WRITTEN QUESTION P-2300/99

by Rosa Miguélez Ramos (PSE) to the Commission

(29 November 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 subsidies enable them to pursue such commercial dumping practices.

Over and above the tentative measures announced by the Council of Industry Ministers on 9 November last, what emergency measures is the Commission prepared to take in support of European shipyards so as to guarantee their survival?

Did the Commission take account of an international climate dominated by unfair practices on the part of South Korea in deciding to demand the return of 18 451 million pesetas granted in the form of tax credits to the shipbuilding industry in Spain, which it considered to be State aid?

What measures does the Commission intend to take to protect existing shipbuilding jobs in the European Union? How does it intend to guarantee the future of this sector, and the thousands of working people who depend on it?

What proposals will the Commission be taking to 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?

Answer given by Mr Monti on behalf of the Commission

(13 December 1999)

The Commission fully shares the Honourable Member's concerns about the current situation on the world shipbuilding market and the difficulties facing Community yards. However in its view the various actions decided by the 9 November 1999 Industry Council represent a balanced package of useful measures that should be pursued to tackle the problem of unfair competition. At this stage there are no plans for short-term emergency measures. The Commission will continue to keep the market situation under review and will collate and evaluate all the information and evidence collected pursuant to the Council conclusions on the issue. It will submit its findings to the Council and to the Parliament as soon as necessary in accordance with Article 12 of Council Regulation (EC) No 1540/98 of 29 June 1998 establishing new rules on aid to shipbuilding(1).

Following the conclusions of the Council, the Korean side has agreed to participate in bilateral discussions involving industries and administrations from both the Community and Korea in the margins of an Organisation for economic cooperation and development (OECD) working party meeting in Paris in mid-December.

In addition, the Commission has encouraged Member States to urge the International monetary fund (IMF) and World Bank to continue investigating whether the conditions and assumptions under which the IMF-led rescue package was given to Korea are fully respected.

So far as the Millennium Round negotiations are concerned, these should be launched and concluded as a single undertaking, in order to strike a generally advantageous overall balance of rights and obligations for all World trade organisation (WTO) members. It would be difficult for the Community, at this stage, to identify shipbuilding as a specific sector where it seeks special rules. Nevertheless, the existing agreement on subsidy and countervailing measures includes a dispute mechanism which provides a means to tackle unfair subsidies. As requested by the Council, the Commission stands ready to launch a trade action under the WTO when sufficient supporting evidence has been gathered.

As for the Commission's recent negative decision regarding special tax credits paid to the publicly-owned yards in Spain, the Commission was carrying out its duty to monitor that conditions of aid decisions are fully respected. The current difficulties facing Community yards underline the need to ensure that Community aid rules are complied with in order to avoid distortions to intra-Community competition.

(1) OJ L 202, 18.7.1998.