The main objective of World Trade Organization (WTO) agreement is to encourage fair trade of certain commodities by removing trade distortions, resulting from differential levels of input subsidies, price and market support, export subsidy and other kinds of trade distorting support. Infact the agreement envisaged phased reduction in various kinds of support being given to various sectors by the member countries. Based on this, it was anticipated that implementation of WTO agreement would raise international prices of at least some items and would improve export prospects of many developing nations. However, recent analysis on post WTO impact particularly in agriculture sector, showed sharp decline in international prices and in most cases they have turned lower than the domestic prices, creating favourable situation for imports rather than export. This has raised many issues of serious concerns and now the reasons are being sought as to why international prices dropped to unimaginable low level, throwing a challenge to domestic production and markets of several agricultural commodities. Now the trade in the fisheries sector and movements towards liberalization of trade also need a very critical look particularly in the context of subsidies existing within the Fishing industry. Free trade is widely accepted as a desirable objective in principle Subsidies are granted for the purpose of achieving specific development objectives or enhancing the incomes or other benefits of certain targeted groups. When subsidies are given to certain types of materials they are likely to have negative impact on economic gains and conservation of the resources. Generally subsidies to farming always cause overproduction of agricultural products. In fisheries sector subsidies can cause excessive fishing efforts, which may lead to over fishing and result in stock depletion and falling catches of fish overtime. While recognizing the legitimacy of supporting disadvant aged groups, such support should be designed in such a way that it minimizes the detrimental effects on efforts and efficiency. It is known that this may be difficult in some developing countries, particularly in those where small scale fisheries are predominant. The subsidy will tend to allow greater inefficiency, when rights on subsidy are not clearly defined and enforced.
Impacts of Free trade
Increased trade infact has good potential to benefit all those involved in this venture. Over the years developing foreign trade has improved to a large extent the standard of living of many developed and developing nations. Fish trade has always been and important part of the fisheries livelihood. International fish trade has been increasing very rapidly and about 45% of the world fish catch is now traded internationally. The share of some developing countries in this trade is increasing significantly representing a good proportion of their foreign exchange earning. In India also fish trade has become an important activity particularly in the socio-economic development, in view of its potential contribution to national income, nutritional security, social objectives and sustainable large export earnings. About 7 million people directly or indirectly involved in this industry. During 2000-01, the volume of seafood export was 440,000 tonnes worth over Rs. 6400 crores.
Free trade in the fisheries sector is very often debated because when the activities of domestic industry is concentrated in specific locations, then the political pressure arising from anticipated decline in the domestic fishing industry is always greater than the political pressure that can generate anticipated gains. This type of political conflict becomes a common affair due to lack of identifying the issues related to equitable distribution of gains of free trade. It is well known that the benefits of international trade are far better than the domestic trade. International trade in the fishing industry has its own advantage in the sense that it can extend its trade activity in processed fish products, trading in harvesting capacity, access rights and in other fishing industry services. Free fish trade may affect the fisheries sector in many ways, for example:Increased pressure on available resources. Enhanced incentatives for destructive fishing practices. Disturbance in wealth distribution and the threat to food security.
Under WTO, promotion of free trade policy has improved the market access and even fish prices have increased significantly resulting good profitability of fishing operations. This in turn imposes the fishermen to increase their efforts in exploitation of more fish stock and due to lack of effective policy management for resource conservation this will lead to depletion of the yield in long run. Once the fish stock is reduced it will affect fishermen's income and economic status. Therefore, in order to get the benefit of free trade, countries need to improve their fisheries management. Liberalization of trade also has an impact on increased demand for fish, which may lead to exploit the stocks through illegal means and destructive practices of fishing.
Infact, the fish is a cheap and important source of protein available to a large proportion of people, including poor masses. However, under free trade policy it is possible that large chunk of fish is exported which i n turn may reduce access of fish to poor communities and becomes a potential threat to food security due to its non-availability and higher price.
With all these variability, still increased free trade generally offers more benefit and therefore it is important in such a situation to over come its potentially negative effects we should be able to address these issues through effective fisheries management policies and better trade tactics, so that sustainability of resource and growth of the industry both are taken care.
Impacts of Subsidies
Subsidies can be either direct or indirect. Direct subsidies relate to payments in the form of price support, cost rebates and grants for investment etc. where as indirect subsidies involve provision of goods or services below market price, or not collecting fees or taxes. Trade restriction such as tariffs or import quotas also amount to subsidies to domestic producers. However, tariffs and import quotas are much less significant in fisheries as on today compared to agriculture.
