International Fish Trade recent developments

1. International Fish Traderecent developments Grimur Valdimarsson, Director Fishery Industries Division FAO, Rome,Italy

2. Outline • Regulatory Framework for Fish Trade • Production • Aquaculture versus Wild • Developing versus Developed countries • Trade • Major commodities • Developing versus Developed countries • Growing trade of developing countries • Trade flows

3. Outline (cont.) • WTO Agreements • DOHA negotiations • FISH INFOnetwork and the work of FAO in the field of market information and development • Value Added fish products and changes in market structures • Conclusions

4. TRADE LIBERALIZATION was put at the heart of the global development agenda as laid down in Agenda 21 of the Earth Summit on Sustainable Development (Rio) in 1992

5. The Earth Summit in Rio in 1992 (Agenda 21) • “promote sustainable development through trade liberalization” • create a system “that is non- discriminatory, rule based, equitable, secure, transparent and predictable”

6. Hunger: 840 million people still suffer from hunger (FAO) Unequal distribution of wealth: “Ten percent of the world’s population produces 70 percent of its goods and services and receives 70 percent of world income - an average of $ 30,000 per person. At the other extreme, half of the world’s population lives on less than $ 2 a day” Collier and Dollar (2001)

7. The WTO (and its predecessor,GATT) has mainly been concerned with facilitating international trade through... lowering CUSTOM DUTIES (TARIFFS) but technical issues are becoming ever more important

8. During the 50 years of negotiations to lower tariffs world trade has grown by 6% annually… • AGRICULTRUAL goods, such as meat, still carry some 70-80% tariffs whereas • FISH & FISHERY products (classified as industrial goods) carry some 4.5% tariffs in developed countries

9. Some production figures...

10. Fish Production (in MT) FISHSTAT 2004

11. Fish Production (in MT) FAO FISHSTAT 2004

12. Fish Production (in MT) FAO FISHSTAT 2004

13. Some fish trade figures...

14. International Fish Exports – 2002(percentage by value) Total export value: US$ 58 billion FAO FISHSTAT 2004

15. International Fish Trade - 2002 FAO FISHSTAT 2004

16. Net exports of food items by developing countries FAO FISHSTAT and FAOSTAT 2004

17. Fish Commodities - Export FAO FISHSTAT 2004

18. Trade Flows 2002 (in billion US$) Exports 3,8 Developing Developed 24,6 5 25 Developed Developing Imports Calculations based on COMEXT 2004

19. MEAT AND SEAFOOD PRICE INDICES (100 = 1997-1999) FAO FISHSTAT and FAOSTAT 2004

20. The ratio of the first hand price to the retail price Tveteraas 2004

21. WTO Agreements

22. WTO Agreements of particular relevance for fisheries • Agreement on Sanitary and Phytosanitary Measures (SPS) • Agreement on Technical Barriers to Trade (TBT) • Agreement on Subsidies and Countervailing Measures • Agreement on Import Licensing Procedures • Agreement on Anti-Dumping • Agreement on Rules of Origin • Dispute Settlement • Tariff reduction (GATT)

23. Agreement on Sanitary and Phytosanitary issues (SPS)... • Right of Members to apply measures they deem necessary to protect human, animal and plant life and health • Should not be a disguised restriction on international trade • Protection levels should not be more trade restrictive than required to provide “appropriate level of protection” APLP

24. Agreement on Technical Barriers to Trade (TBT)... • The Technical Barriers to Trade Agreement (TBT) ensures that members do not use technical regulations or standards as disguised measures to protect domestic industries from foreign competition. • Labelling disputes • Testing procedures

25. Some examples of tariffs and WTO Agreement issues..

26. Tariff escalation for cod: EU • Cod – fresh and frozen 15% • Cod fillets – fresh and frozen 18% • Cod fillets dried, salted 20% • Cod dried, salted 13% • Cod fillets – battered 25% TARIC 2004

