Bilateral fisheries agreements

A model of bilateral fisheries agreements between a coastal state and distant water fishing nation is considered. The model extends the Gordon-Schaefer fisheries model to consider a domestic coastal fleet and a distant water fishing fleet. A license fee on fishing effort is introduced. This may differ between the domestic fleet and the distant water fleet. A strategic game between the coastal states, domestic fleet and the distant water fleet is formulated. It is shown that the Nash equilibrium of the game is equivalent to the demand for fishing licenses for each fleet. A social planner (a fisheries management authority) that maximizes the coastal states welfare is introduced and maximizes social welfare to determine the optimal domestic and foreign license fees. The model is then extended to calculate access fees using a two-part pricing approach. Bilateral bargaining over how to split the rent under two-part pricing is considered, in order to determine an agreeable access fee between the two parties. The Nash bargaining model is employed to do this. The model is motivated by bilateral access fee negotiations in Pacific tuna fisheries and the theoretical results are compared to common practice and institutional features of those fisheries.