FFA FISHERIES TRADE NEWS Volume 4: Issue 5 May 2011

By liam.campling - Posted on 05 June 2011

 

FFA FISHERIES TRADE NEWS

Volume 4: Issue 5  May 2011

By Amanda Hamilton, Elizabeth Havice, Liam Campling[1]

 

Contents 

World Trade Organisation

Vanuatu set for WTO accession

WTO rules in favour of Mexico in the US-Mexico ‘tuna-dolphin’ dispute 

 

Trade Regulation 

EU proposes GSP reforms intended to benefit the most needy developing countries

 

Fisheries Management

PNG withdrawal spells the end of the US Multilateral Treaty

Solomon Islands purse seine fishery closure under VDS

Atlantic bluefin escapes US endangered species listing 

ISSF launches a research vessel to trial by-catch mitigation technologies

 

Tuna Markets

Fiji albacore tuna longline Fishery enters into MSC full assessment

 

 

World Trade Organisation

Vanuatu set for WTO accession

In July 1995, Vanuatu applied for membership to the World Trade Organisation (WTO).  Fifteen years later, in May 2011, the WTO Working Party on Vanuatu’s accession has approved Vanuatu’s accession package, which paves the way for Vanuatu to become a WTO member.[2]  

Following its application for membership in 1995, Vanuatu submitted an accession package that was approved by the Working Party in October 2001.  However, at Vanuatu’s request, the accession process was stalled at the last minute to allow Vanuatu additional time to consider its accession terms.  Given many of the commitments under Vanuatu’s access package went well beyond those of some of the largest developed WTO members (especially in sensitive sectors like heath care, education and agriculture), there were concerns that the package would be harmful to the interests of the people of Vanuatu.[3]  In 2008, Vanuatu resumed its WTO accession process and worked to update the 2001 Draft Accession Package to take into account new developments in its trade regime.  Following the Working Party’s approval of the accession package in April 2011, Vanuatu’s WTO membership can now be finalised.  Vanuatu now has six months to ratify its accession package before officially becoming a WTO member.[4]      

Vanuatu’s primary motivation for becoming a WTO member was summed up in an address to the Working Party on 2 May 2011 by Vanuatu’s Minister of Trade, Commerce, Industry and Tourism, Hon. Sela Molisa - “Trade opening, properly sequenced, within the framework of the rules-based multilateral trading system, provides a necessary condition and an impetus for modernisation, integration into the global economy and rapid growth”.[5]  Other cited benefits of WTO membership to Vanuatu include the opportunity to become formally involved in WTO negotiations (rather than just having observer status) that potentially affect the country’s interest and gaining access to the WTO’s Dispute Settlement Mechanism (although, in practice, questions have been raised about the capacity of LDC’s to raise a dispute through the WTO given the process is extremely costly and arduous).  In addition, the external imposition of trade policy may potentially aid in achieving a more stable political environment in Vanuatu which will help to reassure foreign investors and attract greater investment.[6] 

A number of NGO groups in Vanuatu oppose WTO accession (and reportedly some Members of Parliament), vowing to push the Vanuatu Government to withdraw its decision to become a WTO member during the six month window when Vanuatu’s access package needs to be ratified by Parliament.  In a similar vein to concerns raised in 2001, NGOs believe that joining the WTO will have negative impacts on Vanuatu’s people, particularly farmers, and will damage local industry.  NGOs have indicated that none of the content of the current accession package has been published in Vanuatu to date, which leaves the Vanuatu Government open to criticism for not adequately consulting with the Vanuatu’s people concerning WTO accession.  Questions have also been raised about the value of Vanuatu becoming a WTO at a point in time when serious questions are being raised about the future of the WTO, given the conclusion of the Doha Round seems unlikely in the near future, if at all.[7] 

Currently four PICs, Papua New Guinea, Solomon Islands, Fiji and Tonga are members of the WTO.  Along with Vanuatu, Samoa is also in the process of acceding to the WTO.  Solomon Islands and Vanuatu qualify for Least-Developed Country (LDC) status at the WTO.  

