WRITTEN QUESTION P-1980/00

by Daniel Varela Suanzes-Carpegna (PPE-DE) to the Commission

(7 June 2000)

Subject: European shipbuilding industry

On the basis of a second report submitted by the Commission again highlighting the existence of a world crisis caused by the unfair competition practised by South Korea in the shipbuilding sector, the EU Council of Ministers of 18 May 2000 instructed the Commission to continue to monitor developments on the world market in the sector, particularly Korean practices, and to propose specific measures to protect European shipyards in the event that South Korea is still practising unfair competition in September.

Furthermore, Commissioner Lamy has stated in reply to my Written Question P-0729/00(1) that, if necessary, the Commission would be prepared to initiate an investigation. This could end up before the WTO Dispute Settlement Bodymldr.

Can the Commission say what specific action it has taken to monitor the situation with regard to South Korea and what results this has produced to date?

Specifically, what action has been taken to monitor the undertaking given by South Korea not to intervene to rescue bankrupt shipyards and to implement transparency rules and international accounting standards ensuring that ships are priced so as to cover all costs?

Can the Commission provide more detailed information on this undertaking and the extent to which it has been complied with up to now?

What measures will the Commission adopt if South Korea is still practising unfair competition in September?

What specific conditions must be met for the Commission to lodge a complaint against South Korea before the WTO Dispute Settlement Body in September? Are these conditions already met?

(1) OJ C 330 E, 21.11.2000, p. 210.

Answer given by Mr Lamy on behalf of the Commission

(29 June 2000)

The bilateral dialogue begun in December 1999 culminated in an international agreement in the form of Agreed Minutes between the European Community and the Government of the Republic of Korea relating to the world shipbuilding market. This document, initialled on 10 April 2000, was adopted by the Council on 19 June 2000 and signed by the two parties on 22 June 2000.

In its conclusions of 18 May 2000, the Council (Industry) called on the Commission to begin immediate consultations with Korea under the Agreed Minutes. This request will officially be put to Korea as soon as the agreement enters into force, i.e. on the day of its signature. Korea has, in principle, agreed to hold such negotiations on 18 and 19 July 2000 in Seoul. The Commission delegation to be sent to Seoul will be accompanied by a team of Commission experts covering various aspects of the matters to be discussed.

These consultations should cover verification of compliance with the undertakings given by the Koreans with regard to transparency, non-subsidisation and commercially viable pricing practices.

Under the agreement, progress will be reviewed in September 2000 at a second meeting in Brussels.

In accordance with the Council conclusions of 18 May 2000, the Commission must report to the Council by the end of September 2000 to evaluate the results of the consultations and the solutions found to resolve the problems of the Community industry in the face of competition from Korean shipyards.

At all events, the Commission will continue to monitor closely the shipbuilding market and the competitive behaviour of Korean shipyards. It will report to the Council on the results of its investigations when the time comes.