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Trade and fisheries subsidies

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  • Bayramoglu, Basak
  • Copeland, Brian R.
  • Jacques, Jean-Francois

Abstract

Many renewable resource sectors are heavily subsidized and yet the resources are also seriously depleted. World Trade Organization members included subsidies in a key renewable resource sector (fisheries) in the Doha round of trade negotiations, which subsequently stalled. This paper develops a simple model to show why prospects for a deal on fisheries subsidies may be difficult. Typically international spillover effects create incentives among exporters to negotiate reductions in subsidies: one country's subsidy worsens other exporters' terms of trade. These incentives may not exist in fisheries for 3 reasons. First, open access fishery supply curves are backward bending and so if fisheries are depleted, subsidies raise prices (by reducing sustainable harvesting) and improve other exporters' terms of trade. Second, ecological constraints put an upper bound on sustainable harvesting. This means that subsidies that increase employment may have no effect on output and hence generate no international spillover effects if resources are well managed. And third, even if governments were compelled to reduce fishery subsidies, there may be no spillover benefits to trading partners because of policy substitution: governments would be motivated to weaken other regulations targeting the fish sector.

Suggested Citation

  • Bayramoglu, Basak & Copeland, Brian R. & Jacques, Jean-Francois, 2018. "Trade and fisheries subsidies," Journal of International Economics, Elsevier, vol. 112(C), pages 13-32.
  • Handle: RePEc:eee:inecon:v:112:y:2018:i:c:p:13-32
    DOI: 10.1016/j.jinteco.2018.01.009
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    Cited by:

    1. Basak Bayramoglu & Estelle Gozlan & Clément Nedoncelle & Thibaut Tarabbia, 2023. "Trade Agreements and Sustainable Fisheries [Accords commerciaux et pêche durable]," Working Papers hal-04101044, HAL.
    2. Alberto Roca Florido & Emilio Padilla Rosa, 2024. "Analysing the impacts of a reform on harmful fishery subsidies in Spain using a social accounting matrix," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 13(1), pages 1-29, December.
    3. Cecilia Bellora & Jean-Christophe Bureau & Basak Bayramoglu & Estelle Gozlan & Sébastien Jean, 2020. "Trade and Biodiversity [Commerce et biodiversité]," Working Papers hal-02887592, HAL.
    4. Laura Forastiere & Davide Del Prete & Valerio Leone Sciabolazza, 2020. "Causal Inference on Networks under Continuous Treatment Interference," Papers 2004.13459, arXiv.org, revised Jun 2023.

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    More about this item

    Keywords

    Trade agreements; Fisheries; Renewable resources; Subsidies; Transferable quotas;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • Q22 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Fishery
    • Q27 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Issues in International Trade

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