Brussels, 28/07/2003 (Agence Europe) - High officials from major steel-producing economies (37 countries plus the European Community) met at the OECD headquarters in Paris last week, to push forward negotiations in subsidies to the steel sector.
Those taking part first of all welcomed the increase in steel consumption. This was reported to have "grown by 4% thus far in 2003, and, if sustained, this will reach a record level of over 800 million tonnes of finished products". Closures in capacity affected 105 million tonnes between 19980 and 2002, with an additional 36 million tonnes of closures expected between 2003 and 2005, slowing capacity expansion world-wide to a modest level. Delegates noted that "adjustment is continuing" between consumption and production capacity of steel, a situation which will be reinforced by restructuring and the abolition of aid and market-distorting practices.
The high-level group (HLG) welcomed progress in defining the elements of an agreement to reduce or eliminate subsidies in the steel sector, one of the objectives laid down at the December 2002 meeting (see EUROPE of 19 December 2002). It asked its Disciplines Study Group (DSG), responsible for implementing this agreement, to go towards a general ban on specific subsidies to the steel industry, limiting derogations, but reserving special and differentiated treatment for developing economies. The delegates said that they wanted to see an exemption to this subsidy ban for aid allocated by contracting parties to companies, to recompense costs incurred by capacity closures. They asked the DSG to continue its work on various aspects of the agreement "at an accelerated pace" in 2003 and 2004.