The World Trade Organization (WTO) Agreement on Fisheries Subsidies, adopted in June 2022 after more than two decades of negotiations, marked a significant milestone for promoting sustainable development in the fisheries sector and was celebrated as a historic achievement. This key international instrument requires governments to avoid financially supporting fishing in situations where there are acute concerns about the sustainability of such fishing. WTO members are still negotiating additional rules on fisheries subsidies.

What would these add, and where exactly are we in that negotiating process? This article offers a concise state of play of the current WTO process on the topic, as of March 2025.

When WTO members sealed a multilateral deal to curb the most harmful forms of government subsidies to the fishing sector in 2022, they drew applause from around the world. Harmful fisheries subsidies are a serious challenge in terms of sustainable development. They encourage levels of fishing pressure that marine resources cannot bear, threatening not only marine ecosystems but also the food security and livelihoods of hundreds of millions of people who depend on fishing—often in vulnerable coastal communities in developing countries.

By prohibiting the provision of fisheries subsidies when they can be most damaging, the 2022 WTO Agreement on Fisheries Subsidies (hereafter "the 2022 agreement," also often called Fish 1) is expected to help align government subsidy policies with sustainability imperatives in the fishing sector. This is a much-needed shift in the face of the ever-increasing share of fish stocks being exploited beyond sustainable levels globally (38%, according to the latest estimates by the Food and Agriculture Organization) and the well-known role of subsidies as a driver of such overexploitation.

More precisely, the treaty prohibits subsidies in three types of situations: (1) when fishing activities are illegal, (2) when fish stocks are in an overfished condition—that is, their biomass is alarmingly low—and no measures have been introduced to help them recover, and (3) when fishing occurs on the high seas outside of any collective management arrangement, which essentially means that no collective entity has the responsibility to ensure the sustainable management of these activities. In addition, the rules include a softer obligation for governments to be particularly cautious when providing subsidies to vessels that do not fly their flag and for the fishing of stocks whose sustainability status has not been assessed, as well as transparency requirements with regard to subsidies and other fisheries-related information.

The treaty now needs to be ratified by 111 WTO members to enter into force; 94 members have done so already, so 17 more ratifications are still needed. Once in force, the new set of rules will become legally enforceable. WTO members must thus also prepare to implement their new legal obligations—which they can start doing by using IISD's Self-Assessment Tool for the Implementation of the Fisheries Subsidies Agreement. A dedicated fund has been set up at the WTO to provide developing country members with the financial support they need to implement the agreement.

All of this is promising, but it also begs the question of why WTO members are still negotiating to conclude additional rules on fisheries subsidies (often called Fish 2). The answer lies in the focused nature of the rules agreed 3 years ago. The 2022 agreement is essential in its own right, but the problem of subsidized overfishing is broader than the specific situations targeted by its prohibitions. Even when fishing operators do not engage in illegal activities or when stocks are not (yet) in an overfished condition, fisheries subsidies can be harmful. They often encourage the development of oversized fishing fleets and incentivize excessive levels of fishing pressure, which can eventually lead to fish stocks being overfished or even severely depleted. The original mandate for the negotiations recognized the scope of the problem: it required negotiators to discipline those subsidies that contribute to overcapacity and overfishing.

This is precisely why WTO members are negotiating further, broader rules on fisheries subsidies: to prevent subsidies from contributing to overfishing and fleet overcapacity in the first place. In other words, the rules would aim to address more directly the root cause of the problem (when subsidies start to encourage overcapacity and overfishing) rather than waiting for the most acute manifestations of that problem to appear (when overfishing has been going on for so long that stocks are in an overfished condition).

Such broader rules were also on the table at the WTO's Twelfth Ministerial Conference (MC12) in Geneva, where the 2022 agreement was adopted, and their conclusion was crucial for many WTO members. However, members did not manage to agree on all the parameters of these disciplines. Rather than throwing the entire agreement overboard, they decided to conclude a smaller—but critically important—package and continue negotiating on these additional rules to prohibit subsidies that contribute to overcapacity and overfishing more generally. Now they are working to finish the job.

WTO talks on fisheries subsidies resumed in 2023, with a very busy schedule of negotiating meetings. The goal was to agree on additional provisions on fisheries subsidies by—or at—the WTO's Thirteenth Ministerial Conference (MC13), held in Abu Dhabi in late February and early March 2024. Members began by reconsidering various possible approaches to these broader rules. As the discussions progressed, the chair of negotiations, Ambassador Einar Gunnarsson of Iceland, tabled draft disciplines. This initiated a process of gradual convergence among members on most of the key elements in the rules, as reflected in a revised text issued at the end of 2023. Further negotiating meetings in early 2024 allowed members to continue narrowing gaps between positions and find further convergence on several outstanding issues. This progress was captured in a draft text for additional provisions that many members hoped to adopt at MC13.

But despite intensive talks in Abu Dhabi and an unprecedented level of convergence on virtually all issues on the table, members could not reach full consensus at the ministerial meeting. The work undertaken in Abu Dhabi, nonetheless, generated some of the building blocks needed to conclude the talks. First, it led to another revision of the draft text (later circulated formally here, and see IISD's analysis of it here), which brought WTO members even closer to consensus. Second, it allowed particular members to work bilaterally and find common ground on very sensitive issues on which they held diametrically opposed positions. Finally, the last hours of MC13 saw a diverse group of members undertake efforts to find compromises on several outstanding issues, and the adjustments suggested by this group in a so-called floating text are likely to prove important in finding a landing zone.

