SUBMISSION OF WRITTEN COMMENTS FOR THE HEARING RECORD

U.S. HOUSE OF REPRESENTATIVES COMMITTEE ON WAYS AND MEANS

HEARING ON THE U.S. – CHINA ECONOMIC RELATIONSHIP October 25, 2011

Mr. Chairman, Ranking Member Levin and Members of the Committee:

Oceana is the largest international organization working solely to protect the world’s oceans. Oceana has offices throughout the Americas and in Europe, with more than 500,000 supporters around the globe.

Oceana works to protect and restore the health of the oceans using science-based campaigns. As part of our efforts to promote sustainable fishing, one of our top priorities is in addressing the considerable subsidies many countries provide to their fishing sectors. Oceana has been a leader in advancing global reform of fishing subsidies at the World Trade Organization (WTO) and in the Trans-Pacific Partnership (TPP) agreement.

On behalf of Oceana, we are pleased to submit the following views for the Committee’s consideration regarding China and the role of government subsidies in its fishing practices.

As one of the largest economies in the world, China’s actions in managing its economy and commercial activities have a large and growing effect on the United States and the world, including the oceans. China is the world’s largest marine fishing nation. In 2008, China was responsible for 16 percent of the world catch, amounting to 14.8 million tons of the nearly 80 million tons of wild-caught fish.1 An estimated 48 percent of Asia’s fleet capacity is in China2, including a considerable large-scale industrial fleet. The Chinese fishing fleet includes 50 percent of the world’s very large boats -- those more than 24 meters in length. In comparison, no other country has more than 10 percent of this large boat fleet.3

China’s fishing capacity is not solely the result of market forces. Rather, China is one of the world’s largest subsidizers of commercial fishing, with subsidies estimated at more than US$4 billion annually. 4

These subsidies artificially increase fishing capacity and are a major contributor to global overfishing and other destructive effects on the world’s fisheries. According to the U.N. Food and Agriculture Organization, 85 percent of the world’s fisheries are now overexploited, fully exploited, significantly depleted or recovering from over-exploitation. The situation is so severe that according to leading fisheries scientists, if current trends continue, the world’s fisheries could be beyond recovery within decades.

1 FAO FIGIS data. April 27, 2010. 2 Gelchu, A. and Pauly, D., Growth and Distribution of port-based global fishing effort within countries’ EEZs from 1950 to 1995. Table 3.2, pp. 42. Based on 1995 data. Japan is a distant second with 13% of capacity in Asia. 3 www.fao.org /fishery/topic/1616/en 4 Sumaila, U. R., A. S. Khan, A. J. Dyck, R. Watson, G. Munro, P. Tydemers, and D. Pauly. 2009. A bottom-up re- estimation of global fisheries subsidies. UBC Fisheries Centre Working Paper Series. Working paper #2009-11. Subsidies do not simply increase the size of fishing fleets. They also encourage fleets to fish longer, more intensively and further away, including outside of national boundaries , than would otherwise be possible. As of 2002, China had approximately 1,700 vessels operating on the high seas and in the Exclusive Economic Zones (EEZs) of 38 countries.5 These distant fleets are economically viable largely because of the massive fuel subsidies provided by the Chinese government.

Subsidies have also been shown to support illegal, unregulated, and unreported (IUU) fishing. IUU fishing is a serious global problem and one of the main impediments to the achievement of sustainable fisheries. In one example, the state-owned China National Fisheries Corporation, the largest fishery enterprise in China, has been implicated in IUU activities off the coast of Guinea, including illegal transshipping of fish between vessels, the repackaging of fish products on IUU vessels and the off- loading of illegally caught fish at Las Palma. 6

Finally, Chinese fishing subsidies harm U.S. fishermen. In addition to depleting a worldwide resource, government subsidies distort market forces by artificially reducing the costs of Chinese fishermen, thereby placing U.S. fishermen at a competitive disadvantage. Subsidies also undermine U.S. trade opportunities in potential export markets and new market opportunities that may arise under trade agreements to which the U.S. is a party.

China has a responsibility to fish in a sustainable manner, which is even more critical with its large and growing economy. The well-being of the oceans and coastal communities depends on the United States working with China and other trading partners to eliminate the harmful subsidies that are irrevocably destroying global fish.

Oceana looks forward to working with you, the Committee & the Congress to ensure that Chinese fishing operates on a level and sustainable playing field.

5 Guifang (Julia) Xue, "China's Distant Water Fisheries and Its Response to Flag State Responsibilities," Marine Policy 30 (2006), p. 653. 6 EJF (2007) Pirate Fish on Your Plate -Tracking illegally-caught fish from West Africa into the European Market, pp. 17. Environmental Justice Foundation, London, UK.