'Steel agreement with OECD should address Indian concern'

Tuesday, 08 July 2003, 19:30 IST
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NEW DELHI: The steel subsidies agreement that India is negotiating with the Organisation for Economic Cooperation and Development (OECD) must address the country's core concerns, a leading industry body said here Monday. "India should stay engaged in the OECD process, but the government must ensure that the final agreement reflects the Indian steel industry's minimum concerns," said Indian Steel Alliance (ISA) chairman Jamshed J. Irani after a meeting of the CEOs of leading steel companies. This meeting was held to give the government inputs for the discussions to be held with an OECD delegation visiting India Tuesday. "The ISA believes that any agreement of this nature must ensure that there is no curtailment of Indian steel companies' right to expand capacity in a continuously growing market and in the light of its cost competitiveness," Irani said in a statement. "Thanks to subsidies given earlier by developed countries, there is surplus steel capacity in those countries, but in developing countries like India, steel demand is growing every year and domestic capacity must rise to meet it." The ISA feels an agreement on subsidies "should apply only to integrated steel plants with more than 500,000 tonnes capacity in a year." While the latest draft of the subsidies agreement has conceded a floor capacity of 300,000 tonnes a year for applying the accord, it is limited to five years. The ISA believes that all "special and differential" measures that India is eligible for under the World Trade Organisation (WTO) rules should be available till India's per capita steel consumption reaches at least half the world average. India's per capita consumption of steel continues to be only 26 kg against world average of about 122 kg. The ISA also believes that the government should not agree to any form of pre-notification or pre-authorisation in the steel agreement. "No international agency should unilaterally decide what India's steel industry, which is globally competitive, should do," the ISA has stated. The above concerns also emerged at a National Conference on Steel, which was organised by the Confederation of Indian Industry (CII) on June 3. According to the ISA, any worldwide agreement on steel subsidies must be compatible with the WTO agreement on subsidies and countervailing measures (ASCM). In addition, the proposed agreement must include China, the world's biggest producer of steel. The ISA felt that there is also a need for an agreement to address tariff and non-tariff barriers, which are currently restricting free trading in steel. At the same time, the ISA has stated "that so long as India's minimum concerns are met, there is no harm in negotiating and then adhering to a steel subsidies agreement."
Source: IANS