COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 14.03.1997 
COM(96) 707 final 
97/ 0012 (SYN) 
Proposal for a 
COUNCIL DECISION 
setting up 
a consultation procedure on relations between Member States and third countries in shipping 
matters and on action relating to such matters in international organizations 
and an authorization procedure for agreements concerning maritime transport 
(presented by the Commission) 

EXPLANATORY MEMORANDUM 
A. Foreword 
As the Community has been developing its external action in the field of maritime transport, the need 
has been increasingly felt, i.a. in response to the request of the Member States, to establish agreed 
objectives and rules for such action. 
B. Objectives of the Communication 
The present communication, with the proposal annexed to it, responds to the need to provide a 
coherent concept for the external action of the Community in the field of shipping, a comprehensive 
framework within which such action can be undertaken, and rules necessary to complement existing 
related legislation. 
C. Content of the Communication and proposals 
The main points and conclusions of this Communication are presented in the Executive Summary. 
Chapter II indicates the background and basic considerations for the development of EC action: the 
importance of shipping to the EC, its basic interest in the functioning of the international shipping 
market, recent developments in the world shipping market and the EC position, difficulties 
encountered in external maritime trade and recent shipping policy developments at national and 
international level. 
Chapter III sets out the objectives pursued by the Community in its external relations in shipping, and 
considers the various means that may be used, and Community action that may be undertaken, in 
pursuance of such objectives. An overview of EC action to date relating to external aspects of 
maritime transport is provided in Chapter IV. It covers relevant legislation adopted by the EC, the 
application of EC instruments and policy so far, the developments and action in international 
organizations and within the framework multilateral agreements. 
Chapter V first reviews the present international context in which external shipping relations develop, 
before proceeding to consider further the various components of Community action and criteria for 
identification of priorities, in respect of certain types of Community action. These concern relations 
with third countries or groups of countries, action aiming at the integration of the transport services 
and systems in Europe, and international organizations and multilateral Conventions, including 
particularly the question of participation and representation in international organizations dealing with 
economic and commercial aspects of maritime transport. 
Chapter VI concerns arrangements in respect of action by the Community and the Member States in 
their bilateral relations with third countries. 
A proposal for the legal instruments needed to set out the procedures to be followed in respect of the 
last two points is presented in Annex II. 
The proposed Council Decision would replace Council Decision 77/587/EEC setting up a consultation 
procedure on relations between Member States and third countries in shipping matters and on action 
relating to such matters in international organisations. 
It would also provide for a consultation and authorization procedure for agreements concerning 
commercial maritime transport relations between Member States and third countries. 
EXTERNAL RELATIONS IN THE FIELD OF MARITIME TRANSPORT 
Contents 
EXECUTIVE SUMMARY 
I. INTRODUCTION par 1 - 6 
II. EC SHIPPING AND THE IMPORTANCE OF EXTERNAL RELATIONS 
A. Importance of shipping to the EC par 7-10 
B. The basic EC interest concerning the functioning of the international paF 11-15 
shipping market 
C. Recent developments in the world shipping market and EC position par 16-28 
D. Difficulties encountered in external maritime trade par 29-40 
E. Recent shipping policy developments par 41-44 
III. EC OBJECTIVES AND MEANS OF ACTION IN THE EXTERNAL FIELD 
A. The need for, and the objectives of EC action par 45-51 
B. Means of Community action par 52-56 
1. Preemptive: seeking agreement with third countries on par 53 
policy principles and a common approach to specific issues arising 
2. Addressing problems arising from restrictive measures of third par 54 
countries 
3. Seeking to secure fair competitive conditions par 55 
4. Cooperative activities par 56 
IV. EC ACTION TO DATE RELATING TO EXTERNAL ASPECTS OF MARITIME 
TRANSPORT 
A. Existing legislation, its application and initiatives to resolve specific par 57-64 
problems 
B. Development of EC relations with third countries to-date par 65-86 
/. Agreements with third countries par 66-68 
2. Consultations with third countries par 69-70 
3. Cooperation and technical assistance par 71-75 
C. Action in international organizations & multilateral agreements par 76-86 
IL 
FURTHER DEVELOPMENT OF* THE EC EXTERNAL RELATIONS IN THE FIELD OF 
MARITIME TRANSPORT 
A. The present context in which external shipping relations develop par 87-107 
1. International political, economic and commercial developments par 87-93 
2. Evolution of the role of the EC and its powers in the external field par 94-107 
a Evolution of EC powers and scope of action in the field par 94-99 
of external shipping relations 
b Issues relating to the exercise of EC powers par 100-101 
b.l Bilateral relations of MS with third countries 
b.2 Representation in international organizations 
B. Components and priorities for Community action par 108-157 
1. Relations with third countries or groups of countries par 111-143 
a Seek agreement with third countries on policy principles par 112-126 
and common approach to shipping policy issues 
a. 1 Agreements with third countries on shipping policy 
principles 
a.2 Consultations with third countries 
a.3 Policy workshops 
b Address problems arising from measures of third countries par 127-132 
b.l Elimination of restrictive or discriminatory measures 
b.2 Review and possible adaptation of existing EC legis­
lation: Council Regulation No. 4058/86 
c Action to secure fair competition on a commercial basis par 133-141 
c. 1 Countering unfair pricing practices: review and possible 
adaptation of Council Regulation No. 4057/86 
c.2 Adoption, compliance and enforcement of international 
safety rules and standards, i.a. through stricter PSC and 
possibly action vàv flag states 
d Cooperative actions and technical assistance to third countries par 142-143 
2. Action aiming at the integration of the transport services and systems par 144-150 
in Europe 
3. International Organizations & Multilateral Conventions par 151-157 
a Adaptation of consultation procedure par 151-153 
b Tasks ahead for the short- and medium-term par 154-157 
C-
VI. ARRANGEMENTS FOR PROGRESSIVE TRANSFORMATION OF BILATERAL REGIMES 
A The main principles par 158-161 
B. Agreements between the Community and third countries par 162 
C. Bilateral agreements between Member States and third countries par 163-175 
1. Types of provisions in bilateral agreements between Member States par 166-167 
and third countries 
2. Agreements regarding the provision of maritime transport services par 168-172 
3. Agreements with other provisions only par 173-175 
ANNEXES: 
I. Table: Scope of external action and specific actions and proposals foreseen 
II. Proposal for a Council Decision setting up a consultation procedure on relations between Member 
States and third countries in shipping matters and on action relating to such matters in 
international organisations and an authorization procedure for agreements concerning maritime 
transport. 
III. Existing Community legislation and policy initiatives on external aspects of maritime policy and 
their application. 
IV. Development of relations between the EC and third countries to date. 
I +. 
EXTERNAL RELATIONS IN THE FIELD OF MARITIME TRANSPORT 
EXECUTIVE SUMMARY 
1. In view of the international shipping and trade interests of the EC, the external dimension of its 
shipping policy is of vital importance. 
The central aim of EC external action in the field of shipping is to serve effectively its shipping 
industry and trade interests by securing free access and fair competitive conditions in the world market. 
2. Taking into account its policy interests, the existing conditions of the international shipping 
market and the present international context, the EC should, therefore, in the view of the Commission, 
and in accordance with its new Market Access Strategy, pursue a policy destined to improve the access 
of European shipping industry to third country markets and to create new business opportunities. This 
can be summarised by the following general objectives: 
seek to consolidate, bilaterally as well as multilaterally in international organisations, 
through consultations and negotiations, developments towards liberalisation, as well as 
obtain further roll-back of existing restrictions; 
address specific problems that arise with non-member countries, in particular in respect 
of market access; 
in particular, address the problem of unfair competition and the related problem of sub­
standard shipping arising particularly, although by no means solely, from open registry 
shipping; 
and should, in parallel, 
work towards the development of an integrated and efficient European transport system, 
including assistance for the transition of CEEC to the market economy and alignment 
of their policies in the perspective of accession. 
Consideration of the specific problems faced by the shipping industry leads to the formulation of more 
specific or particular objectives as regards market access and related questions; operating conditions; and 
cooperative action. 
3. To pursue its objectives in the external field, the EC has the following range of possible means 
of action: 
I. Preemptive initiatives to secure agreement on policy principles and a common approach 
to specific issues 
Agreements with third countries 
Multilateral consultations and agreements 
Consultations with individual countries 
This Communication does not address relations with the IMO, concerning safety and technical aspects of 
shipping; for such relations reference is made'to the Communication on "A Common Policy on Safe 
Seas" (COM (93) 66 of 24.02.1993) 
2. Addressing problems arising from restrictive measures of third countries 
Démarches 
Consultations to address restrictive measures or other specific problems 
Measures to counter restrictions 
3. Seeking to secure fair competitive conditions 
Action to counter advantages to foreign shipowners from Government measures 
or support 
Action to ensure compliance with internationally applicable rules and standards 
4. Cooperative activities 
Provide assistance to third countries to develop their shipping sector in a 
competitive environment. 
The Commission considers that, in pursuing its efforts to achieve its key market access objectives, the 
main instrument should be the multilateral negotiations in the context of the World Trade Organisation 
(WTO). However, since they are due to resume in the year 2000, the Commission will use in the 
meantime all the instruments, negotiations and opportunities available to achieve these objectives, in the 
expectation that they could ultimately become a spring board for a multilateral agreement in the WTO. 
The present communication therefore stresses the different instruments and negotiations that the 
Community could use to achieve its key external objectives pending an agreement on a multilateral 
solution. 
The Commission invites the shipping industry to inform the Commission of the problems they encounter 
in third countries, so that it can examine the best way to deal with them. 
4. The role and powers of the EC have considerably increased since 1986, when the package of four 
Regulations forming the basis of Community maritime transport policy was adopted. A review of action 
undertaken to date indicates the potential for further effective development of EC action in this field. 
Intervening developments and the present international context provide a favourable environment for such 
development. 
5. The EC has always privileged a consensual and cooperative approach and considered the resort 
to defensive measures only as a last option if effective solutions through consultation and negotiation are 
not achieved. Action to date has placed particular emphasis on this type of approach and the present 
international conjuncture in which external shipping relations develop appears generally favourable to 
the further development of external relations in this direction. 
6. Taking into account the EC objectives and means of action in the external field with regard to 
maritime transport, the main components of Community external action should be: 
the further development of relations with, and related action vis-à-vis third countries, by means 
of 
* Community agreements with third countries and consultation procedures leading to the 
progressive transformation of existing bilateral regimes, as well as forms of dialogue 
with third countries to promote a common approach to shipping policy issues; 
* action to address problems arising from restrictive or discriminatory measures of third 
countries; 
* action to secure fair competition on a commercial basis; 
* cooperative actions and technical assistance to third countries; 
the development of cooperative action in the field of shipping as a component of a global 
approach to the transport services and systems of Europe, including those of Central and Eastern 
Europe, so that they can develop in as integrated a way as possible; and 
the reinforcement of the role of the Community within relevant international organizations to 
reflect the full development of the Community shipping policy; and the negotiation by the 
Community within such organisations, in accordance with Community procedures, with a view 
in particular to consolidating positive developments in respect of shipping policy and obtaining 
further roll-back of existing restrictions. 
7. Within the framework provided, the scope of appropriate external action under these components 
as well as related priorities are considered. A wide range of such action is envisaged to be undertaken, 
adopting the appropriate means to suit the particular situations and issues, as indicated in the Table in 
Annex I. Within this framework particular emphasis is placed on the use of consultation, agreement and 
cooperative action to the extent possible, whilst being prepared to address problems through defensive 
measures if this becomes necessary. 
8. The appropriate and effective response to problems faced in the world shipping market may 
require the adaptation of existing EC legal instruments to present circumstances, in "the light of 
experience to date. To this end the Commission 
will undertake a review of Council Regulations Nos. 4057/86 and 4058/86; and 
proposes the replacement of the consultation procedure set up by Council Decision 77/587/EEC 
by a new procedure (Annex II), with a view to (i) ensuring coherence of action of the 
Community and of the Member States in their relations with third countries and improving the 
efficiency of such action; and (ii) ensuring the pursuance of Community objectives in discussions 
or negotiations in international organizations. 
9. The competence acquired by the EC and its increasing involvement in relations with third 
countries in the field of maritime transport should lead to a progressive transformation of existing 
bilateral régimes. This process can only be gradual, as the EC proceeds to develop various forms of 
relations with individual countries. 
10. In order for the EC to develop a comprehensive external maritime transport policy, it is necessary 
to establish rules concerning the extension of existing maritime transport agreements and the 
authorization for Member States to conduct bilateral negotiations. To this end, the Commission proposes 
the adoption of a consultation and authorization procedure for agreements concerning maritime transport 
relations between Member States and third countries, which is included in the proposed Council Decision 
presented in Annex II. 
11. The Council is invited to: 
endorse the concept of external policy action suggested in this Communication, 
encompassing 
- aims and objectives; 
- means; 
- components; and 
- priorities 
and 
adopt the proposed instrument, presented in Annex II. 
I. INTRODUCTION 
1. It is now a decade since the adoption, by the Council, of the 1986 package of four Regulations 
which constituted the basis for a coherent Community policy in international maritime transport.2 In view 
of the largely worldwide involvement of Community shipping, this policy addressed predominantly issues 
and problems arising in the external field. 
In reporting previously on the application of the package3, the Commission has particularly also 
emphasized wider action involving or affecting relations with non-member countries. Such action has 
continued to be pursued and further developed. 
2. There have been particularly significant political, economic and commercial developments 
worldwide during the intervening period, which have profoundly affected world shipping. In parallel, 
developments in the EC, including the completion of the internal market, have had implications for 
Community competence; and, in combination with the developments worldwide, have increased the weight 
of the Union on the international scene. 
3. The Commission undertook in 1995 a review of the Community maritime transport policy. In so 
doing, it has been assisted by a Core Group of 12 individuals with wide-ranging experience of the world 
shipping, which submitted a Report in September 1995. The Commission presented the result of its re­
assessment in a Communication "Towards a New Maritime Strategy"4 in March 1996. The Communication 
considered external action in the field of maritime transport, together with action to improve 
competitiveness and action relating to maritime safety as one of the three pillars of maritime transport 
policy, and announced a further Communication to consider more specifically external relations in this 
field. 
4. The Commission considers, indeed, also in response to requests by the Member States, that it is 
appropriate at this stage to: 
take stock of results of actions in the external field in shipping undertaken so far; 
formulate explicitly a coherent set of objectives to be pursued and to guide the coherent 
development of the external action; 
consider the available means and modalities of such action; 
consider and, as relevant, set priorities; 
determine procedures and practical working arrangements that may be required and, in particular: 
arrangements for action by the Member States; 
arrangements for exchange of information concerning developments in external relations 
of the Community and Member States with non-Member countries; 
arrangements for the participation and representation of the Community in certain 
international organizations. 
5. The competence of the Community in this field arises from existing legislation, in particular from 
the package of four maritime Regulations adopted in 1986. This Communication is concerned with 
implementing action based on this competence. 
6. The above mentioned subjects are considered in this Communication, which builds upon 
discussions on the subject in the Council, notably the Edinburgh High Level meeting in November 1992, 
and with High Officials in March 1993 and January 1994. 
See Section IV.A. 
Report from the Commission to the Council: "Implementation of the four Regulations in the field of 
maritime transport adopted by the Council on 22 December 1986" ( SEC(90) 1594 final - 1 August 1990). 
COM (96) 81 final, 13.03.96 
II. EC SHIPPING AND THE IMPORTANCE OF EXTERNAL RELATIONS 
A. Importance of shipping to the EC 
7. Reliable and efficient maritime transport services are of great importance for Community trade. 
The Community is the origin or destination of almost 25 % of the total world trade and 90 % of this 
external Community trade is carried by sea. A significant part of this trade is carried by Community 
shipowners. Estimates for 1992 indicate that around 42% was carried on vessels registered in the 
Community or beneficially owned by Community shipowners. 
8. The importance of the Community shipping industry as an economic activity goes well beyond 
EC external trade. Seaborne trade between the then twelve Member States amounted to a significant 217 
mt in 1994. A further amount of around 224 mt (in 1993) was domestic seaborne trade within the Member 
States, the largest part of which is carried by Community-registered ships. 
9. Beyond this activity, the Community shipping industry is active in cross-trading between third 
countries. The magnitude of this activity has been particularly difficult to estimate for the EC as a whole, 
since no figures are available for several Member States; and those available are not on a uniform basis. 
Somewhat old estimates indicated that roughly one third of all income of the EC shipping industry came 
from such cross-trading activity. 
10. In addition, the industry generates significant employment on ships and on-shore as well as for 
ancillary or other related or dependent services and industries, while the EC shipping industry is the main 
client of the EC shipbuilding industry. 
Considerably reduced during recent years, from around 230.000 in 1985 to 140.000 in 1994, the number 
of seafarers remains significant, although in respect of some Member States the concern arises as to the 
future of the profession, particularly the more highly trained who are also the natural source of expertise 
needed for some on-shore, ancillary and related services. 