The most important kind of indirect subsidies may be the provision of fisheries management and in properly managed fisheries; resource rent is an important aspect (Resource rent is a difference between the price of fish and the total investment necessary to obtain the fish). This rent is actually the price of the productivity of fish stock and to whom it should benefit is primarily a real issue. In absence of proper management policies the benefit will accrue to holders of fishing rights or to fisheries through a share system of remuneration. It could be argued that these rents should be taxed away by the government involved and failure to doing so constitutes again a subsidy. Such issue becomes complicated because it will never be possible to design tax system that confiscates all rent and also the question of resource ownership is a complicated issue. With respect to fisheries, subsidies could of course, nullify or impair the trade benefits. There is however, a different effect of subsidies particularly on fish resources. By implementing subsidies one can enhance the profitability of fisheries sector and this lead to a greater investment in fishing boats and more intensive use of existing boats. This may over fishing and push fish stocks below their sustainable yield level and ultimately this will lead to less fish being caught and fetch higher prices with supply going down the demand level. This is contrary to what happens in agriculture where subsidies lead to greater production and lower the prices on world markets. In some subsidies the structural adjustment support is required by which redundant fishing boats are bought and removed from the fishery. This kind of subsidy would be beneficial to maintain fish stock, as fishing efforts would be reduced and less fish would be caught.
There are two more subsidies one is budgeted subsidies and the other is one relates to unbudgeted subsidies. The budgeted subsidies means the subsidies identifiable in Government fisheries agency budget and unbudgeted mean those that do not appear in fisheries agency budgets and revenues not collected. There is also cross-sectoral subsidies which are generally not granted directly to fisheries but which benefit them indirectly and tend to stimulate fishing efforts and capacity (for example subsidies to ship building and fisheries infrastructure). Under the terms of the WTO 1994 agreement such subsidies target the fisheries sector and have to be implemented effectively.
The WTO subsidies agreement indicate that a subsidy exits where "government revenue that is otherwise due is not collected and where government provides goods and services other then general infrastructure". It is a matter of debate that resource rent from a publicly owned natural resource belongs to people should be collected by the government to be used for public welfare. Such claims of resource rent by the government has not been accepted in principle in the fisheries sector because large pact of fisheries sector itself do not come under the jurisdiction of the coastal states.
There are ranges of environmental subsidies made in the fisheries sector to protect the environment. These subsidies are to provide financing support to enhance resource or reduce fishing efforts. Vessel and fishing permit buy-back schemes and programmes to refit vessels for use are some of the subsidies categorized under this. It is a matter of about the implementation and acceptability of these sorts of subsidies.
Other issue related to Fisheries Management
Can we stop Subsidies?
Fisheries management in the context of WTO is complex one and in order to manage the same effectively different approaches have to be made to address at least some of the sensitive issues like over fishing, habitat degradation and impoverishment of fishing communities. For example an end to subsidies in the fisheries sector is seen as a solution to avoid over fishing. Subsidies are still a fact of life in many industries, the fishing industry being one of them. Subsidies have number of negative side effects because they must be financed by raising taxes or govt. budget deficit. Rising the taxes discourage work effort and reduce labour incomes of the objects being taxed. They also reduce investment and economic growth. Even the budget deficits cause inflation rate, which has again negative effects on the investment and economic growth. Subsidies therefore retard economic growth unless they are being targeted at industries, which may need to be nurtured only during initial p hases of development. Hence while adopting subsidies or eliminating them one has to be very careful and cautious.
Application of Ecosystem principles:
The US National Research Council on sustaining fisheries (NRC 1999) and US Congress on the application of ecosystem principles to Fisheries have suggested that by applying an ecosystem approach some of the issues related to fisheries management can be resolved. Generally ecosystem approach takes an account of (1) factors other than fishing on fishery resources (2) the effect of fishing on ecosystem products in addition to fishery yield and (3) the effects of fishing on other components of ecosystem through tropic interactions or habitat alterations. Unfortunately because of complexity and lack of proper knowledge of the ecosystem, practical application of this approach becomes more difficult.
Declaration of Marine Protected Areas
It has also been strongly advocated to declare the threatened water bodies as Marine Protected Areas (MPA) so that this will help in conserving fishery resources and protecting biodiversity. Though the direct economic benefits of MPA are limited, however this kind of approach to fisheries management may be quite useful.
This approach has been found crucial for effective management of fishery resources in particular social circumstances. In this approach one must be clear about the demarcation of the territory and set of rights given to the community over the territory and these rights should have social/and legal sanction.
