The European Commission and South Korea have signed an agreement aimed at allaying European concerns that South Korean shipy
ards charge unfairly low prices, the European Union's executive body said. But the Commission said in a statement it has already asked for consultations with South Korea, as allowed for under the new agreement, "in order quickly to clarify several issues of concern and receive answers to key questions." These talks will take place in Seoul on July 18 and 19. The Commission gave no details of what it wanted to discuss.
"The Commission considers that the full implementation of Korea's commitments will constitute the effective means to avoid a potential dispute between the EU and Korea in shipbuilding and (to) work together towards a fair and competitive world shipbuilding market," it said. The 15-nation EU and the South Korean government began talks last December on shipbuilding after the Commission accused South Korea of using International Monetary Fund aid received after the 1997 Asian financial crisis and other subsidies to undercut European shipbuilders. South Korea denied the charge.
The agreement, agreed in April, aimed to stabilize the world shipbuilding market, which the EU says suffers from over-capacity and steadily falling prices. The pact contains a pledge not to subsidize shipbuilding, and commitments to transparency and commercial pricing. It provides a consultation mechanism allowing either side to request talks if they feel the agreement is not being respected.