U.S., Steel-Producing Nations Agree to Slash Production in Market glut.(BUSINESS)
Byline: Jeffrey Sparshott, THE WASHINGTON TIMES
Major steel-producing nations yesterday agreed to cut production in a move to help a struggling industry find profits and save jobs.
Steel makers in the United States and elsewhere have been hurt by low worldwide prices and competition from cheaper imports. The Bush administration has tried to save the mills by blocking some of those imports. But any long-term fix involves eliminating a worldwide steel glut, officials said.
The new agreement, which will requires extensive work on details in the coming year, focuses on eliminating government subsidies and will consider ways to shut down inefficient plants.
"What this represents is a political commitment made by the world's major steel-producing nations to reach a subsidies agreement on steel," said Grant Aldonas, the U.S. Commerce Department's undersecretary for international trade.
Government aid in the form of subsidies is the root cause of the overproduction and the low prices, Mr. Aldonas said.
The United States and other steel-producing countries have struggled to solve the steel glut. Yesterday's agreement came while the United States, the European Union and several other nations are involved in a dispute over tariffs that the Bush administration imposed to protect domestic firms.
"It's a landmark agreement," Mr. Aldonas said at a press conference following two days of meetings at the Organization for Economic Cooperation and Development (OECD) in Paris.
EU officials strongly supported the agreement, though the two sides played down a dispute over steel tariffs. The agreement puts off immediate consideration of tariffs but a joint U.S.-EU communique does say that the two sides are ready to address "other market-distorting practices in the steel sector worldwide."
"We can't get through discussions without touching remedies eventually," Mr. Aldonas said, referring to the tariffs.
Faltering U.S. mills earlier this year, hurt by low prices, demanded and received from the Bush administration temporary tariffs of up to 30 percent on steel products. The move, announced in March, was designed to shore up political support in steel states - like Pennsylvania, Ohio and Indiana - for an industry that has lost more than half its jobs since 1980.
The tariffs have boosted prices in the United States, helping some mills while hurting firms that import or buy domestically and refinish steel products. …