Brussels, 21/04/2016 (Agence Europe) - During a high level meeting in Brussels on Monday 18 April, large steel producers from the Organisation for Economic Cooperation and Development (OECD) - Canada, Japan, Mexico, South Korea, Switzerland, Turkey, the EU and the USA - agreed on measures for increased cooperation in the face of the global steel overcapacity crisis. As the OECD symposium the same day showed, China is lagging behind (see EUROPE 11535).
In a joint statement, these countries agreed on the need for “ongoing international dialogue” aimed at identifying effective policies for addressing the “global dimension” of excess capacity in steel, and at promoting greater transparency in their policies.
They agreed that restructuring the steel industry should be “market-driven”, without government measures that distort markets. However, they agreed that governments could at the same time play a “positive role” in the restructuring process, by supporting facility closures and affected communities.
Admitting that the challenges facing the industry arise from many factors such as structural and cyclical economic developments, the OECD countries nevertheless blame government support measures for contributing to significant excess capacity, unfair trade, and distortions in steel trade flows. This has led to the adoption of “a rising number” of trade defence measures and thus to trade tensions.
In order to remedy the situation, the large OECD steel producers agreed to ensure not to provide subsidies or other support to uneconomic or consistently loss-making steel plants, and not to encourage investment in additional steelmaking capacity which could distort competition.
They will ensure that their plans, policies and guidelines do not encourage the net expansion of steelmaking capacity, and will also ensure that all uneconomic or consistently loss-making steel enterprises are permitted to close. In these cases, they will work together to identify and promote policies that address the detrimental impact of steel facility closures on workers and affected communities.
In addition, the countries will also ensure that enterprises in which their governments have full or partial ownership do not receive special benefits that distort competition.
The OECD is asked, in close cooperation with other large steel producing countries, to develop a global forum on restructuring issues in steel, including: - developing an information-sharing mechanism for monitoring crude steel capacity developments, and for monitoring policy and support measures to reduce excess capacity and facilitate restructuring in the steel sector; - developing guidelines on government policies and support measures for restructuring in ways that that minimise market distortions; - monitoring export credit agency support for new steel sector projects; - developing longer term supply and demand forecasts for steel, taking demographic trends and innovation in steel-consuming sectors into account; - and exploring ways to provide technical assistance more effectively for restructuring. (Original version in French by Emmanuel Hagry)