 

WTO rules in favour of Mexico in the US-Mexico ‘tuna-dolphin’ dispute 

As reported previously in FFA Fisheries Trade News (June & December 2009), the WTO Dispute Settlement Body established a panel in April 2009 to review Mexico’s complaint against US rules on ‘dolphin-safe’ labelled tuna.[8]   The dispute panel has released a ruling in favour of Mexico, concluding that US dolphin-safe labelling requirements imposed on imports of Mexican tuna do not comply with international trade regulations.[9]  

The tuna-dolphin dispute between Mexico and the United States spans twenty years and stems from the US Department of Commerce deeming Mexican tuna ineligible to bear the ‘dolphin-safe’ label, on grounds that the Mexican purse seine fleet fishes in the EPO where tuna and dolphins naturally school together.  Mexico claims that the US industry has used the dolphin safe logo as a technical (non-tariff) barrier to trade to discriminate against Mexican tuna imports, given Mexico’s fishing practices are in compliance with IATTC guidelines concerning dolphin by-catch (i.e. not breaching dolphin mortality caps and carrying observers on board vessels for catch verification purposes).[10]  The WTO panel verified Mexico’s concerns by ruling that US requirements violate Article 2.2 of the WTO Agreement on Technical Barriers for Trade, which prohibits implementing technical regulations that restrict trade “beyond the necessary to achieve a legitimate objective”.[11]            

While tuna imports into the US from Mexico are not prohibited, volumes have been minimal (i.e. around 1% of total US tuna imports in 2010) given sales of tuna that is not labelled as ‘dolphin safe’ have generally been limited to small Latin shops.  To date, major retailers and the three major US brand owners (Bumble Bee, StarKist and Chicken of the Sea) have refused to purchase Mexican tuna because it does not comply with requirements needed to carry the ‘dolphin safe’ label.[12]  

The WTO ruling is a major win for Mexico, which in future should now be able to export canned tuna duty-free into the US under preferential market access offered through the North American Free Trade Agreement (NAFTA).

This development has some potential to alter the US and Mexico’s tuna processing sectors and the US canned tuna market, given Mexico has a large purse seine fishing fleet (comprised of 40-50 vessels) and is currently Latin America’s second largest canned tuna processing site (around 175,000 mt annually).[13]

 

Trade Regulation

EU proposes GSP reforms intended to benefit the most needy developing countries[14]

Since the 1970’s, the European Union has offered non-reciprocal preferential market access (in the form of zero or reduced import tariffs) to developing countries under its Generalised System of Preferences (GSP).  The GSP is currently comprised of three regimes: 

* Standard GSP: reduced import tariffs for 176 developing countries and territories. 

* GSP+: duty free access for developing countries who are classified as ‘vulnerable’ and have ratified a series of international conventions in the areas of human/labour rights, sustainable development and good governance (currently 15 beneficiary countries).

* Everything But Arms (EBA):  duty and quota free access for all goods (with the exception of arms and armaments) for Least-Developed Countries (LDCs) (currently 49 countries are classified as LDCs by the UN). 

The EC has released a proposal to reform the GSP to better focus on developing countries that are ‘most in need’.  Under the reform, advanced developing countries who have become globally competitive (and who, according to the EC are the largest beneficiaries of GSP preferences, accounting for around 40% of preferential imports) will no longer be eligible for tariff preferences.  Instead, preferential market access will be limited to around 80 developing countries, rather than 176 countries currently covered under GSP.  Developing countries falling under the following categories will no longer benefit from the GSP scheme:  i) countries that have achieved upper-middle and high levels of income per capita (according to World Bank classification); ii) countries who have equivalent EU preferential access under alternative schemes (i.e. free trade agreements, economic partnership agreements); and, iii) overseas countries and territories (e.g. American Samoa) who have alternative market access arrangements for developed markets. 

Should a comprehensive (or interim) EPA be concluded between the EU and PACP countries, PICs will no longer be ‘beneficiaries’ under the GSP scheme post-2013.  However, under the reformed GSP, PICs would still remain ‘eligible’ and, in the event that their trade arrangements expired, could once again become beneficiaries of the scheme.  

