The United States Trade Representative (USTR) called for comments on the subject of the Global Overcapacity of Steel and its effects on US markets. The AIIS submitted comments to the USTR on March 29, and on April 12, Laurence M. Traub, President, Intermetals Corporation, will testify at the public hearing convened by the USTR.
Global Steel Industry Situation
Executive Summary of Comments
The American Institute for International Steel, Inc.
Excess steel capacity created and sustained over many years hurts a host of steel-related industries in the United States. Among other things, it limits jobs and hours worked on our docks, restrains exports, destabilizes world markets, and generates mountains of needless, expensive trade litigation that ultimately resolves very little.
Six Principles to guide the way forward in global steel excess capacity talks
First, the excess steelmaking capacity issue should be raised as an agenda item at the highest international levels, particularly at the Group of Twenty (G20) meeting this year in Beijing. The G20 is an appropriate forum in which to address this matter because it was specifically created to address high-level policy issues affecting global economic stability. Also, the G20 framework, like that of the OECD, allows for broad participation by the key global economic powers.
Second, the United States and other concerned parties should seek firm political commitments in international forums such as the G20 to reduce excess steelmaking capacity, and to do so in a way that can be readily monitored.
Third, with regard to any international discussions or negotiations concerning reductions to excess steelmaking capacity, we should not let the perfect be the enemy of the good. At the same time that we engage in discussions in the OECD and elsewhere, we should engage in the necessary diplomatic spadework in capitals so that we can fully engage as many allies as possible in the overall effort to help push this process forward.
Fourth, we should be prepared to innovate with policy responses that help end trade-distorting practices, and to consider the broadest range of ideas, both old and new.
Fifth, the ultimate aim of these international discussions should be to turn political commitments into new binding disciplines on SOEs and related trade-distorting subsidies.
Sixth, our international partners should know that the United States speaks with one voice in the OECD and elsewhere. The appropriate Congressional Committees should be engaged throughout this process, on a bipartisan basis.