B. The basic EC interest concerning the functioning of the international shipping market 
11. From the foregoing the Community interest in world seaborne trade is obvious. Both for the sake 
of its exports and imports as well as for its own shipping industry the Community has an overriding 
interest in a worldwide shipping market free of restrictions. 
12. Another consideration is that, over a period of several years, the Community shipping industry 
has faced a depressed world market in which, in trying to secure cargoes, an increasing number of third 
countries have been resorting to protectionist measures in order to develop their fleets. It has also had to 
face low price competition from lines which, benefitting from non-commercial advantages granted by their 
governments, do not have to meet the test of the market the way Community shipowners in general do. 
13. In addition, Community shipowners have had to contend with the fact that the Community is a 
relatively high cost environment for their business and their competitive position has become increasingly 
vulnerable. This has led to a substantial decline of the merchant fleet registered in the Community, from 
about one third of the world tonnage at the beginning of the 80's down to around 13% - including the 
fleets of the new Member States - on 1.01.96, and this appears still not to be the bottom line. 
14. It is in response to these facts and circumstances that the EC has defined its shipping policy. For 
the benefit both of its foreign trading to and from all continents and the deployment of its fleet on all 
seas, the Community strives to achieve the application of commercial principles and freedoms on an open 
world shipping market, free from distortions of competition. 
15. At the same time the Community has to see to it that the operating conditions for the European 
shipping industry are such that the competitiveness of ships registered in the EC and manned as far as 
possible with seafarers from the Member States is safeguarded. The significance of this issue is evident 
in view of the heavy decline of the merchant fleet of the Community. 
Furthermore, working conditions for seafarers should be optimal, and shipping services should be 
undertaken at a minimum level of risk for all directly or indirectly concerned and for the marine 
environment. 
C. Recent developments in the world shipping market and EC position 
The development of international seaborne trade 
16. For well over a decade now, the world shipping industry has faced a depressed world market. 
In the late 1970's the steady and considerable growth of the world shipping industry that was witnessed 
from 1945 onwards, came to an end. In the years that followed, the industry plunged into crisis; the 
demand for shipping services fell considerably, whilst considerable new tonnage was coming into the 
market or was on order, causing prolonged overcapacity world-wide. As a result, freight rates came under 
severe pressure and this remained the case for a very long time. The economic recovery at the end of 
the 1980's did not prove to be a lasting one and 1992 and 1993 have been particularly bad years for the 
world economy and as a result the shipping industry was badly hit as well. Only in 1994 have appeared 
the first signs of a halt in the adverse trend and the expectation of an upturn. 
17. The continuous growth of the world merchant fleet stopped in 1983 and turned into a yearly 
shrinkage until 1988. Only in 1991 did the total gross registered tonnage (grt/gt) of the world fleet reach 
the level of 1982 again and it has since 1991 shown a modest growth of 1,9%. 
18. As for the world shipping market, it is expected that the volumes of seaborne cargoes will conti­
nue to be influenced by the slower growth in demand for primary commodities which have had to make 
way for the increased economic importance of the service sector. Apart from this, the composition of 
cargoes, as well as the growth rates in the international seatrade markets, will continue to be affected by 
other factors such as the further globalisation of manufacturing processes, changes in production tech­
niques and organisation, relocation of industries and the development and integration of regional markets. 
Development of EC shipping 
19. During the long period of recession of the world shipping market the European Community has 
been relatively more affected by the general decline in shipping activities than other major regions in the 
world. 
20. The erosion of the comparative advantages of Community shipping, unfair competition and the 
increasingly protectionist practices adopted by third countries during the ^Os and '80s, as well as low cost 
operations by third country shipowners have been the major causes of the substantial decline of the 
Community flagged fleet relative to world tonnage (see para. 13). The consequences are measured in 
terms of increased dependence on the services of third countries' operators, lost foreign exchange 
earnings, lost employment, lost influence in international trade and shipping negotiations and lost orders 
for Community shipyards. 
21. The decline of the fleet was partly the result of the growing attraction of alternative non-EC 
registries to Community shipowners and consequently of the outflagging of EC-vessels. At the moment, 
around 55% of the fleet owned by EC nationals is under flags other than those of the Member States. 
This figure compares with the 49,7% of the fleet of the top 35 maritime countries under a flag other than 
that of the country of domicile of the owner. 
22. From a macro-economic point of view, the situation has been equally bleak. Since 1981, 
maritime freight has shown a permanent deficit on the balance of payments of the twelve Member States 
combined. Between 1978 and 1990, in the EC more than 200.000 jobs for Member States' nationals as 
crew members on vessels registered in the EC were lost out of a total of around 335.000 in 1978, down 
to around 120.000 in 1990-92. 
Organisational and technological developments 
23. The container revolution has radically transformed the organization of world liner shipping. 
Practically every liner trade is now intermodal to some extent, at least at one end of the trade. Many 
shipping lines now offer a multimodal transport service to shippers. 
24. The organisational and technological changes resulting from this development have been 
considerable, as the shipping lines need to control the logistics of the system and maximise and control 
the use of the container. The need for intermodal infrastructure has also stimulated demand for port 
terminals; port handling; inland haulage hardware; inland distribution centers and tracking systems; and 
is pushing the use of electronic data processing (EDP) and EDI systems. 
25. In parallel to, and as part of this evolution which requires considerable investment, there has been 
a trend towards merger and acquisition, which is expected to continue in the coming years. These 
developments, occurring in a market subject to frequent excess capacity, have been also inciting the 
shipping lines to enter into new forms of cooperative agreements. 
Expansion and proliferation of open registers 
26. The flagging out from traditional, "genuine" registers has been a worldwide phenomenon. Since 
the late '80s there has been an unprecedented proliferation of open registers and the trend to register 
vessels under such flags has steadily increased. 
27. Total tonnage registered in "open registry" countries increased by 107 million dwt between mid-
1985 and end-1994, an overall growth of 51,8%, as compared to a 7,3% increase in the world total dwt 
tonnage. By 31 December 1994, the top ten open registry countries5 accounted for 44.6% of world total 
dwt of cargo carrying ships of 100 gt and over (with 314,1 mill, out of 704,0 mill, total dwt), as 
compared to 30.7% in mid-1985. This flagging out to open registers would have been even more 
pronounced but for the fact that a number of maritime countries established international/second registers 
during this period, leading to a slowdown or even, in some cases, a reversal of the flagging out trend. 
28. In view of these developments, it has become increasingly important to consider how the open 
registry phenomenon could be controlled and contained, so that risks for safety and the marine 
environment can be minimised, and a level-playing field in terms of operating conditions attained, in view 
of the unfair competitive advantages gained by shipowners from not observing international rules and 
standards. Indeed, there is often an almost complete absence of effective control and regulatory oversight 
programs to ensure that consistent and competent maritime safety actions are taken. A shipowner who, 
due to inadequate regulatory oversight, can avoid compliance with the internationally agreed set of 
standards and regulations as regards safety and the pollution of the marine environment has a cost 
advantage - which can be very significant - over his competitor who fully respects all applicable 
international rules and standards. 
D. Difficulties encountered in external maritime trade 
29. In addition to the problems relating to trade and market developments, the Community shipping 
Liberia, Panama, Bahamas, Cyprus, Malta, St. Vincent, Bermuda, Marshall Isl., Vanuatu and Antigua & 
Barbuda. 
7 
industry has been facing problems arising from policies and measures adopted by the governments of third 
countries which affect international shipping relations. 
Whilst the traditional maritime nations as a whole - albeit with certain notable exceptions - have pursued 
a policy of maintaining an open trading, free-enterprise environment, a large number of Governments 
sought and adopted, over the previous two decades, measures to protect and develop their own national 
merchant fleet. 
30. Such measures have often taken the form of restrictions on market access by foreign shipowners; 
in other cases, or in combination with such restrictions, governments have affected operating conditions 
to favour their national fleets, for example, through subsidies or fiscal advantages. Neglect or inadequacy 
of enforcement of internationally applicable rules and standards has greatly contributed to the problems 
of the industry; and all these adverse effects on free and fair competition have made it possible for 
shipowners benefiting from such advantages to offer their services under conditions which shipowners 
relying on their own commercial means and complying duly with applicable rules cannot meet. 
Restrictions on market access 
31. Protectionist measures used by governments restricting market access for foreign shipowners take 
various forms; they may be categorised as: national, unilateral regulations or requirements; bilateral or, 
sometimes, regional arrangements; and international agreements/conventions. 
/. National regulations or requirements 
32. Through national regulations governments have unilaterally imposed restrictions on access to the 
shipping market; restrictions on related doing business activities; discriminatory treatment of foreign 
vessels in ports; and restrictions on auxiliary services. 
(i) Restrictions on access to the shipping market 
33. The most overt unilateral restrictions take the form of national legislation which reserves part of 
national cargoes to national flag ships. 
Restrictions in several countries have taken the form of discrimination in favour of the 
national flag based on legislation and/or using various forms of allocating cargoes on a 
preferential basis; or through the inclusion of clauses in import licenses, or letters of credit, 
which give preference to the national carrier. 
Nomination of the national flag carrier by a requirement that all or certain categories of goods 
exported are sold on cif terms; and that goods imported are purchased on fob terms; this is 
often the case in practice through the imposition of terms in contracts with shippers, without 
necessarily the government being openly involved. 
Other administrative provisions can have the effect of preventing or limiting the participation 
of non-national lines in the trade. 
(ii) Restrictions on "doing business" activities 
34. Access to the-trade has arso been restricted by thwarting activities generally regarded as a 
perfectly normal part of day to day business. Examples of such restrictions are: 
impediments to door-to-door operations; 
difficulties, or prohibitions, on non-nationals establishing branch offices or agencies; 
impediments in obtaining necessary licences, work permits or visas for non-nationals; 
restrictions on inward investment or on the repatriation of profits; 
requirements that national agents, firms or organisations be used in preference to non-national 
interests; 
raising taxes or duties on these activities, which discriminate as compared to those imposed 
on a State's own nationals. 
(Hi) Discriminatory treatment of vessels in ports 
35. Discriminatory treatment of vessels in ports may regard: 
the use of infrastructure and auxiliary maritime services, such as 
assignment of berths or facilities for loading and unloading, 
cargo handling, 
storage and warehousing, 
customs clearance services, 
container station services, 
maritime agency services; 
fees and charges, depending on the flag of the ship or the nationality of the operator. 
2. Bilateral arrangements 
36. Particularly damaging to free market access has been the tendency to bilateralise trades through 
cargo-sharing agreements (mainly, though not exclusively, in liner trades), squeezing out of the market 
cross-traders or severely limiting their possibilities to participate in the trade. The intra-OECD trades have 
been free from such arrangements. But several developed countries, including Member States, have been 
involved in such agreements, either with developing countries or with State-trading countries; often, in 
the latter case, in order to be in a position to participate in the trade at all. 
3. International agreements/conventions 
37. Persistent efforts have been made by developing countries, in particular in UNCTAD, to regulate 
commercial aspects of shipping with a view to promoting and developing their fleets by preferential 
treatment rather than on the basis of commercial criteria. 
38. Many of these efforts have been unsuccessful; but at least in the case of the UN Convention, 
adopted in 1974, on a Code of Conduct for Liner Conferences, they have significantly affected liner 
shipping between European and developing countries, in particular due to the way certain developing 
countries have used it to "legitimize" national restrictive measures. 
Operating conditions 
39. National rules and regulations, either specific to shipping or of a general application, affect the 
operating conditions of the shipping firms of the country concerned and of its merchant fleet. These range 
from manning rules and crew nationality and related conditions to subsidies and fiscal advantages, but also 
regulations on safety of ships and crew and the protection of the marine environment. The latter aspects 
may be particularly affected by inadequate enforcement of internationally applicable rules and standards. 
As a result, operating conditions vary considerably among countries and shipping registers to the extent 
that competition can be seriously distorted. 
Unfair competition 
40. Operators can take advantage of such conditions as referred to above, offered or allowed by 
governments, to a degree that such competition is unfair. 
A guaranteed cargo base, subsidisation, low cost operation by neglect of safety and social rules, are all 
factors permitting the undercutting of rates to an extent that shipowners having to meet the test of the 
market while complying with their obligations and not enjoying any such advantages cannot compete. 
E. Recent shipping policy developments 
41. EC external action in the field of shipping needs to take into account conflicting economic, 
competitive and political forces influencing the international shipping environment. 
42. The dramatic political and economic events of the late '80s and early 90's have left their mark 
on shipping policy developments worldwide. The rhythm of political, economic and social change over 
the last two decades has increased since 1989. Rapidly changing world events including new political and 
economic realities in both developed and developing countries, increased awareness of social, 
environmental and economic disparities and the perceived failure of previous policy approaches meant 
to increase the competitiveness of developing countries' fleets have significantly affected the approach 
of numerous countries to international shipping. 
43. As a consequence, significant shipping policy developments have taken place "in numerous 
developing countries, resulting in fragmentation of previously common shipping policy approaches. 
Liberalisation in the field of shipping has gained ground in Latin America and certain parts of Asia, 
although not yet in Africa. 
44. The decisions made in UNCTAD VIII in Cartagena at the beginning of 1992, which radically 
changed the policy orientations of UNCTAD, signalled a significant reorientation of shipping policies in 
the developing world towards progressive liberalization. This was already noticeable in mid-1991 during 
the Review Conference on the Liner Code, when a number of significant changes became apparent with 
respect to the approach exhibited by developing countries. It has also been apparent during discussions 
on maritime services within the context of the negotiations of the GATS, although it has not so far been 
possible to reach a satisfactory worldwide agreement. 
in 
in. EC OBJECTIVES AND MEANS OF ACTION IN THE EXTERNAL FIELD 
A. The need for, and the objectives of EC action 
45. In view of the worldwide involvement of Community shipping, EC shipping policy was bound 
to give, and indeed has given from the outset, a predominant place to issues concerning seaborne trades 
with or between non-EC countries. Inevitably also, internal EC shipping policies have had to take account 
of the international context. 
46. The basic policy orientation in favour of free and fair competition in world shipping has been the 
traditional one generally followed by the Member States, which as members of the OECD have subscribed 
to the Code of Liberalisation of Invisible Operations and have formulated common shipping policy 
principles. It has been pursued by the Community and the Member States in UNCTAD and, more 
recently, in the GATS negotiations. 
47. An active policy to combat the problems arising from the protectionist policies of third countries 
was difficult to conduct individually or even as a group outside the Community framework. Developments 
in the '70s, and increasingly in the '80s, made the need for Community action imperative. Following the 
adoption in 1977 of a Council Decision "setting up a consultation procedure on relations between Member 
States and third countries and on action relating to such matters in international organizations"6 and of 
Regulation No. 954/797 in 1979, the decisive step for a common policy was the adoption of the 1986 
package, based on the proposals submitted by the Commission with the Communication of March 19858. 
48. In the Communication the Commission formulated a set of basic principles to guide Community 
action in shipping: 
considering that the predominant issues affecting shipping are those concerning trade with third 
counties, actions on matters internal to the Community have to take fully into account their effect 
on the international competitive position of Community shipping; 
the Community should seek, where regulatory action is necessary, and in particular where the 
. ' competitive position of Community shipping is affected, wide international agreement rather than 
take unilateral Community action; 
the Community should ensure equality of treatment of Community shipowners; 
the Community should pursue a non-protectionist shipping policy, based on the principle of free 
and fair competition in world shipping, in the interests of Community,shipowners and the users 
of shipping services, taking into account the interests of the Community's trading partners, 
including the developing countries; 
the Community should support international efforts to maintain and improve the standards of 
maritime safety; 
the Community should seek to improve the commercial competitiveness of Community shipping. 
49. The 1986 package was designed to defend and promote EC commercial interests in international 
shipping, while at the same time applying basic provisions of the Treaty concerning the freedom to 
provide services and the competition rules. Thus the Council decided that this task would be henceforth 
the responsibility of the Community, since shipping policy objectives can be more effectively pursued 
through action at Community level. 
Council Decision 77/587, O.J. L 239, 17.9.1977 
O.J. L 121, 17.5.1979 
"Progress towards a common transport policy * Maritime Transport", COM (85) 90 final of 19 March 
1985. Also see section IV.A. 
11 
50. The central aim of EC external action in the field of shipping is to serve effectively the shipping 
industry and trade interests of the EC by securing free access and fair competitive conditions in the world 
market, where EC shipowners compete and offer their services. The guiding principles set out already in 
1985 retain generally their validity under current conditions of the international shipping market and the 
present context in which the Community's external shipping relations develop, which are reviewed, in 
Chapters II and V.A. Taking into account its policy interests, the existing conditions of the international 
shipping market and the present international context, the EC should, therefore, in the view of the 
Commission, pursue the following general objectives: 
seek to consolidate, bilaterally as well as multilaterally in international organisations, 
through consultations and negotiations, developments towards liberalisation, as well as 
obtain further roll-back of existing restrictions; 
address problems that arise with non-member countries, in particular in respect of market 
access; 
address the problem of unfair competition and the related problem of sub-standard 
shipping arising particularly, although by no means solely, from open registry shipping; 
and should, in parallel, 
work towards the development of an integrated and efficient European transport system, 
including assistance for the transition of central and eastern European countries (CEEC) 
to the market economy and alignment of their policies m the perspective of accession. 
