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LeaderSHIP 2015 REPORT
INT 221
(INT 221 / CCMI 011)
Presentation by
Mr Joost van IERSEL
member of the EESC
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
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
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
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
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
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
• 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
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
New Approach = LeaderSHIP 2015
• The industry needs not only competition and trade
policy, but also COMPETITIVENESS policy
• Aggressive South Korean policy needs urgent
• 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
• Restructuring the industry to arrive at a limited
number of large companies
• Small, very flexible companies networking to serve
smaller niche markets.
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“
The High Level Advisory Group
 Commission report
• 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
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
EESC opinion
Conclusions and recommendations
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
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
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
• Competitiveness without weakening the European
social acquis
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
(TEN 067 + TEN 251)
• 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
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
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
• stricter and more effective standards on navigation
safety and pollution prevention
• Several technical recommendations