Shipbuilders of large oceangoing ships operate in a single worldwide market, in which they compete for a share of limited demand. The competitive environment in this international market can be greatly affected by the industrial policy of any one nation or the order taking practices of builders from any one country. Therefore, policy coordination among major shipbuilding nations is indispensable for healthy development of the industry as a whole. Based on this perception, Japan has been actively seeking international cooperation both in the framework of the OECD Council Working Party on Shipbuilding and through bilateral consultations.

　Especially in recent years, a global expansion in newbuilding capacity has triggered a supply-demand imbalance in the shipbuilding market, and worryingly this imbalance is showing signs of further worsening. Therefore, there are fears that, in the absence of suitable rules, fair competition may be impeded by government subsidies and rampant dumping practices. At present, competition is regulated at the international level by the WTO agreement, however due to the existence of flag-of-convenience (FOC) system and other factors, the usual concepts of export and import do not necessarily apply and subsequently the agreement does not function effectively for this unique industry. Therefore, an international agreement that can accommodate the specific character of shipbuilding is called for.

　Moreover, in recent years the construction of new facilities and the expansion and/or modernization of existing facilities in newly emerging shipbuilding countries including China have led to a dramatic rise in shipbuilding capacities and outputs in these countries. Accordingly, dialogue with new entrants constitutes an important part of international coordination of shipbuilding policy from now on.

　In view of these circumstances, Japan to tackle these issues in the following ways:

　

　

　The OECD (Organization for Economic Cooperation and Development) Council Working Party on Shipbuilding is the sole forum for multilateral policy discussions on shipbuilding issues. The working party consists of principal shipbuilding countries, such as Japan, member countries of the European Union (EU) and the Republic of Korea (ROK). Since its first meeting in May 1966, the working party has discussed market issues including the need to stabilize the supply-demand balance and ensure normal competitive conditions.

　The following major issues are currently being discusses by the Working Party.

　

　

　

　In many developing countries, ships play a vital part in people's daily life as well as in socio-economic development as important means of passenger and cargo transport. However, at present some of these countries find difficulties in the supply of newly built tonnage and the maintenance of existing tonnage on account of the lack of financial and technical resources.

　Moreover, public concern has been rising in recent years about the safety of marine transport and the prevention of marine pollution, and the need for institutional arrangements to address these issues has increased significantly. At the same time, in the context of the move towards eliminating substandard vessels, some countries are particularly interested in developing their ship recycling business. Developing countries are now expecting Japan not only to supply active tonnage but also to provide international assistance in both hardware and software aspects covering diverse areas including the construction of shipbreaking yards and guidance in pertinent legislation.

　Furthermore, to take note of the ripple effect of shipbuilding on the related industries, cooperation in the shipbuilding area will stimulate general economic development in those countries.

　Thus Japan, availing itself of its advanced shipbuilding technology, will actively extend economic and technical assistance in the fields of shipping and shipbuilding.

　

　Projects currently supported by Japan include:

　

　Grants under item 1) and aids under items 2) through 4) are provided through the Japan International Cooperation Agency (JICA), while loans under 1) are provided through the Japan Bank for International Cooperation (JBIC) in cooperation with the Ministry of Land, Infrastructure Transport (MLIT) and the Overseas Shipbuilding Cooperation Center (OSCC).

　

　The Asia-Pacific Shipbuilding Experts Meeting (APSEM) is held once a year with the aim of facilitating regional cooperation in the area of shipbuilding and to contribute to the development of shipbuilding in the countries of the region. At these meetings, shipbuilding experts from participating countries exchange opinions and information on shipbuilding. The 25th APSEM was held in October 2001 in Tokyo, Japan.

　

　International exchange is also ongoing in private sector organizations.

　A regular meeting of top executives from major shipbuilding concerns in Japan, Europe, the ROK and the US. This group (also known as the JEKU Top Executive Meeting) considers topics such as trends in the shipbuilding market, the supply-demand balances, and substandard vessels. In October 2001, the tenth meeting was held in Spain.

　The Shipbuilders' Association of Japan (SAJ) has continued to hold expert meetings on newbuilding requirement forecasts and shipbuilding capacity evaluations with the Association of European Shipbuilders and Ship Repairers (AWES), the Korean Shipbuilders' Association (KSA) and The American Shipbuilding Association (ASA).

　Regarding the problem of substandard vessels, all the major shipbuilders' associations are committed to the activities of the Committee for the Elimination of Substandard Ships (CESS).

　At these meetings, shipbuilders are endeavoring to develop common perceptions and thereby encourage international cooperation at the private industry level.