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Study Into the Nature and Extent of Subsidies in the Fisheries Sector of APEC Members Economies

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Study Into the Nature and Extent of Subsidies in the Fisheries Sector of APEC Members Economies Study Into the Nature and Extent of Subsidies in the Fisheries Sector of APEC Members Economies APEC Committee on Trade and Investment October 2000 CTI 07/1999T Prepared by: PricewaterhouseCoopers Produced for: Asia Pacific Economic Cooperation Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel: (65) 68919 600 Fax: (65) 68919 690 Email: [email protected] Website: www.apec.org ©2000 APEC Secretariat APEC#00-FS- 01.1 ISBN 1-896633-10-2 Table of Contents Page 1.0 INTRODUCTION .................................................................................................1 2.0 REVIEW OF OVERALL PROJECT OBJECTIVES FROM FORMAL REQUIREMENTS OF R.F.P...............................................................................2 3.0 INVENTORY OF SUBSIDIES ............................................................................3 3.1 GLOBAL INVENTORY OF GENERIC TYPES OF SUBSIDY.....................................3 3.2 SUBSIDIES VS. SUPPORT PROGRAMS ................................................................3 3.3 INVENTORY OF APEC MEMBER ECONOMIES SUPPORT PROGRAMS AND SUBSIDY ..........................................................................................................4 4.0 CATEGORIZATION OF SUBSIDIES ...............................................................8 4.1 MODALITIES ....................................................................................................8 4.2 APPLICATIONS .................................................................................................9 4.3 SMALL SCALE VERSUS LARGE SCALE .............................................................9 4.4 COMPARISON TO PREVIOUS RESEARCH ...........................................................9 4.5 QUANTIFICATION OF SUBSIDIES.....................................................................11 5.0 SUBSIDIES MOST FAVOURED IN APEC ECONOMIES...........................12 5.1 CONCENTRATIONS OF SUBSIDIES BY NUMBER OF PROGRAMS .......................12 5.2 CONCENTRATION OF SUBSIDIES BY NUMBER OF ECONOMIES........................14 5.3 CONCENTRATIONS WITHIN LARGE SCALE AND SMALL SCALE PROGRAMS ...14 5.3.1 Concentrations by Number of Programs Within Large Scale Funding ........................................................................................................15 5.3.2 Concentrations by Number of Programs Within Small Scale Funding ........................................................................................................16 5.4 CONCENTRATIONS OF FISHERY SUBSIDIES BY DOLLAR VALUE.....................17 5.5 SUMMARY OF FINDINGS ON MOST-FAVOURED SUBSIDIES ............................18 6.0 POLICY OBJECTIVES .....................................................................................19 6.1 TYPOLOGY OF POLICY OBJECTIVES ...............................................................19 6.2 POLICIES INCREASING FISH STOCKS BY CONSTRAINING FISHING EFFORT (QUADRANT 2) ..............................................................................................21 6.3 POLICIES INCREASING FISH STOCKS BY ENHANCING FISHING EFFORT (QUADRANT 1) ..............................................................................................21 (i) 6.4 POLICIES DECREASING FISH STOCKS BY ENHANCING FISHING EFFORT (WITHOUT CONSIDERATION OF FISHERIES MANAGEMENT) (QUADRANT 3) ...22 6.5 POLICIES DECREASING FISH STOCKS BY CONSTRAINING FISHING EFFORT (QUADRANT 4) ..............................................................................................23 6.6 QUANTIFICATION OF APEC SUBSIDIES BY POLICY INTENT ...........................23 7.0 TRADE ANALYSIS OF FISHERIES SUBSIDIES .........................................24 7.1 OBJECTIVE OF THIS ANALYSIS .......................................................................24 7.2 METHODOLOGY.............................................................................................24 7.3 DEFINITION OF TERMS ...................................................................................26 7.3.1 Subsidy.........................................................................................................26 7.3.2 Prohibited Subsidy .......................................................................................26 7.3.3 Actionable Subsidy ......................................................................................27 7.3.4 Non-Actionable Subsidies............................................................................28 7.4 ASSESSMENT OF RISK OF CHALLENGE...........................................................29 7.5 WTO SPECIAL CASE - TREATMENT OF DEVELOPING AND LEAST DEVELOPED