TED Case Studies

Canada-UK Dispute over Cod

IDENTIFICATION
LEGAL CLUSTERS
GEOGRAPHIC CLUSTERS
TRADE CLUSTERS
ENVIRONMENT CLUSTERS
OTHER FACTORS

I. Identification

1. The Issue

To preserve cod stocks over the long term, cod fishing quotas have been lowered worldwide. In the short term, however, these low quotas have caused many problems. The low quotas have forced the European Community (EC) fishermen, in particular Spanish, Portuguese, and British fishermen, to search for other potential fishing sites. One of the main fishing grounds of EC fishing boats is located off the Newfoundland coast, which straddles the Canadian Exclusive Economic Zone (EEZ). Canadians, who have been struggling to preserve ever-decreasing cod stocks, have not been pleased with the increased trawling of EC boats.

2. Description

When 200-mile EEZ's were created in 1977 Canada began attempting to impose strict quotas on cod fishing. Canada wanted to create sustainable catches which would not damage the fishing economy and would conserve fish stocks. Since that time, the North-West Atlantic Fisheries Organization (NAFO), whose members include Canada and the EC members among others, has determined cod quotas in the North-West Atlantic. In 1983, many scientists recommended that a complete moratorium on cod fishing in the North-West Atlantic because they feared the elimination of all cod stocks from the area. Of course, NAFO, for political as well as economic reasons, did not immediately embrace this recommendation. However, since 1988, most NAFO countries have agreed that severe measures had to be taken to preserve the overwhelmingly immature cod stocks.

Until 1986, NAFO did not have many problems creating quotas for most areas of the North-West Atlantic. However, problems began in 1986 when Spain and Portugal were admitted to the EC. Spain, which is the sixth-largest fishing country in the world, and the largest fishing power in the EC, quickly met their quotas in EC waters. "Their large fishing fleets overstretched fish stocks in Community waters, putting the Community under pressure to find more foreign fisheries." Spain was therefore forced to quickly find new waters in which to fish.

In addition, the EC began to set its own quotas, separate from NAFO, in 1986 called the Total Allowable Catches or TACS. Because of pressure on the EC to partly appease Spanish fishing interests, quotas set by the EC have consistently been higher than those of NAFO. In 1989, for example, "the Community allowed its members to catch twice as much yellowtail as the NAFO had recommended." Scientists on both sides have complained about differing methods used for estimating fish stocks. In addition, fishing industries on both sides are pressuring governments to increase quotas to avoid unemployment in the fishing industry. The 1991 quotas for cod fishing were set by NAFO in late 1990, and the Canadians have demanded that the EC abide by them. The EC did not accept the quota.

Cod fishing in Canada is especially pronounced on the Newfoundland coast and is the most important area for the Canadian fishing industry. However, in recent years, Canadians have been forced to lower quotas because of what scientists believe to be dangerously low fish stocks. In 1992, "Canada lowered its cod stocks for northern waters to a ceiling of 120,000 tonnes -- a 35 percent reduction -- from the 185,000 tonnes originally set. In addition, the catch for the first six months of 1992 [was] reduced by about half that of [the previous] year, which means a total of around 25,000 tonnes." Total catches in Canadian waters declined by 10 percent to 265,000 tonnes in the same year. Therefore, it is easy to see that long- term conservation of fish stocks in the North Atlantic is in Canada's best interest.

In 1991, however, the Canadian government accused EC fishing boats, particularly Spanish and Portuguese, of over-fishing just outside the Canadian EEZ and depleting vital cod stocks inside the Canadian EEZ near Newfoundland. In June 1992, Canada announced a complete ban on cod fishing off the eastern Newfoundland coast. Decreasing cod quotas had already cost over 5000 jobs in Newfoundland. Canada also promised that quota enforcement outside of Canadian waters would be discussed later that month at the Earth Summit in Rio de Janeiro, thus marking the last chance of diplomatically ending the dispute over cod conservation and EC versus NAFO quotas in the North-West Atlantic.

The European Community adamantly denied the Canadian charge, stating that Canada was using the EC as a scapegoat and that Canadian over-fishing within its own EEZ was the main reason for the reduced cod stocks. Many officials said that the depletion of cod stocks was not related to supposed EC boats straddling the 200-mile zone outside of Canadian waters. Even though Spain has already been accused of over-fishing in foreign waters (see UKCOD case), the EC claimed that it had consistently withdrawn its vessels from the waters after fulfilling its quotas and "that there were only 50 to 70 EC fishing vessels outside Canada's 200- mile zone at any time."

