Brussels, 24/10/2000 (Agence Europe) - The European Commission received an official complaint from the Community ship building industry against subsidies that South Korea grants to its ship yards, indicated a spokesperson this Tuesday. This challenge, which has been the object of unfruitful bilateral talks for nearly one year, could be taken, if need be, before the World Trade Organisation.
The European Commission now has 45 days to examine the complaint by the Union committee of naval associations, which notes the details of the Korean subsidies and brings elements of proof of a prejudice resulting from these practices. If these elements are considered insufficient, the European Commission will open a procedure under the Community regulation of barriers to trade and it will have 5 months to analyse the situation and carry out checks, possibly in Korea. At the end of this period (which could be extended by two months), the European Commission will have to provide its conclusions. It now seems resolved to taking the case before the WTO, if the existence of trade barriers contrary to international law and of the prejudice raised by the Community industry are confirmed. The spokesperson recalled that "all the means possible to find an amicable solutions have been exhausted". The bilateral talks in fact ended last September with a failure.
Despite the commitments made in April ("EU/Korea Minutes") with a view to promoting fair competition and stabilisation on the world market, data published recently by the European industry among others shows that this market is now in a surplus capacity (+30%) situation and that the orders placed with Korean shipyards rocketed during the first half of this year. This spectacular rise has mainly been to the advantage of two major shipyards which were in difficulty, namely Daewoo and Samho, whose situation has now recovered thanks to indirect aid granted by the Korean State. The Commission had sought to verify the situation on the ground but access to most of the sites was refused. According to the spokesperson, it is now the time to act. "Given the formal complaint lodged by the industry, we must examine this more closely and as soon as possible, and then decide what measures should be taken", he specified.