International Fish TradeInternational Fish Traderecent developmentsrecent developments

Grimur Valdimarsson, DirectorGrimur Valdimarsson, Director

Fishery Industries DivisionFishery Industries Division

FAO, Rome,ItalyFAO, Rome,Italy

OutlineOutline

Regulatory Framework for Fish TradeRegulatory Framework for Fish Trade Production Production

• Aquaculture versus WildAquaculture versus Wild• Developing versus Developed countriesDeveloping versus Developed countries

TradeTrade Major commoditiesMajor commodities Developing versus Developed countriesDeveloping versus Developed countries

• Growing trade of developing countriesGrowing trade of developing countries• Trade flowsTrade flows

Outline (cont.)Outline (cont.)

WTO AgreementsWTO Agreements DOHA negotiationsDOHA negotiations FISH INFOnetwork and the work of FISH INFOnetwork and the work of

FAO in the field of market FAO in the field of market information and developmentinformation and development

Value Added fish products and Value Added fish products and changes in market structureschanges in market structures

ConclusionsConclusions

TRADE LIBERALIZATIONTRADE LIBERALIZATION

was put at the heart of the global was put at the heart of the global development agenda as laid down in development agenda as laid down in Agenda 21 of the Earth Summit on Agenda 21 of the Earth Summit on

Sustainable DevelopmentSustainable Development

(Rio) (Rio)

in 1992in 1992

The Earth Summit in Rio in The Earth Summit in Rio in 1992 (Agenda 21)1992 (Agenda 21)

““promote sustainable development promote sustainable development through trade liberalization”through trade liberalization”

create a system “that is non- create a system “that is non- discriminatory, rule based, discriminatory, rule based, equitable, secure, transparent and equitable, secure, transparent and predictable”predictable”

Hunger:Hunger: 840 million people still suffer from hunger 840 million people still suffer from hunger

(FAO)(FAO)

Unequal distribution of wealth:Unequal distribution of wealth:““Ten percent of the world’s population Ten percent of the world’s population

produces 70 percent of its goods and produces 70 percent of its goods and services and receives 70 percent of world services and receives 70 percent of world income - an average of $ 30,000 per income - an average of $ 30,000 per person. At the other extreme, half of the person. At the other extreme, half of the world’s population lives on less than $ 2 a world’s population lives on less than $ 2 a day”day”

Collier and Dollar (2001) Collier and Dollar (2001)

The WTO (and its predecessor,GATT) The WTO (and its predecessor,GATT) has mainly been concerned with has mainly been concerned with

facilitating international trade through...facilitating international trade through...

lowering CUSTOM DUTIES (TARIFFS) lowering CUSTOM DUTIES (TARIFFS)

butbut

technical issues are becoming ever technical issues are becoming ever more important more important

During the 50 years of negotiations During the 50 years of negotiations to lower tariffs world trade has grown to lower tariffs world trade has grown

by 6% annually…by 6% annually…

AGRICULTRUAL goods, such as meat, AGRICULTRUAL goods, such as meat, still carry some 70-80% tariffs still carry some 70-80% tariffs whereaswhereas

FISH & FISHERY products (classified FISH & FISHERY products (classified as industrial goods) carry some as industrial goods) carry some 4.5% tariffs in developed countries4.5% tariffs in developed countries

Some production figures...Some production figures...

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

1 4 0

1 9 5 0 1 9 5 4 1 9 5 8 1 9 6 2 1 9 6 6 1 9 7 0 1 9 7 4 1 9 7 8 1 9 8 2 1 9 8 6 1 9 9 0 1 9 9 4 1 9 9 8 2 0 0 2

Mil

lio

ns

A q u a c u lt u r e

C a p t u r e

Fish Production (in MT) Fish Production (in MT)

FISHSTAT 2004

0

2 0

4 0

6 0

8 0

1 0 0

1 2 0

1 4 0

1 9 5 0 1 9 5 4 1 9 5 8 1 9 6 2 1 9 6 6 1 9 7 0 1 9 7 4 1 9 7 8 1 9 8 2 1 9 8 6 1 9 9 0 1 9 9 4 1 9 9 8

Mill

ions

D e v e lo p in g

D e v e lo p e d

Fish Production (in MT) Fish Production (in MT)

FAO FISHSTAT 2004

0

2 0

4 0

6 0

8 0

10 0

12 0

19 5 0 19 5 4 19 5 8 19 6 2 19 6 6 19 7 0 19 7 4 19 7 8 19 8 2 19 8 6 19 9 0 19 9 4 19 9 8

Mill

ion

s

D e v e l o p e d

Fish Production (in MT) Fish Production (in MT)

0

2 0

4 0

6 0

8 0

10 0

12 0

19 5 0 19 5 4 19 5 8 19 6 2 19 6 6 19 7 0 19 7 4 19 7 8 19 8 2 19 8 6 19 9 0 19 9 4 19 9 8

Mill

ion

s

D e v e l o p i n g

FAO FISHSTAT 2004

Some fish trade figures...Some fish trade figures...

