COFI:FT/VIII/2002/2





Item 4 of the Provisional Agenda

COMMITTEE ON FISHERIES

SUB-COMMITTEE ON FISH TRADE

Eighth Session

Bremen, Germany, 12-16 February 2002

STATUS AND IMPORTANT RECENT EVENTS CONCERNING INTERNATIONAL TRADE IN FISHERY PRODUCTS INCLUDING TRADE IMPEDIMENTS

Table of Contents

INTRODUCTION

1. The purpose of this document is to inform the Sub-Committee of major facts and developments regarding international trade in fish and fishery products which have occurred since its Seventh Session in March 2000. The document contains a brief review of world fish production, exports and imports. It also includes a summary of the current trade situation of major fishery commodities. The activities of FAO and other international organizations in the field of world fish trade are described providing an update of the report submitted to the Seventh Session of the Sub-Committee.

2. World fish production declined substantially from 122.3 million tonnes in 1997 to 116.6 million tonnes in 1998, mainly due to decreased catches of small pelagics fisheries in Chile and Peru, caused by the "El Niño". This decline affected mainly fishmeal production, while food fish production stayed the same. In 1999 and 2000 fish production recovered and returned to pre-El Niño level. One third of world fishery production is traded internationally. Preliminary statistics for 2000 indicate a new record of 130 million tonnes, of which 28% coming from aquaculture. China is the top producer reporting 41.6 million tonnes in 2000. Peru was the second major fishing nation with catches of 10.7 million tonnes. The importance of aquaculture continues to expand, especially for freshwater species such as carp.

3. Developed countries accounted for more than 80% of total imports of fishery products in 2000 in value terms. Japan was again the biggest importer of fishery products, accounting for some 27% of the global total. Japanese imports of fish and fishery products are said, after declining recently due to the economic recession, to have returned to previous levels. The European Union (EU) further increased its dependency on imports for its fish supply. The United States, besides being the world's fourth major exporting country, was the second biggest importer.

4. The net receipts of foreign exchange by developing countries globally taken - deducting their imports from the total value of their exports - stabilized at US$ 16 000 million in 1999. This is however more than the net exports from developing countries of other agricultural commodities such as rice, coffee, tea, etc. For many developing nations, fish trade represents a significant source of foreign currency earnings.

5. Major issues of international trade in fishery products in recent years were: the change in quality and safety control measures in the main importing countries; the concept of risk assessment; the concern of the general public on overexploitation of the resource; environmental concerns with regard to aquaculture; the discussion on traceability.

MAIN COMMODITIES

6. In Japan, the economic crisis led to lower demand for shrimp. The main supplying countries had to reduce prices and to look for other outlets, in order to sell their production. The United States (US) market was strong in 2000, but declined sharply in 2001. Demand for shrimp in Europe was improving, in parallel with the overall economic situation, however, the low level of the Euro undercut any substantial growth.

7. Disease problems, experienced by Ecuador and Central America in 1999, led to lower production of cultured shrimp also in 2000. Thailand continues to be the main farmed shrimp producer with 250 000 tonnes annually, and cultured shrimp production is growing after the disease problems experienced in 1996 and 1997 were overcome.

8. Tuna catches have been strong in 1999, and skipjack prices declined to a unprecidented low, making fishing uneconomical. In mid-2000, the main tuna vessel owners created an organization, the World Tuna Purseseiner Organization (WTPO) with the aim to normalize the market. Stringent catch reduction programmes were put into place by this organization, which had an immediate effect on prices. During the course of 2001, members of the organization met regularly, keeping catch reduction in place.

9. Thailand continues to be the main exporter of canned tuna to the United States market, but lower exports were experienced in 2001. The Philippines remained the second most important supplier. The use of tuna loins by Italian canners continues to expand. Loins as raw material now account for about 70 percent of total Italian canned tuna production. Ecuador and Colombia are benefiting from their special duty-free status as Andean community countries and are increasing their shipments to the EU.

10. Groundfish supply was very limited in the first half of 2001. Alaska pollack supply was reduced in all main markets. Cod and hake also reported lower catches and less availability. Prices did not go up as much as expected, as other species - salmon and tilapia - are replacing groundfish in many markets.

