The countries of the Global Forum on Steel Excess Capacity – 33 members of the G20 and/or OECD, including the EU – agreed at a meeting in Berlin on Thursday 30 November on an ambitious package of policy solutions to be implemented in 2018 and 2019 to tackle the global overcapacity in the steel sector.
The agreement seeks to level the playing field in steel trading by addressing subsidies and artificial support for steel production which contribute to overcapacity.
Under the terms of the package agreed, forum members undertake to ensure market-based outcomes in the steel industry, refrain from market-distorting subsidies and other government support measures that contribute to overcapacity, provide a level playing field between state-owned and private companies, and enact effective adjustment polices.
The European Commission has hailed the agreement which will protect the EU steel sector and its 328,000 direct jobs under threat from Chinese dumping.
Europe, the world’s second largest producer with 10% of the market (170 million tonnes per year), has been particularly hard hit by cheap Chinese steel. China accounts for 50% of global production.
Because of the global surplus which reached a historic high of 737 million tonnes in 2016, steel prices have slumped by 40% since the start of the decade, endangering the European Steel sector which has an annual turnover of €166 billion.
Trade Commissioner Cecilia Malmström welcomed the adoption of “important and effective package to tackle the pressing issue of global steel overcapacity” which will “will help create a level playing field and support EU growth and jobs”. She stated that, in the run-up to the WTO’s 11th Ministerial Conference in Buenos Aires, “this success underlines the importance of effective multilateral cooperation to solve global problems”.
“Of course, our work is not yet done. Now we need to walk the talk. Our industry, our workforce, our consumers and citizens depend on these commitments being carried out effectively”, she added, however, giving assurances that the EU would follow the implementation of the measures closely.
The Global Forum on Excess Capacity will continue to meet at least three times per year to monitor implementation of the commitments made on Thursday.
The EU participated in the setting up of the Forum in December 2016, in the wake of the G20 summit in Hangzhou in the summer of 2016. The forum is facilitated by the OECD and reports to G20 ministers every year.
On the domestic level, the EU has put in place 47 anti-dumping and anti-subsidy measures as protection against imports of steel products which have benefited from anti-competitive practices. (Original version in French by Emmanuel Hagry)