South Korea Faces WTO Action For Shipbuilding Practices

Friday, November 12, 1999
The European Union is considering taking action against South Korea under the World Trade Organization, accusing the country of using western subsidies to sell ships at below construction cost and putting European rivals out of business. "The sector is facing a critical situation worldwide with very low prices and a serious overcapacity caused by the Republic of Korea," EU industry ministers said after a regular meeting where they discussed a European Commission report on the world shipbuilding situation. The ministers asked industry, national governments and the Commission to seek "as much detailed evidence as possible...in order to take appropriate action under the WTO". EU Enterprise Policy Commissioner Erkki Liikanen specifically charged South Korea with a deliberate policy of building up a very strong shipbuilding industry through increased capacity and below-cost prices. South Korea, he said, increased its share of the world market to 35 percent, well ahead of Japan and the 15-nation EU. The three make up for about 80 percent of the world shipbuilding market. The most dramatic change was in container vessels, with Korean yards now grabbing 70 percent of contracts worldwide from a previous 15 percent market share, he said. The Commission has been complaining for over a year that South Korea may have been channeling part of a $58 billion bailout from the International Monetary Fund in 1997 into its shipyards. The Korean government has rejected the allegations. "The IMF and the World Bank ought to carry out an analysis of whether the credits are being used to subsidize Korean shipyards," Siegmar Mosdorf, German state secretary in charge of industry, said. Germany and Spain have been the most vocal critics of the Korean increased competitiveness after the industry underwent a severe restructuring which translated into heavy job losses. The sector still employs over 100,000 people in Germany, including related industries. Despite the harm to European industry, Finnish Industry Minister Erkki Tuomioja was against opening a subsidy war by allowing national EU governments to support their own business. The EU agreed earlier this decade to end subsidies to the industry. "The most important message of this meeting is to the Koreans. We would not be helping this if we said we're reconsidering subsidies," said Tuomioja, whose country holds the EU rotating presidency.

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter April 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Shipbuilding

Bollinger Wins Contract for Phase II FRC Builds

Louisiana shipbuilder Bollinger Shipyards announced it has secured a contract to build Phase II of the Sentinel Class Fast Response Cutters (FRC) for the United States Coast Guard (USCG).

Massive Layoff Ahead for Hyundai Heavy

Another massive reduction in the Korean shipbuilding workforce may come as most shipyards are still struggling with falling orders and mounting losses, reports Yonhap quoting industry sources.

Daewoo Shipyard Posts Q1 Operating Loss

South Korean shipbuilder Daewoo Shipbuilding & Marine Engineering Co. posted a first-quarter loss after incurring more costs to finish some offshore projects.   First-quarter

Navy

This Day In Naval History: May 5

1943 - USS Permit (SS 178), USS Snook (SS 279) and USS Sawfish (SS 276) damage two Japanese ships and sink two freighters and a gunboat.   1944 - The hospital ship,

SharpEye Radar Installed and Commissioned on SAS Drakensberg

Kelvin Hughes, a company in the design and supply of navigation and security surveillance systems, has announced the installation and commissioning of a SharpEye

Arabian Shipping at Risk of Al Qaeda Attack

Al Qaeda's Yemen branch remains a powerful force and poses a growing risk to merchant ships in vital waterways nearby despite efforts by Yemeni government forces

 
 
Maritime Careers / Shipboard Positions Naval Architecture Navigation Pod Propulsion Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.0721 sec (14 req/sec)