SEA Europe position on the European Commission proposal for a regulation on foreign subsidies distorting the internal market

Executive Summary

Part I

There is an urgent need for an effective sectoral solution which addresses unfair foreign practices in global shipbuilding1 that adversely affect shipbuilding in Europe. Massive market distortions, particularly resulting from subsidies in Asia, have haunted global shipbuilding for decades. The EU has long acknowledged that no proper trade tools exist to address these distortions, but EU actions in the past four decades have failed to deliver any real solution, with devastating results for Europe.

Part II

The Commission’s Proposal for a Regulation regarding foreign subsidies is promising but requires substantial clarifications and revisions before it can become an effective tool for addressing the foreign subsidies distorting the shipbuilding sector in Europe.
Once essential amendments are agreed and the new instrument enters into force, it needs to be applied to foreign shipbuilding subsidies without any delay. The shipbuilding sector needs an instrument that works in practice, as judged by its impact in the market.

Part III

The recognition of the shipbuilding sector’s urgent need for EU-level action to address unfair trading practices of producers in third countries should also lead to the rapid adoption of separate measures against unfair pricing, e.g. through a revision of the sector-specific Regulation 2016/1035 on protection against injurious pricing of vessels.

Part IV

For decades, Europe’s shipbuilding industry and hundreds of thousands of workers in maritime regions have paid a hefty price for the failure to address market distortions in global shipbuilding. While hopeful that the prompt adoption and use of the new instrument will lead to a much-needed level playing field, temporary measures to support the European shipbuilding sector are urgently necessary in the meantime to ensure that there is an industry left to benefit from the instrument.