Shippers Welcome EU’s South Korea Plans
The European Community Shipowners’ Association (ECSA) and SEA Europe have welcomed plans by the EU to investigate South Korea’s alleged subsidizing of its shipping sector.
In a joint statement, both groups once again called for a “global level playing field” in order to help the maritime industry benefit from open markets and fair trade.
In October 2018, the ECSA and SEA Europe criticized the South Korean government following reports it was going to hive Hyundai Merchant Marine US $5 billion to finance an order for 20 LNG-powered megaships.
The capital was partly organized by the Korea Ocean Business Corp., a state-backed business founded with the aim of helping South Korea’s foundering maritime sector.
The order was given to three prominent but struggling shipbuilding firms – Daewoo Shipbuilding and Marine Engineering Corp., Samsung Heavy Industries and Hyundai Heavy Industries.
The move provoked criticism from the ECSA and SEA Europe, and also prompted the Japanese government to initiate legal proceedings.
Tokyo, according to reports, saw South Korea’s actions as akin to state-aid, which is prohibited under WTO laws.
The ECSA and SEA Europe said: “Today, the EU and South Korea will discuss the South Korean shipping and shipbuilding state subsidies measures in the context of the EU - South Korea Free Trade Agreement (FTA) implementation.
“SEA Europe and ECSA highly welcome 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 EU notified WTO that it wants to join Japan’s consultations with South Korea on measures adopted by South Korea that affect trade in commercial vessels.
“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.”