ICS Calls For Resumption of OECD Shipbuilding Talks

At the Organisation for Economic Co-operation and Development (OECD) in Paris on Thursday, June 21, the International Chamber of Shipping (ICS) said it will call on governments to resume negotiations on a new global agreement to eliminate market distorting measures from shipbuilding.

The ICS said in a prepared statement that it was a source of great disappointment that the OECD had, three years earlier, terminated negotiations on a new agreement to eliminate subsidies and market distorting mechanisms in the shipbuilding industry.

This was primarily due to differences between the European Commission and Asian governments about the treatment of pricing of new ships in any new agreement, the latter wishing instead to concentrate on the elimination of subsidies, a position that was supported by ICS.

ICS stated that it believes that current poor markets are demonstrating just how seriously damaging the oversupply of ships has been to shipowners’ revenues, with many companies now struggling to meet their operating costs.

ICS reiterated its concern about the overcapacity that exists in many shipyards, with an almost obsessive commitment to market share being displayed by the three major shipbuilding nations: China, Korea and Japan, where 90% of world tonnage is built.

ICS Director of External Relations, Simon Bennett remarked: “Even if shipyards go bankrupt, it is likely that in many cases their governments will step in so that they can continue to produce ships which few people want, other than speculators who may be foolishly tempted by knock down prices.”

ICS also stated that it welcomes that the OECD Working Party on Shipbuilding is continuing to meet, in order to explore further what constitutes market distortion and the means of achieving greater transparency on government support measures. ICS stated further that it hopes the OECD Working Party will work towards the goal of encouraging the resumption of formal negotiations on a new global agreement as soon as possible.

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