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                                    2 of 2         "Promote 
                                    incentives and support mechanisms at three 
                                    levels. First, sustaining favourable taxation 
                                    schemes and creating mechanisms to strengthen 
                                    the corporate culture and structure of EU 
                                    shipping companies," the report advised. 
                                     "Second, 
                                    set up mechanisms to attract and sustain 
                                    companies to maritime clusters; and sustaining 
                                    mechanisms for competence and skills building 
                                    and development for the shipping industry. 
                                     "And 
                                    third, faciltate trade by removing trade 
                                    limits through diplomatic means with protectionist 
                                    country/region/trade lane; reducing red 
                                    tape in the EU," the report said. The 
                                    researchers also recommended further research 
                                    into schemes which make a maritime career 
                                    more attractive for EU citizens. "Support 
                                    the position of the EU as frontrunner in 
                                    maritime technology in practice, eg, R&D 
                                    support measures, enabling the testing of 
                                    new technologies, such as unmanned ships; 
                                     "Pay 
                                    a closer attention to feedering and relay 
                                    operations when negotiating new agreements, 
                                    and to the possibilities for EU shipping 
                                    companies to carry their own cargo in a 
                                    more efficient way to the port of final 
                                    destination;  "Support 
                                    further research into clarifying the eligibility 
                                    requirements under the Maritime State Aid 
                                    Guidelines to extend to vessels providing 
                                    offshore services," it said. "The 
                                    trade relationship between the EU and China 
                                    initially started as an import relationship 
                                    but is becoming more balanced, given that 
                                    export volumes from the EU towards China 
                                    have grown faster over the last 15 years 
                                    than import volumes (a factor five versus 
                                    three).  Capacity 
                                    developments in Panama and Nicaragua will 
                                    enable the shipping industry to sail with 
                                    larger vessels than usual and to generate 
                                    cost reductions.  "At 
                                    the level of ports, the level of competition 
                                    between the north and south European ports 
                                    is modest, because of the natural barrier 
                                    of the mountains, and because it is generally 
                                    limited to a small geographical area.  "The 
                                    transshipment function of the south European 
                                    ports faces more competition from competing 
                                    ports and port developments in North Africa," 
                                    the analysts said. Transshipment 
                                    in the north European port range faces less 
                                    external competition unless logistics patterns 
                                    change, for instance to more direct calls 
                                    or mainline to mainline transshipments. 
                                     A 
                                    future challenge for the ports is the ongoing 
                                    increase in vessel size and therefore more 
                                    concentrated volumes need to be handled 
                                    in the ports themselves as well as on the 
                                    hinterland connections.   Cabotage 
                                    operations have been largely excluded from 
                                    any liberalisation efforts at the international 
                                    level, partly due to their politically sensitive 
                                    nature in many countries. This general trend 
                                    to exclude cabotage is well reflected in 
                                    the agreements, as making restrictions on 
                                    this point is a common approach across all 
                                    agreements, the team said.  Although 
                                    the EU-China agreement restricts cabotage 
                                    for EU operators, the  agreement 
                                    opens doors in terms of transport of self-owned 
                                    or leased empty containers, which is not 
                                    provided for in other agreements.  The 
                                    cabotage scheme in India is also restricted 
                                    for foreign flagged vessels. With regard 
                                    to feedering and relay, the former takes 
                                    a higher share of overall traffic than the 
                                    latter, at a ratio of 85 per cent to 15 
                                    per cent of the 
                                    total transshipment traffic globally. This 
                                    means that in economic terms, feedering 
                                    operations are much more relevant than relay 
                                    operations.  Figures 
                                    on global regions indicate that feedering 
                                    operations are particularly relevant in 
                                    China, while relay is relevant in countries 
                                    with major maritime hubs, such as Singapore. 
                                    South Korea is also relevant due to the 
                                    large transhipment traffic that is carried 
                                    through its ports as a result of feedering 
                                    and relay restrictions in China.  Page  1  2
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