RESOLUTION OF THE EUROPEAN COAL AND STEEL COMMUNITY (ECSC) CONSULTATIVE COMMITTEE

on the restructuring of the Community steel industry

(93/C 14/03)

(Unanimously adopted at the 302nd session of 20 November 1992, less 13 abstentions)

THE EUROPEAN COAL AND STEEL COMMUNITY (ECSC) CONSULTATIVE COMMITTEE

1. NOTES that the situation of the Community steel industry has dramatically deteriorated within the last few months, (with severe consequences also for the coal producers and coking plants that supply it). This deterioration is due mainly to the following:

- a considerable reduction in the Community's consumption of steel (of about a 10 % in comparison with 1990),

- a sudden, major increase in imports of steel products at dumping prices from countries which do not apply the competition rules applied in the European Community (overall imports in the first half of 1992 compared with the average for 1991 increased by 30 %, while the increase in imports from central and east European countries during the same period was 70 %),

- difficulties experienced on export markets (due to the economic crisis in several third countries, the weakness of the dollar, the first consequences of the antidumping/countervailing actions launched by the American industry),

- the existence of world-wide overcapacities.

2. RECALLS that the above factors have caused a price collapse on both the internal market (prices for flat products are, at present, 30 % below the level of 1989, while those for certain long products have dropped by the same percentage in the last year) and the export market (in comparison with early 1990, export sales returns for flat products have decreased by about 50 %);

3. CONSIDERS that, in the medium term, no substantial change in this situation is expected to occur and that, therfore, a new process of structural adaptation is necessary;

4. TAKES NOTE that the Community steel industry has already begun this fresh restructuring process, which will be of an exceptional amplitude, entailing a considerable reduction in capacities and heavy job losses;

5. REQUESTS the Commission to make full use of the powers conferred on it by the ECSC Treaty and assume all its responsibilities with regard to the implementation of the action programme proposed by the steel industry. This programme contains the following:

(a) an adequate financing of the social cost following shut-downs. In this regard, ECSC resources must be fully mobilized;

(b) appropriate measures favouring the setting up of private and public funds for the financing of disinvestment costs. The financing of measures intended under this paragraph and (a) above will require an appropriate and gradual use of the ECSC reserves for the benefit of the two industries concerned;

(c) use of the most efficient means provided for by the ECSC Treaty in order to assure, during the phase of restructuring, an orderly and coordinated conduct by steel undertakings, enabling them to adapt their activity to demand in a transparent and balanced way, in accordance with the provisions of the Treaty;

(d) assurance of the strengthening of external control measures in order to prevent unfair imports, originating, in particular, from steel and steel-processing industries which do not respect the requirements of fair competition;

In this context, adequate quantitative solutions have to be found immediately in order to prevent injury by imports from central and east European countries and the Commonwealth of Independent States (CIS);

Furthermore, the Commission has to provide itself with sufficient statutory and human means in order to be able to apply efficiently the rules on anti-dumping/countervailing actions. These, actions must not be influenced by any political considerations.

6. RECALLS the commitment of the Commission and of all Member States to act in accordance with the rules set out in the steel Aid Code. Any derogation from these rules must entail, as a counter-measure, a capacity and production reduction which is sufficient to ensure that distortions of competition in intra-Community trade are not created;

7. APPEALS to the Commission and the governments of the Member States to take full cognizance of the actual, and dramatic scale of the crisis in the steel industry and to make use of all means provided for by the ECSC Treaty in order to respond to the immediate needs of a sector which is fundamental to the industrial and economic development of the Community.