OECD talks end without a concrete solution, but progress is made
The high level OECD meeting that took place between the dates July 16-18, ended without reaching an agreement on subsidy ban issue. The representatives of the world's leading steel producing nations gathering with the purpose of setting up an agreement for eliminating state subsidies on steel worldwide had to face certain problems in determining ways to grant certain exemptions for the developing nations. It appears that the talks will have to continue at least until 2004.
It was basically aimed to have an agreement on hand prior to the next round of WTO talks to take place in Cancun,
Mexico, however this meeting of OECD delegates have also ended without obtaining concrete solutions. In principle, to ban all state subsidies was agreed upon, only except the subsidies aimed at offsetting the cost of closing old inefficient plants.
The closure of old inefficient plants is seen as a necessity that will play an active role in reducing the global overcapacity. Between the years 1998-2002, an excess capacity of 105 million tons are cut by the markets involved in the steel talks and a further 38 million is planned to be cut between 2002-2005.
The progress made was on the issues such as list of products to be covered and types of subsidies to be banned. However, certain dispute is there in respect of the exemptions to be granted to developing countries including
China,
India,
Turkey and
Brazil. The US officials stated that they could agree to allow for research and development and environmental subsidies.
The OECD meetings with the purpose to eliminate state support for steel industries initiated in 2001.