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EU Uncertain of SKorean Shipbuilding

July 5, 2001

BRUSSELS, Belgium (AP) _ The European Union expressed pessimism Thursday about the chances of reaching a deal with South Korea in their dispute over alleged unfair pricing by Korean shipyards.

Officials said the EU was close to lodging a formal complaint with the World Trade Organization and asking the WTO to authorize temporarily subsidies for European shipbuilders while the case is examined _ a process that could take two years.

EU officials said it was possible the two sides could make a last attempt at an amicable solution Thursday and Friday in informal talks at the Organization for Economic Cooperation and Development in Paris. But the Europeans saw little sign of a breakthrough.

``There hasn’t been any substantial progress since the week before,″ said Anthony Gooch, EU trade spokesman.

He told reporters the chances of a deal that would head off a WTO complaint were ``not looking likely at the moment.″

The EU’s head office _ the European Commission _ is expected to agree on turning to the WTO and adopt its proposed subsidy plan on July 18, in time for it to submit its case to the WTO’s dispute settlement body when it next meets on July 24 in Geneva.

The EU claims South Korean subsidies are causing distortions in the international shipbuilding market by pricing its ships up to 15 percent below cost.

The trade group had announced plans to file a WTO complaint by June 30 unless South Korea makes concessions, but last week said it would give the Koreans a few more days.

South Korea is the world’s largest shipbuilding country, taking more than 35 percent of all new ship orders worldwide last year.

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