Considerations on COM(2004)26 - Amendment of Regulation (EC) No 1177/2002 concerning a temporary defensive mechanism to shipbuilding

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dossier COM(2004)26 - Amendment of Regulation (EC) No 1177/2002 concerning a temporary defensive mechanism to shipbuilding.
document COM(2004)26 EN
date March 11, 2004
 
(1) The European Commission and the Government of the Republic of Korea signed the Agreed Minutes relating to world shipbuilding on 22 June 2000, hereinafter 'the Agreed Minutes', with the aim of restoring fair and transparent competitive conditions. However, the commitments under the Agreed Minutes, notably the commitment of ensuring an effective price surveillance mechanism, have not been effectively implemented by the Korean side and therefore a satisfactory result has still not been obtained.

(2) As an exceptional and temporary measure, and in order to assist Community shipyards in those segments that have suffered adverse effects in the form of material injury and serious prejudice caused by unfair Korean competition, a temporary defensive mechanism to shipbuilding was established by Regulation (EC) No 1177/2002(2) for limited market segments and for a short and limited period only. In particular, the temporary defensive mechanism was only authorised after the Community initiated dispute settlement proceedings against the Republic of Korea and could no longer be authorised if these dispute settlement proceedings were resolved or suspended.

(3) On 8 October 2002, as set out in Decision 2002/818/EC(3) the Community initiated dispute settlement proceedings against the Republic of Korea, by requesting consultations, in accordance with the World Trade Organisation's Understanding on the rules and procedures for the settlement of disputes.

(4) The consultations which were held between the Republic of Korea and the Community, as envisaged in the WTO Agreement, did not reach any satisfactory solution. On 11 June 2003, the Community requested the WTO Dispute Settlement Body to set up a panel over the unfair Korean shipbuilding practices.

(5) Regulation (EC) No 1177/2002 expires on 31 March 2004. The Republic of Korea has still not effectively implemented its commitments under the agreed minutes and the WTO disputes settlement proceedings are not expected to have been resolved by that date. It is therefore needed to prolong the temporary defensive mechanism.