to comply with WTO rules. The deadlock over S&DT and equity threatens to derail the entire agreement before ‘Fish 2’ is agreed.

Implications for Marine Sustainability

Without a comprehensive subsidy discipline, overfishing and marine ecosystem damage will continue. The failure to finalise ‘Fish 2’ risks nullifying ‘Fish 1’ and losing the progress made. The WTO faces a critical challenge to balance environmental goals with economic realities of diverse member countries. The future of global marine sustainability depends on resolving these complex issues.

Questions for UPSC:

1. Critically discuss the impact of government subsidies on marine biodiversity and the livelihoods of coastal communities.
2. Examine the role of Special and Differential Treatment (S&DT) in international environmental agreements and its implications for developing countries.
3. Analyse the challenges of enforcing international agreements in the context of domestic political pressures and administrative capacities in developing nations.
4. Estimate the potential consequences of failing to regulate fisheries subsidies on global food security and ocean health.

Answer Hints:

1. Critically discuss the impact of government subsidies on marine biodiversity and the livelihoods of coastal communities.

1. Subsidies lower costs for fuel, vessel construction, and gear, enabling fleets to fish longer and farther.
2. This leads to overcapacity and overfishing, depleting fish stocks and harming marine biodiversity.
3. Illegal, unreported, and unregulated (IUU) fishing is often subsidized, worsening unsustainable practices.
4. Declining fish stocks threaten the livelihoods of coastal communities dependent on fishing for income and food.
5. Small-scale artisanal fishers face competition from subsidized industrial fleets, risking economic marginalization.
6. Long-term ecosystem damage reduces fishery productivity, undermining food security and economic stability.

2. Examine the role of Special and Differential Treatment (S&DT) in international environmental agreements and its implications for developing countries.

1. S&DT provides developing countries flexibility to meet obligations considering economic and capacity disparities.
2. It aims to protect livelihoods of small-scale fishers who rely on subsidies for subsistence and food security.
3. Developing nations seek exemptions or transition periods (e.g., India’s proposed 25 years) to adjust gradually.
4. S&DT addresses historical inequities by differentiating between large industrial subsidies and minimal artisanal support.
5. However, S&DT complicates negotiations by creating divergent expectations between developed and developing countries.
6. Effective S&DT balances environmental goals with socio-economic realities, ensuring fairness and inclusivity.

3. Analyse the challenges of enforcing international agreements in the context of domestic political pressures and administrative capacities in developing nations.

1. Fishing industries exert strong domestic lobbying to maintain subsidies, resisting restrictive international rules.
2. Developing countries often lack scientific data and monitoring tools to demonstrate non-harmful subsidies.
3. Limited administrative capacity hampers effective enforcement and compliance with WTO subsidy disciplines.
4. Political priorities may conflict with environmental commitments, leading to weak implementation.
5. Complexity of defining small-scale vs. industrial fleets creates enforcement ambiguities.
6. Deadlocks in negotiations reflect these domestic and capacity constraints, threatening agreement durability.

4. Estimate the potential consequences of failing to regulate fisheries subsidies on global food security and ocean health.

1. Continued subsidies will drive overcapacity, accelerating overfishing and depletion of critical fish stocks.
2. Marine biodiversity loss will disrupt ecosystems, reducing resilience and productivity of oceans.
3. Declining fish availability threatens food security, especially for coastal and vulnerable populations dependent on fish protein.
4. Small-scale fishers risk losing livelihoods, increasing poverty and social instability in coastal regions.
5. Failure to regulate undermines global efforts to achieve sustainable fisheries and marine conservation targets.
6. Economic losses in fisheries and related industries will increase, affecting global trade and development.