Kia ora again from the South Pacific where this Trade Secrets writer is having a brief and chilly hiatus from the height of summer elsewhere. Today’s main piece looks at some rare pieces of good news: moves by the Quad partners and the WTO to tackle the ecological and human rights disaster created by the global fishing industry. We give a reality check on the scale of the problems and offer some new solutions. Charted waters is looking at the movement of people and the international competition for talent.
Email me at edward.white@ft.com. Trade Secrets will be back in two weeks, with my colleague Andy Bounds taking the chair for a guest appearance.
Some good news at last, but not enough
Over recent years the Financial Times has documented horrific claims of environmental pillage and modern-day slavery across the global fishing fleet.
We’ve written about Taiwanese vessels where Indonesian crews worked 22 hours only to return to sleeping and eating quarters rife with insect infestations. We’ve also exposed the Korean ships that hunted down walruses, seals and dolphins for their livers and genitals. And we’ve reported on China’s distant water fleet — by far the world’s biggest — which stands accused of rapacious illegal overfishing, decimation of endangered species and abuse of south-east Asian fishing crews.
Despite the stark risk overfishing poses to the livelihoods of millions of people, a constant complaint from NGOs has been that governments are doing far too little in response. Policing an industry which operates on the high seas — out of sight out of mind — has not been a high priority for many developed nation capitals. Yet in recent months two key wins have been notched in favour of the oceans and marginalised workers.
The Quad security grouping of the US, Japan, Australia and India in May launched a new satellite-based initiative across the Asia-Pacific region, a plan mostly targeted at illegal Chinese fishing. The Indo-Pacific Partnership for Maritime Domain Awareness will see the Quad partners fund a commercial satellite-based tracking service that will pass on maritime intelligence to countries in near real-time. US officials told the FT’s US-China correspondent Demetri Sevastopulo that the new system would monitor radio frequencies and radar signals that would allow countries in the region to pick up vessels that have turned off automatic identification systems (AIS) transponders to avoid detection — a key problem in illegal fishing.
Then in June, the WTO’s 12th ministerial conference finally — after 20 years of negotiations — reached an agreement to end harmful fisheries subsidies. As Alice Tipping of the International Institute for Sustainable Development neatly surmised: while the exceptions for developing countries are still to be worked out, the rules will at the least force governments to consider the legality and sustainability of the fishing activity they subsidise, something that very few do at present.
In a world that has over the past three years lurched from a pandemic to war in Europe, and where big economies teeter on the edge of economic recession, it seems important to note these positive steps when they do occur. That being said, neither the WTO’s breaking of a decades-long bureaucratic impasse nor the Quad partners promising to police the Pacific portend to be a panacea. The scale of the problem, Trade Secrets believes, requires far bolder action.
For the uninitiated: the UN estimates that up to 26mn tonnes of fish are caught illegally each year (with a value of about $23bn). Globally, around 20 per cent of all fish caught come from illegal, unreported and unregulated fishing activities. And half of global fish stocks are fished at biologically unsustainable levels (a change from 10 per cent in the 1970s).
Yet the fishing industry still enjoys massive subsidies. And it’s not just China. Researchers in academic journal Marine Policy found that China, the EU, the US, Korea and Japan — the top five — account for close to 60 per cent of total global subsidies, at a massive $20bn. They also noted that over the previous decade “the bulk harmful ‘capacity-enhancing’ subsidies, particularly those for fossil fuels have actually increased as a proportion of total subsidies”.
What’s more, subsidies classified as harmful still stand at about $22bn, annually.
Earlier this year, one of the most extensive investigations into China’s distant water fleet found that 95 per cent of the crew on board reported witnessing illegal fishing. The problems are among their most acute in West Africa, where Chinese trawlers catch an estimated 2.35mn tonnes of fish annually.
From a common sense point of view, the Quad’s focus on the Pacific will miss huge swaths of the most problematic areas, especially off the coast of western Africa, but also South America. The focus only on China is also problematic given vessels from the Quad-friendly countries of Taiwan and South Korea have for years faced accusations of widespread environmental plunder and shocking treatment of south-east Asian crews.
And while the US has also promised to increasingly utilise its coastguard to help police Chinese fishing — a move started by the Trump administration and continued under President Joe Biden — sending a few cutters into the vast Pacific, an area of 165mn square kilometres, is not expected to significantly move the dial.
Similarly, when it comes to the WTO breakthrough on subsidies, in a speech in late July WTO director-general Ngozi Okonjo-Iweala herself said: “Reaching the agreement was a vitally important step — but implementing it is what will matter.”
Implementation is one issue. Enforcement is another. To make serious improvements via the WTO its members will probably have to bring complaints against China, a move that will undoubtedly risk backlash from Beijing.
So, what is really needed? Trade Secrets posed this question to Steve Trent, the founder of the Environmental Justice Foundation who has decades of experience advocating for sweeping changes in the fisheries industry.
Trent believes a focus on China in the short-term remains “valuable” and he supports the Quad’s initiative given that abuses are “systemic across the Chinese fleet, without independent and consistent monitoring, the likelihood is these abuses will continue, at least in the near term”.
But longer term, Trent is clear: “Ultimately, you need transparency across the architecture of global fisheries governance. It is quite simple. Every vessel, we should be able to see who is fishing what, where, when and how”.
One of the key first steps, he believes, is for the major market states of Japan, the US and the EU to align their regulation and requirements for market access and exclude from their markets those products where they cannot prove the provenance, when they do not have the transparency that allows surety that it “has not been produced by a slave, caught by a slave, or caught legally or unsustainably”.
Alan Beattie writes a Trade Secrets column for FT.com every Wednesday. Click here to read the latest, and visit ft.com/trade-secrets to see all Alan’s columns and previous newsletters too.
Charted waters
For today’s Charted waters, I want to focus on the international market for human capital rather than goods and services. My colleague John Burn-Murdoch has (once again) produced some excellent data analysis on the subject.
What we can see from the above chart is that the UK has become a younger country, now the fourth-youngest in Europe, but only because of migration.
Now for the bad news. The UK’s luck in attracting young foreign workers is on the turn. As the above chart shows, it is not just Brexit. The global competition for talented labour has been increasing for the past decade. The question is what the UK is going to do about this. The concern is that it is going to do nothing. (Jonathan Moules)
Trade links
Argentina’s new economy minister has pledged to bring fiscal order to the country and regain market confidence by establishing a “super ministry” to tackle double-digit inflation.
The British pound and government bond yields slipped last week after the Bank of England raised interest rates by the most in 27 years to battle surging inflation and warned of a protracted recession.
Opec and its allies agreed one of the smallest oil production increases in the group’s history as Saudi Arabia attempted to appease western allies without using up all its unused capacity.
Favouring political allies when constructing supply chains is expensive, tricky and possibly self-defeating, according to Alan Beattie.
Trade Secrets is edited by Jonathan Moules
Source: Economy - ft.com