To date, only Solomon Islands has utilised GSP trade preferences for tuna exports to the EU under the EBA regime, given its LDC classification.  Other non-LDC PICs with EU market access (i.e PNG and Fiji) have opted to utilise duty free market access under the Cotonou Agreement (i.e. 24% for canned tuna, 15-22% for fresh/frozen tuna) through the establishment of interim EPAs, as preferences offered under the standard GSP (i.e. 3.5% for tuna products) are too low and offered to too many competing developing countries to provide any competitive advantage to PIC tuna exporters.[15] 

In an effort to further promote human and labour rights and the principles of good governance and sustainable development, the EU also intends to provide more incentives for developing countries to join the GSP+ scheme, by loosening the vulnerability criterion and enabling applications to be lodged any time, rather than once every 1.5 years. To date, PICs have not attempted to utilise GSP+ for preferential market access.   

The current GSP scheme was scheduled to expire in December 2011; however, the EC has extended the present system until the end of 2013, to avoid GSP preferences lapsing while new the new GSP scheme is being developed.  The proposed new reforms now need to be presented to the European Parliament and Council of Ministers, and once approved, will apply as of 1 January 2014, at the latest. If the GSP+ is extended to additional tuna exporting countries this will indirectly erode the commercial advantages of IEPA signatories as more and more competing countries will have duty free access to the EU market.

 

Fisheries Management

PNG withdrawal spells the end of the US Multilateral Treaty

After two years of negotiations, the US Multilateral Treaty between the United States and sixteen Pacific Island Parties (PIPs) looks set to end after 25 years, following an announcement by PNG of its intention to withdraw from the Treaty.  Under US Treaty provisions, if one of four key members of the Treaty withdraws (US, PNG, FSM or Kiribati), then the Treaty ceases one year after lodging of the notice of intention to withdraw.   The current (third) phase of the US Treaty was due to expire in June 2013; however, with PNG’s withdrawal the Treaty will end 12 months early in June 2012.[16]  

A number of issues have likely contributed to PNG’s decision to withdraw from the US Treaty.  

First, one of the major aims of PIPs during negotiations has been to re-shape the US Treaty to incorporate stronger conservation and management measures (particularly for bigeye and yellowfin).  Currently, the US fleet is exempted from fishing effort limits applied under the Vessel Day Scheme.  This has been an issue of growing concern for PNA countries, given effort levels of the US fleet have increased dramatically since 2007 from the introduction of vessels operating under US-flag as joint ventures between US and Taiwanese interests.  In addition, the US refused a request from PNA members to voluntarily cease fishing in high seas areas located within 10˚N and 20˚S latitude and 170˚E and 150˚W longitude; a management measure which  applies to all other foreign vessels licenced to fish in PNA waters.[17]  

A further concern is that guaranteed access offered to US vessels locks up fishing days that could potentially be offered under the VDS to other DWFN with greater capacity to contribute to domestic fisheries development, access fee revenue and/or development aid.  In the past, the US Treaty typically generated higher rates of return than access agreements with other bilateral partners, in part because PIPs sold unused US licences.  Higher fish prices, coupled with rapidly increasing catch volumes by the US fleet have significantly reduced the rate of return from the US Treaty. PIPs suggest that the value of the US Treaty is now below that currently (or potentially) received by some PNA members from other distant water fishing fleets.          

Unless a new multilateral treaty is negotiated between the US and PIPs which includes stronger fisheries management provisions and better reflects PIP’s development aspirations (in terms of onshore development, broader cooperation and market access), the US purse seine fleet will likely have to annually negotiate bilateral fisheries access arrangements like other distant water fishing fleets, if it wishes to continue fishing in PIP waters, post June-2012. The end of the US Treaty will also eliminate the US government’s main diplomatic activity in the region. 

