Local view for "http://purl.org/linkedpolitics/eu/plenary/2005-11-30-Speech-3-211"
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"en.20051130.19.3-211"2
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".
Mr President, the Commission has been reviewing Council Regulation (EEC) No 4056/86 applying EU competition rules to liner shipping for the past three years. After extensive consultation with carriers, transport users, Member States and third countries, we believe that the ability that shipping lines have to fix prices and regulate capacity is no longer justified in today’s market circumstances. The current exemption is unique. No other economic sector – even those that directly compete with liners – benefits from such a generous exemption.
A more competitive environment should allow EU carriers to compete and grow. Smaller carriers will also have an opportunity to grow if they follow an innovative business model. No impact is foreseen on employment or in investment in new vessels. Both carriers and shippers recognised that the most recent study by Global Insight was of a high standard and that its results were based on thorough research.
We have the solid backing of the European Shippers’ Council representing more than 100 000 European exports from the smallest to multinationals. We have the support of UNICE. The liner industry itself is more divided. This is only to be expected as the industry has been insulated from competition and benefited from a legalised cartel. But even so, much of the industry now accepts that the future must be based on competition and that the days of special regimes are counted.
In any event, as regulators we have to look at the larger picture. Our concern is the competitiveness of EU industry. This includes shipping lines as well as their clients, our exporters. If we look at the majority of shipping lines, price-fixing is becoming less and less relevant to their business strategies as they seek more effective ways of ensuring their survival in a changing and challenging environment.
I would also like to assure Parliament that the Commission pays great attention to the international implications of any regulation that touches the shipping industry. We are aware that liner conferences are tolerated in other jurisdictions and have engaged in bilateral contacts so as to ensure that our partners are aware of whatever changes are brought to our legislation.
Although the Commission is firmly convinced of the benefits of putting an end to the conference system, it is equally convinced of the need to give the industry sufficient time to adapt to a fully competitive market. I intend to put a proposal to the College of Commissioners for the repeal of Council Regulation (EEC) No 4056/86, including a substantial transition period before the conference system is abolished.
To conclude, the Commission is committed to better regulation and to the Lisbon Agenda. I believe that abolishing the conference system will make the application of competition rules to the maritime sector simpler, more cost effective and fairer. Abolition of the conference system will bring significant opportunities. I am confident that both the liner industry and its clients will reap the benefits.
Collective price-fixing and capacity regulation are by definition hard-core restrictions to competition. These types of restriction have as their goal the artificial maintenance of high prices. Participants in such a cartel may benefit. Their customers most certainly do not. And nor does the wider economy. The present system can only be explained in an historic context.
Price-fixing by liner conferences actually results in higher prices for exporters. EU shipping lines are faring well. Four out of the top five world carriers are EU based. Yet our exporters repeatedly draw our attention to the need to stop allowing price-fixing.
As regulators, our duty is to ensure that the rules are in tune with market conditions. The exemption from competition rules for liner conferences is a relic of the past. The last twenty years have seen considerable changes in the liner market, with an increase in cooperative arrangements between shipping lines in the form of consortia and global alliances that do not include price-fixing. This goes to show that conferences are not central to the continued good health of the maritime industry.
The sector is important for the health of the economy as a whole. Scheduled services in container transport account for approximately 40% of the EU-25’s external trade by sea in value terms. Today, conferences are allowed to fix prices on all major shipping routes and these prices are generally assumed to act as a benchmark for prices on all shipping routes to and from the EU.
In addition to the benchmark effect of the conference tariff, an average of 30% of the price of transport is made up of charges and surcharges jointly fixed by lines participating in conferences and the same levels of charges are very often applied by non-conference carriers. This means that 18% of imports and 21% of EU-25 exports are affected by carriers’ ability to jointly fix prices in the liner conference block exemption. These figures show how important it is to unleash further competitive forces in the liner sector, much in line with the Lisbon Agenda and in keeping with the goal to transform Europe into the most competitive economy.
I welcome the work carried out by Parliament in reacting to the Commission’s White Paper of October 2004. I welcome in particular Parliament’s recognition that the rules for the sector must comply with Article 81.
I am aware of the concern in certain quarters about the consequences of abolishing the conference block exemption. What does abolition of conferences mean? It means reliance on market mechanisms to determine price and capacity as in all other sectors of the economy.
We have carried out an extensive economic impact assessment: three independent studies were commissioned. The results show that if shipping lines are no longer allowed to operate as a cartel, that is likely to result in lower transport costs to the benefit of exports throughout the EU and with a positive impact on developing countries. Service quality and innovation are likely to be improved."@en1
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