In effective fisheries management system, in order to save the depleting stock a novel approach has been suggested, which is named as eco-labelling. In this method fish products of threatened fish species will be labeled as ecologically not safe so that product acceptability in the market will be poor/people should bycot the products and discourage their entry into market. This approach is difficult because of attitude and integrity of the opinion of the people in making such decisions. Another problem in this issue is realibility of issuing the certificate of eco-labelling by the institute. So the idea will be very difficult to make operational in an effective manner. Furthermore, eco-labelling or certifications of products and how it will affect the trade flow have to be viewed seriously.
Subsidies given to the Fisheries Sector in India
The Deptt. Of Animal Husbandry & Dairying (DAHD) of the Ministry of Agriculture & Cooperation, Govt. of India has been implementing the subsidy schemes in Fisheries Sector
1. Inland Fisheries:
In order to boost inland fish production, assistance in the form of subsidy is given to the fish farmers through Fish Farmers Development Agencies (FFDA) for construction of new ponds, reclamation/renovation of existing ponds and tanks, inputs (Fish seed, feed, fertilizers, manures etc.) for the first year of fish culture, running water fish culture, integrated fish farming, fish seed hatchery, fish feed mills etc. Subsidy for the above mentioned activities are given at double the rates to the fishermen of scheduled tribes. Assistance is also given to progressive fish farmers as an incentive for purchase of aerators. The funding pattern of the scheme was revised from 50:50 to 75:25 between the Centre and the States during the IX Plan.
2. Integrated Coastal Aquaculture:
Similar type of support is also given to fish farmers/fishermen in coastal states through 39 Brackish water Fish Farmers Development Agencies (Fads) to utilize the country's vast Brackish water resources for fish/shrimp culture.
3. Marine Fisheries Sector:
Under motorization of traditional crafts, 50% of the cost of engine is provided as subsidy, subject to a maximum of Rs. 10,000/- for Out Board Motors (OBM) and Rs. 12,000/- for In Board Motors (IBM), which is equally shared by the centre and the states. Besides, a sum of Rs. 6,000/- is also provided as grant to fishermen for purchase of gear. The entire cost of subsidy on engine and gear is met by the Centre in the case of Union Territories.
4. Export Production � Capture Fisheries
To increase the efficiency of large mechanized vessels, financial assistance for installation of fish finders, global positioning system, radio telephones and fish hold on board the vessels is given to the beneficiaries. Under the scheme, MPEDA subsidizes 30% of the cost of the items and their installation charges subject to a maximum of Rest. 50, 000/- per vessel.
5. Export Production � Culture Fisheries
This scheme is exclusively to promote shrimp farming for augmenting export and shrimp production. Assistance in the form of subsidy is given for new farm development, small and medium size hatcheries and for effluent treatment system. Assistance given to the beneficiaries is 25% of the capital cost with maximum ceilings of Rs. 1.5 lakhs per beneficiary for new farm, Rs. 5 lakhs for medium scale hatchery and Rs. 1.5 lakhs for effluent treatment system whereas in case of small scale hatcheries, the assistance is Rs. 1.5 lakhs for private sector, Rs. 2.5 lakhs to cooperative sector and Rs. 5 lakhs to the government sector.
6. The cost of central excise duty on high-speed diesel oil for small-mechanized fishing vessels below 20 meters length is fully subsidized (Rs. 0.35 per later) and is borne on 80:20 basis by the centre and the states. While in case of Union Territories and the States, which have exempted sales tax levied on HSD oil, subsidy is borne 100% by the centre.
7. For the development of fishing harbor facilities at major and minor ports, 100% grant is provided to Port Trust for construction of fishing harbors at major ports. Incase of minor fishing harbors and fish landing centers, the cost is shared on 50:50 basis by the centre and the states. Union Territories are provided 100% grant under the subsidy. During the IX Plan a new component on "repair and renovation" has been added to the scheme for providing one time assistance to the States/UTs for improving hygienic conditions at the harbors to meet international standards.
8. Introduction of new technology, modernization of processing facilities and development of infrastructure facilities
Under the scheme, assistance is given to seafood processors for installation of machines for production of quality ice, generator, up gradation of cold storage, machinery and equipment for production of value added marine products, seafood processing units and also given assistance is also given for setting up of water effluent treatment plants, chill room facilities and water purification system in seafood processing plants.
Under the scheme, MPEDA is assisting exporters for export of aquarium/ornamental fish, setting up chill storage, near the landing centre/airport and joint participation in international fairs to promote Indian Marine Products in new markets. Grants in aid of a sum of Rs. 20 lakhs is also given to the companies for setting up of chilled storage at international airports. Besides, financial assistance is also given to ornamental fish breeders and to the Seafood processors/exporters for adoption of bar-coding on the packages.
The export of marine products has steadily grown over the years - from a mere Rs.3.92 crore in 1961-62 to Rs. 8607.94 crore in 2008-09. Marine products account for approximately 1.1 % of the total exports from India.
