First-Ever Fisheries Subsidies Agreement Enters Into Force at the World Trade Organization
After more than 20 years of negotiations, the World Trade Organization’s (WTO) Agreement on Fisheries Subsidies1 (the Agreement) has now entered into force. The Agreement prohibits WTO member states from subsidizing various unsustainable fishing practices, a practice estimated at US$22 billion a year worldwide.2 The United States accepted the Agreement on 11 April 2023, and it entered into force on 15 September 2025.
Although this marks a major shift worldwide, in the United States, federally managed fisheries can expect minimal impacts because of comprehensive fishery rebuilding and management plans already required by US law.
Specifically, the Agreement prohibits governments from providing “subsidies” that:
- Contribute to illegal, unregulated, and unreported (IUU) fishing;
- Impact overfished stocks; or
- Support fishing on the high seas unless the fishery is managed by a competent Regional Fishery Management Organization (RFMO).
These rules apply broadly to “all species of living marine resources” and all “fishing related activities” such as onboard processing, bunkering, transshipping, and provisioning of supplies or personnel at sea; however, inland fisheries and aquaculture are exempt.
The term “subsidy” is also incredibly broad under the Agreement, meaning any act taken by a government, a public body, or private body funded by a government involving:
- Financial contributions involving a direct or indirect transfer of funds or liabilities;
- Forgone or uncollected revenue;
- Provision of goods or services; or
- Income or price support3
Government-backed grants, loans, guarantees, equity infusions, tax credits, and fiscal incentives are all examples of “subsidies” for the purposes of the Agreement. However, there is a two-year ramp-up period during which subsidies from developing countries cannot be challenged after entry into force.
IUU Fishing
Under the Agreement, member states agree not to provide subsidies to any vessel or operator found to have engaged in IUU fishing or in activities in support of IUU fishing. This prohibition is triggered when a coastal state, flag state, or relevant RFMO makes an affirmative determination that a vessel or operator is engaging in IUU fishing. The subsidy prohibition will last at least as long as the IUU sanction remains in force or for as long as the operator is listed on the IUU list. However, the subsidizing member state may set longer durations. Additionally, any subsidizing member state must give due regard to the notification that a vessel is engaged in IUU fishing and take appropriate domestic actions to remove any subsidies received by that vessel or vessels that may provide at-sea support to that vessel.
Overfished Stocks
Member states also agree not to provide any subsidies for fishing or fishing-related activities targeting stocks that are overfished. This prohibition is triggered when a coastal state or RFMO recognizes a stock as overfished. There is an exception, however, if there are fishery-management measures in place to rebuild the overfished stock to a biologically sustainable level.4 As with the IUU provisions, there is a two-year ramp-up period during which subsidies from developing countries cannot be challenged.
In the United States, the Magnuson–Stevens Fishery Conservation and Management Act (MSA)5 requires the National Marine Fisheries Service (NMFS) to immediately implement measures to rebuild overfished stocks.6 The Agreement should therefore have minimal impacts to US fishing fleets because management measures—namely, rebuilding plans—are legally required to rebuild stocks managed under the MSA to biologically sustainable levels. Because of this, the prohibition on subsidies “for fishing or fishing related activities regarding an overfished stock” should not apply to most domestic US stocks.
Shortly after the text of the Agreement was finalized, NMFS published in the Federal Register a change of policy to all Fisheries Finance Programs (FFP) to match the standard set in the Agreement: the FFP will “decline loans for applicants applying for funds for a vessel(s) or harvesting privilege(s) in any fishery that is not subject to a fisheries management plan that includes rebuilding or sustainable harvesting provisions consistent with the [MSA] to prevent overfishing and rebuild stocks to sustainable levels.”7
High Seas Fishing
Further, the Agreement prohibits member states from subsidizing any fishing or fishing-related activities occurring on the high seas that do not fall under the authority of a competent RFMO. Unlike the Agreement’s provisions for IUU fishing and overfished stocks, there is no affirmative trigger for this prohibition. Instead, this restriction will automatically attach based on provided subsidies and actions taken by vessels on the high seas.
Four-Year Clock
Entry into force of the WTO’s first-ever legally binding agreement on subsidies marks a monumental change. However, it is still an incomplete Agreement. Article 12 gives states four years to either adopt “comprehensive disciplines” or for the WTO General Council to unanimously vote to extend the Agreement. If either fail, the Agreement will automatically terminate. The firm will continue to monitor WTO negotiations and developments.
Conclusion
US fishermen have been advocating for a more level playing field for decades. With this agreement going into place, there are now new tools that the US government can take to address subsidies that are incentivizing overfishing.
The firm's lawyers routinely monitor changes in fishing regulations and are available to help interested parties navigate this rapidly evolving landscape.
This publication/newsletter is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied upon in regard to any particular facts or circumstances without first consulting a lawyer. Any views expressed herein are those of the author(s) and not necessarily those of the law firm's clients.