THE
OECD has decided to terminate negotiations on a Shipbuilding Agreement,
following a recommendation from the Chair of the OECD’s Council Working Party
on Shipbuilding (WP6). The OECD provided the forum for the negotiation of a
multilateral Shipbuilding Agreement since 1989, when negotiations were commenced
in Paris.
Those negotiations led to the conclusion amongst OECD members
of the 1994 Agreement Respecting Normal Competitive Conditions in the Commercial
Shipbuilding and Repair Industry. However this 1994 Agreement never entered into
force because one signatory was unable to ratify it.In June 2002 the OECD
Council approved the commencement of fresh negotiations, with a deadline of
December 2005 for their conclusion.Non-OECD economies with significant
shipbuilding capacities also participated on an equal footing with OECD members.
Those negotiations were paused in 2005 to allow participants to consider their
positions on a number of issues where there were significant differences of
view, in particular regarding the inclusion of a pricing mechanism in any
Shipbuilding Agreement. Such a pricing mechanism was intended to deal with
pricing distortions, and would have been the shipbuilding equivalent of the WTO
Anti-Dumping Code. However, there were significant differences of view amongst
participants as to whether such pricing distortions actually exist in the
shipbuilding market. The WP6 has been working since the end of 2005 to try to
restart the paused negotiations.
In April 2010 the OECD announced that
the Council Working Party on Shipbuilding had reached agreement in principle to
restart the negotiations, but the differences on how to deal with the issue of
pricing proved impossible to overcome.In the end the OECD decided that it would
be best to terminate the negotiations and allow the Working Party to focus on
other important work, such as a better understanding of market distortion,
greater transparency of government support, the state of the shipbuilding market
and environmental and climate change issues affecting the
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