OECD Delegates Talk Steel

Representatives from more than 40 nations are meeting late this week to discuss conditions in the global steel industry.

Delegates to the Organization for Economic Cooperation and Development (OECD) are meeting in Paris this week “ to continue their work on improving the conditions in world steel,” according to an OECD news release.

“Progress that is being made in facilitating the ongoing and planned closure of inefficient capacity will be evaluated, as will work that has been undertaken on the ways that multilateral disciplines on market-distorting government interventions in steel, and related industry practices, could be strengthened,” the organization has declared.

Excess capacity is the issue that the board of directors of the International Iron & Steel Institute (IISI), Brussels, hopes will be addressed. The board confirmed in a vote earlier this week its support for the OECD negotiations and urged OECD delegates “to make further progress on the issues of assisting the closure of excess steelmaking capacity and removal of state aid which distorts the fair operation of the market for steel.”

The IISI is urging governments “to establish a new state aid code for assistance given to the steel industry whether by national, regional or local authorities. This code should prohibit the use of government finance to maintain existing steel plants or support investment in new capacity, but should allow the use of government finance to help cover the social and environmental costs associated with the permanent closure of steel capacity.”

The organization also recommends that an independent review panel should be established to support a new code.

Most nations with steelmaking capacity are represented at the talks, including the U.S., China, Russia, Japan, Canada, South Korea, Brazil, Mexico and western European nations.

At its last meeting, held in Paris in February, the OECD Steel Committee reviewed statistics of likely pending steel mill closures provided by member nations, and agreed to “develop options for the strengthening of disciplines on government interventions and other market distortions in steel, feeding the results, as appropriate, into wider-ranging discussions at the World Trade Organization.”