51. Considering the specific problems faced by the shipping industry, which are indicated in Section 
II.D, Community action in this field should aim at achieving a number of more specific or particular 
objectives: 
As regards market access and related questions: 
(i) the consolidation of developments towards liberalisation that have taken place in recent 
years in respect of shipping policy internationally; 
(ii) increased opportunities for EC shipowners in providing services in the trades with and 
between third countries, including the provision of multimodal transport services involving 
a sea leg, in particular by eliminating or countering restrictions on access to the shipping 
market and on connected land-side operations; 
(Hi) removing other unilateral measures of third countries adversely affecting shipping 
activity, for example, discriminatory taxation or treatment of ships in ports; 
(iv) ensuring equal treatment, on the part of third countries, of Community shipowners 
without discrimination vis à vis their competitors; 
(v) promoting a market orientated, international shipping policy environment, also with due 
regard to the competition rules, in particular, Regulations no. 4056/86 and 870/95. 
There is a need to get rid of regulations that either distort competition or place 
unnecessary and unjustified burdens on commercial operators; this includes Government 
interventions in favour of shipping lines having agreements that restrict competition. 
12 
As regards operating conditions 
In its relations with third countries the Community should: 
(vi) promote the adoption, observance and enforcement of appropriate international 
standards relating to the safety of ships and crew and the protection of the 
marine environment; 
(vii) achieve fair competitive conditions in the world shipping market, i.a. through the 
adoption, observance and enforcement of internationally applicable standards as 
above; 
Third country shipowners can derive advantages from Government measures or 
support taking various forms (such as cargo preference, subsidies, non-
enforcement of rules & standards), which distort competitive conditions. 
(viii) seek solutions to the economic and safety problems associated with the 
proliferation and expansion of open registers. 
As regards cooperative action 
The Community should also, in pursuing the above objectives, give particular attention to 
(ix) promotion of co-operation with third countries, in particular developing countries 
and CEEC. 
In its relations in this field with developing countries, the Community should take 
account of the objectives referredMo in Article 130u of the Treaty on European 
Union. 
Cooperative actions and technical assistance can serve mutual interests by 
resolving problems and promoting convergent policy approaches. 
More particularly, in Central and Eastern Europe, they can significantly 
contribute towards the development of an integrated and efficient European 
transport system and the preparation of the candidate European countries for 
eventual accession. 
B. Means of Community action 
52. In pursuance of its objectives in external relations in shipping, the Community may, as 
appropriate, have recourse to a range of measures, whether unilateral (based on the Regulations adopted 
by the Council in December 1986) or on the basis of agreements (bilateral or multilateral) and cooperative 
action. The various means of Community action may be classified into the following types: 
Preemptive action, seeking agreement on policy principles and a common approach to specific 
issues, may be taken to achieve a situation where policies pursued by third countries are close 
or compatible enough in respect of the provision of international shipping services, as to allow 
the free exercise of shipping activity and to avoid as far as possible the occurrence of problems 
between the Community and those countries in the sector. 
In cases where third countries' policies impose restrictions, the Community has to be prepared 
to address such specific problems in appropriate ways, through consultation or, if this fails, 
13 
through other measures. 
Problems also arise from unfair competition based on non-commercial advantages provided by 
governments or on their failure to ensure compliance of their ships and/or operators with 
internationally applicable rules and standards; in such cases the Community should consider 
possible means of securing fair competitive conditions. 
Furthermore the Community should use its possibilities to develop further its cooperative 
activities with third countries in the shipping sector. 
1. Preemptive action: seeking agreement on policy principles and a common approach to 
specific issues arising 
53. Seeking agreement on policy principles and a common approach to specific issues arising may 
take the form of consultation with third countries, negotiation of agreements with them, or multilateral 
consultations and agreements: 
agreements with third countries, including agreements on principles of shipping policy, 
negotiated by the Commission on the basis of a Council authorisation and concluded by the 
Council. The need for such agreements arises in the absence of a multilateral agreement that 
would meet the Community objectives. Such agreements may be sectoral or part of more 
general agreements. The use of a sectoral agreement may be preferable in certain cases. The 
choice between a sectoral agreement or provisions on shipping as part of a more general 
agreement cannot be answered on the basis of a general rule, but should be decided in each 
case where the timing of negotiations on a general agreement raises such a possibility (see 
also in this connection paras. 114-116 below); 
multilateral consultations and agreements (such as in UNCTAD and the World Trade 
Organization). 
A satisfactory multilateral agreement on maritime transport in the WTO, for which 
negotiations are to resume in the year 2000, would be the most effective means to achieve 
the widest possible liberalisation of the sector. 
Multilateral consultations and agreements are considered under the section concerning 
participation and representation in international organizations dealing with maritime transport. 
consultations with third countries, whether or not within the framework of an existing 
agreement, to evaluate policy options better, influence policies of third countries, and reach 
understanding on a basic policy approach. 
2. Addressing problems arising from restrictive measures of third countries 
54. Addressing problems arising from measures taken by third countries may involve: 
demarches to third countries, which may need to be followed by consultations; 
consultations with third countries, whether or not within the framework of an existing 
agreement, to address restrictive measures taken or other specific problems that have already 
been identified with such countries; the outcome of such consultations may be reflected in 
appropriate documents, including agreed minutes, depending on the nature of the issues, the 
nature of the commitments made and the procedure under which the consultations are 
conducted (consultation procedure or a Council Decision based on Regulation no. 4058/86); 
where legally binding commitments are envisaged, negotiations conducted by the Commission 
would be based on an authorisation from the Council (procedurally as for agreements with 
14 
third countries under the previous paragraph, but normally of a more limited scope); 
measures to counter restrictions by third countries on market access, if consultations do not 
succeed (ref. Regulation no. 4058/86). 
3. Seeking to secure fair competitive conditions 
55. Seeking to secure fair competitive conditions may involve: 
action to counter advantages to foreign shipowners from Government measures or support: 
The elimination of cargo preference measures would remove an advantage which 
shipowners benefiting from such preference enjoy and which places them in a 
better position when seeking to obtain cargoes open to competition. 
In cases of unfair pricing practices in international liner shipping, Regulation 
No. 4057/86 can be used to address the problem and avoid further injury to the 
Community shipping industry. 
In addition, a review of the Regulation will be undertaken, to evaluate the 
possibilities for more effective responses to problems arising from unfair 
practices of third-country shipowners. 
Subsidies and fiscal advantages are difficult to handle through bilateral relations. 
A multilateral régime would also appear difficult to obtain, but a subsidy code 
is envisaged in the GATS. 
The adoption, observance and enforcement of appropriate international standards 
relating to the safety of ships and crew and the protection of the marine 
environment, would help to achieve a more level-playing field. Besides 
promoting such action, the Community could seek to exercise its influence 
directly by addressing specific countries, for example, by offering its assistance 
in enforcing Port State Control (PSC) and Flag state responsibilities. 
Action to ensure compliance with internationally applicable rules and standards concerning 
the safety of vessels and crew and the protection of the marine environment: 
This will involve: 
vigorous enforcement of port state control in the EC and the area 
covered by the Paris MOU; 
promotion of PSC in other regions by cooperating with interested third 
countries and groups of countries, as well as with IMO; 
promotion of the adoption and enforcement of appropriate international 
standards through consultation and assistance to third countries. 
Such action relates to the Communication of the Commission on "A Common 
Policy on Safe Seas"9 and points to the possibility of taking action in the 
external field in support of the objectives relating to safety and environmental 
protection, thereby also seeking to achieve a level-playing field by removing an 
unfair advantage of shipowners who use substandard vessels. 
COM(93) 66 of 24.02.1993 
15 
4. Cooperative activities: 
56. The Community should continue to use its means to promote cooperation with third countries so 
as to serve mutual interest, by 
providing assistance to third countries (developing countries and CEEC), to orient their 
shipping sector and/or enable their shipping companies to provide competitive services in a 
free shipping market environment and to promote institutional reform, improve administrative 
and management infrastructure, and training for application of international Conventions. 
This can take the form of seminars or workshops, to identify in common 
appropriate action programs, and technical assistance for carrying out agreed 
actions. Assistance actions generally come under existing programmes or are 
otherwise agreed with requesting countries, and the Commission is attentive that 
the objectives be served as far as possible. 
16 
IV. EC ACTION TO DATE RELATING TO EXTERNAL ASPECTS OF MARITIME 
TRANSPORT 
A. Existing legislation, its application and initiatives to resolve specific problems 
57. The main legal instruments on shipping adopted by the EC to date relate to important aspects of 
its external relations in this field. 
Council Decision 77/587 ,0 set up a consultation procedure on relations between Member States and third 
countries in shipping matters and on action relating to such matters in international organisations. 
Council Regulation No 954/79 " concerns the conditions of ratification by Member States of the UN 
Convention on a Code of Conduct for Liner Conferences, so as to preserve conditions of competition as 
regards liner conference shipping, while at the same time offering national shipping lines of developing 
countries particular opportunities to participate in liner conferences and the trade carried by them. 
The four Regulations adopted by the Council in December 1986 ll concern: 
the application of the principle of freedom to provide services to maritime transport between 
Member States and between Member States and third countries; 
the application of Articles 85 and 86 of the Treaty to maritime transport; 
unfair pricing practices in maritime transport; and 
coordinated action to safeguard free access to cargoes in ocean trades. 
They constitute a coherent package of Community instruments in pursuance of a non-protectionist policy, 
while applying basic provisions of the Treaty. 
In respect of restrictive measures by third countries or unfair practices by foreign shipowners, the 
Regulations serve to discourage such measures or practices or, when these do occur, to achieve effective 
solutions through negotiation. In cases where this is not achieved the Regulations provide the basis for 
defensive action to counter such measures and practices. 
58. In addition to phasing out unilateral restrictions by Member States, the Regulation applying the 
principle of freedom to provide services to maritime transport has put an effective brake on new initiatives 
for cargo-sharing arrangements between Member States and third countries. 
59. Numerous cases have been raised under Regulation No. 4056/86 and related decisions made by 
the Commission. The Regulation has proved an effective means of ensuring compliance with Articles 85 
and 86 in shipping and to ensure the effective competition in the liner shipping trades serving the 
European Union and the provision of high quality, low-cost services to shippers, i.e. the exporters and 
the importers of the Union. 
60. The Regulation addressing unfair pricing practices in maritime transport has been used to good 
effect and there are, furthermore, strong indications that it has influenced the behaviour of certain 
third-country lines, in particular concerning their rate setting policies. 
61. Apart from the actual implementation of defensive measures in cases where an effective 
solution through negotiations is not achieved, the Regulation providing for coordinated action to 
safeguard free access to cargoes constitutes a valuable deterrent. In the case of restrictions imposed by 
10 O.J. L 239, 17.9.1977 
11 O.J. L 121, 17.5.1979 
12 Council -Regulations Nos. 4055/86, 4056/86, 4057/86, 4058/86; O.J. L 378. 31.12.1986 
17 
the West and Central African states, where the use of the Regulation has been requested, the Community 
has continued to try to achieve a mutually acceptable solution through consultations. More generally, the 
possibility provided by the Regulation to take counter-measures, has been of particular value for the 
Commission in its discussions with a number of countries when seeking to secure market access and non­
discriminatory treatment for Community shipowners. 
62. Member States and Community shipowners have regularly raised with the Commission issues 
regarding specific problems arising in particular shipping trades. In its report to the Council on the 
implementation of the shipping Regulations'3 the Commission reported, i.a., on action undertaken by that 
time to address such problems as arose with Algeria; Kenya; Korea; Taiwan; Indonesia; Japan; and on 
consultations with third countries, such as Brazil, Sri Lanka and the USSR. The Commission has 
continued to pursue such action, in close consultation with the Member States. It has, in particular, 
raised specific issues regarding maritime transport in discussions with a number of third countries, 
namely Taiwan; Korea; China; Ukraine; Japan. Such discussions have resulted in several concessions 
obtained from the competent authorities of the countries concerned. 
63. The results obtained clearly show that the Community can efficiently secure the interest of the 
Member States collectively. It is obvious that the leverage of the Community vis-à-vis third countries can 
be used to obtain concessions that individual Member States would not be able to realise. Apart from 
its significant tactical advantage, a Community approach is distinctly preferable to that of individual 
Member States since they are not normally in a position to take account of the interests of the 
Community as a whole. In this respect, the need to establish a coherent and comprehensive maritime 
Community policy on the basis of well defined policy objectives can be considered essential for the 
further development of the EC merchant fleet and to prevent any internal distortions of competition. 
64. Further information on matters referred to in this section can be found in Annex III. 
B. Development of EC relations with third countries to^date 
65. In the intervening years after 1986 an increasing number of third countries have developed their 
relations with the Community in shipping. The Commission lias used, and intends to continue to use, 
its possibilities to work towards the objective of free and fair competition in the world market. It 
considers this effort as an essential component of implementing the established Community policy. 
EC relations with third countries have developed to-date by means of (i) agreements, (ii) consultations, 
as well as (iii) various forms of cooperation, including technical assistance. 
(I) Agreements with third countries 
66. Although the Community has not, so far, concluded any sectoral maritime transport agreement 
with a third country, a number of general agreements between the EC and third countries (or groups 
of third countries) contain substantive provisions which relate to shipping. Other agreements, whilst 
not containing specific substantive provisions on shipping, provide for cooperation/technical assistance 
as well as for consultations, as necessary. 
67. In the first category belong: the Lomé Convention, the Europe Agreements, the Partnership and 
Cooperation Agreements with countries of the former USSR, and the EEA Agreement14. 
13 SEC(90) 1594 final, 1.08.1990 
14 For more detail as regards, i.a., the content of the agreements concerning maritime transport see Annex V. 
18 
Association agreements have also been or are being negotiated with most third countries of the 
Mediterranean. They provide for early negotiations leading to liberalization of maritime transport along 
similar lines to those recent agreements with Central and Eastern European countries. 
68. Over the years, the Community has concluded trade and economic cooperation agreements with 
numerous third countries; transport is generally included among the sectors for economic cooperation, 
and this has been the basis for consultations and cooperative action with a number of such countries. In 
several such agreements, maritime transport has been the subject of an exchange of letters annexed to 
the agreement, whereby the Parties undertake to address any issue relating to the operation of shipping 
with a view to finding solutions to problems that may arise. In several instances discussions in the 
framework of the Joint Committees have taken place with satisfactory results. 
In more recent negotiations for such agreements, engaged with Korea and South Africa (as well as for 
a new partnership agreement with Mexico), the Community has proposed the inclusion of substantive 
provisions on shipping. The negotiations with Korea have been concluded and the agreement was signed 
recently. 
(2) Consultations with third countries 
69. The Commission has, for some time, engaged in discussions and consultations with important 
partners in maritime transport, which have been intensified with the development of EC shipping policy 
and activity relating to international shipping: several EFTA countries - Finland15, Norway, Sweden15 
and Switzerland; the USA, within the framework of the Consultative Shipping Group; the Republic of 
Korea; Japan; and, until 1991, the USSR. Such consultations serve the purpose of exchange of 
information and views on developments and policy issues of mutual interest, as well as the pursuance 
of solutions to problems that arise16. 
70. Consultations with other countries have so far been held on an ad hoc basis, where required. Use 
is made of opportunities offered in the framework of existing agreements or of less formal events, incl. 
workshops organised with representatives of third countries or groups of countries. 
. (3) Cooperation and Technical assistance 
71. The Commission has organised several seminars and conferences or workshops with third 
countries or groups of countries on shipping issues. These have provided the possibility to discuss 
constructively with high-level officials as well as with commercial interests existing problems and to 
consider needs for technical assistance in the efforts to liberalise the sector, facilitate transport operations 
and promote compliance with internationally applicable rules and standards. A number of these 
conferences and workshops have resulted in joint action programs that are been followed-up and/or 
specific technical assistance projects'7. 
72. Technical assistance provides an important means to improve the functioning of the trade and 
help liberalisation of such trades by providing better conditions of operation for the lines. This serves 
the dual objective of development policy and shipping policy. Actions in respect of, i.a., India, countries 
of the Maghreb and of West and Central Africa, as well as for the ASEAN countries have been 
undertaken, in addition to numerous projects under the PHARE and TACIS programs. 
Prior to their accession to the EC. 
As far as the developed countries are concerned, the Maritime Transport Committee of the OECD has also 
traditionally served as the forum for multilateral contact among them as regards shipping matters; the 
Commission regularly participates at its meetings (see para. 83). 
See also Section V.B.2 
73. The Commission has also established cooperative relations with a number of international 
organisations and institutions: UNCTAD, the World Bank; and with the World Maritime University 
and the International Maritime Law Institute concerning study programs and fellowships for shipping 
officials of developing countries. 
