EC SAYS WORLD SHIPBUILDING IS IN CRISIS

   The European Commission said in a market assessment report that the world shipbuilding industry is in crisis.
    "As capacities continue to grow, competition from low-wage countries is getting stronger and prices are nose-diving," the EC said.
    The Brussels agency said that, for certain types of ships, profits from shipbuilding operations "seem almost impossible to achieve."
    This situation has been made more acute by the Asian crisis and shipbuilding capacity cuts are needed, it added.
    Under the European Union’s council regulation No. 1540/98, the EC is required to present to the council of ministers a report on the market situation and appraise whether European yards are affected by anti-competitive practises.
    The EC expressed concerns about South Korean shipyards and the country’s emergency measures in favor of ailing shipyards.
    The report identifies areas of possible EU action to address competition issues. These include ensuring that the conditions of the International Monetary Fund-led rescue package are fully respected by Korea; examining the possibilities offered by the Agreement on Subsidies and Countervailing Measures of the World Trade Organization; continuing to monitor the market; and seeking an agreement to establish a level-playing field in shipbuilding.
    The 1994 agreement of the Organization for Economic Cooperation and Development to cut shipbuilding subsidies has not been implemented, the EC said.
    In a related development, the EC said that the program of "restructuring aids" – subsidies – for German and Spanish shipyards has been completed.