Protectionism in steel and basic metal industries
Nature
Due to an excess of supply in the steel industry, protectionist trade laws are enacted, mainly against developing countries, in the hopes of curtailing over-production while maintaining jobs in the steel sector of the industrialized countries. These protectionist laws (some are under the guise of "voluntary limits") are more favourable to the large, wealthy nations, and hinder the economic development of the smaller, poorer countries.
Incidence
In 1985, the (then) non-communist world has a capacity to produce 640 million tonnes of steel, while it was estimated that world demand would be only 438 million tons for that year, 441 million tonnes for 1986, and 467 million in 1995. Some USA steel executives estimate that 15% of worldwide capacity needs to be cut in order to balance supply and demand. In 1992, eastern Europe, mainly Czechoslovakia, was selling steel on the European market at prices 20% below the EEC/EU market price.
In 2002, the USA imposed safeguard measures on 10 steel product groupings in the form of additional tariffs up to 30%. Immediately thereafter, the EC, followed by Japan, Korea, China, Switzerland, Norway, New Zealand and Brazil, engaged WTO dispute settlement procedures. In 2003, a WTO panel ruled that each of the US safeguard measures imposed on 10 steel product groupings was in breach of WTO rules.
Counter-claim
In the USA alone in 1980-1984, 40,000 steel jobs were lost and 210,000 more were threatened because of the availability of much less expensive imported steel. In the ten years between 1973 and 1983, steel production in the USA and the UK declined by 44% for each, while it declined by 37% in Belgium and Luxembourg and 30% in France. During that same period, steel production increased by 65% in Romania, 105% in Brazil, and 930% in South Korea. Why should so many workers in the industrialized nations forfeit their jobs in order to keep production down, if the non-industrialized nations continue to over-produce ?
Aggravated by
Strategy(ies)
Value(s)
Type
(E) Emanations of other problems