WRITTEN QUESTION E-2547/00

by Laura González Álvarez (GUE/NGL) to the Council

(31 July 2000)

Subject: Crisis in the European shipbuilding industry

The report adopted by the Commission on 3 May 2000 and considered by the Council on 18 May 2000 draws attention to the continual decline in the market share enjoyed by the European Union in the shipbuilding sector and highlights in particular the problem of the commercially unsustainable prices applied by shipyards in the the Republic of Korea with the direct and indirect support of the Korean Government and the banks of that country.

What firm measures have the Member States taken, or will they take, to implement the conclusions reached by the Council of the European Union at its meeting of 18 May 2000, in order to:

- keep the International Monetary Fund and World Bank informed of its views and call for stringent monitoring to ensure that the IMF aid granted to the Republic of Korea is closely controlled and rigorously assessed, particularly that granted to the shipbuilding sector;

- continue its efforts in the appropriate international organisations to standardise the rules applicable to the shipbuilding sector?

Do the agreements reached by the Commission and the Korean Government offer sufficient legal basis to ensure that the Republic of Korea will correct its policy? What trade policy instruments could be used to bring additional pressure to bear on the Republic of Korea?

Why does the Council not call on the Member States to lodge a complaint against the WTO and ask for an investigation to be opened by the IMF and World Bank?

What steps has the Commission taken, or will it take, to encourage the integration of the European shipbuilding industry in order to help ensure its survival?

Reply

(20 November 2000)

1. As stated by the Honourable Member, the 2nd Commission report on the situation in the world shipbuilding industry was examined by the Industry Council at its meeting on 18 May 2000 and certain conclusions were adopted.

In these conclusions, the Council called on the Commission to continue to monitor closely developments with the Member States and industry and to exercise pressure on the Republic of Korea fully to implement theAgreed Minutesas well as to assume responsibility to work towards an improvement of the market situation, in particular concerning price levels and new building capacities.

2. Subsequently on the basis of these conclusions, the Council:

- was informed that, in accordance with the consultation mechanism provided for in the Agreed Minutes, the Commission had immediately initiated ad hoc consultations with the Government of the Republic of Korea with a view to ending unfair competition (a second meeting was planned for September 2000);

- expected to receive a Commission progress report on the situation by the end of September 2000.

3. By its Decision of 19 June 2000(1), the Council approved the Agreed Minutes between the European Community and the Government of the Republic of Korea on the world shipbuilding market.

This Decision is based on the Treaty establishing the European Community, in particular Article 133 thereof, in conjunction with the first sentence of Article 300 (2).

4. The Honourable Member is also reminded that, in its conclusions of 18 May 2000, the Council likewise called on:

- the industry and the Commission to collect further detailed evidence on possible injurious pricing and other non-market oriented behaviour in order to launch and support, respectively, a complaint under the Trade Barrier Regulation if required;

- the Commission and Member States to keep the International Monetary Fund (IMF) and the World Bank informed about the findings and to request that the implementation of the conditions under which IMF-led assistance was granted to the Republic of Korea is closely monitored and assessed with particular reference to shipbuilding.

5. Finally, the last question raised is clearly one for the Commission since it refers to steps planned by the Commission to encourage the integration of the European shipbuilding industry in order to help ensure its survival.

(1) Decision 2000/409/EC (see OJ L 155, 28.6.2000, p. 47).