92001E1676

WRITTEN QUESTION E-1676/01

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

(14 June 2001)

Subject: Shipbuilding industry

On 8 May 2001 the Commission at last proposed, in view of the unfair competition which has been practised for years now by South Korea, as described in its fourth report on the industry, that the matter should be brought before the WTO on 30 June.

Also proposed is the immediate adoption of aid for this long-suffering industry, to a maximum of 14 % for the affected sections. Aid had been suspended on 31 December 2000.

What compensation will be granted to enterprises in this sector for the damage suffered between 31 December 2000 and the present, given that almost no orders have been registered and the Union's industry has been left totally at the mercy of South Korea's unfair competition?

Answer given by Mr Monti on behalf of the Commission

(30 July 2001)

As pointed out by the Honourable Member in his question, there has been a low ordering activity for ships the first months of this year in the Community. However, this can to a large extent be explained by a very large ordering activity at the end of last year linked to the abolition of operating aid. The Commission cannot see any need for compensating the yards for this effect on the timing of orders. Furthermore, the reduced ordering activity in 2001 has not only been noted in the Community but also elsewhere. E.g. South Korean yards are reported to have registered a 32,6 % drop in orders the first quarter of 2001 compared to the same period last year.

The Commission is actively pursuing all possible means to reach a normal situation in the world shipbuilding market. The Commission is thus negotiating with the South Korean government in order to reach a stable solution, which should ensure normal prices on the world market. The Commission is in parallel preparing a World Trade Organisation (WTO) action against illegal Korean subsidies and a temporary defensive mechanism for Community yards. The WTO action against Korea will be launched, and the temporary defensive mechanism will be proposed to the Council and Parliament if the negotiations with Korea fail.