Leaders of the G7 nations should be taking steps to address the global overcapacity situation that exists in the steel industry. This is the message from 12 global steel associations released in a statement today.
“Government support measures and other policies have contributed to significant global excess capacity in steel, unfair trade and distortions in steel trade flows around the world,” the 12 associations assert in their statement.
“Among other things, these market-distorting government policies have prevented adequate industry adjustment in some markets in response to changes in global demand,” the statement continues. “This is an issue of concern in countries where government policies encourage steel capacity growth without regard to market signals, or where government actions sustain uneconomic or consistently loss-making steel plants that otherwise would exit the market.”
The statement continued, “Steel producers in the G7 nations, and elsewhere around the world, highly appreciate intergovernmental attempts so far to cope with the global overcapacity issue, and urge their governments to take urgent action to address this global problem, building upon the work program outlined by high level government representatives in Brussels in mid-April to address the overcapacity and adjustment challenges facing the steel industry. It is critical that all major steel-producing nations participate in efforts to eliminate trade-distorting policies that are contributing to the current steel crisis. Otherwise, as was noted at the OECD Steel Committee meeting in May 2015, ‘a failure to address or halt market distortions will result in subsidised and state-supported enterprises surviving at the expense of efficient companies operating in environments with minimal government support.”
The 12 steel associations urged the G7 summit in Japan ‘to discuss the need to maintain effective remedial measures, consistent with their WTO rights and obligations, against exports from countries in which market economy conditions do not prevail’.