WRITTEN QUESTION E-3758/00

by Jaime Valdivielso de Cué (PPE-DE) to the Commission

(4 December 2000)

Subject: Shipbuilding

On 24 October 2000 the Committee of EC Shipbuilders' Associations (CESA) submitted a formal complaint to the Commission against the unfair competition which South Korea has been practising for over two years now. This situation is documented and proven in the Commission's reports on the subject, notably that of 14 April 2000.

Can the Commission state what benefits have arisen from the friendship agreement between the EU and South Korea?

Can the Commission state how it intends to support the shipbuilding industry in the face of the long-term damage inflicted on it by South Korea's unfair trade practices?

Can the Commission state how the industry will be compensated for the damage suffered?

Answer given by Mr Lamy on behalf of the Commission

(22 January 2001)

The bilateral dialogue with Korea led to the signing of the agreement known as the Agreed Minutes on 22 June 2000, under which Korea made important commitments to stabilise the situation in the world shipbuilding market.

Within this framework, Korea first of all recognised the political importance of this issue for the Community.

It then acknowledged that mistakes might have been made in the past and undertook in future to prevent the recurrence of the unfair practices objected to by the Community.

It also recognised its responsibilities as the major player in the world market and agreed that a price increase was necessary to stabilise the situation and move towards commercially viable price levels.

During the ensuing consultations, this fairly positive outcome was tarnished by the lack of an agreement on concrete measures to implement the bilateral agreement, ensure compliance and monitor the results.

It was against this background that the European industry lodged its complaint under the Trade Barriers Regulation (TBR)(1). The Commission upheld the complaint and an enquiry was officially opened on 2 December 2000.

At its meeting on 29 November 2000 the Commission decided that if it was not possible to reach a satisfactory solution with Korea under the TBR procedure, it could take the case to the World Trade Organisation (WTO) with a view to penalising Korea's unfair practices. In conjunction with action in the WTO, the Commission also suggested to the Council that a temporary defence mechanism be introduced for the period required to complete the WTO trade procedure. This measure, allowing support for Community shipyards, would be concentrated on market segments directly affected by unfair competition from Korean shipyards.

On 5 December 2000, the Industry Council asked the Commission to take all possible steps to stop the Korean practices and report on the results of action already taken no later than 1 May 2001.

It also noted the Commission's initiative to introduce an appropriate temporary measure to fight against the unfair practices until the end of the WTO procedure, in the absence of a satisfactory agreement with Korea.

(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).