The European Commission voiced fears that the United States is capitulating to protectionist pressures to shield its shipbuilding industry from global competition.
The European Union's executive agency largely blames the United States for the collapse of negotiations in the Organization for Economic Cooperation and Development (OECD), which are aimed at bringing an end to shipbuilding subsidies.The United States, in an unexpected change of position, demanded that vessels financed by its export credit schemes be built in U.S. shipyards.
"The U.S. will have to show us it is not moving toward protectionism," a
commission official said.
The United States and the European Union had collectively squandered the chance of winning meaningful concessions from Japan and South Korea, the world's top two shipbuilding nations, to trim their shipyard subsidies, the official said.
The commission also is concerned about the impact of the Gibbons Bill, which will penalize ships calling at U.S. ports if they have been built with ''unfair" subsidies.
The commission official declined to comment on the likely EU response if its ships are targeted.
The EU has steadily cut the ceiling on shipyard subsidies from 28 percent to 9 percent of the value of oceangoing vessels, and has offered to outlaw all handouts if other shipbuilding nations scrap their aid policies.
But following the stalemate in the OECD talks, the commission, which negotiates on behalf of the 12 EU member states, likely will come under
pressure from the Mediterranean countries to relax its subsidy regulations.
Finland, one of the leading builders of luxury cruise vessels, and Norway, will be subject to the EU's subsidy ceiling beginning Jan. 1, 1995, should those countries enter the union on that date as planned.
The EU remains divided over whether to push for the abolition of the U.S. Jones Act, which reserves coastal shipping in the United States to U.S.-built vessels, as part of a global accord on subsidies.
France, Italy and Spain are pushing hard for a repeal of the Jones Act, while other EU states say they can live with it.
Hopes for ending the stalemate in talks depend on a report being prepared by Staffan Sohlman, Sweden's Ambassador to the OECD and chairman of the negotiations.