International Fish Exports – 2002International Fish Exports – 2002(percentage by value)(percentage by value)

S h r i m p1 8 %

G r o u n d f i s h1 5 %

S a l m o n8 %

O t h e r s2 5 %

T u n a9 %

C e p h a l o p o d s5 %

M o l l u s c s ( o t h e r )

6 %

F r e s h w a t e r2 %

S m a l l p e l a g i c s

7 %

F i s h m e a l4 %

F i s h o i l1 %

Total export value: US$ 58 billionFAO FISHSTAT 2004

International Fish Trade - 2002International Fish Trade - 2002I m p o r t s

U S A1 9 %

J a p a n2 2 %

D e v e lo p in g1 8 %

E U ( 1 5 )3 3 %

O t h e r s8 %

E x p o r t s

E U ( 1 5 )2 1 %

O t h e r s2 2 %

J a p a n1 %

U S A6 %

D e v e l o -p i n g5 0 %

FAO FISHSTAT 2004

Net exports of food items by Net exports of food items by developing countriesdeveloping countries

- 5

0

5

1 0

1 5

2 0

Fis

h

Co

ffee

Ba

na

na

Co

co

a

Su

ga

r

Te

a

Ric

e

Me

at

U S $ 1 0 0 0 m i l l i o n 1 9 8 2

1 9 9 2

2 0 0 2

FAO FISHSTAT and FAOSTAT 2004

0

5

10

15

20

25

30

35

197619771978197919801981198219831984198519861987198819891990199119921993199419951996199719981999200020012002

US

$ x

1000

mil

lion

Developed Developing

Fish Commodities - Export Fish Commodities - Export

FAO FISHSTAT 2004

Trade Flows 2002 Trade Flows 2002 (in billion US$)(in billion US$)

Developed Developing

Developed Developing

Exports

Imports

24,6 5

3,8

25

Calculations based onCOMEXT 2004

MEAT AND SEAFOOD PRICE INDICES MEAT AND SEAFOOD PRICE INDICES (100 = 1997-1999)(100 = 1997-1999)

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

1991

-01

1992

-01

1993

-01

1994

-01

1995

-01

1996

-01

1997

-01

1998

-01

1999

-01

2000

-01

2001

-01

2002

-01

2003

-01

2004

-01

Pig

Bovine

Salmon

Cod

FAO FISHSTAT and FAOSTAT 2004

The ratio of the first hand price to The ratio of the first hand price to the retail pricethe retail price

01 02 03 04 05 06 07 08 09 0

1 0 0

P o r k U S A

B e e f U S A

W h o l e s a l m o nF r a n c e

C O D U K

Tveteraas 2004

WTO AgreementsWTO Agreements

WTO Agreements of particular WTO Agreements of particular relevance for fisheriesrelevance for fisheries

Agreement on Sanitary and Phytosanitary Agreement on Sanitary and Phytosanitary Measures (SPS)Measures (SPS)

Agreement on Technical Barriers to Trade Agreement on Technical Barriers to Trade (TBT)(TBT)

Agreement on Subsidies and Countervailing Agreement on Subsidies and Countervailing MeasuresMeasures

Agreement on Import Licensing ProceduresAgreement on Import Licensing Procedures Agreement on Anti-DumpingAgreement on Anti-Dumping Agreement on Rules of OriginAgreement on Rules of Origin Dispute SettlementDispute Settlement Tariff reduction (GATT)Tariff reduction (GATT)

Agreement on Sanitary and Agreement on Sanitary and Phytosanitary issues (SPS)...Phytosanitary issues (SPS)...

Right of Members to apply measures Right of Members to apply measures they deem necessary to protect they deem necessary to protect human, animal and plant life and human, animal and plant life and health health

Should not be a disguised restriction Should not be a disguised restriction on international tradeon international trade

Protection levels should not be more Protection levels should not be more trade restrictive than required to trade restrictive than required to provide “appropriate level of provide “appropriate level of protection” APLPprotection” APLP

Agreement on Technical Agreement on Technical Barriers to Trade (TBT)...Barriers to Trade (TBT)...

