FAO Fisheries & Aquaculture - Impacts of globalization

Impacts of globalization on fisheries

Globalization can further liberalize trade in fish and fishery product with potential impact on food security in exporting countries

FAO/J.Cort

Issue

"Globalization", a term used abundantly since the beginning of the 1990s has progressively developed since World War Two. It is recognized through a number of trends such as growing economic integration and liberalisation; trade deregulation; convergence of macroeconomic policies; modification of the role and concept of nation state; proliferation of supranational agreements and regulatory bodies; and globalization of information systems. These trends are associated with both positive and negative impacts on human well-being, the use and conservation of the environment, equity within countries and between developing and developed countries, participation and democratic decision-making, food security, poverty alleviation and others.

Some hold very strong views that globalization has resulted in increasing inequity and poverty; reduced and diluted responsibility of capital owners to national and local communities dislocating local employment systems; and increased threats to sustainability of natural resources use where effective management measures are not being put in place. Others stress the positive effects of globalization by, e.g. removing stumbling blocks of development; accelerating necessary reforms; promoting strategic thinking; diluting the power of sectarian interests; and spreading of environmental awareness through global information systems such as Internet, etc,

While globalization is clearly not an issue specific to fisheries, there are very few aspects of fisheries and aquaculture that are not affected i.e. through, inter alia,

the expansion of long-range fleets until the end of the 1980s;
the increased market flows of fish and fishery products from the developing to the developed world and vice versa since the mid 1970s;
the transfers of technology and fishing capacity from the developed to the developing countries during the same period,
through modernization of fish capture and processing technologies and introduction of more efficient means of production;
vastly improved and expanded information flow on all aspects of fisheries including markets and prices;
efforts to further liberalize trade in fish and fishery product with potential impact on food security in exporting countries;
pressure to reduce or eliminate subsidies;
increased awareness of environmental impacts;
demands for decentralisation of and participation in decision-making;
identification of clear property or use rights;
new international instruments not specific to fisheries (e.g. WTO agreements, Convention on Biological Diversity)
as well as unilaterally adopted policies on deregulation and structural adjustment of national economies that affect, inter alia, the fisheries sector.

Globalization may have a number of positive or negative effects on the economic, social and nutritional roles and performance of the fisheries sector.

Positive impacts include:

access to and diversification of overseas markets with a resulting increase in incomes in the fisheries sector, including the artisanal sector;
increase in intra-regional trade;
access to technological improvements;
increased demand for fish and fishery products because of higher per capita income and population growth;;
increase in the contribution of the fisheries sector to foreign currency earnings and to GDP through added value of fishery products;
presence in local markets of improved quality fish products;
increased competitiveness in international markets of some local fishing companies through better organisation of production and management as well as an overall increase of fishers' well-being provided that increased wealth is equitably distributed.

Negative impacts include:

increased production costs to meet quality and sanitation standards applicable in main foreign markets;
higher prices for tradable fish products in domestic markets and potential reduction of fish supply from local fisheries to domestic markets;
increased pressure on fully or overexploited fish stocks and potential risk of depletion if adequate management systems are not in place;
increasing impact of indirect effects of globalization that add additional pressures to fish stocks;
erosion of decision-making at various levels in the absence of adequate reforms in governance;
difficulties to meet scales of production needed to compete in a global environment by small countries, especially small island developing states as well as increase of poverty in fishing communities in the absence of an equitable distribution of benefits.

Globalization can improve and expand information flow on all aspects of fisheries including markets and prices

Courtesy of NOAA/NMFS/W.B.Folsom

While there are different views on the pros and cons of globalization, there is little doubt that the ongoing processes will continue and that there is a need to carefully study its impact on the fishery sector and economy at large. This is all the more necessary in order to identify appropriate policies and measures, which can help the fishery sector to successfully adjust to new global developments, derive the maximum benefit and mitigate negative effects.

FAO studies indicate that the fishery sectors of many countries in Asia and the Pacific have derived benefits and continue to benefit from globalization. These benefits include improved quality and better access of their fishery products to markets in other countries within and outside of Asia and the Pacific; increased export earnings; greater exchange of technology; increased productivity and efficiency and better supply of fish products to local populations through liberalisation of imports. Negative effects of globalization on fisheries in Asia and the Pacific were also identified in the form of increased market competition between the small-scale fisheries sector products and imported low priced fish products. The studies also identified changes in the structure of demand for fishery products, incorporation of new technologies and changes in the marketing and distribution systems as important factors of change of the fishery sector.

