WRITTEN QUESTION E-0240/02 by Charles Tannock (PPE-DE) to the Commission. Korean shipbuilding subsidies and the W.T.O..
Date: 2002-02-06
Institutions: European Parliament, Provisional data
Subjects: Dispute Settlement Body, European Union, South Korea, World Trade Organisation, economic support, international trade, restriction on competition, shipbuilding

26.9.2002

EN

Official Journal of the European Communities

C 229 E/65

The same principle of equal charges for cross-border credit transfers and those effected within a Member
State will apply from 1 July 2003, that date being chosen so that the infrastructure necessary can be set
up.

Both electronic transactions and credit transfers are governed by the principle of the transparency of
charges levied, even where a currency other than the euro is involved in a cross-border payment
transaction in euro.

The Council did not consider it appropriate at present to apply the principle of equal charges to paper
cheques as by nature they cannot be processed as efficiently as the other means of payment, in particular
electronic payments. However, the principle of transparent charges also applies to cheques.

It should also be recalled that because of the disappearance of the Eurocheque on 1 January 2002 the
cheque is essentially used for payments made within a Member State and in certain Member States no
longer exists.

The Regulation also provides that not later than 1 July 2004 the Commission shall submit to the European
Parliament and to the Council a report on the application of this Regulation and in particular on the
advisability of
improving consumer services by strengthening the conditions of competition in the
provision of cross-border payment services. That report will be accompanied, where appropriate, by
proposals for the amendment of the Regulation.

The Honourable Member is reminded that the Commission is responsible for the application of the rules of
competition, including unlawful agreements.

(1) OJ L 344, 28.12.2001, p. 13.

(2002/C 229 E/072)

WRITTEN QUESTION E-0240/02

by Charles Tannock (PPE-DE) to the Commission

(6 February 2002)

Subject: Korean shipbuilding subsidies and the W.T.O.

When it became apparent to the Commission that the Korean government was maintaining its sizeable
share of the world shipbuilding market through subsidies that contravened World Trade Organisation
(W.T.O.) rules why did the Commission not lodge a complaint as soon as possible with the W.T.O. rather
than waiting months before suggesting that the response should be to permit shipbuilders in certain
Member States to engage in similar behaviour? Does the Commission not believe that the appropriate
response to a violation of W.T.O. rules should be to proceed according to the accepted procedures, and
does the Commission not accept that its current proposals in this area would violate both our W.T.O.
obligations and the European Union’s own internal competition requirements?

Answer given by Mr Lamy on behalf of the Commission

(13 March 2002)

In its report under the Trade Barriers Regulation (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
in particular those
established under the auspices of the World Trade Organisation (1)), on Korean shipbuilding practice the
Commission found that Korean shipyards increased their market share in most segments of the world
shipbuilding market from 1997 to November 2000, causing considerable injury to Community shipyards
in certain segments. The Commission also found that certain Korean yards had received subsidies that

the Community’s rights under international

trade rules,

C 229 E/66

Official Journal of the European Communities

EN

26.9.2002

contravened World Trade organisation (WTO) rules. Therefore the Commission considered a double
response to be necessary. Accordingly, in 2001, it prepared to start a WTO Complaint and proposed a
Temporary Defensive Mechanism for shipbuilding. These two elements cannot be disassociated, as the
Temporary Defensive Mechanism cannot become effective until the Commission starts the WTO action
against Korea.

The Commission believes that the proposal for a Temporary Defensive Mechanism is fully compatible with
WTO law and the WTO Agreement on Subsidies and Countervailing Measures (ASCM) and the WTO Anti-
dumping Agreement (ADA). Subsidies, provided that they are not prohibited (i.e. export-contingent or
local content-contingent) within the meaning of Article 3 of the ASCM and are not demonstrated to cause
‘adverse effects’ within the meaning of Article 5 of the ASCM, are legitimate national policy instruments so
far as the WTO is concerned. Thus, under the WTO rules, the Community has the right to authorise aid to
its shipbuilding industry and did so for many years until 31 December 2000. The proposed Temporary
Defensive Mechanism neither imposes conditions so as to render it prohibited, nor can it be deemed to
cause adverse effects to third countries. Any claims of WTO incompatibility of the aid as such are
therefore groundless.

Furthermore, the proposed measures are not sanctions in the sense of the Dispute settlement procedure,
but permitted policy measures and therefore the recourse to Dispute Settlement can in no way be seen as
limiting the normal rights and obligations of Members under the WTO agreement, including the right to
provide WTO compatible aid.

Of course the Commission accepts that the appropriate response to a violation of WTO rules should be to
follow the appropriate WTO procedures. That is, indeed, what the Commission intends to do. However,
the WTO dispute settlement procedures are lengthy. In addition, the Union must show that it has the
capacity of dissuasion if it wishes to arrive at an agreement with Korea. In this respect, the proposed
Temporary Defensive Mechanism could keep the pressure on Korean shipyards.

At this stage, the Commission can only confirm,
in accordance with its twin-track strategy, that the
complaint to the WTO will be introduced immediately, if the Council adopts the Temporary Defensive
Mechanism.

(1) OJ L 349, 31.12.1994.

(2002/C 229 E/073)

WRITTEN QUESTION E-0246/02

by Maurizio Turco (NI) to the Commission

(6 February 2002)

Subject: Answer to Written Question E-3031/01 concerning UNIDCP activities in Afghanistan

In its answer of 15 January 2002 to Written Question E-3031/01 (1) the Commission, instead of answering
the queries concerning the activities of the United Nations Drug Control Programme in Afghanistan, makes
a detailed analysis of the Community’s role in helping displaced persons.

What the questioner wanted and still wants to know is:

D between January and December 2001 how much European funding (in euro) was spent or allocated to
the UNIDCP in Afghanistan, under what heading (budget item and project title), to what entity it was
paid (if other than the UNIDCP), what funding was subjected to controls and checks by what entity
and what the results were?

(1) OJ C 172 E, 18.7.2002.