GROWTH IN EXPORT OF INDIAN MARINE PRODUCTS
(1961- 62to2008 � 2009)
Value inRs. Crore
Average Unit value Realization (Rs. / Kg)
Average Exchange Rate US $
Value inUS $ Million
WTO and Seafood export
The provisions relating to agriculture in the WTO are of two types (i) Direct and (ii) indirect. Direct provisions relate to three categories namely (i) increased market access (ii) reduction in aggregate measures of support (AMS) and (iii) Reduction in subsidy for export competition. The indirect measures relate to Intellectual Property Rights (IPRs).
Under increased market access, each member country of WTO is required to replace all types of non-tariff barriers with tariff barriers. Developing countries are required to reduce tariff up to 24% and developed countries upto 36%. This provision will obviously expand market opportunities for developing countries. However, India is at disadvantageous position in relation to those, which belong to other groups. Most of the developing countries want to increase their exports to developed countries and as such they have formed groups. For example, the countries of South East Asia have formed ASEAN, which is operative sinc e 1967. The countries belonging to Africa, Caribbean and Pacific regions known as ACP countries enjoy separate status in international trade since the Lome Convention in 1975 and they also enjoy privileged position in trade with developed countries. For example, in trade with Europe, they have to pay fewer tariffs than that paid by India. The European Community (EC) has developed, major trading regimes namely ACP, GSP (Generalized System of Preferences), LDDC (Least Developed Developing Countries) and Associate members. For example Cyprus and Malta have the status of associate members and enjoy preference over other developing countries in export to the EC. Countries not belonging to ACP have to pay more tariffs. As per the WTO agreement developed countries would reduce subsidies and tariff so, better overseas market will be available for Indian fish products. It is important to note that the subsidies reduction requirement under WTO is not applicable in India. The countries having less than $ 1000 per capita income annually does not fall under this category. The structure of custom duties for export of canned fish to Europe is presented in Table 1 to explain the preferential treatment.
Table � 1
Custom Duty under various Trading Regimes for
Import of Canned Fish into Western Europe
Full Custom Duty (%)
Other (than Sardinas)
Tuna & Skipjack
Note: Table adopted from data is Commonwealth Guide to Trading with Single European Market prepared by Export Market Department of the Export & Industrial Development Division of Commonwealth Secretariat 1993, p-61.
The countries trading under GSP are required to pay more than those trading under ACP and LDDC regimes. India, therefore, is at disadvantageous position as compared to ACP &LDDC countries. There is some encouraging development now. India has become a dialogue partner in the recently concluded conference of ASEAN at Bangkok. Even then the economics of trade for India with developed countries has become complex with emergence of trading blocks. It is easy to import from developed countries but if one wants to export to developed countries it becomes difficult because of strict rules like product standardization, safety, quality assurance and environmental legislation.
The WTO regulations mainly recommend the lifting of Quantitative Restricti ons (QR) to allow free trade. India as a signatory to the same is obliged to adhere to these regulations. With each EXIM policy, increasing number of agricultural products is being brought under the open general license (OGL). Fishery products (excluding live forms) are now under OGL. Thus, there is no restriction for import of fishery products in frozen or any other form (except live form).
The value of fishery exports for the year 2000 was Rs. 6400 crores which is 23.3% more than 1999. In dollar terms it was 1387 million, which was 16.6% more than the previous year. This was an all time record for the marine products export from India. In quantity terms it was 4, 21, 000 MT which was 22.8% more than the previous year.
Seafood export from India � major products
Value (Rs. in crores)
Frozen Cuttle Fish
The major markets for India's fishery products are Japan, US and the EU. Developing markets are the South East Asian countries. The products exported are high value products and are not readily available in the domestic market and if available are at a premium. There are over 400 seafood processing plants in India. According to a study conducted by Central Institute of Fisheries Technology, the total annual installed capacity of the seafood industry is around 22 lakh tonnes (based on 300 working days per year) with the utilized capacity being less than 20%. The major constraint for the low utilized capacity was identified to be lack of raw material.
Fish and fishery products are now under the OGL and there is no QR on importing the same. The duties at present on these items are 40.4% (35% basic duty, 4% special additional duty and 1.4% others). For the imports to be attractive the domestic prices must be higher than the international prices by atleast t his margin. The import of these items is thus not attractive, as the domestic prices of raw material are much lower. The fear that fish and fishery products will inundate the domestic market is also thus far fetched. With very high idle capacity at present and in view of the stagnation in the landings of major raw materials (like shrimp), import of marine products has to be encouraged for enhancing the utilized capacity and generating foreign exchange. But proper quarantine arrangements to prevent introduction of new pathogenic microorganisms, viruses etc. should be enforced.There are still few more issues under WTO agreement like: - Trade Related Intellectual Property Rights (TRIPS) and imposition of patent regime.
