OECD Steel Talks End Without Agreement For Third Straight Year
Multilateral talks to reduce or eliminate subsidies to the steel industry have ended without an agreement for the third straight year. The seventh meeting of the High-Level Group (HLG), hosted by the Organization for Economic Cooperation and Development (OECD), was held June 28-29 in Paris, France. Delegations from nearly 40 nations have been meeting since 2001 to craft an agreement that would end market-distorting subsidies, such as tax breaks and low-interest loans.
Senior government officials from major steel-producing economies had convened the HLG meeting to review the status of discussions on a proposed agreement to curtail subsidies to the steel sector. The HLG meeting was intended to discuss global steel market and capacity developments and explore ways to advance work on an agreement to reduce or eliminate government subsidies to the steel industry. Specifically, the HLG met to consider how to address issues in three key areas: (1) exceptions to a blanket ban on subsidies; (2) the nature and scope of special and differential treatment for developing economies; and (3) the "actionability" of pre-notified, subsidies that were "approved" by Parties to countervailing duty cases. A complete negotiating text reflecting the positions of participants has been drafted.
The two major areas of disagreement are what qualifies as a subsidy and whether certain developing nations, such as Brazil, China , India and Turkey, should be excluded from the agreement and for how long.
While failing to reach any specific agreement, the HLG issued a Communique that reaffirmed the HLG's interest in reaching an agreement that eliminates or reduces trade-distorting subsidies in steel provided at all levels of government. The HLG also concluded that, while significant progress towards an agreement has been made, there remain differences among the participants in key areas that require further examination and discussion. In addition, the HLG urged participants to use the coming months for informal bilateral consultations aimed at narrowing differences and advancing the negotiations. The one thing that all of the delegations agreed to was that they would restart the talks in 2005.
Some participants at the talks continued to express their reservations over the choice of the OECD, rather than the World Trade Organization (WTO), as the proper forum to discuss the reduction or elimination of steel subsidies. Other delegations have countered that argument by noting that the WTO's Agreement on Subsidies and Countervailing Measures was not stringent enough to address all of the issues related to steel subsidies.
Additional information on the OECD steel talks can be found on the OECD's Web site at: www.oecd.org/document/5/0,2340,en_2649_201185_32362885_119690_1_1_1,00.html
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