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FOR IMMEDIATE RELEASE Contact: Julie Cram/Curt Cultice
Monday, February 11, 2002 202-482-3809

 

Statement by Under Secretary of Commerce for International Trade
Grant Aldonas on Conclusion of Third High-Level Meeting on Steel at the OECD

Friday, the Third High-Level meeting on Steel at the OECD concluded in Paris, France. The meeting was attended by 39 countries representing virtually all of the world’s steelmaking capacity.

The U.S. delegation was encouraged by the continued progress toward addressing the problem of excess production capacity in the global steel industry, and in developing the first steps to addressing market-distorting practices that have helped foster this excess capacity.

Two developments from this latest meeting are of particular note: First, participants agreed to form a new Capacity Working Group to identify the best means to regularly update and review countries’ information on production capacity and developments for their steel industries. By instituting regular governmental peer reviews, the U.S. anticipates that countries’ efforts to encourage the market-based reduction of excess capacity will be greatly improved.

Second, participating countries reiterated their view that government interventions and other market distortions in steel must be eliminated to solve the problem of overcapacity and to let market forces prevail in the steel industry worldwide. Based on this consensus, the participating countries agreed that a second group should be formed to look at disciplining market-distorting practices.

Despite these encouraging developments, there is much more to be done. The United States was disappointed in the quality of several of the countries’ information on additional capacity reductions in their respective steel industries. In addition, although the amount of capacity forecasted to close through 2005 is now estimated to be up to 117.5 million metric tons, this is far less than the total amount of excess capacity worldwide of approximately 200 million metric tons.

The issues discussed at the OECD meeting and the conclusions reached by the participating countries are summarized in a communiqué that was accepted by all of the countries, which was published on the OECD website: http://www.oecd.org/oecd/pages/documentation/displayxml/0,3375,EN-document-0-nodirectorate-25899-0,00.html)

The group on capacity will meet on March 13, 2002 and the group on disciplines will meet on March 14 and 15, 2002. Both groups will then report their findings to the next High-Level Meeting on steel, which is scheduled for April 18 and 19, 2002.

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