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Food For Few-Thought For Others

Written By: Sanjay Chatterjee - final year student of Haldia Law College.
Environmental law
Legal Service
  • Food For Few-Thought For Others: - A study on the effect of over fishing in Free Trade regime.

    Abstract- This article scoops out the incorrigible effects of the introduction of free trade regulations in the province of fishing in the ocean at a time when over fishing has already made some eyebrows go high.

    The Outset
    The concept of the free trade evolved keeping in mind the future of the developed nations and the needs of the developing society and obviously as a means to uplift the third world countries. It had aimed towards a more liberal way of trading keeping in mind the present era of globalisation. Obviously it does not needs mentioning that it has been successful in achieving the objectives but at the same time it is required to be reminded that the colour of those success fades away as soon as we see the harsh reality lying beneath. No doubt it had given a boost to the economy of most of the countries but at the cost of an unsecured future.

    According to a report published by Greenpeace International Organisation, Fifty-two percent of the commercial stocks assessed are considered fully, exploited i.e. with no room for further expansion, another 25 percent of the stocks are in even worse shape: 17 percent are over-exploited, 7 percent are depleted and 1 percent is recovering, of the remaining commercial stocks, only 3 percent are under-exploited and 20 percent moderately.

    UNEP case studies of the impacts of past fish trade liberalization in three countries (Mauritania, Argentina and Senegal) demonstrate that market liberalization in fish is particularly harmful for the economies, societies and conservation of stocks of developing countries with weak fisheries management regimes, a situation which is sadly characteristic of most of the world. There are lots and lots of evidences which are witnesses of the fact that liberalizing trade to a greater extent would only increase the rate of fish resource depletion.

    The tariff reduction on fish and fish products may bring an economic boost for the developing countries and a handful of developed countries but it is a fact that such boost would only be of a short-term nature and nothing more than that. Rather on the other hand the developing countries would face a serious depletion of the marine resources and thus their scope for further development would be on a standstill. Moreover the consumers of the developing nation would have to face a price hike on the fish and fish products as more of the national fishing effort is diverted to fishing for export species, leading to less supply of locally fished and consumed pelagics. Even the OECD countries would have to face a problem.

    Why Such Demand For Fish?

    Fish is a highly traded commodity. In volume terms approximately 37 percent of world production (capture and aquaculture combined) is traded internationally. Measured in export values, world trade in fish and fish products reached $71 billion (US) in 2004, about nine times the nominal values of 1976.6 By comparison, international beef exports for the same year were only 18.3 billion US$. The bulk of fish exports come from the EU and nine individual fish-exporting countries. The European Union (EU) remains by far the largest exporter with 34 percent of total export value7, followed by China at 9 percent, Thailand and Norway at 6 percent, Canada and the US at 5 percent, Viet Nam, Chile and Taiwan each at 3 percent and Indonesia at2 percent. Trade value by species shows that shrimp and salmon account for 27 percent of all traded values (18 percent and 9 percent respectively) followed by groundfish at 11 percent, tuna at 8 percent, and cephalopods, small pelagics and combined fishmeal and oil each at 5 percent. All other species combined account for 34 percent of total value. In 1976 developing countries exported just over 2.5 million metric tons of fish and fish products, less than half the 5.39 million metric tons exported by developed countries. The volume of developing country exports has risen steadily over the last 30 years, reaching 15.1 million metric tons in 2004; a six-fold increase over 1976 levels.

    Consequences of Over fishing

    Hence it can be well understood that in order to boost the economy to the optimum level the developed countries are going far beyond the concept of the sustainable use of the resources available. This phenomenon would lead to depletion of the stocks, hike in prices of the fish and fish products and other disadvantages which are explained above. More than that it would have an adverse effect on the ecosystems of the whole world. Fishing has an ecological impact much beyond the performance of commercial stocks. Because of the huge amounts of biomass that it removes from the oceans, the species that it catches and dumps back in the water because they are damaged, too small or have little or no commercial value, and the damage that it does to marine habitat, fishing is having a devastating overall impact on ocean ecosystems.