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

Labelling disputes Labelling disputes Testing proceduresTesting procedures

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

Tariff escalation for cod: EUTariff escalation for cod: EU

Cod – fresh and frozenCod – fresh and frozen 15%15% Cod fillets – fresh and frozen Cod fillets – fresh and frozen 18%18% Cod fillets dried, saltedCod fillets dried, salted 20%20% Cod dried, saltedCod dried, salted 13%13% Cod fillets – batteredCod fillets – battered 25%25%

TARIC 2004

Tariff escalation for tuna: EUTariff escalation for tuna: EU EU tariffs are 18% for frozen whole tuna and 24% EU tariffs are 18% for frozen whole tuna and 24%

for tuna loins and canned tunafor tuna loins and canned tuna

But there are some special Agreements..But there are some special Agreements..

Asian Caribbean Pacific (ACP) countries: 0% duty Asian Caribbean Pacific (ACP) countries: 0% duty on all seafood products on all seafood products

GPS-Drug Agreement set certain duty free quotas GPS-Drug Agreement set certain duty free quotas for canned tuna and tuna loins from Andean for canned tuna and tuna loins from Andean Community and Central AmericaCommunity and Central America

EBA (everything but Arms Agreement) of the EU EBA (everything but Arms Agreement) of the EU for LDC´s (for LDC´s (least developed countriesleast developed countries))

SPS Agreement applied by SPS Agreement applied by EU: antibioticsEU: antibiotics

Detention of shrimp with antibiotics Detention of shrimp with antibiotics (mostly chloramphenicol) in EU(mostly chloramphenicol) in EU• China (mainland and Taiwan, province of China (mainland and Taiwan, province of

China) China) • ThailandThailand• IndonesiaIndonesia• India India • PhilippinesPhilippines• Viet NamViet Nam• BangladeshBangladesh• and others and others

Examples of TBT/SPS issuesExamples of TBT/SPS issues Country of origin labeling in USA (COOL)Country of origin labeling in USA (COOL) TEDs (Turtle Excluding Devices) for TEDs (Turtle Excluding Devices) for

catching shrimpcatching shrimp Tuna-dolphin issue. The certification that Tuna-dolphin issue. The certification that

dolphins are not killed in fishing for tunadolphins are not killed in fishing for tuna Trade description of scallops: Saint-Trade description of scallops: Saint-

Jacques vs pétoncle Jacques vs pétoncle Australia: Banning imports of salmon from Australia: Banning imports of salmon from

Canada due to possible fish disease agentsCanada due to possible fish disease agents Trade description of sardines: Peru vs EUTrade description of sardines: Peru vs EU

• Sardinella pilchardus vs. Sardinops sagaxSardinella pilchardus vs. Sardinops sagax

WTO definition of dumpingWTO definition of dumping

Three methods to calculate a Three methods to calculate a product’s “normal value”. product’s “normal value”. • The main one is based on the price in The main one is based on the price in

the exporter’s domestic market. the exporter’s domestic market. • the price charged by the exporter in the price charged by the exporter in

another country, another country, • or a calculation based on the or a calculation based on the

combination of the exporter’s combination of the exporter’s production costs, other expenses and production costs, other expenses and normal profit margins. normal profit margins.

Anti-dumping: Shrimp USAAnti-dumping: Shrimp USA

Against countries selling at a price Against countries selling at a price below domestic (US) production below domestic (US) production pricesprices

Obvious difference between the US Obvious difference between the US definition of dumping and the WTO definition of dumping and the WTO definitiondefinition

Complaint to the WTO likely to come Complaint to the WTO likely to come soonsoon

Resulting US tariffs on shrimp...Resulting US tariffs on shrimp...

Countries affected:Countries affected:• BrazilBrazil up to 67.8%up to 67.8%• EcuadorEcuador 6.08%-9.35%6.08%-9.35%• IndiaIndia 3.56%-27.46%3.56%-27.46%• ThailandThailand 5.56%-10.25%5.56%-10.25%• ChinaChina 27.9%-113%27.9%-113%• Viet NamViet Nam 4.1%-25.8%4.1%-25.8%

99thth Round: Doha Agenda: Round: Doha Agenda: The Development RoundThe Development Round

Market access for Market access for non-agricultural products non-agricultural products

(including fish)(including fish)

GOAL OF THE DOHA ROUND:GOAL OF THE DOHA ROUND: Reduce or eliminate import tariffsReduce or eliminate import tariffs Reduce tariff escalation and tariff peaks Reduce tariff escalation and tariff peaks

(value-added products)(value-added products) Protect special needs of developing Protect special needs of developing

countriescountries Capacity building on negotiation issuesCapacity building on negotiation issues

Fish processing in Fish processing in developing countriesdeveloping countries

LARGE POTENTIAL FOR EMPLOYMENT LARGE POTENTIAL FOR EMPLOYMENT CREATION (NOT THE LEAST FOR CREATION (NOT THE LEAST FOR WOMEN)WOMEN)

TODAY, TARIFF ESCALATION TODAY, TARIFF ESCALATION HINDERS PRODUCTION OF VALUE-HINDERS PRODUCTION OF VALUE-ADDED PRODUCTS ADDED PRODUCTS

Are fish exports bad for developing Are fish exports bad for developing countries?countries?