 

Solomon Islands purse seine fishery closure under VDS[18]

After only five months, Solomon Islands has used all of its allocated purse seine fishing days for 2011 under the PNA Vessel Day Scheme (VDS).  In honouring a firm commitment made by PNA members in 2010 to implement strict limits on purse seine fishing effective from 1 January 2011, the Solomon Islands Cabinet has temporarily closed the fishery to all purse seine fishing while it considers options for purchasing of additional fishing days from other PNA members.  

Under the VDS, any PNA member that uses all of its allocated fishing days (referred to as Party Allowable Effort (PAE)) prior to the end of the VDS management year (31 December) must close its fishery for the remainder of the fishing year or alternatively, purchase additional fishing days from another PNA member whose days allocation is under-utilised.  

In 2010, Nauru purchased additional days from Marshall Islands when it depleted its allocation.  Anticipating that it will exceed its 2011 PAE, PNG has purchased all of Palau’s allocated fishing days.  These trading arrangements demonstrate progress in the development of an internal mechanism for trading fishing days between PNA members, which has been a major constraint to the effective implementation of the VDS, to date. 

 

Conditions ‘seal the deal’ for MSC certification of the NZ albacore troll fishery[19] 

Marine Stewardship Council (MSC) certification of the New Zealand albacore troll fishery can now proceed, following the resolution of an objection to the outcomes of the full-assessment lodged by the International Seafood Sustainability Foundation (ISSF) in March 2011.  In its formal objection, ISSF raised concerns about certifying an individual tuna fishery targeting a regional stock (i.e. South Pacific albacore), which operates under weak RFMO (WCPFC) management.  

Under the MSC objections process, the certifying body (Moody Marine), the client (Tuna Management Association of New Zealand (TMANZ)) and the objecting stakeholder (ISSF) have been working through an independent adjudicator to resolve the objection.  The client fishery has agreed to implement a number of conditions called for by ISSF, including the development of target and limit reference points at the RFMO level, as well as the adoption of harvest control rules. Changes must be made within the next five years.   

One of ISSF’s major criticisms of the MSC certification process to date is that it does not take into account enough the effectiveness (or rather, ineffectiveness) of RMFOs conservation and management highly migratory tuna stocks.  Rather, the focus has been more on national-level fisheries management schemes.  ISSF believes that by placing conditions on the fishery for improvements in regional management mechanisms, this commits national fisheries administrations and industry to pushing for fisheries management improvements at the RFMO level. 

This outcome sets a likely precedent for other fisheries targeting South Pacific Albacore (e.g. Fiji longline albacore fishery), as well as other tuna fisheries generally (both within the WCPO and elsewhere) that may seek to obtain MSC certification in future, given widespread concerns about the effectiveness of all five tuna RFMOs in conserving and managing tuna stocks. 

 

Atlantic bluefin escapes US endangered species listing 

The US National Oceanic and Atmospheric Administration (NOAA) has been reviewing a petition and lawsuit lodged in May 2010 by the Center for Biological Diversity (a US-based environmental NGO) urging the National Marine Fisheries Service (NMFS) to list Atlantic bluefin tuna as endangered under the United States Endangered Species Act.[20]    

The Center’s concerns regarding the potential extinction of Atlantic bluefin relates to severe levels of overfishing occurring on fish stocks, as well as habitat degradation, particularly that caused by the Deepwater Horizon BP oil spill in the Gulf of Mexico, given the area is a major breeding ground for Atlantic bluefin.  If bluefin was listed as ‘endangered’, it would be illegal for vessels fishing in US waters, as well as US-flagged vessels operating outside of US waters, to target Atlantic bluefin.[21] 

Following an extensive scientific review, NOAA announced on 27 May 2011 that Atlantic bluefin does not warrant protection under the Endangered Species Act, given there is currently no compelling evidence of the likelihood the fish’s extinction (which is required for a species to be listed as endangered under the Act).[22]  However, the agency remains concerned about the long-term sustainability of Atlantic bluefin and will treat it as a ‘species of concern’, before revisiting its decision in early 2013.  By this time, a new stock assessment will be released by ICCAT, which should assess the impact of stricter international regulatory measures for bluefin.  In addition, more information concerning the impact of the BP oil spill on the western Atlantic bluefin stock will be available.[23] 

This decision follows the rejection of a proposal in March 2010 to ban the international trade of bluefin tuna under the Convention on the International Trade of Endangered Species (CITES). The failed ban was supported by the US. 

