WRITTEN QUESTION E-2568/00

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

(1 August 2000)

Subject: European shipbuilding industry

In his reply to my parliamentary Question P-1980/00(1) on the action taken by the Commission to protect the European shipbuilding industry from dumping by Korea, the Commissioner responsible for trade, Pascal Lamy, informed me that the European Union had concluded an international agreement in the form of an authorised act between the European Union and the Government of the Republic of Korea, which came into force on 22 June 2000. Pursuant to that agreement, Korea undertakes to fulfil its obligations as regards accounting transparency, non-subsidisation and the charging of commercially viable prices, in which connection the agreement provides for an ad hoc consultation scheme enabling Korea's compliance with the above-mentioned obligations to be checked. Korea has already agreed to hold consultations on 18 and 19 July 2000. In his reply Mr Lamy also says that in September 2000, pursuant to the text of the agreement, the functioning of the agreement will be reviewed at a second meeting, to be held in Brussels. Lastly, he states that the Commission will continue monitoring Korea's compliance with the agreement and will notify the Council at the end of September regarding the outcome of the consultations and, consequently, the strategy to be followed in future.

Would the Commission keep me informed regarding the outcome of the consultations with Korea which are due to take place during the current month of July and, if necessary, regarding any specific action taken by Korea in compliance with the agreement?

Could the Commission provide information concerning the procedure to be followed should Korea fail to comply with its obligations under the agreement and, in particular, is it still prepared (as it stated in its reply to my earlier Question P-0729/00) to initiate an investigation [which] could end up before the WTO Dispute Settlement Body if the European shipbuilding industry lodges a complaint under the regulation on obstacles to trade? Has any such complaint yet been made by the European shipbuilding industry and, if so, what action does the Commission intend to take in response?

Would the Commission keep me informed of future developments in this field and, in particular, of the outcome of the meeting to be held in Brussels in September?

(1) OJ C 53 E, 20.2.2001, p. 197.

Answer given by Mr Lamy on behalf of the Commission

(26 September 2000)

The consultations between the Community and Korea, held in Seoul on 18 and 19 July in the framework of the Agreed Minutes, took place in an open, constructive atmosphere. The outcome of the first round can be considered as fairly positive.

The Commission is currently analysing a considerable amount of legal, economic and financial information and documentation provided by Korea as part of the transparency exercise.

Two further important results were also achieved:

- Korea's agreement in principle to a survey being carried out in the shipyards on the basis of an antidumping questionnaire to check that the prices of contracts offered by Korean shipyards are in line with normal prices under the GATT (General Agreement on Tariffs and Trade) Anti-dumping Agreement;

- agreement to hold a second round of consultations in September to examine the overall functioning of the Agreement, and, more importantly, to concentrate on finding effective solutions in order to resolve the bilateral dispute. To this end, the announcement by the shipyards of a 5 % to 10 % price increase for certain ships and the price monitoring mechanism set up by the Korean authorities can be considered as early encouraging signs.

Nevertheless, the Commission wants to see where Korea's goodwill gestures lead and expects the Koreans to come up with practical solutions at the second consultation meeting planned for the second fortnight in September. The Commission will report the outcome of the consultations to the Council at the end of September. Parliament will obviously be kept informed.

The European industry recently announced that if the results of the consultations were not considered satisfactory it would immediately lodge a complaint under the Trade Barriers Regulation (TBR)(1). If the bilateral dialogue fails, this procedure could lead to World Trade Organisation (WTO) action to penalise the Korean use of subsidies and dumping, and to remedy the situation.

(1) Council Regulation (EC) No 3286/94 of 22 December 1994 laying down Community procedures in the field of the common commercial policy in order to ensure the exercise of the Community's rights under international trade rules, in particular those established under the auspices of the World Trade Organisation (OJ L 349, 31.12.1994).