After hearing members' views again in the months following MC13, many of which emphasized how close they were to landing a deal in Abu Dhabi, Gunnarsson attempted to conclude negotiations in July in Geneva. He issued a slightly amended text, suggesting a possible landing zone on outstanding issues based on the floating text from MC13 and put the decision to members at the July meeting of the WTO's General Council—the organization's highest decision-making body outside of the ministerial conference. Some members still had reservations about certain aspects of the disciplines, and further discussions explored possible solutions to these concerns. Despite this gap-closing work, it became evident that consensus would again prove elusive.

A similar scenario occurred in the last months of 2024. After consulting members, Gunnarsson decided to explore again whether negotiations could be concluded at the General Council's December meeting. He circulated a version of the negotiating text that was revised based on the July discussions. Almost all members again signalled that they were ready to conclude talks based on that text, possibly with relatively minor tweaks, but full consensus could not be achieved. Two large developing country members, in particular, indicated that they wanted to see more major changes to the text before they would be open to adopting the proposed disciplines.

The current situation is a study in contrasts. On the one hand, WTO members have never been so close to consensus on the actual substance of these additional rules. And the overwhelming majority would like to conclude the negotiations as soon as possible based on the current draft text, possibly with limited adjustments. On the other hand, full consensus has not yet materialized, and at least two members have explicitly called for more substantial changes to the rules. For members to be able to deliver this crucial deal, a change in current political dynamics will be needed.

The draft text on the table reflects members' gradual convergence on a "hybrid" approach that combines elements from several proposals made by different members and groups of members over the years. The structure of the rules is quite similar to the set of disciplines that was already being considered in the lead-up to MC12, yet with a few important changes.

The main rule broadly prohibits subsidies that contribute to overfishing and overcapacity. It includes a list of subsidy types that are presumed to be harmful (and thus prohibited) but is also accompanied by two types of exemptions. First, the subsidizing member can keep subsidizing when it can show that fisheries management measures are in place to keep fish stocks healthy, with stricter demonstration requirements for developed members, distant water fishing nations, and large subsidizers. This differentiation between members—that is, tougher requirements for those with more industrialized and subsidized fishing sectors—is one of the key changes made to the draft rules over the last 2 years. Second, the main rule is tempered with a series of temporary and permanent exemptions for developing country members or groups of developing country members as special and differential treatment. Another key evolution in the draft rules since MC12 has been the gradual widening of some of these flexibilities for developing countries, especially regarding an exemption for subsidies given to artisanal fishers.

This main prohibition is accompanied by a similar, conditional prohibition of subsidies that target fishing activities beyond the subsidizing member's waters, which is accompanied by a more general obligation to refrain from providing such subsidies when possible. This additional rule includes a dedicated process for monitoring these subsidies. Finally, the draft text also includes additional transparency obligations.

A central question for WTO members, as they consider their next steps in these negotiations and how they could be brought to a successful conclusion, is what the rules on the table mean in sustainable development terms. At least three central considerations should guide this reflection. (For a slightly more detailed version of these key considerations, see the final section of IISD's analysis here.)

First, agreeing on these new rules is essential to protect both marine ecosystems and the communities that depend on fishing for nutrition, jobs, and livelihoods. The suggested provisions are broader than those agreed in the context of the 2022 agreement, and so is their potential impact. These additional disciplines are key to better addressing the underlying role of subsidies as a driver of overfishing, beyond the specific situations that are already addressed in the existing agreement.

Second, the rules on the table are neither perfect from a sustainability perspective nor the ideal result from any member's point of view. Precisely because of the breadth of the impact that these new disciplines could have, negotiations have been very intense and complex. The suggested rules are the result of painstaking work to find compromises between governments with very divergent initial positions. And after years of hard negotiating work, the draft text reflects the best set of disciplines on which members have managed to find convergence. Among the options that have been proposed and discussed, some would have been more ambitious from a sustainability perspective, but they did not generate as much support as the current text.

Third, the draft disciplines represent a lot of value in sustainable development terms. They would prohibit the riskiest types of subsidies when no credible fisheries management measures are in place. And while the temporary exemption for developing country members' subsidies to large-scale fishing is very wide, it would only apply for a period. The permanent exemptions for very small fishing nations and for developing countries' subsidies to small-scale fishing would have a much smaller impact. Eventually, fisheries management would need to accompany most subsidies to large-scale fishing.

At a global governance level, the disciplines would subject fisheries subsidies and their sustainability to scrutiny that does not exist today, putting the issue explicitly on the ongoing international agenda in a WTO committee.

Most importantly, the disciplines could change what society at large expects of policy-makers across the globe—and, as a result, how policy-makers behave—as they define the support that their government provides to the fishing sector. Fisheries subsidy policies would be expected to align with sustainable development objectives, a principle that would be enshrined in a multilateral, binding set of rules for the first time.

As members consider how to use 2025 to build toward a text that might be able to gather consensus, it's worth remembering that the suggested rules are not perfect. But from a sustainable development point of view, they hold a lot of value that should not be simply left on the table.

* This article was first published in IISD’s Trade and Sustainability Review.

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Tristan Irschlinger is Senior Policy Advisor, Fisheries Subsidies, International Institute for Sustainable Development.

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Synergies by TESS is a blog dedicated to promoting inclusive policy dialogue at the intersection of trade, environment, and sustainable development, drawing on perspectives from a range of experts from around the globe. The editor is Fabrice Lehmann.

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