- Trade Related Investment Measures (TRIMS)
- Application of Sanitary and Phyto Sanitary (SPS) measures.
Under TRIPS agreement, the patent shall be available for any inventions in all the fields of technology provided they are new, involve inventive steps and are capable of industrial applications. Signatories of the GATT are obliged to adopt a patent system for micro organisms; however the patenting of higher animal life forms left undecided, with signatories having the option to use or not to use patents to protect such IPR.
Under the provisions of SPS agreement, all the member countries have the right to take sanitary and phyto sanitary measures necessary for the protection of animal health or life. To challenge any possible hurdles under SPS measures, Indian sea food industry has to gear up to improve the quality of processed seafood to comply with the quality parameters of Hazard-Analysis and Critical Control Point (HACCP) quality system, which is now mandatory for the seafood processors. It is im portant to mention here that earlier EU had imposed temporary ban on Indian sea food export after noticing widespread hygiene problems in local production and processing facilities by a team of EU inspectors but later EU ban was removed only after the Indian Commerce Ministry has revamped the export inspection procedures and system besides gearing up the Export Inspection Council and its agencies and two tier inspection process was introduced. There is least doubt that the HACCP based quality system would boost acceptability of Indian sea food products in international markets.The World Fish Trade
Recent changes in quality control measures on fishery products introduced by the main importing countries represent a new challenge for the developing world and require major investment, according to a study by the UN Food and Agriculture Organization (FAO).
The study recalled that in August 1997, the European Community stopped imports of seafood from India, Bangladesh and Madagascar. In December 1997, there was a decision to prohibit the import of fresh seafood from Kenya, Tanzania, Mozambique and Uganda.
"The impact of these measures was severe in the seafood industry of the exporting countries, creating loss of employment and foreign exchange earnings of several hundreds of million of US dollars", FAO report underlined.
"The investments needed to bring a fish processing plant up to the new hygiene standards are substantial, and many companies feel that the implementation of the new regulations on fishery products is de-facto a non-tariff measure aga inst value-added products originating from developing countries", according to FAO.
Another obstacle to trade could be created by eco-labelling, i.e. certification that the fish was produced from a sustainably managed resource. "There is a danger that small-scale fishermen in the developing countries may be disadvantaged by difficulties to certify their fish production", FAO fisheries expert Erhard Ruckes said "Fish is the most important food product exported by developing countries. It comes well before coffee, banana and tea", according to Ruckes.
"For many developing countries, fish trade is a significant source of foreign currency earnings. Net-exports by these countries rose from US $ 5.2 billion in 1985 to US $ 17.2 BILLION IN 1996", Ruckes added.
Developed countries account for more than 80 percent of total imports of fishery products. Japan is the biggest importer, followed by the United States and the European Community.
"In 1996, world fish production including aquaculture, totaled 121 million tons representing a value of well over US $ 120 billion. Taking into account trade or value-addition on the way to the consumer, global fish business is estimated at more than US $ 250billion", Ruckes underlined.
It has been estimated that in 1994 about 35% of the 200 major marine fishery resources showed declining yields, 25% had a stable exploitation at a high level and 40% yields were still increasing. "The potential for further expansion of theses resources is strictly limited, despite the expansion of some fisheries into deeper waters", according to FAO.
"Several countries have expressed the wish to see FAO play a stronger role in the elaboration of the criteria for listing species in the frame of the Convention of International Trade in Endangered Species of Wild Fauna and Flora (CITES)", FAO expert said. CITES underlines that when a species is endangered to a point close to extinction, international trade may be prohibited or submitted to stringent control measures. Last June, all sturgeon species were listed in an appendix of the Convention. The major consequence was the regulation of international trade in caviar.
FAO has developed a project for the establishment of FIGIS (Fisheries Global Information system), which will initially concentrate on information and analysis of the biological status of aquatic resources. In a later stage, it will include pertinent trade information such as products, prices, market trends, countries of origin and destination.
