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OECD Scraps Shipbuilding Agreement Talks

by Ulrika Lomas, Tax-News.com, Brussels

20 December 2010


The Organization for Economic Cooperation and Development has announced its decision to terminate negotiations on a Shipbuilding Agreement, following a recommendation from Ambassador Harald Neple, Chair of the OECD’s Council Working Party on Shipbuilding. Negotiations were stalled in September 2005 having begun in 2002.

The OECD said that the Neple had advised that despite intensive efforts, “differences of view amongst some parties on the treatment of pricing, in both the negotiations and in any final Agreement, had proven impossible to bridge.

The Ambassador went on to say that the issue of a pricing mechanism was central to some key participants, who believed that this was a crucial element of any workable Shipbuilding Agreement. However, others held the view that pricing distortions were not prevalent in shipbuilding, and that it would be better to focus on government subsidies and other support measures, without which such pricing distortions could not be sustained.

“It seems pointless to continue efforts to restart the negotiations when after all this time there has been no significant narrowing of those differences,” Neple said. “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 industry.”

The decision to terminate the negotiations will not affect the Working Party on Shipbuilding, which will continue to carry out work in fulfillment of its mandate, which is scheduled for review by the end of 2013, the OECD said. In particular, the Working Party will continue its efforts to strengthen its contact with non-OECD economies with significant shipbuilding sectors, which are becoming increasingly important in world shipbuilding.

TAGS: business | marine | law | trade treaty | regulation | trade

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