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International Fish TradeInternational Fish Traderecent developmentsrecent developments

Grimur Valdimarsson,Grimur Valdimarsson,

DirectorDirectorFishery Industries DivisionFishery Industries Division

FAO, Rome,ItalyFAO, Rome,Italy

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OutlineOutline

Regulatory Framework for Fish TradeRegulatory Framework for Fish Trade

ProductionProduction

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

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Outline (cont.)Outline (cont.)

WTO AgreementsWTO Agreements

DOHA negotiationsDOHA negotiations

FISH INFOnetwork and the work ofFISH INFOnetwork and the work ofFAO in the field of marketFAO in the field of marketinformation and developmentinformation and development

Value Added fish products andValue Added fish products andchanges in market structureschanges in market structures

ConclusionsConclusions

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TRADE LIBERALIZATIONTRADE LIBERALIZATION

was put at the heart of the globalwas put at the heart of the globaldevelopment agenda as laid down indevelopment agenda as laid down inAgenda 21 of the Earth Summit onAgenda 21 of the Earth Summit on

Sustainable DevelopmentSustainable Development(Rio)(Rio)

in 1992in 1992

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The Earth Summit in Rio inThe Earth Summit in Rio in

1992 (Agenda 21)1992 (Agenda 21)

promote sustainable developmentpromote sustainable development

through trade liberalizationthrough trade liberalization

create a system that is noncreate a system that is non--

discriminatory, rule based,discriminatory, rule based,equitable, secure, transparent andequitable, secure, transparent andpredictablepredictable

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Hunger:Hunger:

840 million people still suffer from840 million people still suffer fromhungerhunger

(FAO)(FAO)

Unequal distribution of wealth:Unequal distribution of wealth:Ten percent of the worlds populationTen percent of the worlds population

produces 70 percent of its goods andproduces 70 percent of its goods andservices and receives 70 percent ofservices and receives 70 percent of

world incomeworld income -- an average of $ 30,000an average of $ 30,000per person. At the other extreme, halfper person. At the other extreme, halfof the worlds population lives on lessof the worlds population lives on lessthan $ 2 a daythan $ 2 a day

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

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

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

lowering CUSTOM DUTIESlowering CUSTOM DUTIES(TARIFFS)(TARIFFS)

butbuttechnical issues are becoming evertechnical issues are becoming ever

more importantmore important

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

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0

20

40

60

80

100

120

140

1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002

Millions

Aquaculture

Capture

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

FISHSTAT 2004

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0

20

40

60

80

100

120

140

1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998

Millions

Developing

Developed

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

FAO FISHSTAT 2004

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0

20

40

60

80

100

120

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

Millions

Developed

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

0

20

40

60

80

100

120

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

Millions

Developing

FAO FISHSTAT 2004

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

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International Fish ExportsInternational Fish Exports 20022002

(percentage by valu

e)(percentage by valu

e)

Shrimp

18%

Groundfish

15%

Salmon8%

Others25%

Tuna

9%

Cephalopods5%

Molluscs

(other)

6%

Freshwater

2%

Small

pelagics7%

Fishmeal

4%

Fish oil

1%

Total export value:

US$ 58 billionFAO FISHSTAT 2004

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International Fish TradeInternational Fish Trade -- 20022002Imports

USA

19%

Japan

22%

eve loping

18%

EU (15)

33%

Others

8%

Exports

EU (15)

21%

Others

22%

Japan

1%

USA

6%

Develo-

ping

50%

FAO FISHSTAT 2004

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Net exports of food items byNet exports of food items by

developing cou

ntriesdeveloping cou

ntries

-5

0

5

10

15

20

Fish

Coffee

Banana

Cocoa

Sugar

Tea

Rice

Meat

US$ 1000 million 1982

1992

2002

FAO FISHSTAT and FAOSTAT 2004

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19801981

1982

1983

1984

1985

19861987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

Deve

e

Deve

hCommodities

hCommodities--

Expo

rt

Expo

rt

FAOF

ISHSTAT2004

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

Developed Developing

Developed Developing

Exports

Imports

24,6 5

3,8

25

Calculations based on

COMEXT 2004

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

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The ratio of the first hand price toThe ratio of the first hand price to

the retail pricethe retail price

0

10

20

30

40

50

60

70

80

90

100

Feb-92

ug-92

Feb-93

Aug-93

Feb-94

Aug-94

Feb-95

Aug-95

Feb-96

Aug-96

Feb-97

Aug-97

Feb-98

ug-98

Feb-99

ug-99

Feb-00

ug-00

Feb-01

ug-01

Feb-02

Aug-02

Feb-03

Pork USA

Beef USA

Whole salmonFrance

COD UK

Tveteraas 2004

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WTO AgreementsWTO Agreements