Fish trade hygiene & public health issues in context of WTO issues
Food and Agriculture Organization (FAO) Code of Conduct for Responsible Fisheries emphasize the need to minimize the risks of disease transfer and other adverse impacts on the wild and cultured stocks, associated with the introduction of non-native species and transport of eggs, larvae or fry, broodstocks or other live materials. The FAO code also adopts the principle that international trade in fish and fishery products should be conducted in accordance with the principles, right and obligations as per international agreements. India is a signatory to a range of trade related agreements under World Trade Organization (WTO). During recent years, several nations have become cautious of trans-boundary introductions in their concern to protect the native fauna and also to avoid the spread of new pathogens. A number of pathogens of public health significance have been reported from aquatic organism. These pathogens are important in internation al trade in aquatic organisms. Though most nations behave in a cautionary manner, these nations understand that trade in fish and fishery products between nations should be conducted in accordance with the principles, rights and obligations established in the WTO agreement and other relevant international agreements. One of the important agreements under WTO is application of Sanitary and Phytosanitary (SPS) measures. The SPS agreement specifies that measures should be applied only to the extent necessary to protect human, animal and plant life or health. SPS agreement uses the standards, guidelines and recommendations developed by Office International des Epizooties (OIE) for animal health and zoonoses as the international benchmark. Each country is, therefore, expected to have acquired facilities for complying with the above conditions and to have evolved appropriate code of practices, either of its own, or as a group of nations. In general, countries cann ot apply standards higher than those specified by the code. However, each country has right to adopt its own level of acceptable risk, which may be higher than the international standard, but this must be based on scientific risk analysis. SPS measures should not be trade restrictive. Therefore, under this agreement, absence of a disease in the importing country can be used as a trade barrier for shipments of live aquatic organisms and products from our country, if the exporter is not able to confirm the absence of the disease. Each country will have to substantiate claims of freedom from major diseases in order to support export certification and quarantine import policy. In such a scenario, each country must be able to demonstrate that adequate level of expertise exists to detect, diagnose and control aquatic animal diseases. In the absence of such programmes in India, consignments of aquatic organisms and their products carrying pathogens of concern will enter the country or our exports of live animals or fishery products can be restricted on the grounds that they pose risks to importing country. In light of WTO agreement, the manpower and infrastructure capability in our country to address these aspects needs to be strengthened for supporting risk analysis, health certification, diagnostics, surveillance and disease reporting, in a time bound manner.
Trade in aquatic animal products has two facets in Indian scenario i.e. our products can be blacklisted on account of presence of certain pathogens and secondly, a number of pathogens of quarantine importance may gain access to our environment along with these products.
Certification is an essential component of quarantine and will be increasingly required for trade under WTO. For the exports, pre-shipment inspection or official health surveillance programme can provide the data to be used in any certification programme. For imports, we should ins ist on pre-shipment certificate for freedom from diseases of concern to our country in addition to OIE listed disease. Also we should undertake post arrival inspection during quarantine.
Surveillance is required to detect exotic pathogens and to implement control measures. Surveillance is essential to consolidate information on distribution of pathogens, to facilitate the development of zoning policies and to develop disease management strategies for protecting the domestic industry and the environment. Under WTO agreement, India will be required to substantiate its claims of freedom from diseases of concern to the importing country.
By the end of the 1980s, it had become clear to public health authorities in developed countries that a new system was necessary. The system had to address all the relevant hazards in food production and had, therefore, to be incorporated into the harvesting, processing and distribution of fish products. This woul d require its use on board fishing vessels and by aqua culturists, as well as in fish processing factories, the vehicles used to transport fish and storage and retailing areas. The system that was developed is called the Hazard Analysis and Critical Control Point (HACCP) system. In the HACCP system, each substance, micro-organism or condition of food that can cause disease is called a "hazard". Initially, the system gained credibility through its proven efficiency in controlling the hazard created by Clostridium botulinum, a common toxinogenic bacterium, in low-acid canned foods. By applying the HACCP principle, processors were consistently able to ensure adequate timing and temperature control during retorting and improved seaming of cans. This, in turn, virtually eliminated the bacterium from canned foods.
Regulatory agencies in the European Community (EC) and the United States made fish and fishery products the first category of foods in the food industry to be sub ject to mandatory application of HACCP systems. The EC issued the first regulation for fish products, "laying down the health conditions for the production and the placing on the market of fishery products", in 1991. In May 1994, the EC adopted an additional regulation, which made it mandatory to impose more exact rules for the application of "own health checks". The United States HACCP-based regulation, Procedures for the Safe and Sanitary Processing and Importing of Fish and Fishery Products � Final Rules, was published on 18th December 1995 and entered into force one year later. Other developed and developing countries soon followed these initiatives.
In 1997, the HACCP system was incorporated into the WHO/FAO Codex Alimentarius in the form of a general guideline. This makes the HACCP system the basic reference for international trade disputes under the World Trade Organization (WTO) agreement on the Application of Sanitary and Phytosanitary Measures. However, the inclusion of the HACCP system as a general guideline for the Codex Alimentarius does not make all HACCP systems identical. For instance, the United States' HACCP regulations apply to processors, while the EC regulations apply to the whole production chain, from handling fish on board fishing vessels to retailing of fish. In both cases, the HACCP system is therefore very closely liked to the individual food safety and hygiene regulation framework.