74. Experience with actions of cooperation and provision of technical assistance, as above, can be 
considered generally positive and promising in terms of serving the objectives of such actions as regards 
the third countries involved as well as the Community. The Commission intends to further pursue such 
activity as an integral part of its external relations in the field of maritime transport. 
75. A more detailed review of developments covered in this section is provided in Annex IV. 
C. Action in international organizations & multilateral agreements 
76. The Commission participates systematically in the work of international oganizations dealing with 
maritime transport and in the negotiation of international conventions concerning international shipping. 
These have included, in particular: 
the Uruguay Round negotiation for a GATS and the continuation of these negotiations on 
maritime transport in the Negotiating Group on Maritime Transport Services (NGMTS) in the 
World Trade Organization; 
UNCTAD, as well as UN conferences and negotiations organized under the auspices of 
UNCTAD; 
the Maritime Transport Committee (MTC) of the OECD; 
the Consultative Shipping Group (CSG); 
- IMO and ILO. 
77. The Uruguay Round negotiations have been conducted by the Commission under specific 
arrangements agreed by the Council so as to ensure the unified representation of the EC. The currently 
continuing negotiations on certain services are conducted by the Commission in conformity with the 
"Code of Conduct agreed between the Council, the Member States and the Commission on the post-
Uruguay Round Negotiations on Services" approved by the Council in May 1994, as were the 
negotiations on maritime services. 
78. Since its adoption in 1977, the consultation procedure set up in Council Decision 77/587 has been 
used as a basis to harmonize the position taken in other international organizations and international 
conferences. In certain cases of important negotiations common objectives have been adopted by the 
Council or directives have been given to the Commission for participation and representation of the EC. 
based on the recommendations submitted by the Commission (see para. 82 below). 
79. In UNCTAD the EC has been represented, notably, at sessions of the Conference as well as the 
sessions of the Committee on Shipping, until the latter's demise in 1992; and of the subsequently 
established Standing Committee on Services: Shipping, since 1992. 
80. The Commission has coordinated positions, as necessary, on subjects discussed at these meetings 
and on Resolutions adopted therein. Until 1992 this was regularly done within the coordination 
framework of Group B. It has, also, represented the Community on matters of specific relevance for the 
EC and on which Group B as a whole did not have a position or interest. The representation of the EC 
at these meetings and participation in their work has been facing considerable difficulties, not only 
because of the Community's status as an observer rather than as a full participant, but primarily because 
of the reluctance of the Member States to accept the implications of such role as regards their own 
independent voice. 
81. Following UNCTAD VIII (Cartagena, 1992) and the abandonment of the tradition of a 
coordinated position of the OECD countries, the Community has been speaking at the sessions of the 
oob 
Standing Committee with one voice, represented jointly by the Presidency and the Commission. This has 
represented a significant shift in practice, which has been increasingly confirmed at the successive three 
sessions of the Standing Committee held since November 1992, as Member States have come to 
recognize the necessity of common action and representation and the significant risks involved if each 
of them were to express individually its views. At the same time this represents a fragile practical 
arrangement: it leaves open the question of an agreed and binding discipline which is needed in the light 
of the Court's requirement for unity of representation. 
82. In the UN framework, in addition to participation in the work of UNCTAD as above, the 
Commission has also participated during recent years in negotiations organized under the auspices of 
UNCTAD, relating to international Conventions, and more specifically: 
Convention on conditions for registration of ships (from 1983 to 1986): 
besides coordination of positions, as required, within Group B, the EC had to negotiate 
specific EC clauses necessary to ensure compatibility of the Convention with relevant 
Treaty provisions;18 
First Review Conference of the Liner Code (October/November 1989 and June 1991): 
negotiation on behalf of the EC on the basis of directives adopted by the Council.19 
83. In the OECD the Commission participates regularly in the discussions of the MTC and its 
subsidiary bodies. It seeks to ensure that views expressed by Member States on issues relating to the 
common policy are in line with it. It presents the EC position where relevant; it also presents the views 
of the Commission on matters within its own competence as well as on those on which it is exercising 
its initiative to formulate recommendations or make legislative proposals. 
84. The nature of the discussions usually taking place in the MTC does not, as a rule, require a 
coordination of positions of the Member States; whenever such a need has arisen, coordination has taken 
place either in the Council Transport Working Group or on the spot. An unsatisfactory aspect of the 
OECD framework relates to the implications of the status of the Commission in meetings with groups of 
non-OECD countries. 
85. The informal framework of the Consultative Shipping Group has traditionally been one which 
has not raised problems for the Commission to play its role in the dialogue of the CSG with the USA. 
86. Coordination of positions in IMO and ILO is of increasing importance in view of the 
development of EC policy on matters within the area of work of these organizations. The modalities of 
such coordination have been the subject of discussions within the Council Transport Working Group; for 
practical reasons they will not be elaborated in this Communication which does not cover the fields of 
activity of these organizations. 
COM(85) 388 final, 5.07.85 
Communication from the Commission on a recommendation and proposal for a Council Decision 
authorising the Commission to participate on behalf of the Community in the Review Conference on the 
United Nations Convention on a Code of Conduct for Liner Conferences and in its preparatory work and 
on common action in this regard, SEC(87) 2063 final, 17.12.87; 
Council.Decision of 7.12.88, doc. 6529/88 - MAR 17, 6.06.88 
a, 
V. FURTHER DEVELOPMENT OF THE EC EXTERNAL RELATIONS IN THE FIELD 
OF MARITIME TRANSPORT 
A. The present context in which external shipping relations develop 
/. International political, economic and commercial developments 
87. The present context in which EC action is situated is in several respects considerably different 
from that prevailing only a few years ago. 
There has been in recent years a marked reorientation towards liberalisation worldwide, which 
could not fail to affect shipping policies as well. Thus significant improvement in lifting 
restrictions on access to the shipping market has been made in several Latin American and Asian 
countries. At the same time a similar reorientation has taken place in "international 
organisations: this is to be seen in the reorientation of UNCTAD towards progressive 
liberalization, signalled by UNCTAD VIII at the beginning of 1992. The conclusion, more 
recently, of the Uruguay Round and the GATS confirrn this trend although, regrettably, the 
negotiations on maritime transport could not be successfully concluded. 
This reorientation has been resisted by formerly protected industries in various countries; and this 
has made it difficult to achieve legally binding commitments that would make the changes 
irreversible. 
At the same time, we are witnessing tendencies towards unilateralism at the expense of the 
multilateral approach to seeking solutions to international problems. This tendency is particularly 
pronounced in the USA as manifested, for example, by the attitude of the USA with regard to 
the negotiations on maritime transport in the WTO as well as the recent reservation of Alaskan 
oil exports for US flag ships, and is a source of increasing concern. 
There have been considerable shifts in the relative importance of various trades, the most 
noteworthy in terms of its global significance being the growth of Asian trades, including the 
expansion of intra-Asian trades. 
Commercial developments involving global carriers and changes in patterns of cooperation 
accompanying the extension of multimodal transport and the evolution of logistic requirements. 
There has been further internationalisation of shipping activity with increasing separation of 
management from ownership, chartering of vessels of different nationality, recourse to foreign 
crew, and slot chartering arrangements. 
88. Closer to the EC, there is a totally new situation as the disappearance of the State-trading system 
has radically altered the political and economic environment; from confrontation we have turned to 
cooperation and assistance programs, association or partnership agreements, and the prospect of accession 
of a number of CEEC in the not distant future. Thus the old preoccupation with the perceived threat from 
State-trading countries' shipping has disappeared as far as the CEEC and former USSR are concerned. 
89. On the EC side, there has been à marked increase in the weight and role of the EC in 
international economic relations with the completion of the single market, the Maastricht Treaty, the 
enlargement of the Community and the development of closer and deeper ties with numerous countries 
and in particular CEEC, CIS and Mediterranean countries. 
90. Effective external action in the field of maritime transport in pursuance of the Community's 
objectives (ref. Chapter III) should now be further developed so as to take advantage of the Community's 
changed position. In effect, the competitive position of Community shipping would be enhanced if, with 
regard to third countries and in international organisations, the EC were to take full advantage of its 
changed position and speak with one voice. 
91. Apart from the legal considerations (see next Section 2.a), the commercial advantages which can 
be derived from a common external policy in the maritime transport sector are considerable. The 
negotiating power of the Community representing the fifteen Member States is far greater than that of 
the individual Member States. The results obtained by the Commission so far, during discussions on 
maritime transport with the authorities of a number of countries, have proved that the Community, 
speaking with one voice on behalf of the Member States, can achieve more than individual Member 
States. 
92. Given the competence of the Community, confirmed in the recent Opinion No. 1/94 of the ECJ, 
to conclude agreements on maritime transport with third countries, the Community has a responsibility 
to formulate external maritime transport policy. All actions vis à vis third countries in the field of 
commercial maritime transport matters should therefore be subject to Community oversight in order to 
safeguard consistency and clarity in its external relations. In summary, it is in the first place the 
responsibility of the Community to assume the task of negotiations with third countries. 
93. This does not, however, mean that the Commission must immediately take up all the 
responsibilities that come with the Community's competence to conclude shipping agreements with third 
countries. The Commission intends at the present stage rather to concentrate on priority cases identified 
on the basis of the criteria considered in Section V.B.I.a. 
2. Evolution of the role of the EC and its powers in the external field 
a. Evolution of Community powers and scope of action in the field of external shipping 
relations 
94. The evolution of Community competence in the external field was set out by the Commission 
in the White Paper on "The development of the Common Transport Policy" presented in December 1992. 
95. Since then, the Court of Justice, in its Opinion Number 1/94, has pronounced itself on the long-
running dispute regarding external competence for trade in services and, in this context, for transport. 
As far as maritime transport is concerned, the principal conclusion was that, in areas of exclusive 
Community competence, the legal basis for any such action was Article 84.2 of the Treaty. It also set 
out a certain number of considerations regarding the delineation of the areas which fell under exclusive 
competence. 
96. Already, the Community had begun to exercise external competence in the shipping area based 
on Article 84.2 of the Treaty. The European Court of Justice held in Case 22/70 that as the Community 
develops common internal rules it also acquires authority over external negotiations which might affect 
these common rules (ERTA doctrine20). Later, Case 1/76 of the Court of Justice constituted an 
important step in the definition of the external powers of the Community, declaring that if the 
Community has an internal competence to achieve a specific objective, it implicitly disposes of the 
exclusive external competence on that subject as far as such an external exercise is necessary to achieve 
that objective21. The Court's Opinion (1/94) did not in any way detract from the rationale of these two 
judgements. Accordingly, the legislation adopted by the Council gives the Community exclusive 
competence, in accordance with the ERTA doctrine, in particular for agreements relating to the provision 
of maritime transport services on the basis of Regulation 4055/86. 
20 Commission v. Council, Case 22/70 [1971] ECR 263 
21 Case 1/76 (on the Agreement establishing a European laying-up fund for inland waterway vessels) 
[1976] „ 
o23 
97. However, not all issues addressed in agreements with a third country in the field of shipping can 
je considered as necessarily falling within the area referred to in the previous paragraph. Agreements on 
such issues may therefore still be concluded by individual Member States. Furthermore, even where the 
Community has an exclusive power, Member States can, in certain circumstances, be authorised by the 
Council to negotiate bilaterally. The Court of Justice in a number of judgements has set out the principles 
for such a procedure22. 
98. Given the arguments set out in Section V.A.I above, allied to the fact that a number of 
significant issues fall under the area of exclusive competence, there is however a strong case for the 
pursuit, at Community level, of agreements covering the entirety of international maritime relations, if 
necessary on the basis of shared competence between the Community and Member States. • Such an 
approach allows the demonstrably greater negotiating leverage of the Community to be used, while at the 
same time avoiding lengthy, and ultimately unproductive debate within Community institutions regarding 
the exact delineation of the Community's and Member States' respective competencies. * 
99. In view of the evolution of the Community's powers in the external field and its wider role in 
international economic relations, there is clearly a need for an increased scope of action by the 
Community and its Member States, acting as one, in the field of external shipping relations. The Court's 
Opinion confirmed that, where areas of shared competence are being addressed in international 
negotiations, there is an obligation on Member States to ensure close cooperation in the definition of 
positions. 
b. Issues relating to the exercise of EC powers 
1. Bilateral relations of Member States with third countries 
100. The Member States have over a long period developed a system of bilateral agreements with 
third countries regulating maritime transport relations. These agreements deal with a wide range of issues, 
including market access. 
Moreover, a number of the existing bilateral agreements concluded by Member States include provisions 
based on nationality which imply a different treatment of the nationals of the Member State involved than 
lhat accorded to nationals of other Member States. Such clauses, in particular clauses in the form of 
cargo-sharing arrangements, violate the principle of the freedom to provide services, as applied by 
Council Regulation No. 4055/86 in maritime transport between Member States and between Member 
States and third countries. All such provisions ought to have been appropriately adjusted or terminated 
in accordance with the Regulation, at the latest by the end of 1992. Nevertheless, there are still numerous 
agreements with such provisions in force, whose adjustment has not yet been achieved. The Commission 
has, as a result, opened procedures on the basis of Article, 169 of the Treaty, seeking to terminate the 
infringements to the Regulation." 
101. The conclusion of agreements between Member States and third countries negatively affecting 
the freedom to provide maritime transport services in the terms of Council Regulation No. 4055/86 is 
no longer allowed. Only in specified exceptional circumstances in liner trades may cargo sharing 
arrangements be permitted in accordance with a specified Community procedure. 
More generally, in accordance with the ERTA doctrine (see para. 96 above), the Member States no 
longer have the competence to conclude agreements relating to the provision o( maritime transport 
services. 
22 Citations of Donderwolke, Tezi, Bulk Oil 
23 Commission Report on the implementation of Council Regulation No. 4055/86, SEC(94) 1570 final 
5.10.1994., 
c2^ 
102. Bilateral agreements between Member States and third countries containing other provisions24 
falling within Community competence are a different subject. In addition to the question of competence, 
covered in the preceding section, there is the important question how best to attain the desired objectives. 
In comparison with each Member State the Community, acting as one, will be in a much better position 
to negotiate with trading partners than individual Member States. Not only because the Community as 
a whole is one of the most important trading blocs in the world but also because a consistent coordination 
of all interests involved will lead to a more coherent approach to third countries. 
103. In view of the large-number of cases in which a bilateral agreement is considered necessary by 
either a Member State or a third country, a Community approach is needed whereby cases should be 
identified which should be handled by the Community and others which could, for the time being, be 
left to the individual Member States, acting within a Community procedure. 
The questions relating to Community agreements with third countries and possible transitional 
arrangements for bilateral agreements of the Member States are of particular importance for the 
development of the EC external relations in the field of maritime transport; they are dealt with in detail 
in Section B.l.a.l and Chapter VI below. 
2. Representation in international organisations dealing with economic and commercial 
aspects of shipping 2S 
104. EC action to date in international organizations, as well as difficulties arising in respect of EC 
participation and representation, have been the subject of Section IV.C above. Consideration of the 
question of participation and representation of the Community and the Member States in international 
organizations dealing with economic and commercial aspects of shipping has acquired considerable 
importance, in particular, because of the relatively recent developments in UNCTAD (UNCTAD VIII 
and the Cartagena Commitment, January 1992, and onwards). As far as representation in the WTO is 
concerned, there have so far been few practical implications resulting from the need to develop a code 
of conduct for defending Community interests, and maritime issues have been handled relatively 
satisfactorily. The difficulties that have arisen in discussions on shipping in the OECD relate more to 
formal aspects concerning the general status of the EC in the organization rather than with issues of 
substance in respect of shipping; these difficulties, as a result, are not addressed in this Communication. 
105. The new orientation and organisation of work of UNCTAD require new working arrangements 
on the part of the Community. Work on shipping is now within the scope of wider work on services 
instead of being dealt in a specific Committee on Shipping, as had been the case previously. 
In addition, there is no longer a spokesman for the OECD countries as a group nor is there coordination 
of positions of these countries. 
106. In accordance with the provisions of the Treaty, the Community has to speak with one voice in 
all cases in which Community competence or common interest is involved.26 The Group system that 
existed until recently in UNCTAD, whereby each Group's position was presented by its spokesman, led 
to the full implications of the Treaty provisions being avoided. The new circumstances impose new 
arrangements, in line with the requirements of the Treaty. 
On types of provisions contained in bilateral agreements see Section Vl.C.l. 
As already indicated (see Executive Summary, footnote 1), this Communication does not address relations 
with the IMO, concerning safety and technical aspects of shipping. More particularly, representation in 
the IMO has been the subject of a specific arrangement. 
See also European Court Opinion 2/91 given on 19.03.1993. confirmed by Opinion 1/94. 
In the past, the common position of the OECD countries was presented by the Group B spokesman; as 
a result, the question of representation of the EC outside Group B did not arise except on those 
infrequent occasions where the EC had a particular concern, not generally shared by the other OECD 
countries. 
This is no longer the case. In the circumstances it is all the more important that the Community speaks 
with one voice instead of Member States trying to present their views individually. 
