WRITTEN QUESTION E-1371/01

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

(7 May 2001)

Subject: European shipbuilding industry

Following the official complaint concerning the unfair competition being practised by the Korean shipbuilding industry, submitted to the Commission on 24 October 2000 by the Committee of EU Shipbuilders' Associations (CESA), the Commission decided to initiate an examination procedure, notice of which was published in the Official Journal on 2 December 2000. The procedure will last at least five months. Addressing Parliament on 12 March 2001, the Member of the Commission responsible for competition, Mario Monti, indicated that the Commission was still attempting to achieve an amicable negotiated settlement to the dispute, despite the fact that it intended to raise the South Korean case in the World Trade Organisation (WTO). Regarding the aid system to be employed while the examination procedure was taking place, Mr Monti said that aids linked to contacts and capacity expansion would be ruled out. The only aids admissible for the time being are environment-related aids, R. & D. aid, aid for modernisation and innovation, regional aids not serving to increase capacity, and so forth.

1. Could the Commission say what progress has been made to date in the examination procedure initiated in December 2000?

2. Does the Commission not believe that a deadline has to be imposed on the negotiations with the Korean authorities, since what is at stake, apart from the future of a modern, competitive EU shipbuilding industry, is the credibility and respect due to the EU because it is capable of safeguarding its industry's interests? If it agrees, could it say when the deadline will be?

3. Could the Commission supply a list of the aids which the EU considers admissible? Among those aids, what types have been launched since January 2001? What amounts have been granted,

and which Member States have received them? What methods will the Commission employ to enable the aids to be put to wider and more intensive use? Has the range of aids been restricted, or is the Commission currently considering whether to authorise other kinds of aid? What advantages would be accorded to Objective 1 regions where the aids are concerned?

4. How do its three Members concerned, Mr Lamy (trade), Mr Monti (competition), and Mr Liikanen (enterprise), work together in this area within the Commission? How are responsibilities split among them, and how do they coordinate their activities?

Reply given by Mr Lamy on behalf of the Commission

(13 July 2001)

1. At the request of the Committee of EU Shipbuilders' Associations (CESA), a procedure against certain Korean subsidies was initiated under the Trade Barriers Regulation in December 2000. In the light of a detailed inquiry into Korean and Community shipyards, the report of 8 May 2001 concluded that the Korean shipyards had received subsidies, that these had caused the Community industry considerable injury (particularly in the container and oil products and chemical carriers sectors), that the Commission should immediately approach the Korean authorities with a demand to withdraw the subsidies or eliminate the injurious effects thereof and that, if no amicable settlement was reached within a few weeks, the Commission should open proceedings under the Understanding governing the WTO's dispute settlement procedure.

2. In the light of the conclusions of the said report, and unless negotiations with the Korean authorities provide a solution by the beginning of July 2001, the Commission will decide whether the time has come to initiate proceedings in the WTO.

3. The Community legislation governing aids to shipbuilding is Council Regulation (EC) No 1540/98 of 29 June 1998 establishing new rules on aid to shipbuilding(1). Subject to specific conditions, the following aids are lawful: aids in the event of closure and restructuring, investment aid for innovation, regional investment aid, research and development aid and aid for protecting the environment. This year the only case of aid notified to Commission has been one of aid granted for research and development

Aid linked to contracts is also authorised as long as it is in line with the 1981 OECD Understanding on Export Credits for Ships.

In consultation with the industry the Commission is currently looking into the possibility of adjusting the provisions on aid for research and development.

4. The three Members of the Commission with responsibilities in this field (the Commissioners for Trade, Competition and Enterprise and the Information Society, including the fourth Commission report to the Council on the situation in world shipbuilding)(2), collaborated actively in deciding the Commission's position in this matter, in keeping with their respective areas of competence.

(1) OJ L 202, 18.7.1998.

(2) COM(2001) 219 final.