The Organisation for Economic Co-operation and Development (OECD) has welcomed the outcomes of today's Ministerial meeting of the Global Forum on Steel Excess Capacity. It has congratulated Germany on what it calls ‘this important achievement on the last day of its G20 Presidency’.
The Global Forum was created by G20 Leaders, at their Hangzhou summit in September of last year and the OECD has been serving the Global Forum as its facilitator and has contributed to its achievements to date.
"I am very pleased with the result agreed today, which confirms the relevance of the G20 in crafting collective solutions to global problems. Ministers agreed on a roadmap to reduce steel excess capacity. This will contribute not only to a more stable and sustainable steel sector, but is also an opportunity to reduce trade distortions and improve our trade relations more generally," said OECD secretary-feneral Angel Gurría.
The 33 Members of the Global Forum agreed on a report with six guiding principles for governments on the basis of which the OECD has worked closely with members to develop specific policy recommendations – concrete policy solutions the G20 Leaders asked for over one year ago. These emphasise the importance of having the right policy framework conditions; they call for the removal of subsidies and other measures that distort steel markets; they stress the need for a level playing field among steel enterprises of all types of ownership; and they highlight the importance of the Forum regularly updating its information on capacity and policy measures.
The Global Forum's work is underpinned by an information-sharing mechanism put in place by the OECD. Forum members now share detailed information on the steel plants currently in existence, the new plants or additions of capacity that are taking place, and the extent to which steelmaking facilities are being closed in member economies. In addition, for the first time, through the inventory of policy measures, members can now “map” the policy landscape in a fairly exhaustive manner and have information on a broad spectrum of policies that can directly or indirectly affect excess steelmaking capacity.
"The outcome today is the crowning achievement of a successful German G20 Presidency which the OECD has been delighted to support in areas such as inclusive growth, climate change, tax policy, and the digital economy," said Gabriela Ramos, the OECD chief of staff and G20 Sherpa.
The OECD will continue to serve as the facilitator of the Global forum and work with GFSEC members in implementing the roadmap.
Today’s meeting has received positive comments from the European steel industry. Gareth Stace, director, UK Steel, commented: “The outcome of today’s meeting is enormously welcome, representing a significant step towards delivering concrete action that will secure the health of the whole sector well into the future.”
According to Stace, the agreement ‘finally contains the seeds of success’. He said he was confident that there will be ‘real progress’ going forward.
“Overcapacity in the steel sector is a global problem, and today we finally saw the start of a global solution. The underlying cause of the crisis that swept through the steel sector last year are far from tackled, but I sincerely hope this is the light at the end of the tunnel,” Stace said.
Thomas Gibson, president and CEO of the American Iron and Steel Institute (AISI) commented:
“We are grateful and appreciative of the leadership and commitment of the US government to address the global steel overcapacity crisis and the market-distorting government policies and practices that have driven it. The massive build-up in steel capacity in other countries, which has fuelled historic levels of unfairly traded imports into the US, is the most critical issue facing the steel industry today. The report of the Global Forum issued today properly focuses on the need for governments to eliminate market-distorting subsidies and other measures that contribute to excess capacity and to ensure a level playing field between private sector steel producers and state-owned enterprises. However, these and the other policy recommendations presented by the Global Forum will only be meaningful if they are actually implemented by governments. Promises alone will not solve the problems facing the global steel industry; concrete actions by governments must follow in short order.
“At the same time, continued aggressive enforcement of the full range of US trade laws, including Section 232 and our anti-dumping and countervailing duty laws, is critical to ensure that the US industry is not further damaged by unfair trade in steel. In our view, a trade policy that couples vigorous enforcement with continued international engagement offers the best opportunity for successfully addressing the global overcapacity crisis in steel.”
Axel Eggert, director-general of EUROFER, the European Steel Association, said that global excess capacity benefits nobody. “But it is safe to say that the European steel industry has been particularly affected by the effects. The EU’s open single market attracts the dumped steel from production abroad that does not find customers in domestic exporting markets,” Eggert emphasised. “This is happening even as Europe has reduced its structural overcapacity,” he added.