OECD members disagree on over-capacity problem

Against a background of 25 per cent over-supply in shipbuilding capacity and a 20 per cent fall in newbuilding prices since 1997, OECD members cannot even agree on the size of the problem. The OECD wants all parties to agree figures for future newbuilding demand and shipbuilding capacity.

However, Korea?s forecasts for newbuilding requirement were 10 per cent higher than those supplied by Japan and Europe. Also Korea?s figures on shipbuilding capacity (all countries) were 20 per cent higher than those from Japan and Europe.

In case there is no agreement, the OECD?s working party will compile its own figures before the next meeting in May/June.

Following the meeting the OECD urged member governments “not to extricate companies from any difficulties caused by the actions undertaken by shipbuilders” ? a obvious reference to bankrupt yards in Korea.

In a side meeting EU representatives said it is still considering WTO action against Korean yards over the nine contracts it says have been signed at prices up to 40 per cent below costs (The Motor Ship, November and December 1999). The Japanese may join any action against Korean yards.