On 6 December, the EU and South Korea discussed the South Korean shipping and shipbuilding state subsidies measures in the context of the EU – South Korea Free Trade Agreement (FTA) implementation.
SEA Europe (the European Shipyards and Maritime Equipment Association) and ECSA expressed their satisfaction of these discussions, as European shipbuilding and maritime equipment industry and European shipowners, need a global level playing field and benefit from fair trade and competition as well as open markets.
The two associations have previously voiced serious concerns about the negative impact of recent ‘unsustainable, unfair and economically unsound trade-distorting’ rules in the shipbuilding and shipping industry, which ‘jeopardize the recovery path of the global market towards a healthier business environment and more profitability’.
In addition, the two associations expressed concerns over the recent EU decision to join Japan’s consultations with South Korea on measures adopted by South Korea that affect trade in commercial vessels.
Responding to the increased competition and the dwindling shipbuilding orders which have brought an idle period for the domestic shipbuilding industry, the Republic of Korea has developed and implemented a range of measures to provide financial support to its shipbuilders.
However, Japan considers that certain measures taken by South Korea related to state aid measures, are inconsistent with its obligations under the WTO Agreement on Subsidies and Countervailing Measures (ASCM) and the GATT 1994.
SEA Europe and ECSA are concerned with any interference into market forces through unfair state aid measures and cargo reservation schemes. The actions launched by the EU and Japan now confirm these concerns. Both associations stand united in upholding the need for governments to fully respect and abide by their international obligations.
