19 September, 2018There remain 540 million tons of excess steel capacity globally, putting steelworkers’ jobs at risk from massive dumping during the next industry downturn.
This was one conclusion from the OECD Steel Committee, which brought together over 100 government, industry and trade union representatives for a 17-18 September biannual meeting in Paris. Along with IndustriALL Global Union, participating unions included IndustriAll Europe, the Trade Union Advisory Committee (TUAC) of the OECD, the French CFE-CGC and British Unite.
Global steel capacity is expected to increase in 2018 for the first time since 2015. Increased capacity in coming years is expected to be concentrated in the Middle East and India.
China came under heavy criticism at the meeting by governments, industry associations and IndustriALL Global Union for its contribution to overcapacity. Chinese steel production, with state support, has increased five-fold in less than two decades, with significant production dumped abroad at below-market prices.
Chinese industry and government representatives at the meeting denied there is overcapacity in China. They noted that China has already reduced its capacity by 120 million tons and said there is now a strict rule in China that no new capacity can be added unless at least an equal amount of capacity is eliminated. China now accounts for half of global steel production.
The recent unilateral imposition of steel tariffs by the U.S. also came under heavy criticism by meeting participants. The U.S. government representative responded that these tariffs are compliant with international trade rules and were imposed in response to national security threats.
Participants agreed that multilateral initiatives such as the Committee and the Global Forum on Excess Steel Capacity must begin to deliver on their promise of reducing excess steel capacity.
Ronald Janssen of TUAC pointed out (PowerPoint) that labour market institutions which support workers’ rights, such as Swedish job security councils, can enable capacity reductions and other industry change to be more equitable, in a workshop preceding the Committee meeting.
“Suicide rates can increase when steel plants close. Has the Committee considered the mental health of displaced employees and mental health assistance required in connection with plant closures?”
asked Unite lay executive member Tony Pearson during this workshop.
The Global Forum on Excess Steel Capacity was meeting in the two days after the Committee. Global Forum was formed by the G20 in 2016 to work with OECD Steel Committee in confronting the excess capacity crisis.
Committee and the Global Forum are encouraging countries to work together to develop a common understanding of state subsidies for the steel sector, which are a key cause of global overcapacity. In the Chairman’s conclusions, the Committee reiterated the need to swiftly remove subsidies and other government support measures that are market-distorting and contributing to excess capacity, though there was no consensus on which support measures are market-distorting.
The Committee also developed draft guidelines for state support and is developing a subsidies database. Work is progressing slowly and it’s not clear that the Committee and Global Forum are well coordinated in this work. TUAC and IndustriALL made a joint submission (PDF) on these draft guidelines.
IndustriALL again protested at the Committee meeting trade unions’ exclusion from the Global Forum.
“Steelworkers are an important stakeholder in these debates, and excess capacity has a large impact on them and their communities. They should have a seat at the table,”
stated IndustriALL base metals director Adam Lee.