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WTO Agreements of particularWTO Agreements of particular

relevance for fisheriesrelevance for fisheries Agreement on Sanitary and PhytosanitaryAgreement on Sanitary and Phytosanitary

Measures (SPS)Measures (SPS)

Agreement on Technical Barriers to TradeAgreement on Technical Barriers to Trade

(TBT)(TBT) Agreement on Subsidies and CountervailingAgreement on Subsidies and Countervailing

MeasuresMeasures

Agreement on Import Licensing ProceduresAgreement on Import Licensing Procedures

Agreement on AntiAgreement on Anti--DumpingDumping Agreement on Rules of OriginAgreement on Rules of Origin

Dispute SettlementDispute Settlement

Tariff reduction (GATT)Tariff reduction (GATT)

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Agreement on Sanitary andAgreement on Sanitary and

Phytosanitary issues (SPS)...Phytosanitary issues (SPS)...

Right of Members to apply measuresRight of Members to apply measuresthey deem necessary to protectthey deem necessary to protecthuman, animal and plant life andhuman, animal and plant life and

healthhealth Should not be a disguised restrictionShould not be a disguised restriction

on international tradeon international trade

Protection levels should not be moreProtection levels should not be moretrade restrictive than required totrade restrictive than required toprovide appropriate level ofprovide appropriate level ofprotection APLPprotection APLP

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Agreement on TechnicalAgreement on TechnicalBarriers to Trade (TBT)...Barriers to Trade (TBT)...

The Technical Barriers to TradeThe Technical Barriers to TradeAgreement (TBT) ensures thatAgreement (TBT) ensures thatmembers do not use technicalmembers do not use technicalregulations or standards as disguisedregulations or standards as disguisedmeasures to protect domesticmeasures to protect domesticindustries from foreign competition.industries from foreign competition.

Labelling disputesLabelling disputes TestingTesting proceduresprocedures

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Some examples of tariffs andSome examples of tariffs and

WTO Agreement issues..WTO Agreement issues..

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Tariff escalation for cod: EUTariff escalation for cod: EU

CodCod fresh and frozenfresh and frozen 15%15%

Cod filletsCod fillets fresh and frozenfresh and frozen 18%18%

Cod fillets dried, saltedCod fillets dried, salted 20%20% Cod dried, saltedCod dried, salted 13%13%

Cod filletsCod fillets batteredbattered 25%25%

TARIC 2004

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Tariff escalation for tuna: EUTariff escalation for tuna: EU

EU tariffs are 18% for frozen whole tuna andEU tariffs are 18% for frozen whole tuna and24% for tuna loins and canned tuna24% for tuna loins and canned tuna

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

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

GPSGPS--Drug Agreement set certain duty free quotasDrug Agreement set certain duty free quotasfor canned tuna and tuna loins from Andeanfor canned tuna and tuna loins from AndeanCommunity and Central AmericaCommunity and Central America

EBA (everything but Arms Agreement) of the EUEBA (everything but Arms Agreement) of the EUfor LDCfor LDCs (s (least developed countriesleast developed countries))

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SPS Agreement applied bySPS Agreement applied by

EU: antibioticsEU: antibiotics Detention of shrimp with antibioticsDetention of shrimp with antibiotics

(mostly chloramphenicol) in EU(mostly chloramphenicol) in EU China (mainland and Taiwan, province ofChina (mainland and Taiwan, province of

China)China) ThailandThailand

IndonesiaIndonesia

IndiaIndia

PhilippinesPhilippines Viet NamViet Nam

BangladeshBangladesh

and othersand others

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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) forTEDs (Turtle Excluding Devices) for

catching shrimpcatching shrimp

TunaTuna--dolphin issue. The certification thatdolphin issue. The certification thatdolphins are not killed in fishing for tunadolphins are not killed in fishing for tuna Trade description of scallops: SaintTrade description of scallops: Saint--

Jacques vs ptoncleJacques vs ptoncle Australia: Banning imports of salmon fromAustralia: 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

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WTO definition of dumpingWTO definition of dumping

Three methods to calculate aThree methods to calculate aproducts normal value.products normal value. The main one is based on the price inThe main one is based on the price in

the exporters domestic market.the exporters domestic market. the price charged by the exporter inthe price charged by the exporter in

another country,another country,

or a calculation based on theor a calculation based on the

combination of the exporters productioncombination of the exporters productioncosts, other expenses and normal profitcosts, other expenses and normal profitmargins.margins.

