Local view for "http://purl.org/linkedpolitics/eu/plenary/2001-03-12-Speech-1-154"
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"en.20010312.10.1-154"2
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".
Mr President, I would like to thank the three Members of Parliament for their contributions.
You are, of course, aware that the Commission favours those types of aid in which the distortion of competition caused by a case of State aid is offset by a positive incentive effect. This is why, in its decision of 29 November, the Commission decided not to extend the operating aid provided for in Article 3 of Regulation 1540/98.
The third report from the Commission to the Council on the situation of world shipbuilding, which I have just mentioned
confirmed that contract-related aid involved a range of negative effects on the single market. This aid was burdensome, unfocused
and distorted intra-Community trade.
The Commission is considering very carefully the form that the temporary mechanism should take if we cannot reach a satisfactory solution through talks with South Korea. On the one hand, we must steer clear of the problems we have encountered in the past and, on the other, we must find a useful instrument which will supplement both the current international talks and a WTO procedure, should this prove necessary, enabling Community shipyards to compete on an equal footing under standard conditions.
This mechanism should specifically discourage the unfair practices of South Korea for as long as the WTO procedure takes to reach its conclusion and target those market segments in which European industry has suffered directly as a result of the unfair trade practices of South Korea.
I can assure you that we are working on the preparation of the proposal with all speed. We will make every endeavour to ensure that it is ready within the timeframe set by the Council, should it be needed. Parliament will, of course, be kept informed of our progress. In the meantime, there must not be any doubt as to the Commission's determination to take up a position in defence of those Community shipyards which are suffering the consequences of unacceptable international trade practices which distort competition.
Aid for research and development was mentioned, in particular.
I would like to start by emphasising that the Commission is fully aware of the importance of European shipbuilding and of the specific difficulties encountered by many shipyards. We are fully aware of the nature of these difficulties.
The expansion of South Korean shipyards, which are already heavily in debt, has been made possible by further loans from financial institutions which do not operate under market conditions.
Various forms of indirect State intervention have enabled South Korea to keep capacities in production
which, had the normal commercial criteria been applied, would have had to be reduced in order to be able to meet effective market requirements.
This surplus capacity is acting like a dead weight on the world shipbuilding market and even threatening the future of some European yards.
The Commission feels that unfair competition practices in the international shipbuilding sector need to be tackled by means of appropriate mechanisms. This means, first and foremost, through talks and, as a last resort, in the WTO.
Although Commissioner Lamy is in a better position than I am to give you detailed information about the current state of these talks, I can assure you that the Commission is continuing to make every endeavour to negotiate a solution to the problem. It is, of course, willing to raise the issue in the World Trade Organisation and is currently making the necessary preparations to initiate the procedure. Commission Lamy made this quite clear to the South Korean authorities during his meeting with them in mid-February.
Should the current international talks fail to lead to a solution, the Commission has undertaken to refer the matter to the Council by 1 May and to propose a temporary
protective
support
mechanism. This does not mean reintroducing the former provisions on operating aid
laid down in Article 3 of Regulation 1540/98.
The third report from the Commission to the Council on the situation of world shipbuilding states clearly that the operating aid arrangements under said regulation have not provided a solution to the international trade problems.
It is precisely the typical negative consequences of operating aid that have led the Commission to express a generally negative opinion on this type of aid. Shipbuilding was the last industrial sector in which this type of aid was still authorised."@en1
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