European Commission Executive Vice-President and Commissioner for Trade Valdis Dombrovskis chaired today a ministerial videoconference meeting of the Global Forum on Steel Excess Capacity.
In a joint statement, the EU, together with 28 members of the Forum, called on G20 Leaders ahead of their meeting next month to step up joint efforts to address the overcapacity that harms EU steel producers.
Speaking on the occasion, the Executive Vice-President said: “In the midst of the COVID-19 crisis, our industries have been confronted with plummeting demand. This exacerbates the problem of global overcapacity. In these difficult circumstances, it is more important than ever to restore balance and ensure a level playing field in the global steel market. This is what this Forum sets out to achieve: only by working together can we eliminate subsidies and cut overcapacity. The European Union will continue working towards a sustainable solution that will put the EU steel sector back on track and I invite all partners concerned to join this multilateral effort.”
The members of the Forum also committed today to enhanced transparency and continued effort to monitor and address the global excess capacity. They called on China, India and Saudi Arabia to re-engage in the work of the Forum and reiterated that the platform remains open to all G20 and interested OECD members.
The steel sector is a vital industry and occupies a central position in EU’s economy and the global value chains, providing 2.6 million – direct and indirect – jobs in the EU. The EU activated all tools at its disposal to defend EU industry from unfair trade, including an unprecedented number trade defence measures. In addition to anti-dumping and anti-subsidy measures, the EU has put in place safeguards that addresses trade diversion resulting from U.S. unilateral steel duties. However, these efforts can only address the effects of global overcapacity on trade – not its root causes.
To that effect, the EU was a key player in creation in December 2016 of the Global Forum on Steel Excess Capacity. Initially, the Forum brought together 33 economies, all G20 members plus interested OECD countries. Since its creation, members have exchanged an unprecedented amount of information that enabled them to identify and track the underlying causes of steel overcapacity and to define concrete actions to address the problem by enhancing the role of the market. Since 2019, China, India and Saudi Arabia have disengaged from the Forum’s work.
Despite some initial important achievements since the creation of the Forum, developments in some non-participating countries, together with the impacts of the global crisis caused by the Covid-19 pandemic, have widened the gap between capacity and demand. Global excess capacity is going to increase significantly this year, to a level of at least 606 million tonnes, equivalent to three times the Union’s total steelmaking capacity. This excess capacity is likely to remain high for the foreseeable future with yet again a damaging impact on the steel sector, as well as related industries and jobs.