Beyond the prohibition list: redirecting negative subsidies into positive incentives could mitigate overfishing and protect coastal communities in WTO fisheries reform

Hollie Booth , Luky Adrianto

The World Trade Organization’s Agreement on Fisheries Subsidies is a landmark in multilateral environmental governance, yet its current phase of negotiations on addressing subsidies that contribute to overcapacity and overfishing is contentious due to perceived welfare risks for small-scale fishers. In framing the debate around prohibiting subsidies, negotiators have thus far given little attention to which financial instruments could take their place, which is a missed opportunity. Here we argue that positive incentives — financial instruments designed to encourage sustainable fishing actions or reward positive environmental outcomes — are a neglected but powerful complement to prohibition. Drawing on evidence from co-designed, rigorously evaluated pilot programs in Indonesian small-scale fisheries, we show that positive subsidies could mitigate overfishing while protecting small-scale fishing communities. We propose that the Agreement on Fisheries Subsidies, and analogous national reforms, should explicitly distinguish capacity-reducing from capacity-enhancing instruments, preserve policy space for transparent and evidence-based positive subsidies, and recognise community co-designed programs within special and differential treatment. Reframing fisheries subsidy reform from prohibition to redirection would advance the goals of the Agreement: decoupling public support from fishing effort, protecting small-scale fishing communities, and creating new mechanisms to incentivise ecosystem recovery. It could also facilitate negotiations by addressing the concerns of fisher folk and developing coastal states.