1. INT 221 EESC OPINION ON THE COMMISSION’S LeaderSHIP 2015 REPORT (INT 221 / CCMI 011) Presentation by Mr Joost van IERSEL member of the EESC

2. BACKGROUND

3. The shipbuilding and shiprepair sector Strategic sector Strong state intervention, in Europe & world-wide Means of transport for international trade Contribution to defence and security Early exposure to globalisation Failure to implement anti-dumping rules  uncontrolled distortions of competition

4. The shipbuilding and shiprepair sector /2 Strong continuous growth in the production of ships for more than two decades Rapid technological progress, reduction of costs Shipbuilding market is determined by offer prices Damaging business practices from South Korea  market loss of the EU Around 2003: strong economic growth in China  record number of new orders Developments may not last, Europe should seek sustainable solutions

5. The shipbuilding and shiprepair sector /3 Alternately over-capacity and under-capacity Until recently shrinking market, lay-offs Strategic state investment in Asia  supply/demand discrepancy 2004: €34 billion turnover, 9,000 companies, a workforce of 350,000, 10% of turnover ploughed back into R&D

6. Policy characteristics Emphasis on trade policy and competitiveness Efforts towards an internationally applicable agreement guaranteeing a level playing field Difficulty to apply the existing multilateral trade rules to the shipbuilding sector Unfair pricing practices and subsidies of certain competitors, South Korea!!! Essential to start a bilateral dialogue with China Dual Council policy: WTO complaint + TDM

7. Evolution of shipbuilding policy Strategic importance  traditionally strong government intervention Focus on state-aid systems since the '70s OECD agreement concerning shipbuilding  no entry into force EC 1540/98, abolition of operating aid as of 2000 Council/South Korea talks on damaging business practices  lack of implementation

8. Evolution of shipbuilding policy /2 Commission brings the case to the WTO + TDM (temporary defensive mechanism) New OECD efforts (without USA) COM (2002) 714: Industrial policy in an enlarged Europe Council call for European competitiveness policy LeaderSHIP 2015 High Level Advisory Group + Commission report: 30 recommendations in eight areas for the competitiveness of the European shipbuilding and repair industry

9. Industrial Policy new-style After the Liikanen report commissioner Verheugen devises conditions: –No state aid –Improving conditions for industry –Internal market –Technological platforms –Consultation at a preliminary stage –Trade policy –Intellectual property –Skills

10. New Approach = LeaderSHIP 2015

11. Why? The industry needs not only competition and trade policy, but also COMPETITIVENESS policy Aggressive South Korean policy needs urgent response

12. What? Objectives: improved leadership through strengthened competitiveness EU's role should cover: - financing and guarantee schemes - safety and environmental standards - intellectual property Common policy for naval defence New vessel types and new generations of marine equipment Restructuring the industry to arrive at a limited number of large companies Small, very flexible companies networking to serve smaller niche markets.

13. The High Level Advisory Group  Commission report Chaired by Commissioner Liikanen, discussions on LeaderSHIP 2015. Necessary are: –level playing field in world shipbuilding through the EU trade policy, enforcement of applicable WTO rules and enforceable OECD disciplines –EU/industry cooperation on R&D and innovation –Pre- and post-delivery financing –Quality assessment improvement, safety and control of shipbuilding and ship repair –Protection of intellectual property rights –Optimal industrial structure  "aid for consolidation“

14. The High Level Advisory Group  Commission report /2 The Council endorses the Commission report The Commission report on LeaderSHIP 2015 transposes the work of the High Level Advisory Group into formal Community policy

15. Commission report Leading role for European shipbuilding and shiprepair by 2015 Strategic dimension of shipbuilding and shiprepair Need for WTO rules to be obeyed 8 areas: –Level playing field in world shipbuilding –R&D and innovation investment –Financing and guarantee schemes –Safer and more environment-friendly ships –European approach to naval shipbuilding –Protection of intellectual property rights –Access to a skilled workforce –Sustainable industry structure

16. EESC opinion Conclusions and recommendations

17. EESC opinion /1 European approach instead of national policies Yearly progress report World-wide level playing field Monitoring of the application of state-aid rules and unfair practices R&D and innovation

18. EESC opinion /2 A guarantee fund as suggested in LeaderSHIP should be a priority for the Commission Appropriate standards for maintenance of ships Cooperation between coastguards concerning safety and security The Social Dialogue should address differences in labour productivity world-wide Consolidation Naval sector: synergy between yards for knowledge and know-how

19. EESC opinion /3 Strengthen and modernise the "invisible" ship repair and conversion sector Dependence of competitiveness on RDI "Securing the access to a skilled workforce" is of key importance Establishment of a sectoral social dialogue is positive Competitiveness without weakening the European social acquis

20. EESC opinion /4 Key aspects: industrial cooperation between shipyards and suppliers, access to foreign markets and consolidation of the industry Common market in defence equipment Importance of implementation Monitoring: European observatory? Marine Industries Forum Commission should consider price stabilisation on international markets through Community support measures

21. INT 221 EESC OPINION ON ERIKA II & PHASING IN DOUBLE- HULL OIL TANKERS (TEN 067 + TEN 251)

22. Background The Commission’s ERIKA II package for maritime safety and prevention of pollution MARPOL regulation : prohibiting the carriage of heavy grade oil in single-hull oil tankers on a world-wide basis

23. EESC opinion The economic and social concerns related to the exemption from MARPOL invoked by one member state should be specified A definition of “heavy grade oil products” is necessary

24. EESC opinion /2 Need for the ILO's maritime conventions to be incorporated in Community law The "human factor" in accident prevention and crisis management is missing from ERIKA II ILO's maritime conventions and recommendations should be ratified and implemented stricter and more effective standards on navigation safety and pollution prevention Several technical recommendations