The Center for Biological Diversity strongly criticised NOAA’s decision on the grounds that the Obama Administration is siding with concerns raised by the US tuna fishing industry, rather than making a decision based on science.[24]  Following the announcement, the Center formally notified NMFS that it intends to sue the agency for failing to protect Atlantic bluefin tuna under the Endangered Species Act.[25] 

 

ISSF launches a research vessel to trial by-catch mitigation technologies[26]

As part of its ongoing effort to promote sustainable tuna fishing, ISSF is embarking on research into potential technologies for mitigating by-catch associated with purse seine fishing, in particular, the use of fish aggregating devices (FADs).  While NGOs, particularly Greenpeace, are pushing for a total ban on FAD fishing by purse seiners, ISSF’s is focussing on development and adoption of more sustainable FAD fishing techniques.  

In the coming two months, ISSF, in conjunction with IATTC, will deploy a research vessel in the Eastern Pacific Ocean to test new purse seine fishing techniques.  ISSF tentatively plans to deploy the research vessel in the WCPO in 2012.  ISSF intends to share research findings with industry through an ongoing series of ‘best practice’ workshops to be held in major global fishing ports, including American Samoa, Ghana, Ecuador, California, Spain and Panama. 

 

Tuna Markets

Fiji albacore tuna longline Fishery enters into MSC full assessment

The Fiji albacore tuna longline fishery has entered into full assessment under Marine Stewardship Council (MSC) certification.[27]  The assessment, to be conducted by MSC-accredited certifying body, Intertek Moody Marine, will take place over the next 9-12 months.  Provided no major objections are lodged, the target date for certification is May 2012.

The assessment covers vessels that are members of the Fiji Tuna Boat Owners Association (FTBOA), which operate mostly within Fiji’s EEZ.  Collectively, FTBOA member vessels catch around 3,000-4,000 mt of albacore annually, which is marketed fresh to the Japanese and US sashimi markets, as well as sold frozen to  canneries in American Samoa and Fiji.   MSC certification offers Fiji an opportunity to take advantage of the burgeoning demand for sustainably caught tuna, particularly in Northern Europe.  

 

Coming in the next issue (June 2011, Vol. 4: Issue 6)

* Update on reform process of EU Fisheries Partnership Agreements

* Update on bluefin tuna fisheries and trade dynamics

 

1 Prepared for the FFA Fisheries Development Division by Liam Campling, Consultant Fisheries Trade Analyst, FFA and School of Business and Management, Queen Mary, University of London, Elizabeth Havice, University of North Carolina at Chapel Hill; and Amanda Hamilton, independent consultant. Desktop publishing by Antony Price. The authors would like to thank Hugh Walton for his input on an earlier draft of this briefing. The contents of this briefing (including all analysis and opinions) are the responsibility of the authors and do not necessarily reflect the positions or thinking of the FFA Secretariat or its Members.

2 WTO 2011, ‘Vanuatu on verge of WTO membership’, WTO: 2011 News Items, 2 May 2011.  Available at: http://www.wto.org

3 Oxfam 2005, ‘Making extortion history – the case for development friendly WTO accession for the world’s poorest countries’, Briefing Paper 79, Oxfam, October 2005. 

4 WTO 2011.

5 Hon. Sela Molisa 2011, ‘Vanuatu is in the hands of the WTO: please open the doors of membership’. Statement delivered to the meeting of the re-convened working party on the accession of Vanuatu, 2 May 2011 by the Vanuatu Minister of Trade, Commerce, Industry and Tourism, Pacific Trade Information Network, 9 May 2011.  

