September 21, 2018
On September 20, 2018, the Second Ministerial Meeting of the Global Forum on Steel Excess Capacity (GFSEC) was held in Paris, the French Republic. As a representative of Japan, Mr. Naoshi Hirose, Director-General for Trade Policy, Minister’s Secretariat, Ministry of Economy, Trade and Industry (METI), attended the meeting.
1. Agreement reached at the Second Ministerial Meeting of the GFSEC
At the meeting, based on the concrete policy solutions including the six principles, an agreement reached at the First Ministerial Meeting of the GFSEC in November 2017, GFSEC members held discussions on the outcome of the efforts by the members engaged in the first half of 2018 to solve steel excess capacity and on future efforts. Based on the discussion result, they formulated and agreed upon a Ministerial Report. In addition, they confirmed that the report will be briefed at a G20 summit meeting to be held in November 30, 2018.
The report consists of mainly: i) the current situations of the members in addressing steel excess capacity; ii) the outcome of reviews toward the refraining from market-distorting government support measures; and iii) specific time schedules of GFSEC’s future efforts.
On December 1, 2018, as the 2019 G20 chair, Japan will preside at the GFSEC. As the members are required to continue to secure the implementation of the concrete policy solutions including the six principles in order to strengthen market functions, it is significant for Japan to exercise strong leadership as the chair at the GFSEC and advance the review process with enhanced transparency credibility and effectiveness in a meticulous and swift manner.
To this end, at the meeting, Japan stated its intention to host a working-level GFSEC meeting in December 2018 immediately after assuming GFSEC chairmanship. Japan will continue to play an active role to solve these issues.
Outline of the report:
- Global cooperation to address the steel excess capacity
- Outcome of review processes
A. As the reduction of steel excess capacity is progressing but steel capacity still remains excessive, the members agreed that they should jointly take action for further reduction of steel excess capacity.
B. The members will formulate a report of review results on subsidies concerning the first half of 2018. They agreed that they will continue such review in the future.
- Future steps taken by the GFSEC
For the full text of the Ministerial Report, visit the website below:
Reference: Outline of the six principles agreed to at the first meeting
(1) Global challenge, collective policy solutions; (2) Refraining from market-distorting government support measures; (3) Fostering a level playing field in the steel industry; (4) Ensuring market-based outcomes in the steel industry; (5) Encouraging adjustment and thereby reducing excess capacity; and (6) Ensuring greater transparency (two annual information sharing and three review meetings).
2. Outline of the GFSEC
On the basis of discussions in international forums including the G7 Ise-Shima summit meeting in 2016, in which G7 leaders recognized for the first time the need to address excess capacity in the steel industry, the leaders agreed to establish the GFSEC at the G20 Hangzhou summit meeting.
In December 2016, the GFSEC was formally established with the participation of 33 countries and regions, which consist of G20 members and OECD members that are interested in the steel excess capacity issue, and in November 2017, the GFSEC held its first meeting in Berlin, Germany. Over the course of 9 working-level meetings of officials, the GFSEC member counties shared information on steel capacity and government support measures and discussed policy solutions to overcome the excess capacity issue.
The ministerial report compiled at this second meeting will serve as a report on the progress in concrete policy solutions to address excess capacity, which was called for at the G20 Hamburg summit meeting in 2017.