Regulation of “Environmentally Harmful Subsidies” in the WTO:A Case Study of Fisheries Subsidies and the “Chair’s Text”

The magnitude of global fisheries crisis is staggering. According to the UNEP report, 80% of commercially valuable fish stocks are now at various stages of depletion. It is generally agreed that the cause of global fisheries crisis is "overcapacity" and "overfishing"and that the fisheries subsidiesis the main cause of such overcapacity and overfishing. However, the current ASCM proved to be inadequate to regulate fisheries subsidies because the objective of the ASCM is to counter the trade-distorting effects of the subsidy, not those kinds of harm that fisheries subsidies normally bring about, i.e. environmental harm. As a result, fisheries subsidies do not fit into the language and the structure of the ASCM. WTO Members have recognized this problem, and in Doha, they agreed to launch negotiations with the aim to "clarify and improve WTO disciplines on fisheries subsidies" taking into account the importance of this sector to developing countries." Fisheries subsidy is a good example of so called "environmentally harmful subsidies" and discussions on fisheries subsidies offer us an useful lessons and insights for future regulation of other environmentally harmful subsidies, namely, inadequacy of actionable subsidy concept and the importance of regime interaction.