Stock Traders: U.S. and Canada Struggle With a Yellowtail Bust

by Laurie Schreiber

MYSTIC, Conn. – The New England Fishery Management Council (NEFMC) agreed to pursue the establishment of a precedent-setting mechanism that would allow the United States and Canada to trade transboundary groundfish stock allocations.

The idea came up this past fall, as managers considered how to support the struggling New England industry in the face of disastrous allocation cuts for the 2013 fishing year.

Last October, the NEFMC agreed to ask the U.S. representatives to the Steering Committee of the United States/Canada Transboundary Management Guidance Committee (TMGC) to negotiate a one-time request to trade an amount of Georges Bank (GB) haddock from the 2013 U.S. share, in return for an amount of Georges Bank yellowtail flounder from the Canadian’s 2013 share.

The TMGC, established in 2000, is a government/industry committee composed of representatives from Canada and the U.S. The TMGC’s purpose is to develop guidance in the form of harvest strategies, resource sharing and management processes for Canadian and U.S. management authorities for the cod, haddock and yellowtail flounder transboundary resources on Georges Bank.

Last fall’s discussion came about after the TMGC recommended limiting the 2013 allowable biological catch for GB yellowtail to 500 metric tons (mt). According to a TMGC guidance document, the TMGC based the 500-mt recommendation on the reemergence of retrospective problems with the GB yellowtail stock assessment.

The figure means a U.S. share of 215 mt, and 285 mt for Canada. It’s a 57 percent reduction from the 2012 quota of 1,150 mt, and 81 percent down from the 2011 quota of 2,650 mt.

The GB yellowtail stock is judged to be in poor shape. The situation affects the groundfish and the scallop fleets, both of which catch GB yellowtail as bycatch.

GB haddock, on the other hand, is an abundant stock.

The TMGC steering committee held a meeting in February to discuss quota trading, assessment timing and alternative management strategies.

NEFMC chairman Rip Cunningham said the steering committee agreed that quota-trading opportunities should be explored further, and that a pilot project should be explored and a trading mechanism developed. A working group was set up to work out a trade as soon as possible.

“The working group will begin to formulate a timeline and outline trading mechanisms, with the objective of getting it in place as soon as possible,” Cunningham said.

The steering committee also discussed moving from annual to multi-year assessments of the transboundary stocks. The proposal was made due to budgetary constraints, although it was agreed that annual assessments would be ideal.

The two delegations agreed the transboundary understanding should be reviewed on some periodic basis to make sure it’s working to the benefit of both parties, Cunningham said.
“We don’t view this as a negative, but as a way to strengthen our relationship with Canada,” he said.

Cunningham said it was unclear whether the two sides would be able to come to a trading agreement in time for the remainder of the 2013 fishing year, which began on May 1. For now, the industry is living with the 500-mt limit on GB yellowtail flounder, which results in a “very restrictive” share for U.S. groundfishermen, Cunningham noted.

However, amended Cunningham, “Never say ‘never’ – or ‘always.’ It may be highly unlikely, but if the working group comes up with a creative mechanism for us to do it, the objective was for us to move ahead as soon as possible.”

National Marine Fisheries Service (NMFS) chief John Bullard said the goal is to get a trade underway in 2013.

“It’s very ambitious, but it’s doable,” said Bullard. “We haven’t approved the principles yet, but we’ve authorized the working group to get into the weeds to develop the administrative mechanisms for doing this. Canada has a different fishing year than we do. So we’re proposing off-year trading, where we would receive yellowtail in 2013, and give up haddock in 2014. That’s an advantage because receiving will be easier administratively than giving up. So we’ve let Canada know that we’re very ambitious or aggressive in terms of wanting to get this done in 2013.”

In terms of negotiating a figure, Bullard said, Canada will be in a better position to know what’s available from their side when they’re closer to finishing up their fishing year.

“In the meantime,” said Bullard, “we’ll be figuring out, What are the steps we have to take in order to receive a number, once that number is administered? So the short answer is, This is very ambitious, very aggressive, but we think it’s possible to have this in place for 2013.”
The working group developed guiding principles that include:

• the objective of quota-trading should provide an additional source of flexibility for the U.S. And Canada and create additional fishing opportunities;

• increased fishing opportunities through trades would provide mutual benefit while also maintaining consistency with TMGC harvest strategies;

• trades will occur between countries as opposed to between U.S. and Canadian business entities, but the initial drive for a quota trade would occur at the industry level;

• trades would only be considered between eastern Georges Bank cod and haddock, and Georges Bank yellowtail;

• trading would be separate from the total allowable catch-setting process;

• trades could occur prior, during or after fishing year;

• trades could occur between fishing years;

• any quota trades would be mutually beneficial to the respective fishing industries.

Canada’s Department of Fisheries and Oceans, NEFMC and NMFS would administer the trade program.

NEFMC member Tom Dempsey was skeptical about the need for a trading mechanism. With Georges Bank haddock in good shape and the quota likely to go up, the Canadians will be unlikely to need additional quota on that stock in 2014 and beyond, Dempsey said. “They’re going to have more haddock than they can catch,” he said.

Dempsey continued, “I feel like we’re going to spend a tremendous amount of time building a trading platform that’s never going to be used. We’re rushing to create a system that will allow us to get more yellowtail this year, but I’m not convinced a trading platform will result in any trades in the future. If what we’re talking about is getting unused Canadian yellowtail in 2013, and they’re willing, on paper, to trade us on haddock, let’s just ask them to give it to us, rather than going through this whole mechanism of building a trading platform.”

But Bullard said the Canadian delegation expressed interest in the plan as a multi-year opportunity.

Bullard said that, for the pilot year, the goal is first to develop the administrative process as a multi-year process for the entire fishery and then fill in the numbers once there’s more information.

NEFMC member Matt McKenzie supported the concept.

“Even if we never use it again, we’ve established a mechanism,” he said. “Going back to when we felt our hands were tied on this issue, I’m impressed with how fast this developed.”

Terry Stockwell, Maine’s representative on the NEFMC, also supported the concept.

“Developing the concept of trading establishes a huge precedent, and it’s a big step for U.S./Canada relations,” Stockwell said. “Both sides have to win. We need to have the dialogue started.”

Vito Giacalone, policy director at the Gloucester, Mass.-based Northeast Seafood Coalition, said the coalition also supported the idea. But he said it will be essential, as the discussion moves forward, to consider the role played by the sector management system when deciding how much fish will be traded by the U.S.

“Once the sectors have their allocations, each sector can figure out whether they’ll cover a trade,” Giacalone said. “And collectively, that fish either covers the trade or it doesn’t.”

NEFMC executive director Tom Nies said the NEFMC also needs to sort out how trades would affect the scallop fishery’s allocation of GB yellowtail.