SEA Europe, which represents the maritime sector in Europe, said the continent risks losing its strategic maritime technology sector to Asia if the European Union does not adopt a tailor-made sector-specific approach to safeguard European shipyards and equipment manufacturers against international competition
The body said the absence of such a sector-specific plan would lead to losses of more than a million jobs in maritime technology, US$129Bn of added value created by the sector and blunt Europe’s edge in the innovation of complex vessel construction.
SEA Europe chair Kjersti Kleven said European shipyards and maritime equipment manufacturers are key to the European Green Deal but warned that if the EU fails to adopt “tailor-made sectoral policies and financial support beyond its horizontal industrial policies” it risks making Europe “entirely dependent” on Asia for the design, building, repair, retrofitting, and equipment of civilian ships.
The trade body has previously stated its opposition to what it sees as ‘unfair trade practices’ and protectionism in the Asia Pacific region and said state-led advantages offered to Asian companies “directly target Europe’s global leadership in both complex shipbuilding and advanced maritime equipment manufacturing.”
These comments come when Europe’s maritime sector has been hit hard by the Covid-19 outbreak as production has ceased or slowed down. However SEA Europe said the negative consequences from the outbreak will be felt more acutely in the medium and long-term as shipbuilding and maritime equipment manufacturing are export-oriented businesses, heavily dependent on macroeconomic trends, trade volumes, and market sentiments.
SEA Europe expects the outbreak will negatively impact the markets for complex ship types, such as ferries, cruise vessels, dredgers and offshore vessels where European firms are market leaders.
The trade body said orders for newbuild cruise ships will be cancelled as travel restrictions kick in. In addition, it is concerned the fall in oil prices will affect the offshore sector which has only recently begun to recover from the previous oil crisis.
SEA Europe secretary general Christophe Tytgat added “many companies face serious liquidity problems or are in need of bank credit, which is a very serious problem for an industry that is – by nature – highly capital-intensive. In addition, orders for newbuild ships or ship repair and retrofitting are postponed, declared force majeure or cancelled, because all shipowners, including cruise and ferry operators, are in serious difficulties.”
“However, these economic consequences will last much longer than for many other sectors, due to the specificities of the sector, and come on top of existing severe competitive distortions from Asia. To monitor the local situation in member states weekly and assess the impact for our companies, employees and supply chain, SEA Europe has set up an internal task force.”
SEA Europe welcomed the EU’s new Industrial Strategy for Europe but highlighted its own recommendations to the EU in a recent white paper Maritime Technology in Europe: A Strategic Solution Provider for Major Societal Challenges, published in October 2019.