    In fact, intensive over-fishing the world over has been, for some time now, fundamentally altering eco-systems. By severely depleting dominant predator species like groundfish, the fishing industry creates the conditions that stimulate the growth in abundance of species lower on the food web thereby generating new prey-predator relationships and establishing new dominant species; situations that may be impossible to reverse. The scientists who have documented this phenomenon refer to it as the ultimate end point of fishing down the food web: an ecosystem dominated by jellyfish, a species formerly low on the food chain, with no predators and no commercial value that comes to rule over an ecosystem where previously dominant pelagics or demersal species have been severely depleted by over-fishing.

    unlike fish exports, which are more broadly distributed between countries, fish imports are highly concentrated. Three big developed country markets, Japan, the US and the EU, collectively garner almost 75 percent of all imports. The remaining developed countries take another 13 percent, leaving all developing countries with the relatively small 12 percent share of the value of overall imports. It is therefore evident that the developing countries are taking the major portion of the catch and the left about portion is given to the developed countries. That is, the overfishing is mainly the needs of the developed countries and so further trade liberalization would act as a boon for only the developed countries and would prove fatal to the marine lives. Certainly it was not the aim of trade liberalization.
    Hence a very important question arises her that whether free trade is an enemy to the environment or not. In this connection two very important cases needs to be discussed, first the Tuna-Dolphin case and the Shrimp-Turtle case.

    Tuna Dolphin Case: A Boon For The Developing Countries

    The origin of what became known as the "tuna-dolphin" case was the United States' Marine Mammal Protection Act (MMPA), which imposed a ban on imports of tuna from countries that did not have a conservation program designed to protect dolphins in the tuna-fishing process. Tuna, it turns out, are often found swimming in schools underneath dolphins. In order to catch the tuna, fishermen used to drag large nets through the water and then pull them up under the tuna. Dolphins swimming above the tuna would be caught at the same time and die in the nets along with the tuna. The MMPA therefore required American tuna fishermen to adjust their fishing practices to avoid such deaths, and banned tuna from countries in which dolphin deaths from tuna fishing exceeded deaths from U.S. tuna fishing by more than 25 percent. As a result, tuna from Mexico, Venezuela, Panama, Ecuador, and the Pacific island of Vanuatu were banned in 1990. Mexico and Venezuela challenged the U.S. action in the dispute resolution system of the General Agreement on Trade and Tariffs (GATT) and won their cases in 1991 and 1992. The decision in the Mexico case is considered a key turning point in jurisprudence of the world trade system, even though it was not officially adopted as a binding decision by the members of the GATT.

    The dispute resolution panel decided that the United States could not justify the MMPA's ban on Mexican tuna imports for several reasons.
    # First, the panel said that Article XX's exceptions must be interpreted narrowly so that any one country cannot undermine the multilateral trade rules.

    # Second, the panel said that the United States had not proved that the tuna ban was "necessary," i.e., that it was the least-trade restrictive way to protect dolphins, in contrast to, for example, negotiating dolphin-protection agreements with other countries.

    # Third, the panel said that the percentage link to U.S. dolphin deaths made it difficult for Mexican authorities to predict in advance the acceptable level of Mexican dolphin deaths.

    # Finally, the panel said that the United States could not use the Article XX exceptions to regulate natural resources outside of its borders.
    The case thus laid out some of the issues that have continued to frame the debate over the environment and trade. The panel approached the dispute with a distinct pro-trade bias, analyzing each of the contested points from the perspective of the effect of the MMPA on free trade. Furthermore, the panel viewed preserving the multilateral free trade system as more important than any one country's evaluation of the need to protect the environment. These results should not be too surprising, however.

