Progress towards international shipbuilding agreement

Economies taking part in the Organisation of  Economic Cooperation and Development's (OECD’s) Council Working Party on Shipbuilding (WP6) in Paris have agreed in principle to restart negotiations on a Shipbuilding Agreement that were paused in September 2005.

“By reaching this in-principle agreement, the WP6 today took a significant step towards a multilateral Shipbuilding Agreement intended to bring about normal competitive conditions to the global shipbuilding industry” said Harald Neple, Chairman of the Working Party and Norway’s Ambassador to the OECD.

OECD members, Croatia and Romania are regular members of the WP6. Delegations from Brazil, China, the Russian Federation, Chinese Taipei and Ukraine also participated in the meeting.

This in-principle-agreement, which is still subject to a number of procedural steps, including final endorsement by governments and a formal decision by the OECD Council, means that after a five year pause preparations can commence to formally restart the negotiations later in 2010.

The WP6 also agreed to bring its next meeting forward from early December to 9-10 September 2010 to accelerate the procedural steps leading up to the negotiations.

The OECD has 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.  While successfully negotiated, this 1994 Agreement never entered into force because one signatory was unable to ratify the Agreement (the entry-into-force provisions required that all signatories ratify the instrument).

Eventually, those signatories that had ratified the 1994 Agreement decided that it would be very unlikely that it would ever come into force, and in June 2002 the OECD Council approved the commencement of fresh negotiations, with a deadline of December 2005 for their conclusion.

A significant difference between the two negotiations was that in 2002 the OECD Council decided to invite non-OECD economies with significant shipbuilding capacities to participate on an equal footing with OECD members.      By the time the negotiations were “paused” in September 2005, Brazil, China, Croatia, the Philippines, Romania, the Russian Federation, Chinese Taipei and Ukraine had participated.

Those negotiations were paused in 2005 by the then Chairman, Ambassador Jaggi (Switzerland) to allow participants to consider their positions on a number of issues where there were significant differences of view.  The WP6 has been working since that time to try to restart the paused negotiations.

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