Steel-Producing Countries Launch Talks at Reducing Subsidies in Global Steel Market

Washington, DC - Undersecretary of Commerce Grant Aldonas and senior government officials from major steel producing economies agreed to formally launch talks to reduce, and ultimately eliminate, government subsidies that have distorted the global steel market for decades. The agreement was reached during the Fifth High-Level Meeting on Steel at the Organization For Economic Co-Operation and Development (OECD) in Paris.

"We were given a clear mandate from President Bush to produce significant results in solving the underlying problems of the global steel industry - namely government intervention in the market that leads to over-capacity of steel in the global marketplace," said Mr. Aldonas. "What this represents is a political commitment made by the world's major steel producing nations to reach a subsidies agreement on steel."

In addition, the group looked at ways industry restructuring could be accelerated to reduce inefficient excess capacity in the steel market.

In a communique released by the OECD, the High-Level Group agreed and committed to the following:

On closing steel capacity and industry restructuring:

•a more rigorous peer review process, including improvements to ensure more accurate, complete and timely reporting;
•review suggested options for helping to facilitate permanent steel plant closures.

On subsidies and other government supports:

•in 2003, develop the elements of a subsidies agreement that could ultimately be negotiated in the World Trade Organization;
•consideration of a voluntary commitment to refrain from introducing new subsidy programs to maintain or enhance capacity.