Letter to the Hon. Robert Lighthizer, United States Trade Representative - Portman, Brown, Braun, Casey Urge USTR to Prioritize Extension of the Global Forum on Steel Excess Capacity

Letter

We write to thank you for your support of the Global Forum on Steel Excess Capacity, and ask you to prioritize the extension of the mandate of the Global Forum ahead of the next ministerial meeting at the end of this month. We believe the Global Forum represents a helpful tool in the fight against global steel overcapacity.

As you know, the effects of global steel overcapacity, for some time, have menaced the industrial heartland. Driven largely by non-market and state-owned steel producers, overcapacity -- and associated unfair trade practices like subsidies and dumping -- has injured American market-based steel producers and their workers. Since 2011, global steel production by private enterprises only increased 22 percent, while production by state-owned enterprises increased by 33 percent.

While we recognize that diplomacy is not a substitute for vigorous trade enforcement, we do believe that the Global Forum continues to have an important role to play. China's modest reductions in capacity in recent years are being undermined by new investments in steel capacity in China and by Chinese state-owned enterprises building new steel mills outside of China. China produced a record 928.3 million metric tons of crude steel in 2018, according to the World Steel Association. Chinese steel production has increased by an additional nine percent so far this year, and now accounts for 53 percent of global steel production. Clearly, there is still much work to be done to reform the market-distorting government policies that are driving this continuing increase in capacity and production.

The Global Forum on Steel Excess Capacity. creates opportunities for the United States to organize coalitions of like-minded states to make clear to systemic overproducers that their trade-distorting policies and practices are contrary to the commitments those countries have made to the multilateral trading system. The Forum plays a key role in data collection and analysis, such as its successful efforts to secure information on capacity at individual mills, and demonstrates the importance that many nations place on this problem.

We believe it is important to maintain multilateral engagement to help solve this problem. We thank you for your efforts in this record, and ask that you continue to reiterate to other governments the importance of the work of the Global Forum on Steel Excess Capacity.

Sincerely,