WRITTEN QUESTION E-2351/99

by Rosa Miguélez Ramos (PSE) to the Council

(13 December 1999)

Subject: Future of the European shipbuilding industry

On several occasions since the crisis of 1973, European shipyards have undergone restructuring leading to job losses and slumps in regions whose prosperity depended on shipbuilding and its role as a driving force for other economic sectors. The Commission has itself acknowledged the continued decline in prices. Between January 1997 and March 1999 prices of newly built vessels fell by between 15 and 31,5 per cent. The explanation for this lies primarily in the fact that certain Asian countries, South Korea notably, sell their products at a loss, with prices sometimes 30 per cent below European prices. Sizeable state subsidies enable them to pursue such commercial dumping practices.

Over the above the tentative measures announced by the Council of Industry Ministers on 9 November last, what short-term emergency measures, other than the well-known ones of appealing to the WTO, the IMF and the World Bank, is the Council prepared to order in support of European shipyards so as to guarantee their survival?

Does the Council regard safeguarding the future of the European shipbuilding sector as a priority, given the various social and economic arguments?

What action does the Council intend to take in order to protect existing shipbuilding jobs in the European Union and to guarantee the future of the sector, on which thousands of working people depend?

What instructions will the Council be giving to the Commission for the purpose of the first round of talks in Seattle at the end of this year, with a view to shielding the European shipbuilding industry from the unfair practices in which third countries indulge?

Joint answer to Written Questions E-2290/99, E-2311/99 and E-2351/99

(13 March 2000)

1. In response to the questions and legitimate concerns expressed by the Honourable Members, the Council would first point out that:

- in general the system of aid to shipbuilding is governed by the provisions of Council Regulation (EC) No 1540/98 of 29 June 1998(1);

- more specifically, the Commission, pursuant to Council Regulation (EC) No 1013/97 of 2 June 1997(2), approved aid to certain shipyards under restructuring in Germany and Spain.

2. At its meeting on 9 November 1999, the Council, in its Industry meeting, was presented with two separate reports from the Commission, relating to:

- the situation in world shipbuilding (report drawn up in accordance with Article 12 of Regulation (EC) No 1540/98),

- the monitoring of the restructuring programmes for shipyards in Germany and Spain (fourth report drawn up in accordance with Article 2 of Regulation (EC) No 1013/97).

3. Following the discussion on this item, the Council adopted the conclusions on the situation in world shipbuilding, of which the following key aspects should be noted, in summary:

- the concern expressed by the Council over the critical situation the sector is facing as a result of overcapacity and very low price practices attributable to the Republic of Korea, and its request to the Commission to resume talks with that country with a view to halting such unfair competition,

- the request to industry, the Member States and the Commission to gather as much evidence as possible of such anti-competitive behaviour, in order to take appropriate action within the WTO,

- the urgent appeal to the IMF and the World Bank to monitor compliance with the conditions under which aid was given to the Republic of Korea following the economic crisis,

- the request to the Commission and the Member States to make renewed efforts in the appropriate international fora, including the OECD, in order to ensure the application forthwith of rules guaranteeing fair competition.

Finally, at the close of those conclusions, the Council welcomed the determination of the Commission to fulfil its obligations under Article 12 of the abovementioned Regulation No 1540/98 (3) and to report on developments as soon as necessary.

The Council intends to include the item on the agenda for its Industry meeting on 18 May 2000.

(1) OJ L 202, 18.7.1998, pp. 1 to 10.

(2) OJ L 148, 6.6.1997, pp. 1 to 3.

(3) Article 12: The Commission shall present to the Council a regular report on the market situation and appraise whether European yards are affected by anti-competitive practices. If it is established that industry is being caused injury by anti-competitive practices of any kind, the Commission shall, where appropriate, propose to the Council measures to address the problem.The first report shall be presented to the Council no later than 31 December 1999.