NATIONAL CONFERENCE ON GLOBAL STEEL
INITIATIVES TOMORROW
A National Conference
on Global Steel initiatives is being jointly organised by the
Ministry of Steel, Department of Commerce, UNCTAD and CII in New
Delhi tomorrow to discuss India's concern on the initiative of
the developed countries to conclude an agreement by July 2003
on market distorting measures in the world steel trade. The Union
Minister for Steel Shri Braja Kishore Tripathy will inaugurate
the conference. Under the auspicious of the Organisation of Economic
Cooperation and Development (OECD), Paris, countries with interest
in International steel trade have been deliberating upon issues
relating to effectiveness of existing multilateral discipline
relevant for trade in this sector.
As a part of
the long-term solution to global steel over-capacity, the proponents
of the global steel initiative are of the view that subsidies
and related government support caused significant distortions
in the steel markets. These are to be reduced and where possible
eliminated. The attempt of certain developed countries during
these meetings of OECD has been to get countries to agree upon
formal binding and enforceable commitment for strengthened disciplines
in respect of steel subsidies over and above those provided for
in WTO's Subsidies Agreement. Certain countries have argued that
the ways in which anti-dumping, countervailing duty and safeguard
measures are being applied have introduced distortions in the
markets.
India is the
8th largest producer of steel in the world and produces
approximately 30 million tonnes of crude steel annually. The industry
has a well diversified product base in the country. Although India's
share of global steel production and trade is not significant,
being approximately 3 percent and 1 percent respectively, with
a view to protecting its interests in this sector, India has participated
in the meetings of the OECD High Level Group on steel issues and
the Disciplines Study Group. The representatives of the domestic
steel industry, including the Indian Steel Alliance, have been
regularly briefed about the various developments in the OECD deliberations.
It has been the view of the representatives of the domestic steel
industry that India should remain engaged in the OECD steel deliberations
for protecting its interests. Prior to each meeting of the HLG,
Ministry of Steel has held consultations with representatives
of the domestic steel industry
whose views have been taken into consideration while deciding
the stand of the Government on various issues raised in the OECD
deliberations.
During these
meetings India has opposed the blanket prohibition on all steel
specific subsidies and has emphasised that the Steel Subsidy Agreement
should adhere to the basic architecture of the Subsidies Agreement
whereby a narrow category of subsidies would be prohibited but
the others permitted. Reservations have been expressed on the
various permitted exceptions. In this context the need for ensuring
that closure of steel capacities is indeed permanent has been
emphasised. India has also sought to exclude steel enterprises
with a production capacity of 500,000 tonnes from the disciplines
of the SSA.
India has pointed
out that industry in developing countries are characterised by
low level of infrastructure development, high cost of capital,
prevalence of under-developed regions where industries may be
reluctant to invest. The various export incentive schemes in developing
countries are less in the nature of conferring an advantage to
the exporters in such countries and more for the purpose of creating
a level playing field, in view of the fact that their competitors
from the developed countries do not suffer from these disadvantages.
It has therefore been recognised that Government have to assume
a more active role in assisting the industry by creating a level
playing field. S&D treatment provisions in the Subsidies Agreement
should be seen in this context and not perceived as a bounty to
the developing countries.
These provisions
are a structural need for developing countries in the multilateral
trading system and should be equally applicable to a sectoral
agreement on steel. Accordingly India has sought to retain in
the SSA the flexibility available to developing countries under
the Subsidies Agreement. In addition, it has sought non-actionable
treatment for assistance granted by developing countries for technology
upgradation and plant modernisation. It has also sought flexibility
to provide assistance to steel enterprises in backward regions.
India has also
emphasised the need to address distortions caused by abuse of
anti-dumping/countervailaing duty/safeguard measures by various
countries against imports of steel products. In India's view this
issue should be discussed simultaneously with the work on trade
distorting subsidies.
