Simulation of International Trade and Environment (SITE)

1. The Simulation Venue

The SHARK Simulation venue is TBA

2. The Scenario

China takes the United States to the World Trade Organization (WTO) panel for Dispute Resolution over its institution of quotas on shark taking in the U.S. Exclusive Economic Zone (EEZ). The Chinese government argues that these quotas represent restrictive non-tariff barriers to trade therefore violating the General Agreement on Tariffs and Trade (GATT). Additionally, the East Asian market for shark represents a lucrative opportunity for North American shark hunters which has been severely curtailed by these restrictive measures imposed by the U.S. National Marine Fisheries Service.

The forum for the simulation will be the WTO and a hearing before a three-judge panel regarding the case. The panel will be preceeded by a press conference. There are two parties directly involved in the case: the United States government and the Chinese government. There are also other interested parties who can make statements before the panel.

Students participating in the simulation will be divided into the following teams.

1. The WTO three-judge panel for Dispute Resolution

2. The Press

3. Government of the United States

4. Government of China

5. Representative from the North American Fishers Association

6. spokesperson from the U.S. National Marine Fisheries Service

3. Background on the Scenario

Since 1986 demand for shark products has greatly increased as the result of a number of factors. As tuna and swordfish supplies fell, fishermen turned increasingly to sharks. For example, in Florida the shark catch doubled between 1986 and 1987. Shark meat soon became popular and increasing demand drove up prices. During the 400 million years sharks have inhabited the world's oceans they have evolved into apex predators -- they are at the top of the food chain among marine life -- but are not able to withstand predation by humans. Because of demand for shark meat and for fins used in shark's fin soup, shark have come under heavy pressure from harvesters in North American waters. Therefore, the U.S. National Marine Fisheries Service has instituted quotas on shark taking in the U.S. Exclusive Economic Zone (EEZ).

Many sharks are now being killed. The meat of the shark itself, which can be expensive, is not the part of the animal with the greatest economic value. Half of the shark's value is in the fins which are largely sent to Asia to make shark-fin soup. The fins have noodle-like cartilaginous tissues used by Chinese chefs to thicken and flavor soup. Long strands are prized and unusually large fins can be worth more than the average $10 per pound.(1) Demand for shark's fins have risen dramatically in the People's Republic of China (PRC).

Liberalization in the PRC which lifted restrictions against eating shark-fin soup, combined with increasing wealth, have fueled the increasing demand for sharks.(2) Hong Kong alone consumes an estimated 3 million kilograms of shark in a year.(3) Sharks preferred for shark-fin soup are sandbar, bull, hammerhead, blacktip, porbeagle, mako, thresher, and blue; only the lower caudal lobe from mako and thresher is considered acceptable.

Since shark meat has remained relatively low priced, fishermen are often interested in the fins only -- leading to the practice of live-finning, which is removing the fins from the shark while the shark is alive and returning the shark to the water. While some sharks may be able to swim in shallow water without fins, they sink to the bottom in deeper water. It is estimated that worldwide 100-200 million sharks per year die in the fishing/finning process, earning $240 million per year for suppliers. It is feared that some species are already near extinction. While the National Marine Fishery Service (NMFS) admits that no one truly knows how many sharks are out there, estimates from test sample areas and mathematical models suggest that the following species are already near extinction: mako, elephant fish, lemon sharks, hammerheads and great whites.

Increased fishing of sharks is of particular concern in light of their slow rate of reproduction. Shark reproductive strategy produces few adults. It takes most sharks 12 to 15 years to reach sexual maturity. Gestation periods can be as long as 22 months. The result is that once the shark population is depleted it takes decades to replace itself. In addition to their culinary appeal, sharks have both medical and ecological benefits. For example, shark corneas are transplanted into human eyes, shark cartilage is used to create artificial skin for burn victims, and shark-liver oil is used in hemorrhoidal medications.

In addition, sharks rarely develop cancer and research on sharks might lead to a better understanding of the disease. Shark cartilige, thought to cure cancer, has led to a boom in poruidct sales. One Costa Rican company reports a seven-fold increased in production of shark products such as this. Sharks help balance out the ecology in oceans. Without sharks, some prey -- for example, stingrays favored by hammerheads -- would boom. In Australia, ecologists believe that increased shark fishing may have caused the spiny lobster industry in some areas to collapse since small octopi, whose numbers are no longer kept down by sharks, prey on the lobsters.(4) Sharks also serve to remove the sick, diseased, weak or injured animals from the ocean.

Last year the United States outlawed live finning and published plans to protect 39 species of shark. Federal officials have worked for 3 years on a fisheries management plan for Atlantic and Gulf waters to protect the shark population. The plan, called the Fishery Management Plan (FMP) comes from the National Marine Fisheries Service (NMFS). Its aim is to reduce the commercial and recreational fishing through licensing requirements and quotas. The plan also bans the practice of stripping the fins from sharks and dumping the sharks back into the ocean. There have been reports that in shallower waters the sharks have attacked swimmers on occasion, as they drifted towards shores and beaches.

In addition to the efforts of the United States international cooperation will be necessary. A conference on shark conservation was held in 1992 in Sydney during which delegates agreed to recommend a ban on finning and establish quotas and fishery management plans.(5) Australia has recently banned trade in great white parts and restricted fishing for several other shark species. In addition, South Africa recently declared the great white shark a protected species and imposed a ban on fishing them and selling their jaws and other parts.

When the NMFS first produced a draft of its fisheries management plan in 1989 the fishing industry was outraged, complaining that the NMFS had in the mid-1980s encouraged fishermen to enter the business of shark fishing particularly by conducting seminars, calling sharks an "underutilized resource" and even giving them names of Chinese people who dealt in fins.(6) Since then, there has been a realization that stocks are becoming endangered and some management is required.

"A Plan With Teeth to Curb Shark Overfishing." National Geographic (January 1993).

Ballantine, Lex. "Sharks - Predator or Prey?" Dive Training (March 1993). Church, Vernon. "Danger: No Sharks! The Kings of the High Seas are Floundering." Newsweek (December 14, 1993).

Conniff, Richard. "From Jaws to Laws - Now the Big, Bad Shark Needs Protection from Us." Smithsonian 24 (June 1990).

Evans, Shari M. "`Conservation' Was Key Theme at Shark Conference." Marine Conservation News 5/3. Washington, DC: Center for Marine Conservation, Autumn, 1993.

Fishery Management Plan For Sharks of the Atlantic Ocean. Washington, DC: Prepared by the National Marine Fisheries Service, National Oceanic and Atmospheric Administration of the U.S. Department of Commerce, April 26, 1993.

Fordham, Sonja. "At Last We Have a Shark Plan."

Marine Conservation News 5/2. Washington, DC: Center for Marine Conservation, Summer 1993.

Fordham, Sonja. "Shark Management Plan Still Controversial." Marine Conservation News 5/3. Washington, DC: Center for Marine Conservation, Autumn, 1993. Gold, Jay P. and Springer, Victor G. Sharks in Question. Washington, DC: Smithsonian Institution Press, 1990.

Gruber, Samuel H., ed. Discovering Sharks. Highlands, NJ: American Littoral Society, 1990.

Highley, Keith. "Shark Attack." One Earth. Hong Kong: Friends of the Earth, Spring 1993.

Ingwerson, Marshall. "How Too Few Sharks Could Spoil the Soup." Christian Science Monitor (April 26, 1989).

MacQuitty, Miranda. Shark. New York: Alfred A. Knopf, 1992. Ross, Philip E. "Man Bites Shark." Scientific American 262 (June 1990).