It should not be underestimated, however, how important these international waters are to EC fishing. In 1991, "foreign catches ...were about 47,000 tonnes -- 27% of total landings...During January [1992], 2,900 tonnes were caught by EC vessels, mainly from Spain and Portugal, and another 450 tonnes taken by non-EC vessels flying the Panamanian flag of convenience..." Canadian officials claim that those "Panamanian" ships were Spanish and Portuguese as well. In addition, Europe imports large amounts of cod caught by Canadian boats in the region. However, because of decreasing quotas, these amounts have diminished substantially as well. For example, "last year [1991] Canada sent around 17,000 tonnes of cod to the UK, compared to 29,000 tonnes the previous year."

The 1992 moratorium on cod fishing off the Newfoundland coast therefore has had an adverse effect on the EC fishing industry. Again, the major issue is whether or not the EC is willing to make the short-term sacrifices, which invariably means increased unemployment for EC fishermen, to sustain long-term markets of cod in the North-West Atlantic. Because of decreasing quotas, the EC has also lost many jobs in the fishing industry, and the ban could further this pattern.

Canada seems to be more willing than the EC to make sacrifices in an effort to conserve ailing cod stocks. "The ban on cod fishing is expected to cost the jobs of 19,000 fishermen and fish plant workers in Newfoundland and at least 19,000 layoffs in other businesses."

Although this issue has been intensely debated, no formal hearings have begun. In June of 1992, the EC halted further fishing efforts in the Grand Banks area off the coast of Newfoundland because their quotas had been met. However, according to Canada, there were no indications that the EC would support the two-year moratorium. Canada has been attempting to change the UN Convention Law of the Sea by proposing to give "coastal states rights beyond the current 200-mile limit over so- called `straddling' fish stocks." Already 40 coastal nations have given Canada support in this effort. However, none of the powerful G7 countries have supported the proposed measure.

3. Related Cases

UKCOD case
TURBOT case
SALMON case
LOBSTER case
SQUID case
DONUT case
IRISH case
DRIFTJAP case

4. Draft Author:James Benseler

II. Legal Clusters

5. Discourse and Status: DISagreement and INPROGress

This disagreement will be difficult to resolve. The major dispute is whether or not the EC fishing boats are straddling the 200 mile fishing zone. It is particularly hard to define the exact line of the EEZ, and thus whether or not the EC fishing boats are within their rights to fish those waters. Fish migrations further complicates the issue. In March 1995 a Canadian gunboat fired at, boarded, and seized a Spanish boat fishing for other fish just outside the 200 mile limit, fearing a repeat of the cod case. This time the fish of interest was the turbot, recalling armed naval clashes between British and Dutch fleets over herring in the mid-1700s.

6. Forum and Scope: CANada and UNIlateral

If Canada takes formal action, it could conceivably propose an amendment to the Law of the Sea (also see KHAIN case) at the United Nations or the World Court. Canada initiated discussion at the Earth Summit in June of 1992 on extending its economic zone as well as other fish conservation methods. This extension would lead to a chain reaction of extensions by other countries.

7. Decision Breadth: 13 (Canada and the 12 EC members)

8. Legal Standing: LAW

III. Geographic Clusters

9. Geographic Locations

a. Geographic Domain: ATLANTIC

b. Geographic Site: West Atlantic Ocean [WATL]

c. Geographic Impact: CANADA

10. Sub-National Factors:NO

The impact of the cod depletion is nonetheless pronounced, sometimes deadly, for the fishing industries in Canada's maritime provinces.

11. Type of Habitat: OCEAN

IV. Trade Clusters

12. Type of Measure: Regulatory Ban [REGBAN]

The forbidding of catches by non-Canadian fishermen is a regulatory ban.

13. Direct v. Indirect Impacts: INDirect

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product:YES (FISH)

b. Indirectly Related to Product:NO

c. Not Related to Product: NO

d. Related to Process:YES (Species Loss Sea) [SPLS]

15. Trade Product Identification: FISH

16. Economic Data

Despite the Canadian push for lower cod quotas, the fishing industry remains important to Canada. "Cod fishing brought in C$700 million in 1991 and accounts for 40 percent of all fish landed off Newfoundland. The species supports 31,000 jobs in Atlantic Canada, 90 percent of them on the island." It is understandable that the Canadian government is extremely Concerned with alleged EC over fishing off the Newfoundland coast.