Possible solutions

The effects on fisheries of globalization and modifications of the global socio-economic context are not always directly manageable from within the sector or even at national level. Several of the changes and their effects can only be addressed globally, through international co-operation, with the view to, inter alia:

expand market access for all exports from developing countries, including through further reduction of tariffs;
reduce agricultural protectionism in high-income countries;
enhance the capacity of the poorest countries to influence the global debate, supporting inter alia, their participation in international trade negotiations on tariffs; Sanitary and Phytosanitary Measures (SPS); Technical Barriers to Trade (TBT); rules of origin (traceability) and food security to reduce their probability to become barriers to trade.
Assist exporting developing nations, in line with the directives and guidelines of WTO, in attaining and maintaining compliance with the rules and regulations of the global marketplace, in particular in the areas of quality assurance and technology. Assistance from importing countries would be particularly important;
facilitate the access of developing countries to best technology;
ensure that trade liberalisation works most effectively for the poor.
promote active exchange of information between countries and within sectors to raise awareness about needs and requirements of the market, available technology, training and credit.
Development of competitive products in terms of price, quality, delivery, duties, regulations, preferences, currencies, reputations, etc., meeting or better exceeding internationally agreed standards.
Establishment of an adequate governance, in the form of legal frameworks as well as functioning and stable institutions.

All of these would have repercussions on fisheries and the evolution of key issues such as international transfer of fishing capacity, illegal fishing and flags of convenience, management of global commons, especially the marine environment and high seas fisheries, biosafety and others. More details on these areas can be found elsewhere on this CD. Many other changes brought about by globalization need adjustments in national fisheries policies in order to ensure that full advantage is being taken of these developments for economic growth, food security and poverty alleviation.

More specifically, in fisheries, potential benefits from globalization may only be realized and sustained (and potential drawbacks mitigated) if governments introduce appropriate policies and measures to:

properly manage, conserve and rehabilitate fisheries resources and coastal environments to ensure that globalization does not exacerbate the overexploitation of natural resources, increasing damage to the coastal environment and social conflicts.
protect specifically the small-scale and traditional fishery sector through technical assistance, training, investment support, fiscal measures, and economic incentives.
ensure that fisheries sector meets the requirements of the global market place, particularly in terms of quality, through improved information flows to and from the communities and producers, investment and training.
promote partnerships between fish exporters or associations of exporters in developing countries and distribution centres in importing countries.
promote fish imports by fair trade organisations assisting producer associations in complying with the required criteria.
improve the artisanal sector (e.g. conditions of work and infrastructure; roads and communications networks; processing and trading establishments; and fish inspection services).

Globalization can have positive impacts for consumers

FAO/19562/G.Bizzarri

Action taken

All of the actions mentioned above are being implemented more or less actively in one way or another, but often with insufficient means and capacity. The international community is increasingly engaged in assisting countries that are lagging behind, although several action groups consider that not enough is done for those countries and communities. Much effort has been made by many countries to strengthen their fish inspection services and upgrade their production systems in order to comply with the sanitary requirements, in particular with the HACCP approach. Importing countries have given assistance to developing countries to reach and maintain compliance with required market standards but more is needed.

However, most governments are still grappling with the issue and attempting to forecast the consequence of the changes as well as the action to be taken to benefit from the positive ones while minimising and mitigating the negative ones. Between 1999 and 2000, FAO, organized workshops on the effects of globalization and deregulation on marine capture fisheries in Asia and the Pacific, and in the Caribbean. A Caribbean Fisheries Agenda on globalization (CFAG) has been formulated, identifying issues and a political strategy and plan of action that are presently implemented. FAO is also presently implementing a major umbrella-training programme on the issue for developing member countries. Assistance is provided for the implementation of the Uruguay round agreements and in the preparations for the next round of multilateral trade negotiations.

FAO is also active in a range of other areas discussed elsewhere on this CD that seek to avoid or mitigate negative impacts of globalization and to maximize the benefits countries derive from it. These include assistance towards the implementation of the various international agreements including the Code of Conduct for Responsible Fisheries and the UN Fish Stocks Agreement as well as the various international plans of action (e.g. on management of fishing capacity, prevention of illegal, unreported and unregulated fisheries).

Outlook

There can be little doubt that the process will continue. Countries and communities will increasingly become part of global relationships and be subject to global market forces. So also the fisheries sector will continue to be effected. For those deriving a livelihood in fisheries, the issue is whether national and local governments will have the required capacity and capability of taking full advantage of the opportunities offered by such closer integration while fostering cultural identity, maintaining social balance and political control, and avoid increasing disparities in wealth and well-being. These are the challenges faced by the international community, governments and civil society and it is too early to make predictions on how well they will face up to them, but much will depend on initiatives taken by fishery dependent communities.

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