6 Oxfam 2005; Radio New Zealand 2011, ‘WTO membership offers reassures to investors in Vanuatu’, Pacific Trade Information Network, 4 May 2011.  Available at:  http://www.rnzi.com

7 Radio Australia 2011, ‘Vanuatu NGOs reject joining World Trade Organisation’, Pacific Beat, 4 May 2011.  Available at:  http://radioaustralia.net.an/pacbeat/

8 Elizabeth Havice and Liam Campling 2009, ‘Mexico-US tuna-dolphin debate returns’, FFA Fisheries Trade News, June 2009.  Liam Campling, Amanda Hamilton & Elizabeth Havice 2009, ‘Update:  US-Mexico tuna-dolphin debate makes moves towards NAFTA’, FFA Fisheries Trade News, December 2009.  Available at: http://www.ffa.int/trade_news 

9 El Economista 2001, ‘WTO Court Rules Against US Dolphin Safe Label Requirements’, Atuna, 24 May 2011.  Available at:  http://www.atuna.com

10 Havice and Campling 2009.

11 El Economista 2011.

12 FIS 2011, ‘WTO panel rules in favor of the Mexican Tuna, Fish Information & Services, 24 May 2011.  Available at: http://www.fis.com

13 Campling, Hamilton & Havice 2009;  Amanda Hamilton, Antony Lewis, Mike A. McCoy, Elizabeth Havice and Liam Campling (forthcoming),  Impact of industry and market drivers on the global tuna supply chain, Honiara: FFA.

14 DG Trade 2011, ‘Focusing on needs:  the EU reshapes its import scheme for developing countries’, DG Trade Press Release, Brussels, 10 May 2011.  DG Trade 2011,  More benefits from preferential trade tariffs for countries most in need:  Reform of the EU Generalised System of Prefences.  Memo/11/284, Brussels, 10 May 2011.  Text of the memo and proposal are available at: http://trade.ec.europa.eu/  

15 Liam Campling, Elizabeth Havice & Vina Ram-Bidesi 2007, Pacific Island Countries, the Global Tuna Industry and the International Trade Regime – A Guidebook, FFA, April 2007. 

16 Christopher Pala 2011, USA’s Lucrative Pacific Tuna Deal Comes to an End,  Islands Business in Atuna, 17 May 2011.  Available at:  http://www.atuna.com

17 Pala 2011, author’s own. 

18 Anouk Ride 2011, Solomon Islands Cabinet makes key decision about sustainability of PNA tuna – to close its tuna fishery later this month. PNA media release, 15 May 2011.  Available at: http://www.pnatuna.org 

19 ISSF 2011, ‘Conditions for NZ Tuna Fishery ‘Significant Improvement’ for MSC.  ISSF Press Release, 6 May 2001.  Available at: http://www.iss-foundation.org

20 Amanda Hamilton, Liam Campling & Elizabeth Havice 2010, Atlantic and Southern bluefin tuna face new regulations, FFA Fisheries Trade News, October & November 2010. Available at: http://www.ffa.int/trade_news

21 Clarke Canfield 2011, Bluefin tuna escapes endangered species list, Kansas City Star, 28 May 2011.  Available at: http://www.kansascity.com

22 Felicity Barringer 2011, US Declines to Protect the Overfished Bluefin Tuna, New York Times, 27 May 2011.  Available at: http://www.nytimes.com

23 Steven Hedlund 2011, US rejects listing bluefin as endangered, Seafood Source, 27 May 2011.  Available at: http://www.seafoodsource.com

24 Felicity Barringer 2011. 

25 The Center for Biological Diversity 2011, Lawsuit Challenges Delay in Protecting Vanishing Bluefin Tuna, Press release, 25 May 2011.  Available at:  http://www.biologicaldiversity.org

26 Atuna 2011, ‘ISSF to Launch Research Vessel’, Atuna, 12 May 2011.  Available at: http://www.atuna.com

27 MSC 2011, Track a Fishery – Fiji albacore longline tuna.  Available at:  http://www.msc.org/track-a-fishery/in-assessment/pacific/fiji_albacore_tuna_longline

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