*EPF505 12/05/2003
Text: End of U.S. Steel Tariffs Boosts Subsidy Talks, OECD Says
(Chances for reaching agreement in 2004 improved) (440)

President Bush's decision to rescind tariffs imposed on steel imports in March 2002 gives a boost to international negotiations aimed at cutting trade-distorting subsidies for steel industries worldwide, the Organization for Economic Cooperation and Development (OECD) says.

In a December 4 news release, Deputy Secretary General of the OECD Herwig Schlögl said that ending the steel safeguard measures improves the climate in the international steel trade and helps to rebuild trust in the multilateral system, thus "greatly" increasing the chances for reaching an agreement on subsidies in 2004.

The OECD noted that major steel-producing countries participating in the ongoing December 4-8 negotiating session on subsidies - the sixth since the talks started in December 2002 -- are discussing an enforcement mechanism, exceptions and ways to address the special needs of developing countries.

The Paris-based OECD, which has 30 member states, plays a prominent role in fostering open markets and good governance.

Following is the text of the news release:

(begin text)

The Organization for Economic Cooperation and Development

OECD Steel Subsidy Talks Given Boost

04/12/20023 -- OECD negotiations on steel were given a boost by President Bush, who today indicated that the US would be redoubling its efforts to advance the negotiations aimed at eliminating trade-distorting subsidies in steel. "This is a welcome development that will provide further impetus to the negotiations," says Herwig Schlögl, Deputy Secretary General of the OECD, who is chairing the OECD High Level Group overseeing the negotiations. "The lifting of the steel safeguard measures improves the climate in international steel trade and helps to rebuild trust into the multilateral system. I am confident that this view is shared by other participants in the OECD negotiations, and I believe that the chances of reaching an agreement in 2004 have greatly increased."

The High Level work on steel was initiated in the OECD in September 2001 to address issues related to the structural problems facing the industry, and the need to strengthen disciplines on government support to the industry. All major steel-producing economies (accounting for more than 90 percent of world steel production) are participating in the negotiations.

In December 2002, participants agreed to initiate negotiations on a subsidies agreement. Five negotiating sessions have since been held -- in February, May, June, July and October 2003. A sixth session is currently underway at OECD headquarters in Paris. Issues being considered at the current meeting (4-8 December) include notification and enforcement provisions related to support measures, exceptions, and ways to address the special needs of developing economies.

(end text)

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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