Posted on 11 Jul 2016
Group of 20 trade ministers meeting here characterized excess capacity in steel and other industries as a global issue requiring collective responses, while citing subsidies and other government support as a contributing factor.
Industrial overcapacity hurts commerce and workers, noted the statement released at the close of a two-day meeting Sunday. To address this problem, nations must communicate and cooperate more to take effective steps to enhance market functions and promote adjustment, the statement said. This is seen as a tacit appeal for the reorganization of China's so-called zombie companies -- those unable to survive without government support.
Japan, the U.S. and Europe had sought to include remedies for tackling the overcapacity problem in the statement. Beijing opposed such a move, calling the issue a structural one that went beyond the scope of a meeting of trade ministers. China has been exporting steel it cannot absorb domestically at low prices, impacting the earnings of steelmakers abroad.
The statement also urged steelmaking nations of the G-20 to participate in a September steel committee meeting of the Organization for Economic Cooperation and Development. The countries are to talk about establishing a global forum to discuss the overcapacity issue.
Also discussed were negotiations at the World Trade Organization over reducing and eliminating tariffs for such environmental products as solar panels and light-emitting diodes. The statement said members will try to find common ground ahead of the G-20 summit in September, with an aim of reaching an agreement by the cabinet-level negotiations at year-end.
Forty-six parties, including Japan, the U.S., Europe and China, are now in talks over an accord on green products. But India is not taking part. China had opposed including specific dates for reaching an agreement out of concern that Indian products will flood its market if tariffs are lifted.
When Group of Seven leaders met for the Ise-Shima summit back in May, their statement outlined a goal of concluding an agreement on this issue by the September G-20 summit. This target date has been pushed back to the end of the year.
Sunday's statement called for countries to pursue an ambitious accord that eliminates tariffs on a broad range of environmental products.
