Ocean governance is entering a new era, defined by unprecedented global cooperation. In September 2025, the World Trade Organization (WTO) Agreement on Fisheries Subsidies, known as Fish-1, came into force, and in January 2026, the Treaty on Marine Biodiversity Beyond National Jurisdictions (BBNJ) will be implemented. Both instruments, according to the WTO, promise a significant change in the global management of marine resources.
Yet this progress immediately faces its biggest test: China’s fishing fleet. As the largest and most heavily subsidized in the world, its dominant presence in Latin America has been repeatedly linked to illegal, unreported, and unregulated (IUU) fishing, placing it squarely at the center of the conflict between new international law and persistent ecological threat.
Environmental platform Dialogue Earth points out that, although Beijing has ratified Fish-1, the requirement to dismantle illegal subsidies is so profound that China’s operations may be forced to reduce or restructure, raising questions about its genuine commitment to the new international framework.
Milko Schvartzman, head of the conservation and fisheries program at the Environmental Policy Circle in Argentina, reminded Diálogo that “although China has not maintained active opposition in recent years, at the beginning of the High Seas Treaty, it was one of the main countries that tried to halt its progress. In the early stages, Beijing opposed the very need for the agreement, but when the U.N. decided to push it forward in 2015, its resistance lost steam.”
Subsidies, overfishing, and resources at risk
The size of the Chinese distant-water fleet is staggering: An estimated 17,000 vessels operate globally, and about 600 of them are continuously concentrated in Latin America, putting severe pressure on the region’s marine resources. These practices, experts and think tanks contend, have contributed to the depletion of species and the disruption of entire ecosystems.
The Organization for Economic Cooperation and Development (OECD) indicated in its 2025 fisheries study that between 2020 and 2022, China accounted for 36.1 percent of global fisheries subsidies — about $11 billion annually — leading spending among 41 countries.
With the implementation of Fish-1, the WTO warns that these subsidies will be restricted if they encourage overcapacity, overfishing, or IUU fishing. For its part, the BBNJ treaty will allow for the creation of marine protected areas, the assessment of environmental impacts, and the sharing of genetic benefits.
This agreement, which took more than two decades to finalize, has a clear environmental focus (creating marine protected areas and assessing impacts) but was primarily propelled to completion over the commercial value of life in the high seas — such as organisms used to develop pharmaceuticals and industrial products.
“Its scope cannot yet be measured, but it will undoubtedly have an impact on the global fishing structure,” says Schvartzman.
One of the most innovative aspects of Fish-1 is the obligation to make subsidies transparent. This measure will compel China to reveal its financial support, thereby enabling civil society and the press to exercise greater scrutiny over its fleets, which presents a significant compliance challenge that Beijing is expected to circumvent.
The advance of the Chinese fleet in South America
The impact of IUU fishing in Latin America is tangible. In Peru, annual losses from illegal fishing of pota (Pacific giant squid) are around $800 million, Escenario Mundial reported. The Lima Chamber of Commerce estimates that Chinese vessels extract more than 500,000 metric tons of this resource without paying taxes or contributing to local employment.
On October 9, 2025, the Chilean government said it was monitoring a Chinese fleet accused of entering its waters and catching cuttlefish, a species that is almost extinct in the area. Infobae reported that some 50 vessels were operating within Chile’s 200 nautical miles.
In Argentina, the Navy detected 380 vessels, mostly Chinese, in March 2025, skirting its territorial waters and concealing their operations by turning off identification systems and using night reflectors.
Peru, faced with the seriousness of the problem, strengthened its regulations in September 2024. The government enacted a Supreme Decree that only mandated the installation of the Satellite Tracking System (SISESAT) for all foreign vessels using Peruvian ports but also involved the Ministry of Defense, tasking the Navy with operating the satellite control system and approving the legitimate use of force to combat illicit maritime activities.
This tough stance severely restricted port access for the Chinese fleet, causing a massive reduction in the number of vessels docking. However, the challenge remains: On August 19, 2025, more than 250 Chinese vessels were detected near the Peruvian sea border.
The pressure is not easing in Ecuador either. In August 2025, fishermen reported the presence of dozens of Chinese vessels near the Galapagos Exclusive Economic Zone (EEZ), while in July, local news sites reported on the presence of the Chinese longliner Haideli 708 in the area.
In Brazil, Chinese vessels were reported off the island of Marajó, engaged in trawling and harvesting freshwater resources for export. Beijing has also sought to expand its port infrastructure in the South Atlantic, particularly in Uruguay, Argentina, and Chile, to support its fleet.
Schvartzman warns that the highest costs for South American countries do not come from satellite monitoring, but from the constant deployment of vessels and coast guards needed to monitor illegal incursions, which places a persistent burden on national budgets.
The challenge of enforcing regulations
Although China has acceded to the Port State Measures Agreement (PSMA), which prohibits vessels involved in IUU fishing from entering foreign ports, illegal fishing by the Chinese fleet continues to persist in the region.
“Last week [third week of October], the Chinese ambassador to Chile publicly defended his fleet’s operations in the Pacific,” asserting that the fleet operates legally in international waters, Schuartzman noted with a warning. “There is a wide gap between rhetorical defense and actual compliance with international rules.”
A recent example: When Peru required the Chinese fleet to comply with verifiable satellite monitoring from Peruvian territory, it chose to avoid Peruvian ports and move its operations to Chile. This move directly undermines regional enforcement efforts.
Economic impacts and Chinese strategies
New international rules threaten the profitability of the Chinese fleet, particularly by restricting subsidies for fishing that leads to overcapacity or IUU practices on the high seas. Schvartzman asserts that, given this scenario, China will seek to offset the impact by moving part of its fleet to the EEZs of South American countries. This is achieved by increasing port investments and entering joint ventures that allow Chinese vessels to operate legally within the EEZs under a local flag.
“Its profitability does not come from fair trade, but from opaque practices,” Schvartzman says. This strategic relocation is a tactic to evade high-seas scrutiny while maintaining profits. For example, the expert adds, the lack of traceability in some countries allows catches made illegally on the high seas to be fraudulently labeled as caught legally within an EEZ, such as ‘Argentine squid.’
To reduce costs and secure operations, China has strengthened its presence in ports in Uruguay, Argentina, and Chile. “Unrestricted access to these ports allows it to maintain its profitability and project an image of legality,” Schvartzman says.
Toward unprecedented transparency
The challenge facing the region is not only environmental or economic, but also geopolitical. Schvartzman considers greater cooperation between navies and coast guards and the political will to coordinate responses to be essential. He stresses that IUU fishing affects food security and strategic resources throughout Latin America.
“Fish-2, currently being negotiated at the WTO as a second phase of the agreement on subsidies, represents an opportunity to strengthen transparency and demand that information on subsidies and marine exploitation be public and accessible,” Schvartzman concluded.
