The European Commission welcomed the establishment of a new Global Forum on Steel Excess Capacity.

Designed to address overcapacity in the global steel industry, the Forum will support the creation of growth and jobs. It comprises the Group of 20 (G20) economies, as well as other members of the Organisation for Economic Cooperation and Development (OECD). It will report annually to the G20 ministers within its three-year, renewable mandate.

Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen said: “With this Forum we have created a global space to respond jointly to the worldwide problem of steel overcapacity. The Forum’s work will mean we can work with our international partners to define timely, robust steps to address overcapacity. This will protect growth and jobs in an efficient, sustainable EU steel industry.”

Commissioner for trade Cecilia Malmström said: “As long as governments outside the EU support their steel industries in ways that distort the market, we will use all the available tools to ensure a level playing field for the EU’s steel producers. But we must also address the root causes of overcapacity in the global steel industry. This is the best way to reduce its extensive damaging effects on the global steel market. The new Global Forum on Steel Excess Capacity can serve as an example of a new kind of governance, based on cooperation, to overcome challenges in other industries affected by overcapacity.”

In March 2016 the Commission issued a communication on maintaining a competitive EU steel industry. Since then it has helped the industry overcome serious challenges, largely due to global overcapacity, much of it in China. The Commission has acted through trade defence, imposing anti-dumping and anti-subsidy duties, to shield the EU’s steel industry from the effects of unfair trade. And it is committed to using trade defence fully in the future.

However, trade defence can only address the effects of global overcapacity on trade — not its root causes. That’s why the European Commission has also been addressing the underlying causes of the problem with the EU’s main partners and the overcapacity issue was raised on several occasions by President Juncker at both bilateral and multilateral level, notably during the last G20 Summit.

The Global Forum on Steel Excess Capacity seeks to tackle those root causes. Its creation today in Berlin responds to a call by the G20 leaders at the Hangzhou Summit in September 2016 to create such a body. Bringing together more than 30 economies in all – all G20 members plus interested OECD members – it is the first global platform on steel issues, and includes all the world’s major producers.

Its goals are ambitious. It recognises that subsidies and state support contribute to overcapacity and require attention. Members will exchange information and policies, and address overcapacity, by enhancing the role of the market and changing the structure of the industry.

The forum will be facilitated by the OECD and report to G20 ministers every year.

In the meantime, the EU will continue its dialogue with its main trade partners and defend fair trading conditions for EU companies. The Commission calls on EU Member States and the European Parliament to urgently agree on the proposals to modernise EU trade defence instruments and make fairer trade a reality.

Source: European Commission

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