17. Impact of Trade Restriction: MEDIUM

Part of the reason that Canada has been upset with supposed EC over fishing is that reduced stocks take away from its own trade potential and can hurt its domestic economy. However, because the area in question is technically in international waters, could any action taken by Canada be considered trade protection? Since the area in question is not definitely within the EEZ, but only straddling it, quantifying the effects of possible Canadian action is particularly problematic.

18. Industry Sector: FOOD

19. Exporters and Importers: CANada and SPAIN

V. Environment Clusters

20. Environmental Problem Type: Species Loss Sea [SPLS]

Obviously cod are affected. Trawlnets will not discriminate in catching a certain species of fish, so other fish may be affected as well.

21. Name, Type, and Diversity of Species

Name: North Atlantic Cod (Gadidae)

Type: Animal/Mandible/Fish/Bony

Diversity: Sustainable yields of 3,850,000 metric tons per year (Northwest Atlantic)

22. Resource Impact and Effect: MEDium and SCALE

Since debates over the scientific methods of estimating quotas are part of this case, an exact impact cannot be stated. "But disagreements over the scientific method used to calculate sustainable catches led to a decision by the Community to defer its acceptance of quotas set by NAFO for cod in four fishing regions." However, it is generally believed that if conservation efforts through quotas and decommissioning of ships do not receive serious attention, cod stocks could be conceivably eliminated in areas other than the Northwest Atlantic. Cod stocks have declined dramatically over recent years and the ban will significantly ease harvest pressure, thus allowing their numbers to rise.

23. Urgency of Problem: MEDium and about 10 years

24. Substitutes: LIKE products

Substitutes have been suggested, such as other fish. usually, this has meant shifting demand elsewhere and onto some other species. For example, pollock fishing in the North Pacific has grown enormously as other stocks have been depleted, but now these stocks are in danger of over-fishing. Pollock has been used as a substitute for crab, with certain flavor-enhancers added, and is extremely popular in Japan.

VI. Other Factors

25. Culture:NO

Some attention has been paid to Spanish and Portuguese claims that their fishermen have been fishing off of Newfoundland for centuries. Moreover, sizeable Spanish and Portuguese communities whose ancestry dates back four centuries, exist in both Canada and the United States. In the end though, the dispute concerns employment more than culture.

26. Trans-Boundary Issues:YES

There are two elements of the case that are trans-border, both stemming from the fact that fish migrate easily from one area of jurisdiction to another. First, the area in dispute borders both Canadian and U.S. fishing waters. This is similar to a dispute between the two countries in the Northwest Pacific (see SALMON case). Second, Canada's EEZ stops at 200 miles and becomes the open waters of the Atlantic Ocean but fish do not respect this line.

27. Rights:NO

28. Relevant Literature

"Canada's Cod Stock `Disappears'."   USDOC, Globefish Statistics  
    (November 4, 1992).
"Canadian Fish Company May Close Deep Sea Operations."  
     Globefish Statistics.  Washington, DC: U.S. Department of
     Commerce (November 4, 1992).
"Canada Repeats Warning to EEC on Overfishing".  European 
     Information Service, European Report (February 26,
     1992).
"Canada Slams Portugal and Spain on Overfishing".  European
       Information Service, European Report (January 15,
       1992).
"EC Commission Stops Fishing Effort in NAFO Zone".  USDOC,        
       Globefish Statistics (November 4, 1992).
"EC Vessels Overfishing for Cod Anger Canadian Government".     
Reuter Textline/Grocer (April 4, 1992).
"Earth Summit to Settle Cod Row with EEC".  Globefish
     Statistics (Washington, DC: U.S. Department of
     Commerce, November 4, 1992).
"Europe Sails into Transatlantic Fishing Storm."  New Scientist   
   (September 15, 1990).
"New Cod War?"  Globefish Statistics (Washington, DC: U.S.
     Department of Commerce, November 4, 1992).
"New Rules in Brussels Will Help Smaller Fish Slip the Net."  New 
    Scientist (September 29, 1990).
"Storm Brewing over Cod Fishing?"  Reuter Textline/Grocer (April  
   4, 1992).