Brussels, 10/05/2001 (Agence Europe) - The reaction of the shipbuilding sector to the European announcement aimed at countering the unfair practices of South Korean shipyards was not long in coming (see yesterday's EUROPE, p.10). On Tuesday, the European industry welcomed the dual provisions recommended by the European Commission with relief and circumspection, while the Korean side challenged the justification of the accusations without, however, closing the door to an eventual compromise.
The Korea Shipbuilders' Association (KSA) "denies that its member companies received any illegal subsidies". All restructuring was undertaken by creditor banks and financial institutions "out of purely commercial considerations in order to minimise their own potential losses", states KSA. It points out that similar measures took place in many sectors to modernise and streamline the Korean economy in the wake of the Asia crisis. It also states that "the Commission has failed to prove that European shipbuilders have suffered any injury from their Korean counterparts", saying that European shipbuilders lost their ability to compete in certain market segments "well before 1997" and that the largest proportion of European shipbuilding is devoted to cruise ships, a profitable segment where they face no competition. In addition, says KSA, the lost market shares have mainly been to the advantage of Poland, Croatia and (…) and not to Korea". It confirms, however, that it is "open to an amicable solution" if it is "based on realistic and acceptable terms".
CESA, Committee of EU Shipbuilders' Associations, has played an active part in the Community procedure and welcomed the long-awaited concrete measures against trade distortion in the shipbuilding sector and, in particular: the Commission conclusions confirming that the complaint by the Committee "is not only factually correct but also legally justified". It also welcomed the fact that the Commission's recommendation that the matter be taken before the WTO "underlines its clear intention to stop any further injury to the EU industry". The CESA cautiously waits to see the "detailed wording" of the proposal for the temporary defensive mechanism before evaluating the effectiveness of the instrument. It said it was confident that the up-coming Council of Industry on 14 and 15 May would "give additional considerations to the practical requirements in the shipbuilding business", and would above all be "a business-like anticipation of market developments".