Strasbourg, 16/11/2001 (Agence Europe) - As we announced earlier (see EUROPE of 16 November, p.14), the European Parliament approved the European Commission's proposal aimed at setting up a temporary defence mechanism in the form of aid to European shipyards, to face up to South Korean dumping. Following the example of its economic and monetary committee, the Parliament did not therefore follow Danish Liberal Karin Riis-Jorgensen who proposed that it should reject the mechanism proposed by the European Commission and called for it to be able to function until end 2003 (on the vote in parliamentary committee, see also EUROPE of 25 October, p.16). It is now up to the Council to give its stance although, being crossed by the same dividing line as the Parliament, it has not yet managed to adopt a position.
The debate was marked by a defence put up by the MEPs of northern Member States against the Commission proposal, while the southern States seemed willing to even extend it. Karin Riis-Jörgensen confirmed her total opposition, that she had vainly sought to have adopted in committee, to aid that is limited and temporary as, she believes, European shipbuilding mainly needs full restructuring. "Are you going to amend your proposal?" she asked the European Commission. Commissioner Frits Bolkestein, who answered on behalf of Mario Monti, replied saying that the Commission does not see any reason why it should change its proposal. The MEPs who took the side of the rapporteur include: Hans Blokland (Europe of Democracies and Diversities, NL), for whom the EU's presentation of a complaint at the WTO against South Korea is hardly credible if the Union applies the compensation mechanism proposed. Subsidies that are not prohibited and which do not have proven adverse effects are "fully compatible" with the rules of the WTO, and recourse by the Union to the organisation's dispute settlement mechanism does not restrict this right, retorted Mr Bolkestein. Piia-Noora Kauppi (EPP-Ed, Finland) was also opposed to the aid envisaged, and cited the example of her country which, she recalled, focused its aid to shipbuilding on technologically more sophisticated ships. Swedish Liberal Olle Schmidt expressed himself along the same lines, recalling that his country was, during the seventies, the world's largest shipbuilder after Japan (we are the ones who built the largest oil tanker ever, he added).
On the other hand, all the Spanish MEPs who took the floor took a stance in favour of the Commission's proposal, stressing above all that it is a question of targeted aid limited in time. Such was the case of Manuel Perez Alvarez (EPP-ED), Luis Berenguer Fuster (Socialist) and Josu Ortuondo Larrea (Greens/EFA) who even wanted to enlarge the mechanism to ships other than oiltankers and tankers in general. Ilda Figueiredo (United Left) also found the Commission's proposal too restrictive. Furthermore, Portuguese Socialist Elisa Maria Damiao and Greek Efstratios Korakas (United Left) felt that such a mechanism is essential for defending the European shipyards that have suffered from South Korean dumping practices, and French Socialist Gérard Caudron hoped the mechanism proposed would be extended to gas carriers. The procedure opened at the WTO "will no doubt last three years" and it is "absurd" to leave our industry defenceless, he said, noting that, between 1988 and 1997, the South Korean production capacity increased 170% whereas that of the EU fell 30%.
According to the Commission, the proposal strikes a good balance between the maximum aid amount and the limited eligibility to such aid, and any enlargement of the eligibility would risk changing the nature of the proposal, replied Frits Bolkestein, who was only opposed, on behalf of the Commission, to extending the mechanism until end 2003. By the end of 2002, "we should have a good idea about how the WTO action is proceeding", he said. In an ideal world, we would not need to make this kind of proposals, said the Commissioner, recognising that operating aid is particularly distorting. However, it was right for the Commission to take action against behaviour like Korea's, he insisted.