WTO report criticizes EC shipbuilding subsidies
The World Trade Organization Friday issued a report criticizing the European Union and its member countries for shipbuilding subsidy schemes despite the Europeans' argument that they were a justified defense against unfair subsidies paid to South Korean shipyard competitors.
The long-running dispute over shipyard subsidies concerns the EC’s so-called “Temporary Defensive Mechanism for Shipbuilding” of 2002 and certain measures of European member states. At the time, the EC argued that there was factual evidence of Korea subsidizing its shipbuilding sector and causing injury to European shipbuilders. Korea asserted that this dispute arose from an attempt by the European Union to take the law into its own hands.
Having heard both South Korea and the European Union, a WTO panel reached the conclusion that EC Temporary Defensive Mechanism for Shipbuilding regulation, the national Temporary Defensive Mechanism for Shipbuilding schemes of Denmark, France, Germany, the Netherlands and Spain, and the European Commission decisions authorizing those schemes, were inconsistent with Article 23.1 of the Understanding on Rules and Procedures Governing the Settlement of Disputes of the WTO.
The temporary defensive shipbuilding subsidy schemes of Denmark, Germany and Spain expired on March 31, 2004 and were not renewed.
The full report of the WTO panel is available at http://www.wto.org/english/tratop_e/dispu_e/301r_e.pdf .