ROK Shipbuilders Face EU Lawsuit
European Trade Commissioner Pascal Lamy yesterday warned that the European Union is considering filing a suit with the World Trade Organization (WTO) over the pending shipbuilding disputes between the EU and Korea, as well as reactivating a subsidy mechanism for EU shipyards.
``In our view, Korean shipbuilders have expanded with the help of subsidies or non-commercially based finance,'' he said. ``This excess capacity acts as a deal weight on the world's shipbuilding market and is threatening the existence of the European shipbuilding industry.''
Pointing out that the worldwide shipbuilding industry is in a crisis due to downward-spiraling prices resulting from excess capacity, he said, ``In this respect, the expansion of already over-leveraged Korean yards was largely debt-financed and made possible by financial institutions not operating under market conditions,'' he said.
In his first visit to Korea as Trade Commissioner, he urged the Korean government to move rapidly to find a solution. However, Lamy emphasized that both sides will make their best efforts to avoid a WTO case. ``We should not let the blood and thunder of our trade disputes blind us from the reality, which is that EU-Korea relations are stronger now than they have ever been,'' he said.
``The European Commission has launched an investigation into these practices and depending on the result, we may have no alternative other than to bring the case to the WTO,'' he warned.
With regard to Wednesday's meeting with Minister of Trade Han Duck-soo, he said, ``We both think it is very important that the Round be launched as soon as possible and that it have a comprehensive agenda,''
He said both sides have very similar views on all aspects, including the need to advance trade liberalization while strengthening the rules-based trading system, adding the EU and Korea have a very strong recent record of cooperation on all multilateral trade issues. …