27. Tariff escalation for tuna: EU • EU tariffs are 18% for frozen whole tuna and 24% for tuna loins and canned tuna But there are some special Agreements.. • Asian Caribbean Pacific (ACP) countries: 0% duty on all seafood products • GPS-Drug Agreement set certain duty free quotas for canned tuna and tuna loins from Andean Community and Central America • EBA (everything but Arms Agreement) of the EU for LDC´s (least developed countries)

28. SPS Agreement applied by EU: antibiotics • Detention of shrimp with antibiotics (mostly chloramphenicol) in EU • China (mainland and Taiwan, province of China) • Thailand • Indonesia • India • Philippines • Viet Nam • Bangladesh • and others

29. Examples of TBT/SPS issues • Country of origin labeling in USA (COOL) • TEDs (Turtle Excluding Devices) for catching shrimp • Tuna-dolphin issue. The certification that dolphins are not killed in fishing for tuna • Trade description of scallops: Saint-Jacques vs pétoncle • Australia: Banning imports of salmon from Canada due to possible fish disease agents • Trade description of sardines: Peru vs EU • Sardinella pilchardus vs. Sardinops sagax

30. WTO definition of dumping • Three methods to calculate a product’s “normal value”. • The main one is based on the price in the exporter’s domestic market. • the price charged by the exporter in another country, • or a calculation based on the combination of the exporter’s production costs, other expenses and normal profit margins.

31. Anti-dumping: Shrimp USA • Against countries selling at a price below domestic (US) production prices • Obvious difference between the US definition of dumping and the WTO definition • Complaint to the WTO likely to come soon

32. Resulting US tariffs on shrimp... • Countries affected: • Brazil up to 67.8% • Ecuador 6.08%-9.35% • India 3.56%-27.46% • Thailand 5.56%-10.25% • China 27.9%-113% • Viet Nam 4.1%-25.8%

33. 9th Round: Doha Agenda: The Development Round

34. Market access for non-agricultural products (including fish) GOAL OF THE DOHA ROUND: • Reduce or eliminate import tariffs • Reduce tariff escalation and tariff peaks (value-added products) • Protect special needs of developing countries • Capacity building on negotiation issues

35. Fish processing in developing countries • LARGE POTENTIAL FOR EMPLOYMENT CREATION (NOT THE LEAST FOR WOMEN) • TODAY, TARIFF ESCALATION HINDERS PRODUCTION OF VALUE-ADDED PRODUCTS

36. Are fish exports bad for developing countries?

37. Impact of Fish Trade on Food Security: 11 countries 2002-2004 • Main Findings were • international trade in fishery products has had a positive effect on food security through export earnings • international trade has not had a detrimental effect on food security in the form of fish as food. • sustainable resource management practices are a necessary condition for sustainable international trade. Kurien 2004

38. Helping developing countries with fish trade...

40. FIN Magazines

41. Price Reports and Market Analysis

42. FAO GLOBEFISH Webpage

43. Value addition- the future?

45. Value Addition...

47. Conclusion • Fish production continues to grow • Developing represent 70% of production (by volume) • 38% of fish production enters international trade (by value) • China is the main producing and exporting country, overtaking Thailand in 2003.

48. Conclusion (cont.) • Shrimp is the main commodity trade with 18% of total value. • Net-export earnings are very important source of income for developing countries. • Intra-developing countries is very limited at US$ 5 billion

49. References Collier P., Dollar D. (2001). Can the World cut Poverty in Half? How Policy Reform and Effective Aid can meet International Development Goals. World Development 29 (11), 1787-1802. COMEXT. (2004). Eurostat: Intra and Extra EU trade. CD Rom. Kurien, J. (2004). Responsible Fish Trade and Food Security. www.globefish.org/dynamisk.php4? id=2168. Reardon T., Timmer P., Barrett C. & Berdegué J. 2003. The rise of supermarkets in Africa, Asia and Latin America. American Journal of Agricultural Economics 85 (5): 1140-1146.

50. References (continued) Taric. (2004). WU taxation and Custom Union. www.europa.eu.int/comm/taxationcustom/dss/tarhome/htm . Tveteraas, R. (2004). The competition between aquaculture and agriculture in Europe. www.globefish.org/dynamisk.php4? id=2312 .