During the first ministerial-level meeting of the Global Forum on Excess Steel Capacity, held Thursday in Germany, the participating nations agreed that excess capacity is a worldwide problem and will therefore require collective action. 

They also agreed that nations should refrain from offering government support and subsidies to their steel industries, work to ensure a level playing field and market-based outcomes, and enact policies that encourage capacity adjustment. 

"I am very pleased with the result agreed upon today, which confirms the relevance of the G20 in crafting collective solutions to global problems. Ministers agreed on a roadmap to reduce steel excess capacity," said OECD Secretary General Angel Gurría.

"This will contribute not only to a more stable and sustainable steel sector, but is also an opportunity to reduce trade distortions and improve our trade relations more generally," Gurría said. 

The forum, which grew out of the 2016 G20 summit in China, is made up of the G20 nations and others in the Organisation for Economic Co-operation and Development, which serves as the forum’s administrator. The forum includes all of North America, Brazil, Russia, China, Japan, Australia, South Korea, Turkey and the European Union. 

The European Steel Association said it believes the agreement on the principles is significant. 

"Never before have countries worked together – at a global level – to develop a policy inventory as comprehensive as this one for steel. Although not binding in law, the agreement is a significant step forward as all market distorting policies and practices beyond WTO rules are targeted," said Axel Eggert, the association’s director general.   

"This framework provides a hook to structure and channel the real implementation work ahead of us, with the ultimate goal of enforceable rules that provide a real global level playing field for European steelmakers," he said. 

However, the association’s U.S. counterparts apparently don't share the same level of enthusiasm, saying that although they are glad to see collective steps being taken to address the issue, more needs to be done. 

"Policy recommendations presented by the Global Forum will only be meaningful if they are actually implemented by governments. Promises alone will not solve the problems facing the global steel industry; concrete actions by governments must follow in short order," said American Iron and Steel Institute chief executive Thomas J. Gibson.  

Added Philip K. Bell, president of the Steel Manufacturers Association: 

"While it is good to see the cooperation between countries and to continue diplomatic efforts to deal with this issue, until the forum identifies specific measures, timetables and targets the overcapacity problem will persist. 

“As we wait to see further progress, U.S. steel producers must continue to insist on vigorous enforcement of U.S. trade laws and a timely conclusion of the Section 232 investigation that includes positive remedy proposals.”

The United Steelworkers union also called for more action.

“Two years of dialogue and meetings resulted in a 52-page report and a set of principles that acknowledges there is global steel overcapacity which is continuing to grow. For the participants in the Global Forum, this may be viewed as a victory, but for workers in the steel sector in the United States, it is just another sign that political leaders are fiddling while Rome burns,” the union said in an unattributed statement. 

“The USW appreciates the hard work that U.S. negotiators put into this process and the strong stances they took on key principles. Yet as attacks on the U.S. steel sector continue, only further dialogue is scheduled. The new report fails to identify specific disciplines, timelines or targets for resolving the problem. A real plan for action is the only thing that will work.” 

Despite this initial agreement, the U.S. and China remain far apart on the issue, with the U.S. pushing for China to take more aggressive action within its borders and China saying that it already has done its part. 

Indeed, the meeting ended with representatives of the two countries exchanging criticisms, according to reports.  

“Pointing to short-term developments and worn-out promises will not cure the fundamental causes of the problem,” said Jamieson Greer, U.S. Trade Representative Robert Lighthizer’s chief of staff, according to The Wall Street Journal. 

“The forum has not made meaningful progress,” he said.