11. Squid fisheries were low in 2001, especially Illex catches from the South-West Atlantic. Octopus catches in the Eastern Central Atlantic were good in the beginning of 2001, leading to higher exports directed to Japan. The Moroccan Government fixed a minimum price, in a move to protect its octopus industry.

12. The 2001 fishmeal production is forecast at 5.4 million tonnes, which is a 12% decrease from 2000. Various fishing bans and problems with the jack mackerel resource in Chilean waters were the main reason for the rather disappointing catch. Also Peruvian production was relatively low. The bovine spongiform encephalopathy (BSE) scare overshadowed the fishmeal market in Europe in 2001. In early 2001 the EU prohibited the use of animal proteins in all animal feeds with the exception of milk powder and fishmeal. The use of the latter was prohibited in ruminant's diets only. In most plants in the EU, feed for non-ruminants is produced in the same line as ruminants food, since the EU legislation resulted in lower fishmeal use in pig and poultry diet too. Fishmeal prices are expected to increase due to good demand. Peru and Chile lodged their complaint with WTO SPS Committee (October 2001) to persuade the EU to lift the current restrictions on fishmeal usage.

13. The overall climate on the fish oil market was good in 2001, with strong improvements in prices. Fish oil production in 2001 was slightly below 2000. There is little availability of fish oil on the market at present. Competing vegetable oils seems to be in shorter supply than initially forecast, and their prices are expected to move up. As a result, a further increase in fish oil prices is likely.

FISH IN FOOD AID

14. The use of fish in food aid continues to decline. In 2000, some 9 000 tonnes were donated which compares to 21 300 tonnes in 1989. Canned fish is the main product, while edible fat reported a dramatic decline in recent years. Norway continues to be the main supplier of fish for food aid, and reported a sharp decline in 1998. Developing countries are practically not tapped as a source of fish for food aid.

Use of fishery products in food aid

Table 1. World Food Programme (WFP) Shipment of Fish and Fishery Products as Food Aid (by commodity in t)

  1989 1992 1995 1997 1998 1999 2000
Canned fish 13 115 14 828 12 022 12 794 9 069 11 345 6 628
Dried fish 1 429 965 150 71 114 180 567
Stock fish 415 411 0 0 0 0 0
Edible fat from fish 6 251 7 338 3 110 5 636 5 185 1 014 1 846
Total (include others) 21 343 23 541 15 328 18 501 14 392 12 539 9 042

Table 2: WFP Pledges of Fish and Fishery Products (by country in t)

  1986 1992 1995 1997 1998 1999 2000
Norway 11 628 10 021 11 160 11 915 5 515 4 813 3 703
Canada 3 506 4 336 2 781 2 199 3 208 2 728 1 182
Germany 2 517 2 218 2 000 688 311 0 0
Japan 3 489 3 460 3 485 4 733 4 125 1 464 0
Total (include others) 22 860 20 835 19 590 19 611 13 408 9 630 4 885

FAO ACTIVITIES RELATED TO INTERNATIONAL FISH TRADE

15. Over the past 20 years, FAO has created various entities working in the field of fish trade, information and technical activities: GLOBEFISH, the Intergovernmental Organization for Marketing Information and Technical Advisory Services for Fishery Products in the Asia and Pacific Region (INFOFISH), the Intergovernmental Organization for Marketing Information and Cooperation Services for Fishery Products in Africa (INFOPECHE), the Centre for Marketing Information and Advisory Services for Fishery Products in Latin America and the Caribbean (INFOPESCA), the Centre for Marketing Information and Advisory Services for Fishery Products in the Arab Region (INFOSAMAK), THE Fish Marketing and Information Service for Central and Eastern European Countries (EASTFISH) and the Assistance to the Fishery Industry Marketing Information in China (INFOYU). Most of the regional services are now operating as independent intergovernmental organizations, but there is a strong networking function which is operational in the system. With greater trade liberalization and globalization, unbiased information on price developments and market trends becomes essential for producers and traders, especially medium and small size companies in the developing world.

