Commissie staat staatssteun voor Europese scheepsbouw toe tot maart 2005 (en)
The existing mechanism allowing for the grant of temporary state aids in the shipbuilding sector (so-called temporary defensive mechanism- TDM) should be extended until 31 March 2005 according to a decision adopted today by the Commission which will now be sent to the Council and to the European Parlament. Announcing this decision today, the EU Commissioner for competition, Mario Monti stated: "While State aid is certainly not the way forward to make EU shipbuilding more competitive globally, today's decision does show that the Commission recognises the exceptional circumstances in cases where Community interests are at stake. The extension until March 2005 is justified because no solution has been found so far bilaterally or at WTO level
EU Trade Commissioner Pascal Lamy added: "Today's decision is a clear signal that we are not ready to let European shipbuilders down while they suffer the consequences of unfair Korean practices. In the meantime we will continue to defend our case against these practices in the WTO. I hope Korea will put an end to its subsidies so that this issue can be settled."
Today's decision reflects the Commission's twin track strategy against unfair trade practices by South Korea. Unfair practices continue to injure EU shipyards and direct aid in support of contracts for the building of container ships, chemical and product tankers and LNG carriers should remain authorised until 31 March 2005
The scope and aid intensities allowed under the existing TDM provisions as set forth in Council regulation (EC) No 1177/2002 of 27 June 2002 will remain unaltered.
The principal provisions of the temporary defensive mechanism are the following:
Maximum aid intensity of 6% of contract value;
Scope: container ships; product and chemical tankers and Liquefied Natural Gas (LNG) tankers;
Expiry of the Regulation: 31 March 2005.
The WTO panel started its work only in December 2003 and its final report is expected not earlier than in August 2004. Taking into consideration a possible appeal by one of the parties, a final decision of the WTO Appellate Body is not awaited before beginning 2005.
The TDM would be desactivated, however, at any earlier date of conclusion of an agreed solution or suspension of the WTO proceedings.
For more information:
IP/01/630, MEMO/01/167, IP/01/656, IP/01/1078, IP/02/642, IP/02/1389 and IP/02/1395, IP/03/821, IP/03/895
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