This briefing paper assesses the state of the World Trade Organization (WTO) negotiations on the prohibition on conferring subsidies to vessels and/or operators engaged in illegal, unreported and unregulated (IUU) fishing (IUU fishing subsidies). That prohibition depends primarily on three elements: the definition of a subsidy, the determination of IUU fishing, and the required nexus between the subsidy and the IUU fishing. The main focus of current discussions is on the second element.

While there is a general consensus on the need to prohibit IUU fishing subsidies, WTO Members continue to disagree on who is to decide whether there is IUU fishing, as well as on what basis that decision is to be made and according to what process (es). That disagreement is closely related to the question of how a WTO Member’s obligation not to subsidize IUU fishing should depend on another Member’s determination of IUU fishing, as well as the role of the WTO and its dispute settlement system in enforcing such an obligation. Although the WTO is not and cannot become a fisheries management organization (Azevêdo, 2019), it is the appropriate forum for negotiating and enforcing multilateral trade rules governing subsidies. At the same time, the rationale of existing rules under the Agreement on Subsidies and Countervailing Measures (ASCM) is fundamentally different from that of a prohibition on fisheries subsidies. As WTO Director-General Azevêdo has pointed out, the ASCM focuses on the trade-distorting effects of subsidies, whereas the negative effects of fisheries subsidies are primarily on the sustainability of fisheries resources (Azevêdo, 2019). A balance must therefore be sought between avoiding that the WTO and its dispute settlement system be given the task of deciding whether fishing is IUU, on the one hand, and ensuring that WTO rules can be used to effectively ensure that Members refrain from subsidizing those types of fishing, on the other.