Brussels, 06/03/2001 (Agence Europe) - On Monday, European Commission experts began a two-week mission to South Korea, to inquire into dumping allegations concerning South Korean shipyards, the Korean press agency, Yonhap, stated. Despite the signing of a joint memorandum in April 2000, Europeans and Koreans have so far not managed to come to a friendly settlement of the dispute on this matter. In December, the Commission opened formal proceedings on Korean subsidies to shipbuilding, on the basis of a complaint filed by the Committee of European Union Shipbuilders and Ship Repairers Association (CESA) (See EUROPE of 4 and 5 December, p.11). The Commission-set itself five months in which to complete its inquiry, in the context of the European regulation on trade barriers, before possibly initiating formal proceedings at the World Trade Organisation.
According to the report on shipbuilding in the world, adopted last November by the Commission, Korean shipyards continue to accept orders at prices that do not fully cover production costs, thanks to State aid. Dumping of this kind reportedly allowed Korea to bag nearly 74% of the additional orders made between 1999 and 2000 and to dominate almost 60% of the market in the container ship sector (see EUROPE of 16 November, p.12).
South Koreans, for their part, give their assurance that their success on the world market is linked to the low won exchange rate, the fall in national currency having brought export prices for ships built in Korea down by 30-40%. The Korean Shipbuilders Association (KSA) also assures that the 1997/1998 crisis caused Korean shipyards to carry out thorough restructuring, which explains their high production capacity.
At the request of the Industry Council, the European Commission undertook to accept certain subsidies to the European shipyards unless both parties come to an agreement by May, despite the fact that the European regime for aid to shipbuilding expired last December (see EUROPE of 6 December, p.6).