September 30, 2022

kia ora again from the South Pacific, where this Trade Secrets writer has a brief and chilly respite from the height of summer elsewhere. Today’s main piece focuses on some rare pieces of good news: steps by the Quad partners and the WTO to address the environmental and human rights disaster caused by the global fishing industry. We give a reality check of the extent of the problems and offer some new solutions. mapped waters looks at the movement of people and the international competition for talent.

Email me at [email protected] Trade Secrets is back in two weeks, with my colleague Andy Bounds taking over for a guest appearance.

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Finally some good news, but not enough

In recent years, the Financial Times has documented horrific claims about environmental looting and modern slavery in the global fishing fleet.

We have written about Taiwanese ships where Indonesian crews worked 22 hours to return to sleeping and dining areas infested with insect infestations. We also uncovered the Korean ships that hunted walruses, seals and dolphins for their livers and genitals. And we’ve reported on China’s distant water fleet – by far the largest in the world – accused of predatory illegal overfishing, the eradication of endangered species and the abuse of fishing crews in Southeast Asia.

Despite the great risk that overfishing poses to the livelihoods of millions of people, a constant complaint from NGOs is that governments are doing far too little in response. Overseeing an industry operating on the high seas – out of sight out of mind – has not been a high priority for many developed country capitals. Yet in recent months, two major victories have been won in favor of the oceans and marginalized workers.

The Quad security group of the US, Japan, Australia and India launched a new satellite initiative in the Asia-Pacific region in May, a plan that focused primarily on illegal Chinese fishing. The Indo-Pacific Partnership for Maritime Domain Awareness will see the Quad partners fund a commercial satellite-based tracking service that will relay maritime information to countries in near real time. US officials told FT’s US-China correspondent Demetri Sevastopulo that the new system would monitor radio frequencies and radar signals that allow countries in the region to pick up ships that have disabled Automatic Identification Systems (AIS) transponders to avoid detection – a key problem in illegal fishing.

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In June, the 12th WTO Ministerial Conference finally reached an agreement after 20 years of negotiations to end harmful fisheries subsidies. As Alice Tipping of the International Institute for Sustainable Development guess what: while the exceptions for developing countries have yet to be worked out, the rules will at the very least force governments to think about the legality and sustainability of the fishing activity they subsidize, something few are doing right now.

In a world that has lurched from pandemic to war in Europe over the past three years, and where major economies are teetering on the brink of economic recession, it seems important to notice these positive moves as they happen. That said, neither the WTO’s breaking of a decades-long bureaucratic deadlock, nor the Quad partners promising to control the Pacific, are a panacea. The magnitude of the problem, Trade Secrets believes, requires much bolder action.

For the uninitiated: the UN estimates that up to 26 million tons of fish are illegally caught annually (worth about $23 billion). Worldwide, approximately 20 percent of all fish caught comes from illegal, unreported and unregulated fishing activities. And half of global fish stocks are fished at biologically unsustainable levels (a change from 10 percent in the 1970s).

Yet the fishing industry still enjoys huge subsidies. And it’s not just China. Researchers in scientific journal Marine Policy found that China, the EU, the US, Korea and Japan — the top five — account for nearly 60 percent of total global subsidies, with a massive $20 billion. They also noted that over the past decade “massive harmful ‘capacity-enhancing’ subsidies, especially those for fossil fuels, have actually increased as a percentage of total subsidies”.

In addition, the subsidies classified as harmful still amount to about $22 billion per year.

Earlier this year, one of the most comprehensive investigations into China’s distant water fleet found that 95 percent of the crew on board said they had witnessed illegal fishing. The problems are among the most acute in West Africa, where Chinese trawlers catch an estimated 2.35 million tons of fish annually.

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From a common sense point of view, the Quad’s focus on the Pacific will miss large areas of the most problematic areas, especially off the coast of West Africa, but also South America. Focusing solely on China is also problematic, as ships from the quad-friendly countries of Taiwan and South Korea have faced accusations of widespread environmental looting and shocking treatment of Southeast Asian crews for years.

And while the US has also pledged to increasingly use its coastguard to help control China’s fisheries — a move started by the Trump administration and continued under President Joe Biden — sending a pair of cutters to the vast Pacific Ocean, an area of ​​165 million square kilometers, do not expect to move the dial significantly.

Similarly, in a speech on the WTO’s breakthrough on subsidies in late July, WTO Director-General Ngozi Okonjo-Iweala said: “Achieving the agreement was an extremely important step, but its implementation is what matters. “

Implementation is one point. Enforcement is another. To make serious improvements through the WTO, its members will likely have to file complaints against China, a move that will undoubtedly have repercussions from Beijing.

So, what is really needed? Trade Secrets posed this question to Steve Trent, the founder of the Environmental Justice Foundation, who has decades of experience advocating sweeping change in the fishing industry.

Trent believes that a focus on China remains “valuable” in the near term and supports the Quad’s initiative, as abuses “are systematic in the Chinese fleet, without independent and consistent monitoring, there is a high probability that these abuses will persist, at least in the short term”.

But in the longer term, Trent is clear: “Ultimately you need transparency about the architecture of global fisheries management. It’s pretty simple. We need to be able to see who is fishing what, where, when and how on every vessel.”

One of the most important first steps, he believes, is for the major market states, Japan, the US and the EU, to align their regulations and market access requirements and exclude products they cannot prove origin when they do. do not have the transparency to provide assurance that it “has not been produced by a slave, captured by a slave or captured legally or unsustainably”.

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Alan Beattie writes a trade secret column for FT.com every Wednesday. Click here to read the latest news and visit ft.com/trade secrets to see all of Alan’s columns and previous newsletters.

mapped waters

For the current Charted waters, I want to focus on the international market for human capital rather than goods and services. My colleague John Burn-Murdoch has done (once again) excellent data analysis on this topic.

Graph showing the UK has risen from Europe's second oldest population to fourth youngest in the last 40 years, with immigration playing a critical role

What we can see from the chart above is that the UK has become a younger country, now the fourth youngest in Europe, but only because of migration.

Chart showing that the UK has become a less desirable destination for potential migrants in recent years

Now for the bad news. The UK’s luck in attracting young foreign workers is next. As the chart above shows, it’s not just Brexit. Global competition for talented workers has increased over the past decade. The question is what the UK will do about this. The worry is that it won’t work. (Jonathan Moules)

Argentina’s new economy minister has promised to bring the country fiscal order and regain market confidence by creating a “super ministry” to tackle double-digit inflation.

Sterling and government bond yields fell last week after the Bank of England raised interest rates to a 27-year high to counter rising inflation and warned of a prolonged recession.

Opec and its allies agreed on one of the smallest oil production surges in the group’s history, as Saudi Arabia tried to appease Western allies without using up all of its untapped capacity.

According to Alan Beattie, it is expensive, cumbersome and potentially self-defeating to favor political allies in building supply chains.


Trade Secrets is edited by Jonathan Moules


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