107. In case of negotiation on subjects of importance leading to a legally binding document, the 
Commission acts on the basis of a Council Decision including directives for the negotiation; such has 
been the case, for example, at the Liner Code Review Conference. In other cases the course of action 
may be agreed at the level of the Council Working Group or in Coreper and, as appropriate, at 
coordination meetings on the spot, and be presented by the Commission or, for matters within the 
competence of the Member States, by the Presidency. In such cases, individual Member States' 
delegations may also intervene to provide additional information or support the common position with 
additional arguments, however, always within the commonly agreed line. 
B. Components and priorities for Community action 
108. The completion of the single market and the establishment of the EEA, the recent changes in 
Central and Eastern Europe and the new association or partnership with the countries of the region, 
continuing growth in the international mobility of goods and people, and the increasing interdependence 
in world trade and services, call for the further development of the external action of the Community 
in the field of shipping. 
109. Taking into account the EC objectives and means of action in the external field with regard to 
maritime transport, considered in Chapter III, the main components of Community action in respect of 
the further development of its external action in this field should be: 
the further development of relations with, and related action vis-à-vis third countries, by means 
of 
* Community agreements with third countries and procedures leading to the progressive 
transformation of existing bilateral regimes, as well as forms of dialogue with third 
countries to promote a common approach to shipping policy issues; 
* action to address problems arising from restrictive or discriminatory measures of third 
countries; 
* action to secure fair competition on a commercial basis; 
* cooperative actions and technical assistance to third countries; 
the development of cooperative action in the field of shipping as a component of a global 
approach to the transport services and systems of Europe, including those of Central and Eastern 
Europe, so that they can develop in as integrated a way as possible; and 
the reinforcement of the role of the Community within relevant international organizations to 
reflect the full development of the Community shipping policy; and the negotiation by the 
Community within such organisations, in accordance with Community procedures, with a view 
in particular to consolidating positive developments in respect of shipping policy and obtaining 
further roll-back of existing restrictions. 
110. These components of Community action are the subject of Sections V.B.I to 3 below. The scope 
of action required for the full implementation of a comprehensive policy on relations with non-member 
countries makes it necessary also to consider the relative priorities of particular actions to be pursued. 
This raises the need for appropriate arrangements in respect of existing bilateral agreements of Member 
9^ 
States with third countries. 
/. Relations with third countries or groups of countries 
111. The components of Community external action as regards relations with non-member countries, 
referred to in para. 109, are considered below. 
The development of these relations would greatly benefit from efficient exchange of information and 
timely consultation with the Member States concerning their relations with third countries and related 
problems. The existing consultation procedure set up by Council Decision 77/587/EEC does not well 
fulfil present needs. New, practical and effective rules and procedures are therefore required in order to 
ensure adequate, regular and timely exchange of information and views on issues relating to third 
countries. 
The proposed Council Decision, presented in Annex II, aims at adapting to this effect the consultation 
procedure as regards developments concerning shipping relations with third countries. 
a. Seek agreement with third countries on policy principles and common approach to 
shipping policy issues 
112. The Community has an interest in other countries following similar policy principles so that 
problems of the kinds described in Section II.D do not arise and, if they do arise, to address them 
through consultation rather than by recourse to defensive measures. It should therefore, as a matter of 
priority, seek agreement with third countries on policy principles and a common approach to shipping 
policy issues. 
This can take the form of (i) agreements with third countries on policy principles and cooperation, as 
appropriate, (ii) consultations and (iii) informal discussions in, for example, policy workshops that can 
promote a common understanding concerning shipping policy principles. 
1. Agreements with third countries on shipping policy principles 
113. With regard to agreements with non-member countries, and taking into account the considerations 
in Section A of this Chapter, it is necessary also to consider the question of the bilateral agreements of 
the Member States. This question is dealt with in Chapter VI, whereas this section considers only EC 
agreements with non-member countries. 
Provisions on shipping in horizontal agreements between the EC and third countries 
114. In the framework of agreements between the EC and third countries, the Commission considers 
it important to insert appropriate provisions when new or renewed agreements are negotiated. The timing 
of such negotiations is determined by considerations beyond transport. Thus the question of setting 
priorities as among third countries does not arise as a sectoral question; however, the nature and 
specificity of appropriate provisions needs to be considered in each case, taking into account that 
Community agreements with third countries are of various types, ranging from traditional co-operation 
agreements to agreements of economic integration. 
115. In the first place, appropriate provisions concerning in particular the cross-border provision of 
services and establishment, similar to those negotiated so far with CEEC or CIS countries, should be 
included in Association or Partnership agreements with other CEEC, CIS and Mediterranean countries. 
Negotiations with several Mediterranean countries already have been or are to be engaged in the near 
future: 
implementation of agreements with Egypt, Israel, Jordan, Morocco and Tunisia; 
«23-
forthcoming negotiations, as soon as the situation allows, with Algeria; 
* in accordance with the concept of the recent Communication on Mediterranean 
policy, agreements should be foreseen to gradually cover all-non-member 
countries of the area. 
116. In the cases of negotiation of new Trade and Cooperation agreements the Community should 
systematically take advantage of the opportunity to insert provisions relating to shipping. 
A cooperation provision, as in several agreements concluded so far, allows the development of certain 
activities that assist the third country concerned and which may improve the conditions of operation of 
the shipping activity to the benefit of all involved. They may also allow, indirectly, improved market 
access through the promotion of market orientated policies. 
Whenever possible, it is desirable to go beyond a simple cooperation clause and include provisions 
reflecting agreement on key, substantive issues of shipping policy. 
Sectoral agreements and understandings between the EC and third countries on maritime transport 
117. As far as sectoral agreements between the EC and third countries on maritime transport are 
concerned, which would cover shipping generally (rather than addressing specific problems covered in 
para. 128 below), the need for such agreements would generally depend on problems that may exist or 
arise and that may be brought to the attention of the Commission by Member States or otherwise. This 
would be the case, for instance, if similar provisions were of interest to several Member States or if a 
Community agreement were necessary to ensure free access and/or equal treatment of Community 
shipowners by the third country concerned. 
118. The Commission considers at this stage that shipping agreements with certain maritime countries 
should be envisaged in order to consolidate positive policy developments in such countries or improve 
the conditions of market access of Community shipowners. Among countries other than those which 
would be adequately covered through the Association or Partnership and Cooperation Agreements, such 
as CEEC and CIS, the EC should seek agreements with significant maritime countries such as Brazil, 
among the Latin American countries, and China, Taiwan, India, and a number of ASEAN countries, 
among the maritime countries of Asia. 
As a first step and based on contacts held so far, the Commission has very recently submitted 
recommendations to the Council to authorize it to negotiate agreements on maritime transport with India 
and China. 
119. There may be instances where a formal agreement with a particular country appears, for the time 
being, not feasible; a less formal, and not legally binding, understanding may in such instances be 
feasible and appropriate. This will depend on particular circumstances, to be considered by the 
Commission in making appropriate proposals. 
120. The case of ad hoc issues that may need to be addressed, and which may result in agreements 
or less formal understandings on specific issues, is covered in Section B.l.b.l below. 
Implementation of agreements and development of relations 
121. Finally, the relations with the countries with which the Community has concluded an agreement 
containing provisions on maritime transport, will need to be developed. The implementation of concluded 
agreements will require attention, in particular as regards agreements with substantive maritime provisions 
or foreseeing relatively extensive cooperative programs in specific fields, including transport, such as the 
Europe and the Partnership and Cooperation agreements. Among the tasks foreseen, the harmonisation 
of legislation of CEEC to that of the Community should also be noted (see para. 150 below). 
2. Consultations with third countries 
122. In several instances, cooperation agreements with third countries offer the possibility to consult, 
as appropriate or necessary. The need to establish regular consultations on shipping would therefore not 
appear to be the rule. 
123. As far as regular consultations on shipping are concerned, as distinct from consultations in 
particular cases on specific issues that may arise, the Commission intends, therefore, to continue to be 
selective, devoting its attention to countries with which it has significant maritime trade relations and 
whose maritime transport policies directly affect the Community's interests. 
124. The Commission intends therefore in the first place to continue the regular consultations engaged 
so far (see Section IV.B.2 above); and considers it desirable to also engage or intensify such consultations 
with countries such as the USA and Russia. 
3. Policy workshops 
125. The experience with the limited number of shipping policy workshops organised so far leads the 
Commission to consider that such events can positively contribute to promote the objectives of 
Community shipping policy. However, these events require allocation of considerable human and 
budgetary resources; consequently, they can be organised only very selectively in cases of considerable 
mutual interest where they can make an impact. 
126. The case of neighbouring countries - CEEC, CIS, Mediterranean - will need particular attention, 
within the framework of established EU policies and relevant agreements. This includes the continuation 
of action launched at the Constanza workshop relating to the Black Sea (September 1994); and similar 
action in respect of the Baltic Sea region and the Mediterranean. 
b. Address problems arising from measures of third countries 
1. Elimination of restrictive or discriminatory measures 
127. The Community needs in several instances to address either existing restrictive or discriminatory 
measures, or new measures introduced by one or another country: 
Existing measures 
In addition to cases that have already been identified and have to be further pursued (such as 
West and Central Africa, Kenya, South Korea, China), other cases may be taken up as they come 
to the attention of the Commission, by being raised through specific requests by Member States 
or Community shipowners or shippers or otherwise. 
The approach to be followed would be problem-oriented so as to focus on measures of third 
countries of significance for the Community shipping industry. 
New measures 
In addition to existing restrictive or discriminatory measures, new ones are announced from time 
to time by one or another third country. The Commission will be attentive to any cases that will 
be brought to its notice by Member States or by the industry or that the Commission itself may 
identify. 
It is important as a matter of priority to avoid, as far as possible, the introduction and enforcement 
of such measures instead of trying to reverse them once enforced. 
=29 
128. Démarches, followed as appropriate by consultations, have been the course of action regularly, 
and often successfully, pursued in such cases. In that respect, actions of all kind should:to the extent 
possible be co-ordinated within the Transport Working Group of the Council. 
129. Following exploratory discussions with the country concerned, and if negotiations for 
agreement appeared necessary, the Commission would request a Council mandate to that end. an 
130. In situations described above relating either to existing or to new measures, action based on 
Regulation no. 4058/86, as it may be modified (see para. 132 below), could become a priority to be 
identified, subject to international obligations that may be subscribed by the Community under the 
GATS. 
2. Review and possible adaptation of existing EC legislation: Council Regulation No. 
4058/86 
131. Coordinated action using the procedures of Council Regulation No. 4058/86 has so far been 
undertaken and pursued only in the case of restrictive measures imposed by the West and Central African 
countries. As the Commission stated in its Report on the implementation of the maritime Regulations 
adopted in 1986, which it submitted on 1.08.1990, it has been pursuing its action in that case on the basis 
of the relevant Council Regulations, namely Nos. 4058/86, 4055/86 and 4056/8627. 
132. The Regulation has also served as a deterrent against restrictive measures by third countries; 
however, the question has been raised as to the possibility of its effective use in a number of 
circumstances. A review is therefore being made of the Regulation with a view possibly to adapting it 
to ensure a more efficient response to problems arising from restrictions by third countries, or their 
agents, on market access. Consideration may be given to widening of the scope of the third country 
measures covered and the eventual measures that may be adopted by the Community. Account has to be 
taken in this respect of the implications of developments in the negotiations on maritime transport in the 
framework of the World Trade Organisation. 
c. Action to secure fair competition on a commercial basis 
133. As mentioned in para. 39 above, operating conditions vary considerably among countries and 
shipping registers to the extent that competition can be seriously distorted by advantages deriving from 
Government measures or support. In addressing this problem in its Communication entitled "Progress 
towards a common transport policy - Maritime transport"28 the Commission identified a number of such 
measures or factors: 
State ownership or control: this results in several instances in significant subsidisation of 
operations; 
preferential access to an international market to which other shipowners do not have access; 
operation under a flag of a country which has not ratified or does not correctly implement the 
main IMO and ILO conventions. 
134. Community action to address restrictions on market access and recourse, in spécifie cases, to 
Council Regulation No. 4057/86 to counter unfair pricing practices by foreign shipowners, are means that 
may be used to secure conditions of fair competition on a commercial basis. The Commission considers 
unfair competition should also be addressed by ensuring, insofar as it is within the Community 
27 SEC(90) 1594 final, para. 90 
28 COM(85)90 final of 19 March 1985. 
3o 
jurisdiction, and by otherwise promoting the adoption, observance and enforcement of appropriate 
international standards relating to the'safety of ships and crew and the protection of the marine 
environment. 
1. Countering unfair pricing practices: review and possible adaptation of Council 
Regulation No. 4057/86 
135. The Regulation has proved a valuable instrument for adopting a specific, targeted ad hoc 
measure; the mere possibility of its use has allowed both the Commission to use its contacts so as to 
preempt the need to have recourse to it and the industry to secure healthier competitive conditions in at 
least a number of instances known to the Commission. 
136. However, the Regulation has not been designed to address the more general problem of unfair 
competition. A review of the question is underway to consider the adaptation of the Regulation as a 
means for addressing the problem. 
2. Adoption, compliance and enforcement of international safety rules and standards 
through stricter PSC and possibly action vis à vis flag states 
137. Neglect by Governments of enforcement, and by shipowners of observance, of internationally 
applicable rules and standards can provide a significant competitive edge to shipowners using vessels not 
complying with them. 
Thus, besides the paramount importance of observing such rules and standards for reasons of safety of 
ships and crew and for environmental protection, this is also of particular importance for the elimination 
of unfair competition from ships not observing such standards. 
138. Measures in this regard comprise stricter Port State Control and possibly action vis-à-vis flag 
States not adequately enforcing internationally applicable rules and standards concerning the safety of 
vessels and crew and the protection of the marine environment. 
139. This issue relates to the Communication of the Commission of 1993 on "A Common Policy for 
Safe Seas"29 and points to the possibility of taking action in the external field in support of the objectives 
relating to safety and environmental protection. The Commission already submitted in March 1994 a 
proposal for a Council Directive "concerning the enforcement, in respect of shipping using Community 
ports and sailing in the waters under the jurisdiction of the Member States, of international standards for 
ship safety, pollution prevention and shipboard living and working conditions"'0; the Directive was 
adopted by the Council on 19.06.199531 and implemented as from 1.07.1996. 
140. This question is closely linked with the conditions of registration in open registers as well as the 
failure of the flag states concerned to adopt and enforce the relevant rules and standards. 
Flagging out from national ("genuine") registers has assumed unprecedented proportions during recent 
years, so that by now close to half the world tonnage is under open registers. 
There is increasing concern about this trend, and various responses by individual countries, with varying 
degree of success. The Commission considers that the Community has a major stake in this issue and an 
appropriate response to the challenge has to be considered. It would appear that, to the extent there were 
29 COM(93) 66 of 24.02.1993 
30 COM(94) 73 final, 16.03.1994 
31 Council-Directive 95/21/EC of 19.06.1995, OJ L 157 of 7.07.95 
31 
a will to face the problem, this would necessitate a concerted approach by the major maritime countries, 
as well as appropriate intervention in the relevant international fora and selected major open registry 
countries. --=-• — 
The Commission considers the political stance adopted recently by the developed countries as a whole 
within the Maritime Transport Committee of the OECD32 as a step in the right direction. 
141. In its relations with third countries the Community should also exercise its influence to : 
promote Port State Control in other regions through cooperation with interested third 
countries and groups of countries, as well as with IMO, as well as technical assistance 
where appropriate; 
promote the adoption of appropriate international standards through consultation and 
assistance to third countries. 
d. Cooperative actions and technical assistance to third countries 
142. The Commission considers as a potentially effective means of pursuing the Community's 
maritime transport interests assistance to third countries which may be receptive to a reorientation of their 
maritime policies in the direction of the shipping policies advocated by the Community. This can also 
be effective to remedy problems of common concern or interest and as an important means to improve 
the functioning of the trade and help liberalisation by providing better conditions of operation for the EC 
lines. Simplification of customs and other procedures and documentation, improvement of port and 
hinterland infrastructure are significant examples in this respect. Technical assistance, training of officials 
concerned with shipping policy issues, expert or financial support of activities promoting efficient 
commercial operations, including the use of new technologies, may also prove fruitful with respect to the 
attitude taken with regard to market orientated maritime transport and related activities. The exchange of 
information through seminars, workshops or courses or in specific instances, the exchange of senior 
officials are appropriate means to raise awareness, discuss issues, and develop appropriate action 
programs. 
143. Such cooperative action serves the dual objective of development policy and shipping policy, by 
helping to achieve free access to the trade. Therefore the Commission intends to pursue such activities 
within the framework of existing programs, within the provisions of agreements with third countries, as 
well as within the possibilities of available resources, in particular resources available in connection with 
agreements with the countries concerned, taking into account the importance of issues and interest of 
partners. 
