EC GOES TO WTO OVER KOREAN SHIPBUILDING SUBSIDIES

EC GOES TO WTO OVER KOREAN SHIPBUILDING SUBSIDIES    The European Commission on Tuesday announced that it will launch a World Trade Organization procedure against unfair Korean shipbuilding practices and allow “temporary and limited state aid” for European shipbuilders.
   European Trade Commissioner Pascal Lamy said: “We have negotiated in good faith to find an amicable solution to this problem with Korea but this has not proved to be possible.” According to the European Commission, the Korean delegation found no support in the Korean industry for any of the proposals discussed with the European Union.
   “Korea has left us with no option (but) to go to the WTO,” the EC said.
   In June, the council of the European Union approved the twin-track strategy proposed by the European Commission to counter alleged unfair Korean practices in the shipbuilding sector.
   The EU set a deadline of Sept. 30 to resolve the dispute amicably, failing which it would immediately launch procedures for a panel against Korea in WTO and activate a “temporary defensive mechanism” for European shipbuilding.
   European states will be allowed to pay subsidies to shipyards of up to 6 percent of contract value, covering containerships and product and chemical tankers.