    After all, the GATT panel's mandate was to interpret the GATT—a trade treaty. The panel evidently could not find any authority for placing environmental concerns on par with the thrust of the GATT to promote free trade. In addition, the decision explicitly limited the right of a country to protect environmental resources extra-territorially. The panel could not find authority within the language of the agreement to allow one country to affect the environmental resources in another. This should not be surprising, since the prospect of one country taking actions to interfere with the resources of another country could be abused and lead to innumerable disputes.

    Even now, the idea that one country can impose its view of the need for environmental protection on another country's resources is highly controversial. In fact, a second dispute arose out of the tuna-dolphin case because the MMPA also banned tuna and tuna products from third world countries that imported tuna from other countries that did not comply with the MMPA. The GATT overturned this ban, as well.

    Finally, another key issue from this case that continues to affect the debate over environmental protection in a globalized economy is the contrast between the wealthy United States and its ability to have sophisticated fishing techniques with the limited resources of the developing countries and related constraints on the affordability of environmental protection tools.

    After the GATT decision, the tuna-dolphin dispute was resolved by agreements negotiated between the United States and the affected countries that called for dolphin protection measures and through a multilateral declaration on the importance of dolphin conservation. The U.S. Congress later called for a binding agreement to implement the declaration, and the International Dolphin Conservation Program was established. Some environmentalists, nevertheless, are skeptical that anything practically beneficial will come of the program.

    Was the tuna-dolphin case a victory or a defeat, then, for the environmental movement? On the one hand, the GATT dispute resolution panel gave priority to free trade over environmental protection (on sound grounds when viewed in the context of Article XX). On the other hand, the U.S. loss before the panel gave impetus to an internationally agreed-upon action program. In fact, the International Dolphin Conservation Program could be more effective than a unilateral U.S. law. Yet we still do not know how effective that program may turn out to be. In any event, the tuna-dolphin case dramatically raised the stakes in the debate over the relationship between international trade and the environment because it came at the same time that two major sets of trade negotiations were in high gear-those to create the North American Free Trade Area (NAFTA) and to finish the Uruguay Round in the GATT and create the World Trade Organisation (WTO).
    Shrimp Turtle Case: A New Dawn For Asian Countries.

    The United States had implemented a ban on shrimp from countries whose fishing fleets did not have special "turtle excluder devices," to prevent endangered sea turtles from being killed in the shrimping process. India, Malaysia, Thailand, and Pakistan claimed that the law was a disguised restriction on free trade and challenged the measure in the WTO's dispute resolution process. The United States argued, as it had in the tuna-dolphin case, that the exceptions in Article XX of the GATT allowed for the ban. And, as in the tuna-dolphin case, the United States lost, for virtually the same reasons. The dispute resolution panel deciding the case said that the shrimp ban was not justified under the Article XX exceptions because environmental protection measures could not be used to undermine the overall multilateral trading system. The United States appealed the decision, however, under the new appeal procedure that had been created by the revision of the GATT in the Uruguay Round.

    The WTO appellate body again ruled against the United States, but with a significant difference from the rationale of the initial dispute resolution panel. The appellate body said that the panel had read Article XX too narrowly within the context of the overall goal of maintaining free trade. Article XX, the appellate body said, was meant only to prevent abuse of environmental protection laws to undermine the multilateral trading system.

    Furthermore, the appellate body said, the new language in the preamble of the GATT, quoted above, established that the WTO members agreed that sustainable economic development was a goal of the trading system and should be taken into account as "color, texture, and shading" in interpreting the agreement. The appellate body went on to say that the way the United States implemented its shrimp ban, however, was discriminatory, and ordered the United States to end the ban.