2. Action aiming at the integration of the transport services and systems in Europe 
144. As a follow-up to the first Pan-European Transport Conference in Prague of 1991 and in 
preparation for the second such conference held in Crete in March 1994, a Regional Conference for the 
Black Sea was held at ministerial level late in 1993. Conferences for the Baltic Sea and the 
Mediterranean area were also held following the Crete Conference. These regional conferences aimed 
at establishing the basis for a coherent transport network and transport system for the whole of Europe 
and they provided opportunities for exchanges of views and coordination. 
145. The Black Sea Conference (Ministerial Conference on transport challenges in South-Eastern 
Europe) which was held in Constanza, Romania, in October 1993 decided to create a Working Group 
"Statement by OECD Member Countries on Enforcement of International Rules and Standards' 
SG/PRESS(94)34 of 24.05.94 
3a. 
for Waterborne Transport in order to discuss pragmatic solutions for problems in that sector. That 
Working Group started its work with a meeting in Constanza in September 1994, following a first 
preparatory workshop organized in April 1994 for high-level decisicn-makers from the Black Sea region, 
where the European Community policy and the functioning of port and maritime industries in a free 
market environment were presented. 
146. The Commission also intends to launch a comprehensive study on port development in the Black 
Sea area including the assessment on the shipping and port policies of the countries concerned. The study 
would be carried out with financial support from the Community's technical assistance programs. A 
second Black Sea transport conference at ministerial level is envisaged for mid-1997. 
147. Similar initiatives have been launched for the Mediterranean and Baltic Sea areas. The first 
Regional Conference for the Development of Maritime Transport in the Mediterranean was held in 
Barcelona on 27-28 April 1995. A Working Conference on Maritime Transport in the Baltic Sea was 
held on 22-23 May 1995 in Copenhagen upon invitation from the Government of Denmark and the 
European Commission and under the auspices of the Council of the Baltic Sea States. Each Conference 
agreed to create a Waterborne Transport Working Group to prepare and, if possible, adopt a multi-annual 
work program for the respective region. The Mediterranean Waterborne Transport Group met in 
September 1995 and agreed on such a program; final agreement on a program for the Baltic Group is 
pending. 
148. Within the framework of the Pan-European Transport Conference and the regional conferences 
as above, the Commission considers it appropriate to pursue cooperative action programs, focusing in 
particular on actions relating to: 
short-sea shipping; 
inclusion of the ports in the Trans-European Networks; and 
maritime safety, including Port State Control. 
149. In parallel, and in accordance with the provisions on co-operation of the agreements concluded 
(or to be concluded) with the CEEC, CIS and Mediterranean countries, the Commission intends to 
privilege actions and projects aiming at: 
the restructuring and modernisation of transport; 
the improvement of the movement of passengers and goods and the access to the transport 
market by removing administrative, technical and other obstacles; 
the facilitation and development of multimodal transport. 
150. It is further noted that the Europe Agreements provide for progressive harmonisation of transport 
legislation of the CEEC concerned in the perspective of these countries to accede. The Community is 
according particular attention to this process. The strategy for preparing the associated CEEC for 
accession to the European Union, decided by the European Council in Essen in December 1994, views 
the alignment of these countries' legislation as necessary for them to be ready to participate in the 
Internal Market on accession; the White Paper on the Internal Market33 acquis was the first step in 
implementing the Strategy in this area. 
3. International Organizations & Multilateral Conventions 
a. Adaptation of consultation procedure 
151. The considerations in Section V.A.2.b.2 (paras. 104-107) underline the need to adopt practical 
and effective rules to ensure the pursuance of Community objectives in discussions or negotiations in 
international organizations. 
COM(95) 163 final 
33 
152. The consultation procedure adopted in 1977 J4 does not fulfil present needs. The aim, in its Art. 
2, "to consider jointly whether Member States' action within the international organizations concerned 
should be coordinated" has for some time been overtaken by events; and particularly, in view of the new 
situation in UNCTAD, as well as the Court's recent Opinion, this old concept is now obsolete. 
153. A new procedure is therefore now needed, which would provide for the establishment of a 
common position at appropriate level, depending on the subject, its importance and circumstances, and 
for the presentation of such position. 
The proposed Council Decision presented in Annex II aims, i.a., at the adoption of an adequate procedure 
as regards action relating to shipping matters in international organisations. 
b. Tasks ahead for the short- and medium-term 
154. The outcome of important negotiations, at present ongoing or forthcoming, in multilateral fora 
could have a significant effect on world shipping; the EC has a particular stake in this and must act so 
as to safeguard and further its interests. 
155. The negotiation in the field of shipping in the WTO, which is to be resumed in the year 2000, 
is the most significant in terms of its potential impact on world shipping. In line with its shipping policy, 
the Community has been actively seeking commitments from the widest number of countries, including 
all countries with significant shipping activity, for effective standstill on restrictions in the provision of 
shipping services and elimination of existing restrictions within a fixed time scale. The satisfactory 
conclusion of such a multilateral agreement remains a fundamental objective for the Community. 
156. The second Review Conference on the UN Convention on a Code of Conduct for Liner 
Conferences, which was to be convened in 1997, has been postponed. The relevance of key provisions 
of the Code seems to be increasingly open to question in view, in particular, of the declining importance 
of conferences and the reorientation of shipping policies in quite a number of countries; and the 
Convention may be significantly affected by the outcome of the NGMTS negotiations when they resume. 
Thus a Review Conference could pose important policy questions. 
When the Conference is convened, the Commission will propose to the Council the appropriate 
Community position and the participation of the Community at the Conference, and will seek directives 
for the participation and negotiation on behalf of the Community. 
157. In addition to the above negotiations, attention has also to be given to the ongoing consultations 
within the MTC of the OECD as well as to the joint consultations on shipping between the OECD 
countries and other regional groups, which aim at promoting a market orientated shipping policy and 
have become a regular and increasing activity of the MTC over the last few years. 
34 Council Decision 77/587/EEC, OJ L 239, 17.9.1977 
2& 
VI. ARRANGEMENTS FOR PROGRESSIVE TRANSFORMATION OF BILATERAL 
REGIMES 
A. The main principles 
158. Among the components of Community action should be, as stated in Section V.B (para. 109), 
the progressive transformation of existing bilateral regimes by means of a framework of Community 
agreements and procedures. 
159. There are cases where one or another Member State may consider necessary to conclude a 
bilateral agreement with a third country, which would be in conformity with EC law and in particular 
Council Regulation No. 4055/86. Given the exclusive competence of the Community to conclude 
agreements with third countries relating to the provision of maritime transport services, it is clear that 
it has a responsibility for the formulation of the external maritime transport policy. Thus action vis à vis 
third countries in the field of commercial maritime transport matters should be under Community 
oversight in order to safeguard consistency and clarity in the external relations of the Community. 
160. On the other hand the Commission does not consider it at present either necessary or feasible to 
take up immediately all the responsibilities that come with the Community's competence to conclude 
agreements with third countries in all such cases. The Commission intends at the present stage rather 
to concentrate on priority cases identified on the basis of the criteria considered in Chapter V. 
161. An appropriate approach would therefore be: 
(i) Member States should inform the Commission adequately of the extension of agreements in 
force and of their intention to negotiate new agreements or modifications to existing ones. Such 
information is the essential prerequisite for effective machinery beginning with consultations between the 
Commission and the Member States, to ensure that Community competence is respected and the most 
appropriate solutions found for the different types of problem that will arise. Existing instruments, in 
particular Council Decision 77/587 are not adequate in this regard. It is accordingly important that a 
specific procedure be adopted and this is the objective of the provisions in this regard included in the 
proposal presented in Annex II. 
(ii) In those cases in which the Community should negotiate an agreement, the close involvement 
of the Member States in the process should be ensured (see para. 162 below). 
(iii) As regards matters falling within the powers of the Community, a Member State would need 
to be authorized, according to a Community procedure, to negotiate a bilateral agreement. A coordination 
procedure will be essential and conditions might also need to be placed on the scope of the negotiations. 
These might relate for example to the content of the agreement to be negotiated, in particular to take 
account of the interests of other Member States and to avoid any incompatibility with Community law. 
B. Agreements between the Community and third countries 
162. Agreements between the Community and third countries would be concluded on the basis of the 
normal Community procedures: 
recommendation for an authorization to negotiate an agreement; 
decision by the-Council authorising the Commission to negotiate; 
negotiations by the Commission, in accordance with normal procedures; 
conclusion of the agreement by the Council. 
3^ 
An Advisory Committee of Member States' representatives would be established to advise the 
Commission throughout the whole process of the negotiations. 
C. Bilateral agreements between Member States and third countries 
163. Given the Commission's intention to focus for the time being on priority relationships, it is 
necessary for the time being that the Member States, so as not to hinder the normal progress and 
development of their external commercial relations, be allowed to continue negotiating and concluding 
bilateral agreements with third countries provided that in every case the common policy in maritime 
transport is respected and that proper consultation takes place at Community level. 
164. Council Decision 69/494/EEC35 on the progressive standardisation of agreements concerning 
commercial relations between Member States and third countries and on the negotiation of Community 
agreements, has established a notification and consultation procedure at Community level. The Decision 
also established a procedure for the negotiation of agreements with third countries by the Community. 
Title II of this Decision provides the procedure to be followed in case a Member State or the 
Commission considers that a bilateral treaty, agreement or arrangement concerning commercial relations 
should be negotiated by the Commission on behalf of the Community. Title I and III deal with the 
extension of existing agreements and they provide transitional provisions according to which the Council 
may authorise bilateral negotiations between Member States and certain third countries, respectively. 
165. In order for the Community to develop a comprehensive external maritime transport policy, it 
is necessary to establish similar rules concerning the extension of existing maritime transport agreements 
and the authorisation for Member States to conduct bilateral negotiations. These rules should be in 
accordance with the Treaty and should, more specifically, take into account Community legislation in 
the field of maritime transport. To this end, the Commission proposes the adoption of a Council 
Decision which would include, i.a., a consultation and authorization procedure for agreements concerning 
maritime transport relations between Member States and third countries (Annex II). 
/. Types of provisions in bilateral agreements between Member States and third countries 
166. The various provisions appearing in existing bilateral agreements relate to the matters indicated 
below, this list neither being exhaustive nor implying that all agreements contain provisions relating to 
all such matters: 
principles concerning access to the shipping market; 
reference to the application of the Liner Code; 
multimodal transport operations; 
landside operations; 
establishment of commercial presence; 
auxiliary services; 
treatment of vessels in ports; 
freight earnings remittances; 
definition of beneficiaries (companies; flag of vessels); 
recognition of seafarers' documents and treatment; 
assistance in case of accident; 
management of the agreement (e.g. Joint Committee, frequency of meetings, etc.) 
167. Such provisions may, for practical purposes, be usefully distinguished, as far as their subjects 
35 OJ L 326 of 29.12.69 
3^ 
are concerned, into those relating to commercial aspects of transport and those dealing only with what 
may be called technical matters; and those in the first category either concern directly or affect the 
provision of shipping services: 
(i) provisions relating to commercial aspects of transport are those concerning: access to the market; 
multimodal transport; landside operations; establishment of commercial presence; auxiliary 
services; treatment of vessels in ports; and transactions and payments related to the provision 
of the shipping services; 
(ii) provisions relating what may be called technical matters concern: the mutual recognition of 
vessel documents; identity documents for crew; entry or leave of crew members from the 
country concerned; permission for delivery of crew members to hospital; national jurisdiction 
in matters occurring on board; necessary assistance in case of emergency of vessel. 
2. Agreements relating to the provision of maritime transport services 
168. In conformity with Regulation no. 4055/86, no new agreements by Member States affecting the 
freedom to provide services are allowed. For specified exceptional circumstances, the Regulation foresees 
a special procedure. 
169. Council Regulation (EEC) No. 4055/86 applying the principle of freedom to provide services to 
maritime transport between Member States and between Member States and third countries, and in 
particular Article 3 of the Regulation, requires that Member States phase out or adjust cargo-sharing 
arrangements which are contained in existing bilateral agreements with third countries. Obviously, this 
obligation demands action from the Member States which had cargo-sharing arrangements with third 
countries, concluded before 1 January 1987, the date on which Regulation No. 4055/86 entered into 
force. For such agreements, the provisions of Articles 4 of the Regulation can be understood to include 
an authorization for Member States to conduct the negotiations necessary to adjust the cargo-sharing 
arrangements. 
170. Where agreements which were only ratified on or after 1 January 1987, or signed or negotiated 
after this date, fall under the competence of the Community, Member States may continue to deal with 
these agreements, on the condition that the Member States' actions take place in consultation with the 
Commission. 
171. There could be cases where Member States may desire to include in an agreement to be 
negotiated with a third country provisions relating to the provision of maritime transport services and 
which would not raise questions of conformity with Community law, and in particular with Regulation 
No. 4055/86. 
It would be acceptable that, for the time being, the Member State concerned negotiate an agreement 
containing such provisions, if it is not considered preferable, in view of the Community interest, to have 
a Community agreement with the third country concerned (see para. 103 above). The maritime provisions 
included in the Europe and Partnership and Cooperation agreements with third countries negotiated so far 
may serve at this stage as a standard, as to appropriate and acceptable provisions on the subjects they 
cover, in comparable circumstances. 
172. A negotiation by a Member State with a third country would, however, be subject to a procedure 
established in a Council Decision. The envisaged arrangements for bilateral agreements, including such 
a procedure, are set out in the proposal for a Council Decision in Annex III. Its main features are the 
following: 
it authorizes the Member States to extend the validity of existing bilateral agreements insofar as 
they are in conformity with Community law and in particular Regulation No. 4055/86; 
39-
it provides for the possibility that a Member State may be authorized to conclude an agreement 
with a third country regarding the provision of maritime services, without prejudice to Council 
Regulation No. 4055/86: 
such authorization could be granted following notification by a Member State of its desire 
to conclude such an agreement, setting out the need for the agreement, its objectives and 
a draft of the agreement proposed; 
the Member State concerned would be authorized to start negotiations if no question was 
raised by the Commission or by any other Member State within a specified period 
following receipt of the request; 
otherwise, authorization could be given by the Commission, following consultations, if 
appropriate; 
it provides, if considered appropriate by the Commission, for conditions for the negotiation of 
such an agreement by the Member State; 
it provides for information to be submitted to the Commission at the end of the negotiation 
process and for consultation with the Commission before signing the agreement; and 
it provides for the possibility that the Council decides that a Community agreement is more 
appropriate and authorises the Commission to this effect. 
it provides for review of the procedure, on the basis of a report by the Commission, before 31 
December 2000. 
*5. Agreements containing only provisions which do not relate to the provision of mari­
time transport services 
173. Member States have the possibility, as long as Community legislation has not been proposed or 
adopted on such matters, to negotiate agreements containing only provisions which do not relate to the 
provision of maritime transport services, of which the Commission should be adequately informed. 
174. Therefore, agreements which do not contain clauses relating to the provision of maritime 
transport services, are subject to the general rules which apply to the external policy of the Community. 
According to Community law Member States may negotiate and conclude such agreements as long as 
Community legislation has not been proposed or adopted. 
175. However, in order to permit the Community to have the overall picture of the agreements 
concluded, it is necessary that the Member States inform the Commission on any such agreements they 
intend to negotiate. 
3? 
ANNEX I 
TABLE: Scope of external action and specific actions and proposals foreseen 
Component Scope of action Specific actions/proposals foreseen 
1.1 General agreements Association or Partnership agreements: Negotiations engaged or foreseen: 
Negotiation of provisions concerning in particular the cross- - conclusion of current negotiations with Egypt, Jordan and 
border provision of shipping services and establishment Lebanon. 
(commercial presence) - negotiations foreseen with Algeria; 
- negotiations with Mediterranean countries on shipping as 
Trade and Cooperation agreements: foreseen in the present agreements 
Negotiation of provisions concerning shipping, as 
appropriate in each case 
1.2 Sectoral agreements and under- Seek agreements with significant maritime countries such as Recommendations to Council for negotiation of agreements 
standings on maritime transport Brazil, among the Latin American countries, and China, with India and China 
Taiwan, India, and a number of ASEAN countries, among the 
maritime countries of Asia. 
In some instances a less formal understanding may be 
appropriate. 
1.3 Implementation of agreements Implementation of concluded agreements with substantive Regular activity 
and development of relations maritime provisions or foreseeing cooperative programs in 
maritime transport 
Harmonisation of legislation of CEEC to that of the Follow up to White Paper 
Community 
1.4 Consultations with third Regular consultations with certain countries with which EC - continue the regular consultations engaged so far (Japan, 
countries has significant maritime trade relations and whose maritime Korea, Norway, Switzerland, CSG); 
transport policies directly affect EC interests. - engage or intensify consultations with countries such as the 
USA, Russia, China and India. 
Consultations as necessary with other countries in the 
framework of cooperation agreements. 
