2000/409/EC: Council Decision of 19 June 2000 on the signing and conclusion of Agreed Minutes between the European Community and the Government of the Republic of Korea relating to the world shipbuilding market
Date: 2000-06-19
Institutions: Council of the European Union
Subjects: South Korea, competition, international agreement, international market, shipbuilding

28.6.2000

EN

Official Journal of the European Communities

L 155/47

II

(Acts whose publication is not obligatory)

COUNCIL

COUNCIL DECISION

of 19 June 2000

on the signing and conclusion of Agreed Minutes between the European Community and the
Government of the Republic of Korea relating to the world shipbuilding market

(2000/409/EC)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European
Community, and in particular Article 133 in conjunction with
the first sentence of Article 300(2) thereof,

Having regard to the proposal from the Commission,

Whereas:

(1)

(2)

The world shipbuilding industry is experiencing severe
problems due mainly to overcapacity. Unlike
the
Community industry, which carried out a programme of
restructuring and capacity cuts throughout the 1990s,
Korean shipyards substantially increased their capacity
from 1993 onwards.

A study of Korean contracts carried out for the Commis-
sion by an independent consultant showed that Korean
shipyards were pricing well below cost. Such practices
have enabled the Korean industry to increase its market
share substantially, in particular at the expense of the
Community industry, which is currently experiencing
severe difficulties. With world prices extremely low, the
Community industry saw its market share decline from
25 % in 1998 to 17 % in 1999.

(3)

On 9 November 1999 and on 18 May 2000 the
Council, examining the first and the second reports on
the situation in world shipbuilding presented by the

Commission under Article 12 of Council Regulation
(EC) No 1540/98 of 29 June 1998 establishing new
rules on aid to shipbuilding (1), noted that the sector was
facing a critical situation worldwide and expressed its
serious concern at such practices which were severely
damaging to the interests of
shipyards within the
Community. In their Conclusions, the industry ministers
called on the Commission to pursue its efforts to estab-
lish a level playing field for the sector by immediately
engaging the Republic of Korea in constructive consulta-
tions with a view to halting the unfair competition.

As instructed, the Commission accordingly held several
rounds of
intensive consultations with the Korean
Government and negotiated draft Agreed Minutes. Once
the Agreed Minutes are signed they will commit the
Korean Government
to refrain from any direct or
indirect intervention to underwrite loss-making Korean
shipyards, to apply internationally accepted financial and
accounting principles and to ensure that Korean ship-
yards set prices that reflect market conditions. The
Agreed Minutes also provide ad hoc consultation machi-
nery to deal promptly with any issue raised by either of
the parties.

(4)

(5)

The Agreed Minutes should be approved,

HAS DECIDED AS FOLLOWS:

Article 1

The Agreed Minutes between the European Community and
the Government of the Republic of Korea relating to the world
shipbuilding market are hereby approved.

The text of the Agreed Minutes is attached to this Decision.

(1) OJ L 202, 18.7.1998, p. 1.

L 155/48

EN

Official Journal of the European Communities

28.6.2000

The President of the Council is hereby authorised to designate the person empowered to sign the Agreed
Minutes in order to bind the Community.

Article 2

Done at Luxembourg, 19 June 2000.

For the Council

The President

L. CAPOULAS SANTOS