    Despite these reassuring words from the WTO, environmentalists and other members of the American and international public focused on the result of the case and what it seemed to mean. That is, an international tribunal had overturned a democratically enacted law for the protection of an endangered species. Like the tuna-dolphin case, therefore, the shrimp turtle case galvanized opposition to globalization that appeared to be running roughshod over the environment for the benefit of free trade/

    Therefore these two cases gives us the hint that for GATT, multilateral trade is what is of importance to them compared with the environmental protection. Actually the logic of trade liberalization rests on the early 19th century economic theories of comparative and absolute advantage, i.e. that efficiency flows from an international division of trade based on what countries do best, based on certain advantages - natural or otherwise - they have over their trading partners and competitors. According to the theory: if every nation focuses on producing what it does more efficiently than others and trade is free amongst all nations, then the general welfare of all will rise. Tariffs are anathema to liberal economic theorists because they interfere in markets and keep them from attaining the levels of efficiency that the free flows of goods and services based on comparative advantage provide. Here lies the main problem.

    From the perspective of the environmental protection reduction in tariffs would lead to trade liberalization which would prove to be detrimental to the environment in future. On the other side the very concept of free trade indicates the substantial decrease in the tariffs so that every country has the opportunity to grow. Thus it is seen that these two interests clashes with each other, as in the Doha Rounds.

    While the declaration adopted at Doha committed governments to undertake a wide range of negotiations, three areas - agriculture, non-agricultural market access (NAMA) and services became the focus of negotiations after 2003. Under the Non-Agricultural Product Market Access (NAMA) negotiations, which are often referred to as the negotiations on industrial goods, the members agreed to focus on tariff reduction in a wide range of products and industries. Product coverage was to be comprehensive, without a priori exclusions and fish and fish products, like forestry and mining, were included in the scope of the NAMA negotiations process. The Doha Round was approached as a 'single undertaking', i.e. nothing was to be agreed until everything was agreed. Its goal was to produce at the end of all the negotiations, an agreed upon single package of new trade measures that would be binding on all members. Therefore, all strands of the negotiations are linked. This also meant that the stalling of the agriculture negotiations in July 2006 directly resulted in the suspension of all other strands of the negotiations, i.e. the entire Round.

    A cost/benefit analysis of the Argentine fishery estimates that over-fishing the country's hake resources constituted a social loss for future generations of 3.5 billion US$ over 30 years. Had the resource been managed sustainably - simply by respecting the total allowable catch quotas - it could have instead generated a net benefit of 5 billion US$. Hence it can be concluded that trade liberalization would prove to be fatal for the aquatic lives.

    The thing which is most needed is an efficient management system if the trade is ought to be liberalized. It is been already depicted earlier that when fish trade is liberalized in a context of deficient management, or worse, no management at all, it quickly leads to overexploitation of fisheries resources, and results in social harm and environmental degradation. Further trade liberalization would only benefit the developed countries, perhaps the reason for their constant pressure in the earlier Doha Rounds for reduction in tariffs, and the developing countries would only get a short term economic boost at the cost of impoverishing growth as the residual marines lives would be scooped out for further exports.

    Therefore the nations who would be eager to come front and solve the problem should sort out an efficient management structure based upon which trade liberalization can be allowed to take place. Further the countries should put emphasis towards NAMA negotiations and make it sure that the idea of accept all or accept none aroused in the DOHA Rounds is not implemented.

    1. Environment and Globalisation, A Project of The Levin institute.
    2. Trading Away Our Ocean, A Project of the Greenpeace International.
    3. The Environmental Effects of Free Trade, Papers presented at the North American Symposium on Assessing the Linkages between Trade and Environment; Commission for Environmental Cooperation of North America 2002; Published by the Communications and Public Outreach Department of the CEC Secretariat.

    ** Sanjay Chatterjee - a final year student of Haldia Law College. I have participated in the workshop that was organized by NUJS on consumer awareness where my team stood second and also participated in various moot court competitions including the 13th Stetson International Moot Court on Environment. I always tried to strike a different note in the legal arena. Hopefully this article is not going to find your thoughts in a different mode about my commitment towards this piece of work.

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