The negotiations have begun between US trade officials and their foreign counterparts on worldwide production cuts in steel as part of the President's plan to rescue the US steel industry. Public and private sector participants concluded that, while governments can play a constructive role in solving problems of excess capacity, individual steel companies should make their own decisions on whether to cut back production and terminate operations.
Government participants also agreed that, given differing national economic conditions, each government should consult directly with steel producers before deciding on the best approach for addressing overcapacity.
Commerce Department officials believe that this first meeting on steel industry problems facilitated a useful exchange on steel industry problems and laid the groundwork for coordinated international action. A second meeting is tentatively scheduled for mid-December to discuss the outcome of government consultations with industry and consider concrete steps to address overcapacity and unfair practices.
In addition, US Treasury Secretary Paul O'Neill has been lobbying Asian steel-producing nations to agree to buoy prices by eliminating inefficient output; a mission complicated by Asian annoyance with US efforts to block imports of low-cost steel. Making his job tough is the fact that his proposal is losing steam inside the Bush Administration where it has been pushed aside by hotter trade issues. Commerce Secretary Don Evans also received a tepid response when he brought up the topic in Moscow with Russian officials.
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