The HACCP system is likely to evolve. Developed countries are beginning to introduce a regulatory scheme called risk policy into their food industries. The policy is based on quantitative risk assessment, risk management and risk communication. Risk policy requires additional epidemiological data and studies.Trade
The WTO agreements contain components that apply to GMOs (e.g. the removal of trade barriers, the requirements for intellectual property protection and labeling requirements). Although no aquatic GMOs are traded, genetically modified soybean is an ingredient of shrimp and other animal feeds that are traded globally. The EC and Japan have labeling requirements for this feed, and the feed industry is studying the worldwide reaction to the labeling and may look for soybean replacements for feeds.Intellectual property protection
The research development and production of reliable Gomes and the environmental and human health-monitoring infrastructure that should be installed have financial implications for biotechnology companies promoting the use of GMOs. One mechanism to help recover these costs is through intellectual property rights, for example patents that protect the inventors and developers of a product. Article 27 (3) (b) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) allows for the patenting of life forms. The United States Patent Office has granted patents on transgenic salmon and abalone. However, worldwide patenting laws are extremely complex and sometimes even contradictory; WTO and some countries allow the patenting of living organisms, but the EC does not. Many groups have moral objections to the patenting of life (see the paragraph on Ethics) and innovations that are contrary to public morality cannot be patented.
Despite the international community's general acceptance of product ecolabelling, the approach has caused controversy in several international for a, including the WTO Sub-Committee on Trade and Environment and FAO's COFI. General concerns about ecolabelling are its potential to act as a barrier to trade and its coherence, or lack of it, with international trade rules. More specific concerns arise when applying ecolabelling to products from marine capture fisheries because these have special characteristics.
Ecolabelling and international fish trade
Fish and fishery products are among the most widely traded natural resource-based goods. About 37 percent of global fisheries production enters international trade. For many developing countries, foreign exchange revenues from fish exports make a major contribution to the balance of payments and are thus of strategic macroeconomic importance. In the three major global fish importers (Japan, the EC and the United States), the processing, wholesaling and retailing of imported fish are of considerable economic significance, and they satisfy the consumer demand that is not met by domestic production.
The large and increasing trade of global fisheries production and the fact that much of the trade flow is from developing to industrialized countries indicate the potential of eco-labelling as both an incentive to improved fisheries management and a barrier to trade.
WTO and Shrimp turtle issue
The world conference on "Sea Turtle Conservation" which was held in Washington DC in 1979has observed that the shrimp trawls are the major source of sea turtle mortality in many countries around the world and there is an urgent need to test the uses of various excluder devices to resolve the problem. Over the years though the Turtle Excluder Devices (TEDs) have been used successfully to protect sea turtles the efforts to encourage voluntary use of TEDs by shrimp trawls failed miserably. By the year 1987 National Marine Fisheries Service (NMFS) of US passed regulations requiring US shrimp trawlers to use TEDs compulsorily. Later shrimpers filed a lawsuit to prevent the enforcement of these regulations, but to no avail. In 1988 when the Endangered Species Act was put for congressional renewal, the issue of TEDs requirement was so hotly debated that it held up passage of the bill. Eventually the bill did pass, but it diluted the whole issue of TEDs requiremen t. In 1989 US Congress passed an amendment to the Endangered Species Act known as section 609. In the Act the new provision required was that the state department should enter into negotiations with foreign countries on agreement to take measures to protect sea turtles and prohibit the importation of shrimp from the countries that are not certified as having turtle conservation programme. However, the US Congress did not make section 609 effective immediately and implementation of this new act was postponed until May 1, 1991. Under this new act the state department has passed the guidelines to set out the criteria to determine whether a country's domestic shrimp practices were sufficiently turtle friendly for the country to be certified to export to the US. The State Department limited the application of section 609 to only 14 of the 85 countries from which the US purchased shrimp but later in 1995 the Court of International Trade insisted the US to apply restrictions of sec tion 609 to all countries that export shrimp to the US and to prohibit the importation of shrimp from no-complying countries. In 1996 the State Department �certified' 36 nations as requiring TEDs or harvesting shrimp in a manner that did not harm sea turtles. All other nations were effectively barred from exporting wild caught shrimp to the US. Soon after that India, Pakistan, Thailand and Malaysia filed claims against the US under the WTO dispute procedures, arguing that the US was violating sovereign rights of the respective countries to determine how to harvest shrimp in their own waters. Now the question arises as said earlier, should we promote the global free trade at the expense of loss of natural resources, be they turtles or some other resource. The complexity of this dispute hangs on two main issues:How much a country can impose on the sovereign rights of another when two are engaged in international trade and should any nation have the right to allow their tr awlers to be operated in those country's waters where the turtles migrate to spend only a portion of their lives. Can nations protect national resources and markets, against goods produced by harming wildlife within the rules of free trade agreements like the WTO?
