The European Union Commission is likely to recommend at its regular meeting next week that it take action in the World Trade Organization against South Korea for alleged unfair practices in its shipbuilding industry, an EU source said on 24th April. Talks between EU and South Korean officials haven't managed to settle their differences, the official said. If the WTO action goes ahead, the EU will introduce “defensive, temporary support measures" for its shipbuilding industry, he said.
“This won't be a reintroduction of state aid to the industry, which has been illegal, with exceptions for specific cases such as research and development, since December last year”, said. "This is the introduction of targeted support for shipbuilding where it has been proved to be disadvantaged by unfair Korean practices," he added.
European shipbuilders have charged that the Korean government has supported non-market pricing practices through massive debt write-offs to ailing shipyards. In a report released last week, the Korea Shipbuilders' Association called the Commission's and CESA's complaints against the Korean industry "groundless”. "Korean shipbuilders owe their market position to exchange-rate factors, increased productivity, and - not least - non-price factors such as quality, reliability and on-time delivery," KSA said in a statement.