EconPapers    
Economics at your fingertips  
 

Trade and fisheries subsidies

Basak Bayramoglu (), Brian R. Copeland and Jean-François Jacques

Journal of International Economics, 2018, vol. 112, issue C, 13-32

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.

Keywords: Trade agreements; Fisheries; Renewable resources; Subsidies; Transferable quotas (search for similar items in EconPapers)
JEL-codes: F18 F53 Q22 Q27 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022199618300096
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Trade and Fisheries Subsidies (2016) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:112:y:2018:i:c:p:13-32

Access Statistics for this article

Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and Rodríguez-Clare, Andrés

More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

 
Page updated 2019-10-17
Handle: RePEc:eee:inecon:v:112:y:2018:i:c:p:13-32