WASHINGTON – Assistant U.S. Trade Representative for Small Business, Market Access, and Industrial Competitiveness Sushan Demirjian today delivered the following remarks to members of the Global Forum on Steel Excess Capacity (GFSEC).
In her remarks, Ms. Demirjian noted that the current international trade rules are inadequate to address the types of behavior and policies that have led to global excess capacity in the steel industry. Ms. Demirjian reaffirmed the Biden-Harris Administration’s commitment to working with like-minded partners who want to restore market-oriented conditions and address the emissions intensity of the steel industry.
A link to the GFSEC Ministerial Statement can be found here.
Assistant U.S. Trade Representative Demirjian’s remarks as prepared for delivery are below:
Thank you, Minister Alexander. On behalf of U.S. Trade Representative Katherine Tai, I would like to start by thanking the United Kingdom for chairing this Forum and its leadership over the past year. I also want to thank the OECD Secretariat for the technical expertise and logistical support it provides the Forum.
In addition, I would like to recognize the OECD Facilitator’s presentation on the trends in global steelmaking capacity. Global excess capacity is growing to crisis levels; according to the OECD, excess capacity stood at 551 million metric tons in 2023 and is expected to increase to 630 million metric tons in 2026. Excess capacity is leading to significant negative impacts on the steel sector, including through trade distortions, pressure on steel prices, and displacing efficient market-based production.
For many years, we’ve discussed the causes behind excess capacity in the global steel industry, in particular, the state-directed industrial targeting in the People’s Republic of China and the lack of market-oriented conditions in the PRC and other economies.
This continues to harm our workers and businesses, creates strategic dependencies and systemic vulnerabilities, and undermines our decarbonization efforts.
One clear conclusion is that current international trade rules are inadequate to discipline the types of behavior and policies that have caused this crisis.
That is why addressing global steel excess capacity should be a priority for all governments—for the future of our steel and other critical industrial sectors and also the functioning of and confidence in the multilateral trading system.
We are pleased to see that GFSEC members agree on the need to take concrete actions to address the root causes and consequences of excess capacity in their economies. The United States believes this should include the development of new trade monitoring and enforcement tools, and more creative and aggressive use of existing tools.
We also welcome the progress made in the GFSEC over the past year, including new analysis by the OECD Facilitator on the impacts of excess capacity on trade and employment.
We strongly support enhancing the Facilitator’s analytical capabilities through the creation of a new global excess capacity monitor.
We welcome recent actions by our trading partners, particularly Canada and Mexico, to address the impact of non-market excess capacity and other non-market policies and practices.
We strongly encourage other countries to undertake similar measures.
Excess capacity also harms our planet. It exacerbates the climate crisis by prolonging emissions-intensive production and inhibiting the industry’s ability to undertake the investments in existing and emerging technologies that are necessary to reduce emissions.
To this end, the United States is committed to working with like-minded partners who want to restore market-oriented conditions and address the emissions intensity of the steel industry.
Lastly, I want to share that in follow-up to USTR’s engagement with stakeholders earlier this year regarding ways to promote supply chain resilience, USTR is considering how non-market policies and practices, including non-market excess capacity, threaten the integrity of our supply chains.
These issues are critically interlinked. Non-market policies and practices harm our workers and businesses by creating concentration of production, dependence, and chokepoints.
USTR is actively considering how trade rules can help address these issues and strengthen our supply chains.
Within the coming months, USTR expects to release additional policy ideas on defining and responding to non-market policies and practices. We will continue to consult a wide range of stakeholders as we focus on this important work.
Mr. Chair, the Ministerial Statement before us is one that the United States strongly supports. We look forward to continued cooperation with GFSEC members next year. Thank you.
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