PARIS (Reuters) - Steel-producing countries agreed on Thursday to step up efforts to cut subsidies to the industry and reduce capacity, a draft communique from talks at the Organization for Economic Cooperation and Development said.þþ``(Representatives) agreed to undertake work immediately on the elements of an agreement for reducing or eliminating steel trade-distorting subsidies at all levels of government,'' the OECD, which hosted the talks in Paris, said in the communique. ``In addition, they agreed to strengthen the peer review of capacity developments and to examine various options to facilitate plant closures,'' the OECD added.þþThe steel nations said around 140 million tons of inefficient production capacity could be closed between 1998 and 2005, marking an upward revision of a previous target to shut down 128 million tons.þþU.S. Commerce Under Secretary Grant Aldonas said during a break from the talks on Wednesday that he did not expect an increase in the target to close 128 million tons of capacity.þþThursday's agreement comes after the United States enraged trading partners in March by slapping hefty tariffs on U.S. steel imports, in what it says is a temporary action against imports to give domestic firms time to become more competitive.þþPresident Bush's administration says years of government subsidies around the world are partly to blame for the tough conditions facing the U.S. steel sector. Other countries say the U.S. steel industry is uncompetitive and suffers from a lack of investment, and are awaiting a ruling from the World Trade Organization, due around March next year, on whether the U.S. import tariffs are legal under WTO rules.þþAhead of the meeting, OECD Deputy Secretary General Herwig Schloegl, who chaired the talks, said the countries of the former Soviet Union and China, along with the United States, were among the main steel producers needing to cut inefficient excess capacity.þþThe OECD said officials at the talks instructed a lower-level working group to evaluate options for helping facilitate plant closures. Another group would devise ways to reduce subsidies. þþ
Source: NY Times
