Policy principles of the GFSEC


Steel excess capacity is a global issue which requires attention in a global format with broad participation of economies and effective policy solutions to enhance the market function and reduce steel excess capacity.

To support these, Forum members may set and publish goals, if appropriate.


In order to ensure that the steel market operates under market principles, governments and government-related entities should refrain from providing market-distorting subsidies and other types of support measures to steel producers. These include subsidies and other government support measures that sustain uneconomic steel plants, encourage investment in new steelmaking capacity which otherwise would not be built, facilitate exports of steel products, or otherwise distort competition by contributing to excess capacity.


Irrespective of ownership all enterprises acting in the steel market (whether privately owned or directly or indirectly owned, fully or in part, by their governments or by government-related entities) should not receive directly or indirectly subsidies or other type of support that distort competition by contributing to excess capacity, and should follow the same regulations with economic implications and rules, including bankruptcy procedures. A level playing field should be ensured among steel enterprises of all types of ownership. Global Forum members should also continue to fight protectionism including all unfair trade practices while recognising the role of legitimate trade defence instruments in this regard.


Open and competitive markets and a market-driven approach to resource allocation based on the competitive positions of steel enterprises should be the driving forces of the steel sector. New investment, production and trade flows should reflect market-based supply and demand conditions.


Wherever excess capacity exists, governments have a role in advancing policies that facilitate the restructuring of the steel industry while minimizing the social costs to workers and communities. Governments should ensure conditions exist for market-based adjustment, by facilitating the exit of consistently loss-making firms, “zombie” firms, obsolete capacity facilities and firms not meeting environmental, quality and safety standards. This would lead to a net reduction of capacity.


Recognizing that collective policy solutions and transparency are vital for market-based responses by the industry to changing conditions in the steel market, governments should on a reciprocal basis increase transparency through regular information sharing, analysis, review, assessment and discussion as well as regular exchanges about data and concrete policy solutions, among the members of the Global Forum. Governments should ensure that any relevant information on steelmaking capacity developments; supply and demand conditions as well as policy responses including support measures by governments and government-related entities is available on an on-going basis. Members should exchange information on the nature and extent of export credit agency support for new steel projects. The Global Forum will report to the G20 and to interested OECD countries that are members of the Global Forum on progress.