In June 1998 the US Court of Appeals for the federal circuit had vacated an earlier ruling by the US Court of International Trade insisting the State Department to rely on shipment-by-shipment certification of shrimp imports rather than requiring national programmes to protect sea turtles. Again this kind of modification raises two issues:In areas where shrimp landing is heavy, even a few trawlers who operate without TEDs goes unnoticed, undermining the efforts of those trawlers that do use TED and It will be virtually difficult to verify the reliability of certificates issued in many nations where public officials are poorly paid and pressure to certify for export to the US market is intense.
Under these circumstances it is opined that US has to re-examine how the section 609 has to be implemented. US might be able to advocate sea turtle conservation while complying the rules of the WTO. Recently, a diverse coalition of 14 organizations including the Centre for International Environmental Law and Consumers Choice Council to the Centre for Marine Conservation of US have recommended to bring environmental reforms in the WTO and also urged an end to shipment-by-shipment certification and a return to certification of national programme.
As the major shrimp importing countries especially US have imposed a ban on shrimp imports if TEDs are not attached to shrimp trawl nets, the use of TEDs in trawl net has become a major issue for India also. It was against this background that the Central Institute of Fisheries Technology (CIFT) under ICAR, Govt. of India took up the challenge and fabricated TED and successfully demonstrated its operation in State of Orissa. During these operations the TED permitted 100% escapement of turtles while keeping escapement of catch at 1.2% and shrimp alone as low as 0.62%. Now several maritime states in India have promulgated regulations prescribing use of TED in trawling as mandatory.
WTO Rules on Subsidies
The 1994 WTO Agreement on Agriculture exempted fisheries from its scope and so it is necessary to look to the 1994 WTO Agreement on Subsidies and Countervailing Measures (WTO, 1994) for the WTO rules on subsidies applicable to the fisheries sector. Here the rules relating to subsidies are significantly more developed than in earlier agreements and they govern the use of subsidies in the fisheries sector.
The agreement applies a series of tests to establish whether a subsidy exists. For a measure to meet the definition of a subsidy it must confer an economic benefit, pass the �specificity' test, be �prohibited' or �actionable', or cause an adverse effect. In the case of �serious prejudice' it must pass a two-step test. These are expanded on below.
Article 1.1 (a) 1 defines a subsidy as �financial contribution by a government or any public body within a territory' whereThere is a direct transfer of funds (e.g., grants, loans, equity infusion), There is a potential transfers of funds (e.g., loans, guarantees), Government revenue is forgone or not collected (e.g., tax preferences), Government provides free services other than general infrastructure, or purchases goods, There are payments to a funding mechanism or to a private body to perform any of the above, or There is any type of price or income support programme in the sense of Article XVI discussed above (Art. 1.1 (a) 2).
The subsidy must also confer an economic benefit on the recipient (Article 1.1 (b)). Article 1.2 requires that subsidies, as defined in Article 1.1, must then be made subject to the �specificity test' described in Article 2 and must be found to be specific. All subsidies are divided into two broad categories:Specific subsidies are targeted at certain industries, enterprises or groups of industries and enterprises in a given geographic region; Nonspecific subsidies are made generally available and so are more broadly distributed in a country.
Subsidies are of three types. Prohibited subsidies are trade contingent and include those that directly promote exports (export subsidies) or restrain imports through, for example, the required use of domestically produced goods (Art. 3). A procedure is established (Art. 4) leading ultimately to counter measures as a remedy. Nonactionable subsidies (Art. 8) include two categories: all nonspecific subsidies and three subcategories of specific subsidies of which two apply to fisheries sector assistance programmes. Specific subsidies are not actionable if they assist disadvantaged regions or �promote adaptation of existing facilities to new environmental requirements' (Art. 8.2 (c). This opens up the possibility of environmental subsidies in a trade agreement on subsidies. Finally, actionable subsidies must be �specific' and cause one of three �adverse effects' (Art. 5):Injury to the importing country's domestic industry. Nullification or impairment of a trade benefit or �Serious prejudice' to another signatory.
The two-step test applied to determine �serious prejudice' is developed and defined in Article 6. Firstly, ad valorem subsidization must exceed 5% (Art. 6.1 (a)).