16. The Fish Marketing and Information Service for Central and Eastern European Countries (EASTFISH) is now terminating its second phase. The project aims to facilitate the structural adjustment of the fishery sector in participating countries by providing marketing information and managerial expertise. In October 1999, the member countries decided to create an inter-governmental organization (EUROFISH) to continue this work after the end of project funding. In October 2001 five member countries deposited their legal documents at FAO, thus the intergovernmental organization EUROFISH is now established.

17. FAO financed from August 1997 to July 1999 the establishment of INFOYU, which created a network of fish market information, advisory and trade promotion centres in China. The unit was successfully established and the Government of China decided to continue its activities through Government funding.

ACTIVITIES BY WTO WITH REGARD TO FISHERY PRODUCTS

18. The WTO Ministerial Conference, Doha, 9-14 November 2001 agreed inter alia (para. 28)1 "...to negotiations aimed at clarifying and improving disciplines under the Agreements on implementation of Article VI of the GATT 1994 and on Subsidies and Countervailing Measures, while preserving the basic concepts, principles and effectiveness of these Agreements and their instruments and objectives, and taking into account the needs of developing and least-developed participants. In the initial phase of the negotiations, participants will indicate the provisions, including disciplines on trade distorting practices, that they seek to clarify and improve in the subsequent phase. In the context of these negotiations, participants shall also aim to clarify and improve WTO disciplines on fisheries subsidies, taking into account the importance of this sector to developing countries..."
19. At the time of writing this document (November 2001) it was too early to determine how and where fisheries will be included in the "negotiation" as the Trade Negotiation Committee shall hold its first meeting not later than 31.1.2002.2
20. The Ministerial Declaration in para. 31 states "With a view to enhancing the mutual supportiveness of trade and environment, we agree to negotiations, without prejudging their outcome, on:

      1. the relationship between existing WTO rules and specific trade obligations set out in Multilateral Environmental Agreements (MEAs). The negotiations shall be limited in scope to the applicability of such existing WTO rules as among parties to the MEA in question. The negotiations shall not prejudice the WTO rights of any Member that is not a party to the MEA in question;
      2. procedures for regular information exchange between MEA Secretariats and the relevant WTO committees, and the granting of observer status;
      3. the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services.

We note that fisheries subsidies form part of the negotiations provided for in paragraph 28".

21. In para. 32 of the same document, it continues: "We instruct the Committee on Trade and Environment, in pursuing work on all items on its agenda within its current terms of reference, to give particular attention to:

      1. the effect of environmental measures on market access, especially in relation to developing countries, in particular the least-developed among them, and those situations in which the elimination or reduction of trade restrictions and distortions would benefit trade, the environment and development;
      2. the relevant provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights; and
      3. labelling requirements for environmental purposes..."

Here it is interesting to note that eco-labelling including eco-labelling in fisheries will be discussed in the future in the WTO Committee on Trade and Environment.

22. Also of interest to fisheries is para 33 of the Ministerial Declaration: "We recognize the importance of technical assistance and capacity building in the field of trade and environment to developing countries, in particular the least-developed among them. We also encourage that expertise and experience be shared with Members wishing to perform environmental reviews at the national level. A report shall be prepared on these activities for the Fifth Session". FAO has already carried some activities on capacity building for including fisheries issues in trade negotiations, but in collaboration with the WTO secretariat, more resource could be made available to strengthen the negotiating capabilities of developing countries, with regard to fish trade matters.

SUGGESTED ACTION BY THE SUB-COMMITTEE

23. The Sub-Committee is invited to take note of the information provided and contribute additional experience. It is requested to provide guidance for future work of FAO in the area of international trade in fishery products, particularly with regard to: strengthening the position of developing countries and economies in transition in this trade; the need to monitor and promote the use of fishery products in food aid; needs for and possible sources of technical and financial assistance for developing exporting countries to meet quality assurance requirements. The Sub-Committee might also wish to comment on the collaboration between FAO and WTO with respect to fish trade matters. The Sub-Committee is also invited to comment on its experience with the FISH INFOnetwork.

1 WTO WT/MIN (01)/DEC/W/1, 14 November 2001, Ministerial Declaration.

2 para. 46, WTO WT/MIN(01)/DEC/W/1, 14 November 2001 Ministerial Declaration.