ECONOMY

European shipping policy needs to readjust its compass

European shipping policy should focus on protecting the industry by issuing clear guidelines that will allow for better cooperation between shipping companies and clients, in the context of full liberalization, suggests Rodi Kratsa, a New Democracy Member of the European Parliament. Kratsa is a permanent member of the EP’s Transport and Tourism Committee; she drafted the report «Application of Competition Regulations on Maritime Transport» and keeps a close eye on shipping developments, while the majority of European politicians are unfamiliar with this domain of the economy, as Kratsa told Kathimerini in an interview. To what extent is European and Greek shipping concerned about the rapid developments in international trade? The explosion of global trade is due to the massive growth in China and affects the EU considerably. Since 2001, when China became a member of the World Trade Organization, its relations with the EU have grown by 17 percent annually, reaching 210 billion in 2005. Since 2004 the EU is the biggest trade partner of China, which impacts decisively on the system of transport and shipping trade between the two sides. The rise of Chinese maritime exports by 30 percent has changed the quantity and quality of the organization of shipping and its routes. Therefore, while traffic between Europe and North America remains stagnant, it is soaring between Asia and America and Asia and Europe. This is strengthened by the development of countries such as India and Vietnam. We must predict developments and prepare. The continual rise of the market, of capacity, of shipbuilding and chartering rates in the last three years is expected to consolidate in the coming period. From the 10 to 15 percent increase in Asia-Europe traffic, we now have forecasts of 10 percent in the coming years. There are signs of a drop in markets by 30 to 40 percent due to the increase in capacity. China is planning to increase from 10 to 25 percent the portion of its exports via ships of Chinese interests, while South Korea and Japan are entering the market, too, testing the competitiveness of the European fleet. Phenomena such as the concentration in giant companies such as Maersk Sealand, Mediterranean SHG, Evergreen and CMA-CGM hamper competition and harm small and medium-sized shipping companies and discourage new investors. Great caution is needed, especially now that the European Commission insists on full liberalization, abolishing the traditional form of cooperation, the so-called «conferences.» In the global competitive market, European policy must be based on the protection of shipping companies with the issuing of clear guidelines that would create a framework for information exchange between shipping sector bodies and clients about developments in the market and the direction of prices and rates. Do you think international developments will affect Europe and Greece? The challenge for Europe is to develop combined maritime, road, railway and river transport, and to use ports as the main link in that global chain of shipping. Major European ports now play second fiddle to Singapore, Shanghai and Hong Kong. An integrated European port policy is required, promoting their modernization and creating a new operation model with common transparency and competitiveness rules, which the EU is missing. The global fleet is growing in ship size, too. For 2007, 165 ships of 300 meters to carry 10,000 containers will be constructed. Therefore Greece will have to adapt to the new port requirements if it wants to be a transit trade center after its successful deals with China, not to mention services. A system linking major ports with smaller ones and other means of transport is required as well in Greece and its neighboring countries. Is European policy in conflict with Greek interests? The Greek government, shipowners and employees support EU policy on shipping safety, pollution prevention and application of international regulations, while Greeks make major investments in modern and ecological vessels. The differences that come up relate to the EU’s effort to impose rules outside international law. Neither studies nor practice have convinced us that this legislation adds to our existing global position. Shipping is a globalized activity and needs global rules. I strongly believe that any initiative for new measures must come with an assessment of those already applied and taking into account the competitive context of shipping, respect for the environment, the promotion of research and the protection of labor rights. Greece is against the replacement of individual states’ representation in the International Maritime Organization (IMO) by the European Union as a single representation, as this will reduce the active participation of states and the ability to defend sensitive political issues of certain countries such as ours. We do support the coordination of member states in the IMO, especially in domains related to the acquis communautaire. We are also worried about the ignorance of most European politicians and citizens about shipping, its variety and complexity. Politicians and shipping bodies alike are responsible for that. I have taken the initiative for the institution of European Shipping Day and I aim at the awareness and cooperation of the society and the shipping world in a joint effort for a new European vision of shipping development. Such efforts will highlight the importance of shipping and the role our country plays in it.