Global Steel Forum Releases Report On Overcapacity; United States Policymakers Believe More Work Is Needed
Last Thursday, the 33 nations who are members of the Global Forum on Steel Excess Capacity released a report that outlined six guiding principles for governments to use when addressing overcapacity in their own countries and globally. Those principles are:
- Steel excess capacity is a global issue that requires collective policy solutions;
- Countries should refrain from market-distorting subsidies and government support measures;
- Countries should foster a level playing field in the steel industry;
- Countries should ensure market-based outcomes in the steel industry;
- Countries should encourage adjustment to reduce excess capacity; and
- Counties should ensure greater transparency as well as review, discussion, and assessment of the implementation of the Global Forum policy solutions.
With its report, the forum released a fact sheet explaining global steel overcapacity data. The report concluded, “The capacity data for 2014-2016 shared by members suggest that the overcapacity situation may have eased slightly very recently, but not enough to meaningfully reduce the structural imbalance and avoid problems going forward.”
While the United States is part of the forum, U.S. Trade Representative Robert Lighthizer did not attend the meeting at which the report was released. He said the countries need to do more work to truly address the problem. In a statement, Lighthizer said, “The Forum has not made meaningful progress yet on the root causes of steel excess capacity, and pointing to short-term developments and worn out promises will not cure the fundamental causes of the problem. Addressing the ongoing steel excess capacity situation will require immediate and sustained concrete action by all steelmakers, including allowing markets to function, removing market-distorting subsidies and other forms of state support, and treating state-owned enterprises and private steelmakers equally.”
In related news: a bipartisan group of federal lawmakers sent a letter to President Donald Trump last week asking his administration to “develop a comprehensive enforcement plan to address the global steel crisis” and to finish up its Section 232 investigation into steel imports.