8 



foreign nation and exported to U.S. markets with obvious implications for 

 domestic prices, employment and incomes. A more subtle import market 

 effect may also take place. Let us assume that a foreign nation has 

 inventories of fish products produced partly from fish caught in U.S. 

 waters and partly from waters outside U.S. jurisdiction. Foreign suppliers 

 could fill U.S. import demands with products produced from fish caught 

 outside U.S. jurisdiction and satisfy their own domestic demands or other 

 world markets with fish caught from U.S. waters. Note here, that identical 

 species are not necessary for this type of market substitution. All that 

 is required is that the fish be close substitutes in meeting final product 

 demands. 



Under these circumstances the foreign nation could claim, correctly, 

 that the fish captured in U.S. waters are not entering U.S. markets. Note 

 however that by using U.S. fish to satisfy its domestic and other world 

 markets, the foreign nation is able to allocate other stocks to U.S. 

 markets. The end effect in U.S. markets is the same as if the U.S. -caught 

 fish had been directly exported to U.S. markets. 



In terms of U.S. exports, domestic exporters must be able to deliver 

 products at prices competitive with foreign producers. One of the factors 

 affecting the competitive status of domestic exporters is the level of 

 subsidies received by foreign fleets and/or processors. Thus, to assess the 

 international trade aspects of U.S. fisheries, information on the economics 

 of foreign fleets operating in U.S. waters may, in some cases, be necessary. 



It is important to recognize that this is a very complex area because 

 o f the coroplex social accounting problems involved in sorting out costs and 

 returns of foreign fleets. Government intervention and subsidization is 

 widespread and in some cases buried among more general social welfare policies, 