1.5 Policy workshops To be organised in cases of considerable mutual interest where Follow up of action launched at the Workshops relating to: 
they can make an impact. - the Black Sea, the Baltic Sea, and the Mediterranean 
- the ASEAN countries 
39 
0 I I 
1.6 Address problems arising from Démarches, followed as appropriate by consultations - Cases that have already been identified and have to be 
existing or new measures of further pursued (such as West and Central Africa, Kenya, 
third countries South Korea, China) 
- other cases raised by Member States or Community 
shipowners or shippers.* 
'Recourse, in specific cases, to Regulation no. 4058/86 
Review of Regulation No. 4058/86 Eventually proposal to adapt Regulation No. 4058/86 
1.7 Action to secure fair competition Recourse, in specific cases, to Regulation No. 4057/86 
on a commercial basis 
Review of Regulation No. 4057/86 Eventually proposal to adapt Regulation No. 4057/86 
Adoption, compliance and enforcement of international safety Stricter Port State Control; action vis-à-vis flag States not 
rules and standards adequately enforcing internationally applicable rules and ' 
standards 
Supportive action in the external field : 
promote Port State Control in other regions through 
cooperation with interested third countries and groups of 
countries, as well as with IMO, as well as technical 
assistance where appropriate; 
promote the adoption of appropriate international standards 
through consultation and assistance to third countries. 
Eventually concerted approach by the major maritime 
countries, as well as appropriate intervention v.àv. the relevant 
international fora and selected major open registry countries. 
1.8 Cooperative actions and technical Technical assistance, training of officials concerned with Pursue such activities within the framework of existing 
assistance to third countries shipping policy issues, expert or financial support of activities programs, within the provisions of agreements with-third 
promoting efficient commercial operations, incl. the use of new countries,'as well as within the possibilities of available 
technologies. resources 
Exchange of information through seminars, workshops or 
courses or exchange of senior officials. 
^o 
-^ II. Action aiming at the integration Follow-up to the Pan-European Transport Conferences and the Pursue cooperative action programs, focusing in particular on 
of the transport services and regional Ministerial Conferences for the Black Sea, Baltic Sea actions relating to: 
systems in Europe and the Mediterranean area - short-sea shipping; 
- inclusion of the ports in the Trans-European Networks; 
Regional Waterborne Transport Working Groups set up to - maritime safety, including Port State Control. 
prepare and adopt a multi-annual work program for the 
respective region. In parallel, privilege actions and projects aiming, i.a., at: 
the restructuring and modernisation of transport; 
Progressive harmonisation of, i.a., transport legislation of the - the improvement of the movement of passengers and goods 
CEEC, in the perspective of these countries to accede. and the access to the transport market by removing 
administrative, technical and other obstacles; 
- the facilitation and development of multimodal transport. 
III. International Organizations & Adoption of practical and effective EC rules to ensure the Adoption of new consultation procedure (replacing the prôce-
Multilateral Conventions pursuance of Community objectives in discussions or dure of Council Decision 77/587) to provide for the establish-
negotiations in international organizations. ment and presentation of a common position (proposal in 
Annex II) 
Tasks for the short- and medium-term 
- second Review Conference on the UN Convention on a Recommendation to the Council on the Community position 
Code of Conduct for Liner Conferences; and the participation of the Community at the Conference 
- consultations within the MTC of the OECD as well as the 
joint consultations on shipping between the OECD 
countries and other regional groups 
IV. Internal rules for relations with Ensure coherence of action of the Community and of the Adoption of new consultation procedure (replacing the proce-
third countries Member States in their relations with third countries and dure of Council Decision 77/587) - proposal in Annex II 
improved efficiency of such action 
Establish rules concerning the extension of existing maritime Proposal for a Council Decision - Annex II 
transport agreements and the authorization for Member States 
to conduct bilateral negotiations 
9-i 
9^/c»/JL OVAJ) ANNEX II 
Proposal for a Council Decision setting up 
a consultation procedure on relations between Member States and third countries in shipping 
matters and on action relating to such matters in international organizations 
and an authorization procedure for agreements concerning maritime transport 
THE COUNCIL OF THE EUROPEAN UNION, 
Having regard to the Treaty establishing the European Community, and in particular Article 84 (2) 
thereof, 
Having regard to the proposal from the Commission, 
Acting in accordance with the procedure referred to in Article 189c of the Treaty in cooperation with 
dip. European Parliament, 
Having regard to the opinion of the Economic and Social Committee, 
Whereas the development of external relations of the Community in the field of maritime transport 
requires adequate and efficient exchange of information and timely consultation between the 
Commission and the Member States; 
Whereas Council Decision 77/587/EEC set up a consultation procedure on relations between Member 
States and third countries in shipping matters and on action relating to such matters in international 
organizations; 
Whereas consultations should also cover, in addition to developments that have taken place, ongoing 
developments in relations with third countries; 
Whereas any problems arising in the field of shipping in the trades with and between third countries 
and appropriate means to address these problems should be considered; 
Whereas therefore provision should be made for consultations to be held at regular intervals; 
Whereas appropriate action to address problems arising in international organizations should be 
considered; whereas a procedure should be introduced for the establishment of the po ition to be taken 
by the Community and the Member States on questions of common interest discussed within 
international organizations; whereas such position, on matters within the competence of the 
Community or of the Member States, should be presented by the Commission or the Member State 
exercising the presidency of the Council, respectively. 
Whereas maritime transport relations between Member States and third countries are regulated by 
bilateral'agreements as well as by other bilateral and multilateral arrangements containing provisions 
on, or applicable to, matters relating to the provision of shipping services such as access to the 
shipping market, incl. multimodal transport operations, connected landside operations, establishment 
of commercial presence, access to ports, utilisation of port and related services and facilities, 
transactions and payments related to the provision of shipping services, and related provisions; 
OJ L239, 17.09.1977. 
42-
Whereas a regulatory framework for negotiations by Member States with third countries should be 
provided for; whereas the Commission should have the possibility to authorize Member States to 
negotiate, conclude or renew agreements with third countries; whereas in appropriatejcircumstances 
such authorization could be tacitly granted; 
Whereas an effective procedure to secure the examination of bilateral maritime transport agreements 
and other bilateral arrangements which Member States propose to conclude with third countries must 
be established; 
Whereas the purpose of this examination must be to determine whether the proposed agreements are 
compatible with Community law and the common maritime transport policy and would not constitute 
an obstacle to this policy or its implementation; 
Whereas in certain cases it may be appropriate that the Council or, as the case may be, the 
Commission; in authorising a Member State to negotiate or conclude an agreement attaches 
conditions thereto; 
Whereas a committee should be set up for the implementation of this Decision; 
Whereas the procedures for negotiations by the Commission of agreements with third countries or 
within an international organization are not covered by this Decision; 
Whereas in view of the amendments of the procedure established by Council Decision 77/587/EEC 
and the introduction of significant new procedures such Decision should be replaced by a separate act; 
HAS ADOPTED THIS DECISION: 
Article 1 
1. The Member States and the Commission shall consult each other, in accordance with the 
procedures laid down in this Decision: 
(a) on questions concerning shipping matters and dealt with in international organizations, 
and 
(b) on relations with third countries in shipping matters, and on the negotiation, 
conclusion and functioning of bilateral or multilateral agreements in this sphere. 
2. The consultations shall be held 
at regular intervals, and at least once every two months, and 
at any other time upon the request of a Member State or of the Commission, within 
two weeks of the request or at the earliest opportunity in urgent cases. 
Article 2 
1. The main aims of the consultations provided for in Article 1 under para. 1(a) shall be: 
(a) to consider any questions that may raise problems of common interest; 
U o 
(b) depending upon the nature of such problems: 
to consider whether Member States' action within the-international 
organizations concerned should be coordinated; 
to consider any other approach which might be appropriate. 
The Member States and the Commission shall as soon as possible exchange any information 
of relevance to the aims described in paragraph 1. 
Article 3 
1. The main aims of the consultations provided for in Article 1 under para. 1(b) shall be: 
(a) to review developments in shipping relations with third countries; 
(b) to consider the negotiation, conclusion and functioning of bilateral or multilateral 
maritime transport agreements or any other arrangements concerning matters relating 
to the provision of shipping services; 
(c) to consider problems arising in the field of shipping in the trades with and between 
third countries, i.a., 
restrictions on access to the shipping market and on connected land-side 
operations 
any other unilateral measures of third countries affecting shipping activity, 
such as discriminatory taxation or treatment of ships in ports; 
(d) to consider any ether questions that may raise problems of common interest; 
(e) depending upon the nature of such problems as may arise, to consider appropriate 
action to address these problems. 
2. For the purposes of the consultations referred to in Article 1 under para. 1(b), each Member 
State shall inform the other Member States and the Commission of the various developments in its 
relations with third countries in shipping matters, and of the functioning of bilateral or multilateral 
agreements concluded in this field. 
3. A Member State wishing to conduct negotiations with a third country or to proceed to the 
conclusion of an agreement which it has negotiated and initialled or signed but has not, at the date 
of this Decision, completed the procedures for its entry into force, shall submit 1i request to the 
Commission and inform the other Member States. In the request, the Member State shall set out the 
justification for the envisaged agreement, its objectives and a draft text of the proposed agreement. 
A Member State wishing to proceed to the extension, whether express or tacit, of an agreement in 
force at the date of this Decision shall submit a request to the Commission and inform the other 
Member States at least 4 months prior to the date of express extension or of the expiry of the period 
during which notice of termination of the agreement may be given. It shall supply a copy of the 
agreement. 
Article 4 
1. Without prejudice to Article 5 of Council Regulation No. 4055/86, if neither the Commission 
nor any Member State has requested consultations within two months from receipt of a request from 
a Member State under Article 3, para. 3, and the Commission has not submitted to that Member 
State, within three months from such receipt, any observations to the contrary, that Member State will 
be considered to be tacitly authorized to conduct the bilateral negotiations in accordance with its 
request or to complete the procedures for the entry into force of the agreement or to extend the 
agreement, as the case may be. 
2. If the Commission determines, after consultations where these have taken place, that the 
provisions of the envisaged agreement are not contrary to the common maritime transport policy and 
its objectives and would not constitute an obstacle to this policy or its implementation, the Member 
State concerned may be authorized by the Commission, if appropriate subject to conditions, to 
conduct the bilateral negotiations with the third country concerned. 
3. If the Commission determines, after consultations where these have taken place, that any 
provision of an envisaged agreement is not in line with the common maritime transport policy or its 
objectives, or could constitute an obstacle to this policy or its implementation, it shall so notify the 
Member State concerned and inform the other Member States. The Commission may accompany such 
notification with conditions subject to which the agreement could be authorized. 
Article 5 
1. At the end of the negotiation process the Member State concerned shall communicate to the 
Commission the final result of the negotiations. If the Commission does not raise objections within 
three months from receipt of the negotiation results, the Member State concerned may sign the 
agreement in question. 
2. If the Commission raises any objections, the Member State concerned shall re-negotiate 
accordingly on the basis of the conditions, which the Commission has imposed. 
Article 6 
1. The consultations provided for in this Decision shall take place within the committee created 
in Article 7, paragraph 1. 
2. With respect to Article 2, para. 1(b), the positions to take on economic and commercial 
aspects of maritime transport in international organizations by the Community and its Member States 
are adopted in accordance with the procedure set out in Article 7, paragraph 2. 
Where the position corresponds to a matter of Community competence, it is presented by the 
Commission; if the matter is within the competence of the Member States, the position is presented 
by the Member State exercising the presidency of the Council. However, if the Commission or the 
Member State exercising the presidency does not have a status permitting it to expess itself within the 
international organization in question, appropriate modalities shall be defined in the decision adopting 
the position. 
Article 7 
1. The Commission shall be assisted by a committee composed of the representatives of the 
Member States and chaired by the representative of the Commission. 
2. The representative of the Commission shall submit to the committee a draft of any measures 
to be taken. The committee shall deliver its opinion on the draft within a time limit which the 
chairman may lay down according to the urgency of the matter. The opinion shall be delivered by 
the majority laid down in Article 148 (2) of the Treaty in the case of decisions which the Council 
is required to adopt on a proposal from the Commission. The votes of the representatives of the 
Member States within the committee shall be weighted in the manner set out in that Article. The 
Chairman shall not vote. 
The Commission shall adopt the measures envisaged if they are in accordance with the opinion of the 
committee. 
If the measures envisaged are not in accordance with the opinion of the committee, or if no opinion 
is delivered, the Commission shall, without delay, submit to the Council a proposal relating to the 
measures to be taken. The Council shall act by a qualified majority. 
If, on the expiry of a period of two months from the date of referral to the Council the Council has 
not acted, the proposed measures shall be adopted by the Commission. 
Article 8 
The procedures set out in this Decision are without prejudice to procedures relating to a 
recommendation by the Commission to negotiate an agreement with a third country or group of 
countries or within an international organization or relating to the conclusion of such an agreement 
Article 9 
Council Decision 77/587/EEC is hereby repealed. 
Before 31 December 2000 the Council shall consider a report to be submitted by the Commission on 
the working of the procedures set up in this Decision and shall take action on any proposals for 
amending or supplementing it which experience shows to be appropriate. 
Article 10 
This Decision is addressed to the Member States. 
he 
ANNEX III 
EXISTING COMMUNITY LEGISLATION AND POLICY INITIATIVES ON EXTERNAL 
ASPECTS OF MARITIME POLICY AND THEIR APPLICATION 
A. Legislation adopted by the Community 
\. Among the legal instruments concerning maritime transport adopted so far by the Council, those 
forming the basis of shipping policy concern directly the external relations in the field of shipping. 
2. Council Decision 77/587 ' was the first piece of legislation concerning maritime transport, 
adopted under Article 84(2) of the EEC Treaty in June 1977 in an effort to seize the opportunities which 
a common approach by the Member States on shipping matters would bring. It set up a consultation 
procedure on relations between Member States and third countries on shipping matters and on action 
relating to such matters in international organisations. ITtat was the first step towards shaping the 
Community's external relations in matters concerning shipping. The procedure is used regularly to 
consult in the Transport Working Group of the Council on developments and problems arising in the 
relations with individual non-Member countries and to coordinate the position to be taken at meetings 
of international organisations. 
3. Council Regulation No 954/79 2, widely referred to as the " Brussels package", concerns the 
ratification by Member States of, or their accession to, the UN Convention on a Code of Conduct 
for Liner Conferences. This ratification or accession is possible provided that the Member States make 
a number of reservations. The most important is that the Member States confirm that the provisions of 
the Code do not apply in conference trades between the Member States and, on a reciprocal basis, 
between Member States and the other OECD countries which are party to the Code. The regulation also 
preserves competitive access within conferences to that part of cargo liner shipping which is not covered 
by commitments to national shipping lines of third countries under the Code, when ratified by Member 
States. 
In adopting this Regulation, the Community recognized the specific situation of developing countries, 
in particular in liner shipping, as the Liner Code offers national shipping lines of developing countries 
particular opportunities to participate in liner conferences and the trade carried by them. 
4. In December 1986 the Community adopted four important Regulations 3 the first of which 
entered into force on 1 January 1987, the other three on July 1 of the same year: 
Council Regulation (EEC) No. 4055/86 applying the principle of freedom to provide 
services to maritime transport between Member States and between Member States and third 
countries; 
Council Regulation (EEC) No. 4056/86 laying down detailed rules for the application of 
Articles 85 and 86 of the Treaty to maritime transport; 
Council Regulation (EEC) No. 4057/86 on unfair pricing practices in mari-time transport; 
Council Regulation (EEC) No. 4058/86 concerning coordinated action to safeguard free 
access to cargoes in ocean trades. 
2 
3 O.J. L239, 17.9.1977 
O.J. L 121, 17.5.1979 
O.J. L378, 31.12.1986 
44-
5. These four Regulations were adopted against the background of an alarming decline of the 
Community fleet, out of proportion to the impact of the world economic crisis on all fleets, due to 
a loss of comparative advantage and the growth of protectionist policies and practices of other 
countries. It is,, in particular, the threat of these policies and practices which could be countered by 
Community action. 
6. The four Regulations make up a coherent package of Community legislative instruments in 
pursuance of a non-protectionist policy, aiming at safeguarding to the maximum extent possible the 
continuing application of commercial principles in world shipping, while applying basic provisions of 
the Treaty of Rome relating to the freedom to provide services and the competition rules. 
7. As a whole, the package of Regulations adopted in 1986 embodied the determination of the 
Community to ensure free and non-discriminatory access to cargoes for Community shipowners and to 
secure fair competition on a commercial basis in the trades to, from and within the Community, with 
due respect for the interests of shippers and ports. In respect of restrictive measures by third countries 
or unfair practices by foreign shipowners, the Regulations serve to discourage such measures or 
practices or, when these do occur, to achieve effective solutions through negotiation. In cases where this 
is not achieved, the Regulations provide the basis for defensive action to counter such measures and 
practices. 
8. The possibility of achieving a further liberalization in the shipping sector was also taken up 
by the Community in the context of negotiations on an Agreement in Trade in Services in the Uruguay 
Round in mid-December 1993. Regrettably, no satisfactory result could be obtained at the end of the 
Round. As a result the Community withdrew the commitments it had been prepared to undertake and 
obtained a Ministerial Decision setting up a Negotiation Group on Maritime Transport Services 
(NGMTS) to pursue the negotiations with the objective of reaching agreement on the elimination of 
restrictions within a fixed time-scale. 
