WRITTEN QUESTION P-1181/02 by Karin Riis-Jørgensen (ELDR) to the Commission. South Korea's distortion of the shipbuilding market: referral to the WTO.
Date: 2002-04-17
Institutions: European Parliament, Provisional data
Subjects: Dispute Settlement Body, European Commission, South Korea, common commercial policy, interinstitutional relations (EU), international commercial arbitration, operation of the Institutions, production aid, shipbuilding, trade dispute

C 137 E/2

Official Journal of the European Union

EN

12.6.2003

(2003/C 137 E/002)

WRITTEN QUESTION P-1181/02

by Karin Riis-Jørgensen (ELDR) to the Commission

(17 April 2002)

Subject: South Korea’s distortion of the shipbuilding market: referral to the WTO

South Korea has long been distorting competition on the shipbuilding market by pricing its vessels below
their real cost. The European Union and South Korea have held talks with a view to bringing about
healthy competition on the shipbuilding market, but to no avail.

Disagreements over international competition issues are dealt with in the appropriate dispute settlement
bodies of the World Trade Organisation (WTO). Both the Union Member States and South Korea belong to
the WTO.

Because the above negotiations ended in summer 2000 without levelling the playing field, the Member
States meeting within the Council in December 2000 unanimously agreed that the EU should complain to
the WTO because South Korea was breaching its obligations regarding support for ship exports.

Parliament also supported that view in its report on the second report from the Commission to the
Council on the situation in world shipbuilding (A5-0371/2000), in which it ‘[called] on the Commission to
initiate a dispute settlement procedure with the Republic of Korea before the World Trade Organisation
(WTO)’.

In spite of these facts, the Commission has still not referred the matter to the WTO dispute settlement
body.

Instead it has, totally artificially and with no solid legal justification, linked the start of a proper WTO
dispute settlement procedure to its proposal for a regulation which stipulates that limited production aid to
individual European shipyards could be temporarily allowed, while the WTO procedure was taking place,
so as to counterbalance South Korea’s action. Differences of opinion among the Member States as to the
legitimacy and rationality of production aid have made it impossible to bring the proposal for a regulation
into force.

The South Korean Government has said that South Korea is aiming to build even bigger ships, especially
cruise liners, and still does not consider its aid policy to have been in any way wrong or contrary to
international agreements.

From the point of view of the European shipbuilding industry the situation is completely intolerable.
When will the Commission abandon its inaction and ensure that the matter can at last be dealt with by the
WTO?

Answer given by Mr Lamy on behalf of the Commission

(5 June 2002)

in particular those established under the auspices of

Following a complaint
the Union Shipbuilders’
lodged on 24 October 2000 by the Committee of
Associations (CESA) against subsidies granted to Korean shipbuilding companies in alleged violation of
Articles 3 and 5 of the World Trade Organisation (WTO) Agreement on Subsidies and Countervailing
Measures, the Commission initiated an investigation under the Trade Barriers Regulation (TBR), 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
the World Trade Organisation (1).
trade rules,
This investigation showed that Korea has granted substantial amounts of subsidies and that there was
evidence that the subsidies in question were causing adverse effects to Community industry. On the basis
of the conclusions of this first TBR Report,
the Commission proposed to Member States to assist
Community shipyards in those segments that have been considerably injured by unfair Korean competition
via a ‘temporary defense mechanism’ (TDM). The Commission’s proposal was limited to those sectors of
vessels for which material
injury and serious prejudice had been found. Moreover, the Commission
announced to Member States that it would not initiate a WTO action against Korean subsidies in the WTO
unless Member States approved the TDM. Early December 2001, the Council did not take a decision on
the proposal tabled by the Commission.

12.6.2003

EN

Official Journal of the European Union

C 137 E/3

In November 2001, CESA requested the Commission to update the first TBR Report, so as to examine
whether adverse effects had been suffered by the Community industry during the period covering the
13 months (i.e. 1 December 2000 to 31 December 2001) following the end of the original period
considered. Accordingly, the Commission carried out a supplementary investigation, the findings of which
will be discussed by the Member States at the TBR Committee of 29 May 2002.

At this stage, the Commission can only confirm that, following consultation of the TBR Committee, it will
be in a position to take a decision under the Trade Barriers Regulation on whether to proceed with a
complaint to the WTO as soon as the Council adopts the Temporary Defensive Mechanism, in accordance
with its twin-track strategy.

(1) OJ L 349, 31.12.1994.

(2003/C 137 E/003)

WRITTEN QUESTION E-1296/02

by Jens-Peter Bonde (EDD) to the Commission

Subject: Organisations on the list of terrorist organisations

(7 May 2002)

Does the Commission agree that the inclusion of an organisation on the EU list of terrorist organisations
does not in itself mean that, in criminal proceedings in Denmark, it may be regarded as having been
proven to be a terrorist organisation within the meaning of the proposed provisions?

Answer given by Mr Patten on behalf of the Commission

(7 June 2002)

Council Common Position 2001/931/CFSP of 27 December 2001 (1), provides for the application of
specific measures to combat terrrorism. Such measures may lead to the freezing of funds, other financial
assets or economic resources of persons, groups and entities on the basis of specific Community
legislation. The measures may also entail, through police and judicial co-operation in criminal mattters
within the framework of Title VI of the Treaty on European Union, mutual assistance by Member States in
combating and preventing terrorist acts.

The Council decides on the list of persons, groups and entities to whom the Common Position applies.

The list is drawn up on the basis of precise information or material in the relevant file which indicates that
a decision has been taken by a competent authority in respect of persons, groups or entities concerned to
investigate or prosecute them. The investigation or prosecution has to be for a terrorist act, an attempt to
perpetrate, participation in or facilitation of such an act. Furthermore, the investigation or prosecution
must be based on serious and credible evidence or clues or a condemnation for such deeds. Also persons,
groups and entities indentified by the Security Council of the United Nations as being related to terrorism
and against whom it has ordered sanctions may be included in the list.

The conclusion is therefore justified that when a person, group or entity is listed, such listing does not
necessarily mean that is has been proven that the person, group or entity concerned has perpetrated a
terrorist act, or attempted perpetrate, to particpate in or to facilitate such an act as defined in said
Common Position.

(1) OJ L 344, 28.12.2001.