COUNTRIES....................................................................................................31 7.6 ANALYSIS ASSUMPTIONS...............................................................................31 7.7 FINDINGS .......................................................................................................34 7.8 DECISION TREE..............................................................................................35 8.0 IMPLICATIONS OF SUBSIDIES ON INTERNATIONAL TRADE AND FISHERIES..........................................................................................................41 8.1 INTRODUCTION ..............................................................................................41 8.2 CONVENTIONAL APPROACH TO INTERNATIONAL TRADE ANALYSIS..............42 8.3 THE BIOECONOMICS OF FISHERY SUPPLY......................................................43 8.4 THE IMPACT OF SUBSIDIES IN AN ISOLATED ECONOMY .................................44 8.5 ANALYSIS OF SUBSIDIES IN INTERNATIONAL TRADE .....................................46 8.6 IMPLICATIONS OF RELAXING THE TWO-ECONOMY ASSUMPTION ..................49 8.7 REFERENCES..................................................................................................50 9.0 CONCLUSIONS..................................................................................................56 9.1 FINDINGS .......................................................................................................56 FISHERIES MANAGEMENT PROGRAMS ............................................................33 STOCK ENHANCEMENT PROGRAMS- INCLUDING FISH HABITAT IMPROVEMENTS, RELEASE OR JUVENILES, ETC ...............................................45 FISHERIES MANAGEMENT PROGRAMS ...........................................................46 (ii) SUBSIDIZED LOANS-LOANS AT BELOW MARKET RATES (CALCULATED AS THE DIFFERENCE BETWEEN MARKET INTEREST RATES AND LOW INTEREST RATES, APPLIED TO THE TOTAL VALUE OF THE OUTSTANDING LOANS).......................49 R & D-TO DEVELOP NEW FISHERIES TECHNOLOGIES......................................62 R & D-TO DEVELOP NEW FISHERIES TECHNOLOGIES......................................63 FISHING PORT INFRASTRUCTURE ENHANCEMENT- TO PROVIDE PORT IMPROVEMENTS FOR FISHING FLEETS.............................................................78 YEAR ESTABLISHED: 1990 .....................................................................................89 INTENDED PROGRAM RECIPIENTS: AQUA-CULTURAL FISHERS ...............................89 YEAR ESTABLISHED: 1996 -1998...........................................................................91 INTENDED PROGRAM RECIPIENTS: FISHERMEN ......................................................90 INTENDED PROGRAM RECIPIENTS: COUNTY GOVERNMENT ....................................97 MARKET PRICE SUPPORT PROGRAMS ..........................................................103 STOCK ENHANCEMENT PROGRAMS..............................................................110 STOCK ENHANCEMENT PROGRAMS..............................................................111 STOCK ENHANCEMENT PROGRAMS..............................................................113 R&D............................................................................................................121 OTHER CAPITAL AND INFRASTRUCTURE SUPPORT PROGRAMS....................124 STOCK ENHANCEMENT PROGRAMS ..............................................................125 STOCK ENHANCEMENT PROGRAMS ..............................................................127 PROGRAMS TO ASSESS FISH STOCKS............................................................128 R&D............................................................................................................132 OTHER FISHERIES AND CONSERVATION PROGRAMS....................................135 STOCK ENHANCEMENT PROGRAMS ............................................................140 STOCK ENHANCEMENT PROGRAMS ............................................................141 STOCK ENHANCEMENT PROGRAMS ............................................................143 (iii) 1.0 Introduction PricewaterhouseCoopers was awarded a contract by Asia-Pacific Economic Co-operation (APEC), to study the nature and extent of subsidies in the Fisheries sector of APEC member economies. This contract followed a formal competition by the APEC Secretariat. Fisheries is one of the 15 sectors targeted for early voluntary sectoral liberalization (EVSL) and, within the 15, is one of nine (9) sectors identified as fast-track candidates for accelerated trade liberalization. Overall, APEC hopes to achieve fully liberalized trade between APEC developed economy members by 2010, and between all APEC economies by 2020. In light of this targeted liberalization, APEC Trade Ministers requested that this project be carried out, and are expecting the final results
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