B. Application of EC instruments and policy 
9. The adoption in 1986 of the four Regulations in the field of maritime transport has, together 
with the "Brussels Package" on the UN Liner Code, established a Community policy of free and fair 
competition on a commercial basis in international shipping. Adopted at practically the same time as 
the Single Act, it both embodied concretely in the field of shipping the movement to complete the 
common market and stood to benefit from the strengthening of the Community generally. 
10. In the intervening years an increasing number of third countries have developed their relations 
with the Community in shipping. The Commission has used, and intends to continue to use, its 
possibilities to work towards the objective of free and fair competition in the world market. 
11. Whilst restrictions on access to cargo are to various degrees widespread among non-OECD 
countries, nevertheless there has been in recent years a noticeable move towards relaxation or lifting 
of restrictions in international shipping in a number of countries worldwide, belonging to all regions 
with, as yet, the exception of the African region. The Commission has consistently exercised its 
influence to encourage such moves. It considers this effort as an essential component of implementing 
the policy embodied in the 1986 package. 
12. The application of the freedom to provide services appears to have made an impression on third 
countries as well as to have aroused concern in some countries wishing to ensure that their own access 
to the Community market is unrestricted. Regulation No. 4055/86 has put an effective brake on new 
initiatives, whether from within or from outside the Community, for cargo-sharing arrangements 
between Member States and third countries. The Commission considers that it is not only a matter of 
implementing legal obligations under Regulation No. 4055/86 but also a point of credibility and success 
of the EEC maritime transport policy towards third countries that the Member States with cargo-sharing 
4? 
agreements pursue more actively the adjustment of these agreements. As regards the non-respect of 
legal obligations by Member States, the Commission has recently opened proceedings on the basis of 
Article 169 of the Treaty, to bring the infringements to an end. 
13. Numerous cases have been raised under Regulation No. 4056/86 and related decisions made by 
the Commission. The Regulation has, in the view of the Commission, proved an effective means of 
ensuring compliance with Articles 85 and 86 in shipping and to ensure the existence of effective 
competition in the liner shipping trades serving the European Union and the provision of high-quality, 
low-cost services to shippers, i.e. the exporters and the importers of the Union. 
14. Regulation No. 4057/86 has been used to good effect and there is, furthermore, a strong 
indication that it has influenced the behavior of certain third-country lines, in particular concerning their 
rate setting policies. 
15. Apart from the actual implementation of defensive measures in cases where an effective 
solution through negotiations is not achieved, the effect of Regulation No. 4058/86 should also be 
judged for its value as a basis for consultation as well as a deterrent. In the case of restrictions 
imposed by the West and Central African states, where the use of the Regulation has been requested, 
the Community has continued to try to achieve a mutually acceptable solution through consultations. 
More generally, the possibility provided by the Regulation to take counter-measures, has been of 
particular value for the Commission in its discussions with a number of countries when seeking to secure 
market access and non-discriminatory treatment for Community shipowners. 
Specific problems in relations with certain third countries 
16. Member States and Community shipowners have regularly raised with the Commission issues 
regarding specific problems arising in particular shipping trades. 
In its report to the Council on the implementation of the shipping Regulations4 the Commission reported 
on action undertaken by that time to address such problems as arose with Algeria; Kenya; the Republic 
of Korea; Taiwan; Indonesia; Japan; and on consultations with third countries, such as Brazil, Sri Lanka 
and the USSR. 
17. The Commission has continued to pursue such action, in close consultation with the Member 
States. It has, in particular, raised specific issues regarding maritime transport in discussions with a 
number of third countries. Such discussions have resulted in several concessions obtained from the 
competent authorities of the countries concerned. 
18. With Taiwan a Protocol on income tax exemption for shipping companies was concluded in 
August 1990 and on 1 October 1993 an Addendum was signed. It was agreed that the financial 
authorities of Taiwan and the EC Member States would not impose income tax on the operation of ships 
in international traffic by their respective shipping enterprises, including the customary surcharges and 
additional, will be tax exempted on a reciprocal basis. 
19. From 1989 onwards, bilateral consultations have been regularly held to bring about further 
liberalisation of the traditionally restrictive Korean shipping policies. As a result, concessions from the 
Korean Authorities have been obtained concerning access for EC carriers to "inter-port" 5 services and 
to landside activities in Korea, as well as the possibility to invest in freight forwarding. Lastly, in 
November 1993 the Korean authorities agreed that as from the same month, inter-port services would 
4 SEC(90) 1594 final, 1.08.1990 
5 Term indicating the intra-Asian services from/to Korea 
6Q 
be completely liberalised for EC carriers with the exception for services to and from Japan. The same 
applies for feeder services and any other part of normal deep sea maritime transport services from EC 
carriers. As from I July 1994, shipping services from Korea to Japan and vice versa have also been 
liberalized. 
20. As for the People's Republic of China, in August 1992 it was agreed by the Chinese 
authorities that EC carriers shall have the right to establish entities in China as joint or sole ventures able 
to conduct business activities on the basis of equal treatment. EC carriers are also allowed to operate 
feeder services to and from Chinese ports open for international trade with no limitations as to which 
hub port should be used. However the effective application of this undertaking continues to meet 
considerable difficulties. 
21. Consultations with Ukraine, starting in early 1994, resulted in a satisfactory outcome on the 
question of establishment of shipping agencies under non-discriminatory conditions in that country, in 
the form of a governmental Resolution of 15 May 1995. 
22. In consultations with Japan the Commission has repeatedly raised its concern in respect of 
requirements of the Japan Harbour Transportation Association resulting in inefficient port services and 
unduly expensive port charges, having the effect of substantially increasing the cost of shipments and 
therefore restricting trade. In the absence of indications of improvement, the Community made a 
démarche to Japan on this issue in fall 1995. The US Federal Maritime Commission has also started an 
inquiry and indications are that there are concerns voiced in Japan itself. It is hoped that the Japanese 
Government will act to resolve the situation rather than having it raised by the EC in the WTO. 
23. The foregoing shows that the Community in a number of cases has proved its effectiveness in 
securing the maritime interest of the Community and the Member States collectively. The leverage of 
the Community as a whole vis-à-vis third countries can be, and has been, used to obtain advantages that 
individual Member States would not be able to realise. The Community is able to benefit substantially 
from its unique negotiating position as it speaks with one voice on behalf of all the Member States. 
Apart from this significant tactical advantage, a Community approach is distinctly preferable to that of 
individual Member States since they are not normally in a position to take account of the interests of 
the Community as a whole. In this respect, the need to establish a coherent and comprehensive maritime 
Community policy on the basis of well defined policy objectives can be considered essential for the 
further development of the EC merchant fleet. 
& Ci 
ANNEX IV 
DEVELOPMENT OF RELATIONS BETWEEN THE EC AND THIRD COUNTRIES TO DATE 
1. With reference to Section IV.B, this annex provides further details on the development of 
relations between the EC and third countries to-date by means of (i) agreements, (ii) consultations, as 
well as (iii) various forms of cooperation, including technical assistance. 
I Agreements with third countries 
Agreements containing substantive provisions on shipping 
2. The Community has not, so far, concluded any sectoral maritime transport agreement with a 
third country. However, a number of general agreements between the EC and third countries (or 
groups of third countries) contain substantive provisions which relate to shipping. Other agreements, 
whilst not containing specific substantive provisions on shipping, provide for cooperation or technical 
assistance as well as for consultations, as necessary, in the maritime sector. 
3. In the first category belong: the Lomé Convention, the Europe Agreements, the Partnership and 
Cooperation Agreements and the EEA Agreement. AH these agreements have in common that, on the 
EC side, both the EC and the Member States are Parties; this is due to the very wide scope of fields 
included in the agreements and, on the other hand, has permitted the avoidance of questions regarding 
legal basis for external competence. 
4. Firstly, there are the successive Lomé Conventions the third of which, concluded in 1984, for 
the first time contained a chapter dedicated to transport in general and several articles on shipping in 
particular, which were maintained in the fourth Lomé Convention, signed in 1989 and revised in 1995. 
5. These articles establish the principles of unrestricted access to the trade on a commercial basis 
and the implementation of the Liner Code Convention for conferences serving the trades between the 
Community and its ACP partners. Cooperation also is foreseen to improve the ACP countries' shipping 
industries, safety of ships and crews. Furthermore, several areas for financial and technical assistance 
are identified. 
6. Secondly, there are the so-called "Europe agreements" concluded with the countries of Central 
and Eastern Europe, namely, Bulgaria, the Czech Republic, Hungary, Poland, Romania and Slovakia. 
Similar agreements have also recently been signed with Estonia, Latvia, Lithuania and Slovenia. 
7. These agreements establish a close association with the respective third countries and contain 
specific provisions on maritime transport. The latter cover the reciprocal right of establishment and the 
principle of unrestricted access to the market and traffic on a commercial basis. It is further provided 
that non-conference lines shall be free to operate in competition with a conference as long they adhere 
to the principle of fair competition on a commercial basis. Dry and liquid bulk trade is to be freely 
competitive. Cargo sharing arrangements in future bilateral agreements between the parties and third 
countries will be avoided. Any existing unilateral restrictions or measures that may have a discriminatory 
effect as regards the provision of maritime transport services are also abolished. 
8. In addition, it was agreed that cooperation should be developed and strengthened to enable CEE 
countries to restructure and modernize transport and achieve operating standards comparable to those in 
the Community. Such cooperation includes the modernization, on major routes of common interest, of 
port infrastructure and the upgrading of technical equipment for containerization and transhipment as part 
of specified priority areas. 
<T/ 
9. An "Agreement on trade and commercial and economic cooperation" has been concluded with 
Albania; it does not contain specific provisions relating to shipping but includes transport and ports as 
areas of mutual interest for economic cooperation. 
10. Thirdly, with Belarus, Moldova, Russia and Ukraine, "Partnership and Cooperation 
Agreements" have been signed. These agreements include a number of specific clauses on maritime 
transport such as the guarantee of tree access to the international shipping market on a commercial basis, 
national treatment for vessels in ports and the opening of inland waterways for international sea-river 
services. This last issue has not been resolved with Russia and it has been agreed to negotiate on it not 
later than 31.12.1996. National treatment for establishment to under-take shipping agency activities has 
also been agreed, hi addition to providing that no cargo-sharing agreements will be concluded with third 
countries, they disapply any such provisions that exist between any Member State and the other party. 
As is the case with the Europe agreements, extensive economic cooperation in a large number of sectors, 
including transport, is also envisaged in these Partnership and Cooperation Agreements. 
Similar agreements - mutatis mutandis - have been subsequently signed with Kazakhstan and 
Klrgizstan, and very recently with Armenia, Azerbaijan, Georgia and Uzbekistan. 
11. Fourthly, the EEA agreement entered into force on 1 January 1994. As a result, the acquis 
communautaire also with regard to maritime transport now applies in the relationship between the 
Community and the EFTA countries involved. 
However, the measures referring to the external relations of the Community, such as Council 
Regulations 4057/86 and 4058/86, do not apply. Instead, the Community and the EFTA countries agreed 
to coordinate their actions and measures towards third countries and third country companies in the area 
of maritime transport. 
12. The recently concluded customs union agreement with Turkey maintains the objective of dealing 
with the transport sector. New association agreements have been negotiated with Israel, Morocco and 
Tunisia and negotiations are nearing conclusion with Egypt, Jordan and Lebanon and foreseen with 
Algeria. These agreements provide for early negotiations leading to liberalization of maritime transport 
along similar lines to those recent agreements with Central and Eastern European countries. 
13. The Barcelona Euro-Mediterranean Conference in November 1995 adopted a Ministerial 
Declaration whereby participants (EU and 12 Mediterranean countries) undertook to respect the principles 
of the freedom to provide services and free access to international cargoes. 
Trade and economic cooperation agreements 
14. Over the years, the Community has concluded trade and economic cooperation agreements with 
numerous third countries; transport is generally includud among the sectors for economic cooperation, 
and this has been the basis for consultations and cooperative action with a number of such countries. 
15. In several such agreements, which do not contain substantive provisions on services, maritime 
transport has been the subject of an exchange of letters annexed to the agreement, hi these letters, the 
Community and the third country concerned have undertaken to address any issue relating to the 
operation of shipping with a view to finding solutions to problems that may arise. This can be done 
within the Joint Committee established under the auspices of the cooperation agreement. The wording 
of such letters varies; they generally make reference to free and fair competition as a guiding principle, 
hi several instances discussions in the framework of the Joint Committees have taken place with 
satisfactory results. 
5~2 
16. Letters such as mentioned above have been exchanged with countries like Argentina; Brazil; 
Chile; in Central America, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama; the 
Andean Pact and its member countries, Bolivia, Colombia, Ecuador, Peru and Venezuela; Mexico; 
Paraguay; and Uruguay. 
17. In more recent negotiations for such agreements, with Korea and South Africa as well as for a 
new partnership agreement with Mexico, the Community has proposed the inclusion of substantive 
provisions on shipping. The negotiations with Korea were concluded recently. 
2 Consultations with third countries 
18. The Commission has, for some time, engaged in discussions and consultations with important 
partners in maritime transport. Such consultations, which serve the purpose of exchange of information 
and views on developments and policy issues of interest to the two sides, as well as the pursuance of 
solutions to problems that arise, have been intensified with the development of EC shipping policy and 
activity relating to international shipping. 
19. As far as the developed countries are concerned, the Maritime Transport Committee of the 
OECD has traditionally served as the forum for multilateral contact among them as regards shipping 
matters; the Commission regularly participates at its meetings. 
20. In parallel, the Commission has held since as early as the late '70s regular consultations on 
shipping with several EFTA countries: Finland1, Norway, Sweden1 and Switzerland. It has actively 
participated in the Consultative Shipping Group and the dialogue of the Group with the USA, and it has 
established regular contacts and, more recently, annual high-level consultations, with Japan. 
21. Following the adoption of the Regulation imposing countervailing duties on Hyundai Merchant 
Marine2, regular meetings have been held between the Commission and the Korean authorities since 
1989. These meetings have proved valuable in respect of improving maritime relations with Korea, 
solving a number of problems of concern to Community shipowners and seeking a reorientation of the 
shipping policy of the country.3 
22. Consultations with other countries (apart from the USSR, with which regular consultations were 
held until 1991) have so far been held on an ad hoc basis, where required. Use is made of opportunities 
offered in the framework of existing agreements or of less formal events, including workshops organised 
with representatives of third countries or groups of countries (see para. 24 below), for example, with 
Brazil and India. 
3 Cooperation and Technical assistance 
23. Cooperation with third countries has taken the form of seminars and conferences or workshops 
organised by the Commission and technical assistance to individual countries or groups. In addition, the 
Commission is cooperating with international organisations and institutions. 
Seminars and Conferences or Workshops 
24. The Commission has so far organised several seminars and conferences or workshops with third 
3 Prior to their accession to the EC. 
Council Regulation No. 15/89, O.J. L 4, 6.01.1989 
See para.76 above and SEC(90) 1594 final. 
^"3 
countries or groups of countries on shipping issues.4 These events have provided the possibility to 
discuss freely with high-level officials as well as with commercial interests current problems and to 
consider needs for technical assistance in the efforts to liberalise the sector, facilitate transport operations 
and promote compliance with internationally applicable rules and standards. 
A number of these conferences and workshops have resulted in joint action programs that are been 
followed-up and/or specific technical assistance projects.5 
Technical assistance to individual countries or groups 
25. Technical assistance provides an important means to improve the functioning of the trade and 
help liberalisation of such trades by providing better conditions of operation for the lines. This serves 
the dual objective of development policy and shipping policy. 
26. Actions in respect of India, countries of the Maghreb and of West and Central Africa, as well 
as for the ASEAN countries have been undertaken, in addition to numerous projects under the PHARE 
and TACIS programs. 
Cooperation with international institutions 
27. The Commission has also established cooperative relations with a number of international 
organisations and institutions: UNCTAD, the IMO, the World Bank; and with the World Maritime 
University and the International Maritime Law Institute concerning study programs and fellowships for 
shipping officials of developing countries. 
28. Experience with actions of cooperation and provision of technical assistance, as above, can be 
considered generally positive and promising in terms of serving the objectives of such actions as regards 
the third countries involved as well as the Community. The Commission intends to further pursue such 
activity as an integral part of its external relations in the field of maritime transport. 
- Central America (Costa Rica, 1991); 
- Andean Pact (Venezuela, 1992); 
- Brazil (1993); 
- India (January 1994 and December 1995); 
- Black Sea (September 1994); 
- SADC (December 1994); 
- Baltic States (January 1995); 
- Mediterranean Conference (April 1995); 
- Baltic Sea Conference (May 1995); 
- Mediterranean (September 1995); 
- ASEAN countries (October 1995). 
See also Section V.B.2 
S4 



ISSN 0254-1475 
COM(96) 707 final 
DOCUMENTS 
EN 07 11 
Catalogue number : CB-CQ-96-717-EN-C 
ISBN 92-78-13892-4 
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