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AntiAnti--dumping: Shrimp USAdumping: Shrimp USA

Against countries selling at a priceAgainst countries selling at a pricebelow domestic (US) productionbelow domestic (US) productionpricesprices

Obvious difference between the USObvious difference between the USdefinition of dumping and the WTOdefinition of dumping and the WTOdefinitiondefinition

Complaint to the WTO likely to comeComplaint to the WTO likely to comesoonsoon

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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%6.08%--9.35%9.35% IndiaIndia 3.56%3.56%--27.46%27.46%

ThailandThailand 5.56%5.56%--10.25%10.25%

ChinaChina 27.9%27.9%--113%113%

Viet NamViet Nam 4.1%4.1%--25.8%25.8%

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99thth Round: Doha Agenda:Round: Doha Agenda:

The Development RoundThe Development Round

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Market access forMarket access fornonnon--agricultural productsagricultural 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 peaksReduce tariff escalation and tariff peaks(value(value--added products)added products)

Protect special needs of developingProtect special needs of developingcountriescountries

Capacity building on negotiation issuesCapacity building on negotiation issues

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Fish processing inFish processing indeveloping countriesdeveloping countries

LARGE POTENTIAL FORLARGE POTENTIAL FOREMPLOYMENT CREATION (NOT THEEMPLOYMENT CREATION (NOT THELEAST FOR WOMEN)LEAST FOR WOMEN)

TODAY, TARIFF ESCALATIONTODAY, TARIFF ESCALATIONHINDERS PRODUCTION OF VALUEHINDERS PRODUCTION OF VALUE--ADDED PRODUCTSADDED PRODUCTS

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Are fish exports bad for developingAre fish exports bad for developing

countries?countries?

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Impact of Fish Trade on Food Security:Impact of Fish Trade on Food Security:

11 countries 200211 countries 2002--20042004 Main Findings wereMain Findings were

international trade in fishery products has had ainternational trade in fishery products has had a

positive effect on food security through exportpositive effect on food security through exportearningsearnings

international trade has not had a detrimentalinternational trade has not had a detrimentaleffect on food security in the form of fish aseffect on food security in the form of fish asfood.food.

sustainable resource management practices aresustainable resource management practices area necessary condition for sustainablea necessary condition for sustainableinternational trade.international trade.

Kurien 2004

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Helping developing countries withHelping developing countries with

fish trade...fish trade...

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FIN MagazinesFIN Magazines

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FAO GLOBEFISH WebpageFAO GLOBEFISH Webpage

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Value additionValue addition-- the future?the future?

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Value Addition...Value Addition...

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ConclusionConclusion

Fish production continues to growFish production continues to grow

Developing represent 70% ofDeveloping represent 70% of

production (by volume)production (by volume) 38% of fish production enters38% of fish production enters

international trade (by value)international trade (by value)

China is the main producing andChina is the main producing andexporting country, overtakingexporting country, overtakingThailand in 2003.Thailand in 2003.

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Conclusion (cont.)Conclusion (cont.)

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

NetNet--export earnings are veryexport earnings are veryimportant source of income forimportant source of income fordeveloping countries.developing countries.

IntraIntra--developing countries is verydeveloping countries is verylimited at US$ 5 billionlimited at US$ 5 billion

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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 InternationalHow Policy Reform and Effective Aid can meet InternationalDevelopment Goals.Development Goals. World DevelopmentWorld Development29 (11), 178729 (11), 1787--1802.1802.

COMEXT. (2004). Eurostat: Intra and Extra EU trade. CDCOMEXT. (2004). Eurostat: Intra and Extra EU trade. CDRom.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=2168www.globefish.org/dynamisk.php4? id=2168..

Reardon T., Timmer P., Barrett C. & Berdegu J. 2003. TheReardon T., Timmer P., Barrett C. & Berdegu J. 2003. Therise of supermarkets in Africa, Asia and Latin America.rise of supermarkets in Africa, Asia and Latin America.American Journal of Agricultural Economics 85 (5): 1140American Journal of Agricultural Economics 85 (5): 1140--1146.1146.

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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/htmwww.europa.eu.int/comm/taxationcustom/dss/tarhome/htm ..

Tveteraas, R. (2004). The competition between aquacultureTveteraas, 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=2312id=2312 ..

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Reccomended further readingReccomended further reading

Globefish website:Globefish website:www.globefish.orgwww.globefish.org

COFI Document: Status and Important Recent EventsCOFI Document: Status and Important Recent Events

Concerning International Trade in Fisheries ProductsConcerning 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 AcpFish Trade Issues In Wto And Acp--Eu Negotiations, byEu Negotiations, byAundun LemAundun Lemhttp://www.globefish.org/index.php?id=2251http://www.globefish.org/index.php?id=2251