Tariffs and overcapacity focus of OECD steel meeting

Tariffs and overcapacity focus of OECD steel meeting

Trump announced a 25 per cent tariff on U.S. imports of steel and 10 per cent tariff on U.S. imports of aluminum just days prior to the Committee meeting, although details are still being finalized.

Union participants at the meeting included IndustriALL Global Union, industriAll Europe, Community and Unite of the UK, and CFE-CGC Siderurgie of France.

IndustriALL has repeatedly raised concern at meetings of this Committee about steel workers being displaced due to overcapacity. IndustriALL is consulting with affiliates in the base metals sector to find common ground on the newly announced tariffs.

While criticism at the OECD Steel Committee in 2017 focused on China’s role in global steel overcapacity, criticism at this meeting focused on Trump’s plan to address the problem with unilateral measures.

Representatives from the governments of Brazil, Canada, China, India, Italy, Japan, Mexico, Netherlands, Russia, South Africa, South Korea, Turkey, the UK as well as the European Commission spoke against Trump’s planned tariffs during a session on steel trade. European and Latin American industry associations also voiced opposition.

A U.S. government representative said Trump hasn’t yet issued final plans so they wouldn’t respond, however they agreed with other participants that excess capacity is the root problem, and added that measures used to date have not been able to address it adequately.

The OECD Steel Committee Secretariat reported that it will take another 30 years of demand growth to absorb the current level of excess capacity. The Chinese government asked the Committee Chairman to formally acknowledge that Asia was primarily responsible for recent modest reductions in global steel capacity, including a 1 percent decline in 2017. The Chairman’s Statement said the reduction has “mainly happened in absolute figures in Asia” but has been “proportionally significant” in other locations.

The Committee discussed the role of State Owned Enterprises in global overcapacity and expressed concerns about these enterprises receiving unfair advantages from governments in comparison to private enterprises.

The Global Forum on Excess Steel Capacity met immediately after the Committee. Global Forum was formed by the G20 in 2016 to work with OECD Steel Committee in confronting the excess capacity crisis. Both Committee and the Global Forum are encouraging countries to work together to develop a common understanding of state subsidies for the steel sector and to share information on them.

IndustriALL warned that the rapid increase in steel production in the Middle East combined with the lack of respect for core labour rights in the region is deeply concerning, citing the recent arrest of ten Iranian steel workers for protesting against unpaid wages.

“We urge the OECD Steel Committee to raise concern with Middle Eastern governments about both overcapacity and violation of workers’ fundamental rights,” said IndustriALL’s Director for Base Metals, Adam Lee at the meeting.

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