RESOLUTION OF THE ECSC CONSULTATIVE COMMITTEE on the negotiation of arrangements for 1991 to apply to steel imports from certain non-member countries (adopted unanimously at the 290th Session of 8 February 1991, with nine abstentions) (91/C 50/02)

The ECSC Consultative Committee,

- having heard the explanations and comments from the Commission representatives concerning the draft guidelines for the negotiation of arrangements for 1991 to apply to steel imports from certain non-member countries -

1. recalls that the arrangements were created to defend the Community's iron and steel market against imports from non-member countries which are not in a position to respect the rules of a free market;

notes that the countries of Central and Eastern Europe have not yet achieved these conditions, and that in these circumstances the benefit to them of receiving immunity in cases of unfair trade actions should be balanced by a recognition of the legitimate interests of the Community's industry;

2.notes that the steel industry of Eastern Europe has received more support from the Community than any other of their industrial sectors. The Community's steel industry has, therefore, contributed over-proportionally to the global aid given by the Community to these countries;

3.considers the decision to liberalize imports from Brazil to be injudicious at a time when the steel industry of that country - which has an enormous excess capacity making it the world's second largest steel exporting country - benefits from government subsidies of over US $ 7 billion to cover its external debts;

considers that - given the current debate in the Brazilian Parliament on the privatization of the State-owned steel industry - it would be appropriate to maintain in force the present arrangement until the process of privatization is terminated and Brazil has agreed to join the multilateral steel agreement which is presently under discussion;

4.points out that the quantities in the arrangements have always been fixed by the Commission taking into account trends in the Community's apparent consumption. Experts expect (without taking into account the effects of the Gulf war) apparent consumption - following a decrease of 1,5 % in 1990 - to further decrease by 10 % during the first half of 1991 in comparison with the same period of the previous year;

stresses that in 1990 the Commission already increased the arrangement quantities by 15 % while consumption diminished in comparison with the previous year;

maintenance of the quantities as they are would thus be not only in contradiction with the rules that the Commission itself has established, but would also substantially increase the share of the EC market held by the countries of Central and Eastern Europe at a time when this market is already in difficulty; this could add a further twist to the downward spiral in prices;

5.stresses that the decision to abolish subdivisions by product in order (in the Commission's words) to allow the countries of Central and Eastern Europe to make 'better use of export opportunities' to the Community, is particularly serious, and that the ability of the countries of Central and Eastern Europe to concentrate their exports in one or two individual products could result in serious injury to some sectors of the Community industry and to certain Member States;

further points out that maintenance of subdivisions by product will strengthen the application of the 'triple clause', as consultations could only take place after the injury has been caused;

6.observes that the situation on the world steel market is suffering from the weakness of the dollar and the closure of certain importing markets such as the USSR, China, the Gulf countries etc. Given such a situation, deliveries from non-member countries into the Community are very likely to increase, with the serious risk of worsening present market conditions. In this way, the efforts made to restructure the Community steel industry would be nullified, thus inducing a spiral of serious measures on the industrial, economic and, in particular, social level should the Commission proposal be approved;

7.requests the Commission, therefore, to revise its proposals and to maintain in force as they are all elements of 1990 external policy by applying to quantities the traditional rule which takes into account trends in apparent consumption and by retaining subdivisions by product;

8.invites the Commission to conclude this year a multilateral steel agreement as already requested by the Consultative Committee in the resolution adopted unanimously on 18 December 1990 (1).

(1) OJ No C 10, 16. 1. 1991, p. 4.