Implications of the WTO and EU fuel taxation reforms for a European fishing fleet: effects, side-effects and alternative approaches from an input–output analysis of the Galician (northwest Spain) fleet

Abstract

The World Trade Organization (WTO) and European Union (EU) have both put forward tax reforms that impact fisheries’ fuel costs, which are similar in the object of taxation but quite different in the externalities addressed, goals, scope, exemptions or tax rates, creating an opportunity to compare the effects and discuss the alternatives. These proposals are the result of long and intense debates in political, social and academic spheres. However, certain aspects remain unclear. First of all, the number of empirical studies is still limited, particularly considering that fisheries governance is subject to heterogeneous management systems and institutional contexts creating room for different potential outputs. Second, coastal states have no fiscal competence beyond 12 miles, which limits the scope of the reforms to small scale fleets (SSF). All in all, the economic consequences for the fleets remain unclear. To this end, we will build on the Galician fishing sector (NW Spain) input–output tables to discuss the direct impacts, effects and side effects of these reforms on a representative European fleet. Flaws identified in both initiatives mean that targeted externalities will not be corrected and, moreover, additional ones, such as distributional effects penalising SSF or fuel spillovers, could be boosted. Alternative policy approaches are discussed