Impact of Fish Trade on Food Security: Impact of Fish Trade on Food Security: 11 countries 2002-200411 countries 2002-2004

Main Findings were Main Findings were • international trade in fishery products has had a international trade in fishery products has had a

positive effect on food security through export positive effect on food security through export earningsearnings

• international trade has not had a detrimental international trade has not had a detrimental effect on food security in the form of fish as food. effect on food security in the form of fish as food.

• sustainable resource management practices are sustainable resource management practices are a necessary condition for sustainable a necessary condition for sustainable international trade. international trade.

Kurien 2004

Helping developing countries with Helping developing countries with fish trade...fish trade...

FIN MagazinesFIN Magazines

Price Reports and Market Price Reports and Market AnalysisAnalysis

FAO GLOBEFISH WebpageFAO GLOBEFISH Webpage

Value addition- the future?Value addition- the future?

Value Addition...Value Addition...

ConclusionConclusion

Fish production continues to growFish production continues to grow Developing represent 70% of Developing represent 70% of

production (by volume)production (by volume) 38% of fish production enters 38% of fish production enters

international trade (by value)international trade (by value) China is the main producing and China is the main producing and

exporting country, overtaking exporting country, overtaking Thailand in 2003. Thailand in 2003.

Conclusion (cont.)Conclusion (cont.)

Shrimp is the main commodity trade Shrimp is the main commodity trade with 18% of total value. with 18% of total value.

Net-export earnings are very Net-export earnings are very important source of income for important source of income for developing countries. developing countries.

Intra-developing countries is very Intra-developing countries is very limited at US$ 5 billionlimited at US$ 5 billion

ReferencesReferences

Collier P., Dollar D. (2001). Can the World cut Poverty in Half? Collier P., Dollar D. (2001). Can the World cut Poverty in Half? How Policy Reform and Effective Aid can meet International How Policy Reform and Effective Aid can meet International Development Goals. Development Goals. World DevelopmentWorld Development 29 (11), 1787- 29 (11), 1787-1802.1802.

COMEXT. (2004). Eurostat: Intra and Extra EU trade. CD Rom.COMEXT. (2004). Eurostat: Intra and Extra EU trade. CD Rom.

Kurien, J. (2004). Responsible Fish Trade and Food Security. Kurien, J. (2004). Responsible Fish Trade and Food Security. www.globefish.org/dynamisk.php4? id=2168.www.globefish.org/dynamisk.php4? id=2168.

Reardon T., Timmer P., Barrett C. & Berdegué J. 2003. The rise Reardon T., Timmer P., Barrett C. & Berdegué J. 2003. The rise of supermarkets in Africa, Asia and Latin America. American of supermarkets in Africa, Asia and Latin America. American Journal of Agricultural Economics 85 (5): 1140-1146.Journal of Agricultural Economics 85 (5): 1140-1146.

ReferencesReferences (continued) (continued)

Taric. (2004). WU taxation and Custom Union. Taric. (2004). WU taxation and Custom Union. www.europa.eu.int/comm/taxationcustom/dss/tarhome/htm .www.europa.eu.int/comm/taxationcustom/dss/tarhome/htm .

Tveteraas, R. (2004). The competition between aquaculture Tveteraas, R. (2004). The competition between aquaculture and agriculture in Europe. and agriculture in Europe. www.globefish.org/dynamisk.php4? www.globefish.org/dynamisk.php4? id=2312 .id=2312 .

Reccomended further readingReccomended further reading Globefish website:Globefish website: www.globefish.orgwww.globefish.org

COFI Document: Status and Important Recent Events COFI Document: Status and Important Recent Events Concerning International Trade in Fisheries Products Concerning International Trade in Fisheries Products (including World Trade Organization):(including World Trade Organization):

ftp://ftp.fao.org/fi/document/COFI/cofift_9/2e.pdfftp://ftp.fao.org/fi/document/COFI/cofift_9/2e.pdf

Fish Trade Issues In Wto And Acp-Eu Negotiations, by Fish Trade Issues In Wto And Acp-Eu Negotiations, by Aundun LemAundun Lem

http://www.globefish.org/index.php?id=2251http://www.globefish.org/index.php?id=2251