Important step towards subsidy agreement in OECD meeting

Important step towards subsidy agreement in OECD meeting

High level meeting of the Organisation for Economic Corporation and Development (OECD) was held on December 18 and 19 2002 in the Paris headquarters. During the meetings, thirty seven steel producing countries agreed upon the urgent need to prepare an agreement to reduce or eliminate all kinds of government subsidies that are causing injury to the trading of this commodity. According to the International Iron and Steel Institute (IISI) Secretary General Ian Christmas the existence of a strong consensus in the industry worldwide is welcomed that it is necessary to ban the government subsidies. He stated that it is a very positive development that the governments decide to start negotiations to agree on a workable code in this respect. OECD Senior Government officials from major steel producing economies agreed to undertake work immediately on the elements of an agreement for this purpose. The main target will be creating methods to check capacity developments and find way to remove the obstacles of plant closures dealing with management, workers and financial institutions. The worldwide excess capacity is quoted as 200 million tons and it is considered as an important achievement if the targeted 140 million tons of this figure can be reduced. Officials expect that OECD will take all of next year to prepare the framework of the subsidies agreement which will in long term go through the WTO.