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The OECD Council Working Party on Shipbuilding
The OECD Council Working Party on Shipbuilding (WP6) seeks to progressively establish normal competitive conditions in the industry. It encourages transparency through data collection and analysis, and seeks to expand policy dialogue with non-OECD economies that have significant shipbuilding industries.
The Working Party on Shipbuilding is the only international body that can influence and guide government policies by identifying and, where possible, eliminating factors that distort the shipbuilding market.
The bringing about of normal competitive conditions in the shipbuilding industry remains the WP's principal priority. It also encourages transparency, through monitoring and peer review, in order to discourage subsidies and other non-commercial practices. The WP6 is also a forum for information exchange, and is expanding its policy dialogue with non-OECD economies with significant shipbuilding industries.
The Working Party is chaired by Ambassador Elin Østebø Johansen, Permanent Representative of Norway to the OECD. Participating OECD members are: Australia, Canada, Denmark, Finland, Germany, Greece, Italy, Japan, Korea, Netherlands, Norway, Poland, Portugal, Sweden and Turkey. Croatia and Romania are full participants in the Working Party. The European Commission, representing the European Union, also participates in WP6 meetings.
What does the Working Party on Shipbuilding do?
The work of the OECD is carried out in Committees and Working Parties, where national representatives advance ideas and review progress in defined policy areas. The OECD Council Working Party on Shipbuilding (WP6) provides an international platform for the exchange of information and the carrying out of economic and policy analysis on all aspects of the shipbuilding sector. Its principal aim is to progressively establish normal competitive conditions in the industry. In the course of achieving this objective, it works to encourage transparency in the industry and consults widely with both non-OECD economies and relevant industry groups.
What is the relevance of the Working Party to non-OECD economies and industry?
While the world’s shipbuilding industry has been through a period of record production, it was severely affected by the 2008 global financial crisis, and recent years have seen very low levels of new orders received by virtually all shipyards. The global industry now faces a number of challenges, most notably global excess capacity, which will place the economic viability of the industry under pressure in some parts of the world.
Persistent worldwide overcapacity may encourage governments to provide support through subsidies and other measures, as well as spur other market distorting practices, which can create major structural problems even in the most efficient shipbuilding industries. But potential market distortions can be addressed through close co-operation among economies with significant shipbuilding sectors and the active involvement of industry.
The WP6 has placed a high priority on establishing close working relationships with non-OECD economies. In particular, these economies were encouraged to participate on an equal footing with OECD members in the negotiations on a shipbuilding agreement that ran from 2002 until 2005, and Brazil, China, Croatia, the Philippines, Romania, the Russian Federation, Chinese Taipei and Ukraine participated in those negotiations. Although the negotiations were eventually halted, a close working relationship has continued with all of these economies. Both Croatia and Romania have become full participants in the WP6 and the Russian Federation participates as an observer.
The WP6 organises regular workshops aimed at facilitating the exchange of information on policy and industry developments, and as well as the economies already mentioned, other participants have come from India, and Indonesia, amongst others.
The WP6 has also worked closely with industry groups representing shipbuilders, ship owners, ship operators and trade union interests, so that a wide range of perspectives can be taken into account by WP6 members during their formulation of policy responses to address issues and challenges faced by the global shipbuilding sector.
What are the Working Party’s principal activities?
Under its current mandate, the Working Party’s main focus is the creation of normal competitive conditions in the industry through the identification and progressive elimination of subsidies and other measures that distort the market. Activities scheduled for the 2013-14 period include:
- The compilation and analysis of subsidies and other support measures provided to the shipbuilding sector through an Inventory. A number of non-OECD economies participate in this activity.
- Consideration of the nature and effect of factors that can distort the shipbuilding market.
- Country-level peer reviews of support measures in the shipbuilding industry. These follow on from a series of reports on the shipbuilding industries in both OECD and non-OECD economies (reports on China, Chinese Taipei, Russia, Turkey and Vietnam were completed). The peer reviews are prepared with the participation of the respective economies.
- In consultation with key shipbuilder associations, the analysis of shipbuilding supply and demand.
- Regular review and updating of the Sector Understanding on Export Credits for Ships.
- Environmental and climate change issues, and their implication for the shipbuilding industry.