On Saturday 26 October, the Ministerial meeting of the Global Forum on Steel Excess Capacity took place in Tokyo, Japan. The European Commission welcomes the overwhelming support by members to continue working to address the persistent global excess capacity plaguing the global steel sector.
Vice-President for Jobs, Growth, Investment and Competitiveness Jyrki Katainen said: “The Forum puts the finger on what continues to cause steel overcapacity and what is needed to eradicate it. As long as overcapacity persists, the EU is determined to continue Forum work and bring it to G20 Leaders. The EU will resolutely defend our industry from distortions in the steel market.”
Commissioner for Trade Cecilia Malmström said: “There are no excuses: those who walk out on the Forum are turning their backs on multilateralism and on solving global problems through cooperation – and give cover to damaging and unacceptable unilateral actions. We call on China to exercise leadership, participate in the Forum and deliver on its commitments.”
The Forum brings together G20 and interested OECD members to address steel overcapacity at its root.
The Forum welcomed China’s efforts to reduce capacity, but has equally identified the need for further reductions and the elimination of subsidies causing overcapacity. These actions are essential to avert another major global steel crisis. This is why the EU regrets the decision taken by China to not join the consensus, and thus step out of the Global Forum. Nevertheless, the platform remains open to all interested OECD and G20 members, which will continue to be invited to join discussions.
The Commission will continue its work towards a sustainable solution that will put the EU steel sector back on track, as well as work with like-minded partners to resolve the global imbalances of excess capacity of steel.
The steel sector is a vital industry for the European Union's economy and occupies a central position in global value chains, providing 2.6 million direct and indirect jobs in the EU.
Faced with an unprecedented crisis generated by the trade spillovers of Chinese excess capacity, the EU activated all tools at its disposal to defend EU industry from unfair trade, including an unprecedented 25 trade defence measures. However, these efforts address the effects of global overcapacity on trade – not its root causes.
To that effect, the EU led the December 2016 creation of the Global Forum on Steel Excess Capacity, bringing together 33 economies – all G20 members plus interested OECD countries. Since its creation, members have exchanged an unprecedented amount of information on steel capacity, subsidies and other support measures. This has enabled the Forum to identify and track the underlying causes of steel overcapacity and, crucially to define concrete actions to address them by enhancing the role of the market.
The global surplus in steelmaking capacity has decreased significantly since the Forum’s creation but in 2018 is still more than 500 million metric tonnes, an alarmingly high-level equivalent to one quarter of the world’s total capacity. This structural surplus risks flooding world markets as soon as there is a cyclical downturn – with yet again a damaging impact on the steel sector, as well as related industries and jobs.
The EU has reacted with equal intensity to U.S. 232 measures, which are not only the wrong response to global excess capacity, but undermine global efforts to address it. The EU has challenged the measures at the WTO, imposed rebalancing measures to the U.S., and introduced safeguard measures to defend our industry at home.
Steel: Global Forum takes important steps to tackle overcapacity (21 September 2018)
- Publication date
- 29 October 2019
- Directorate-General for Trade
- Trade topics
- Trade policy