Steel Associations Establish a Global Steel Supply Chain Partnership

Written by Sandy Williams

The American Institute for International Steel (AIIS), Eurometal, and the International Steel Trade Association have agreed to establish a global steel supply chain partnership. The purpose is outlined in a press release from AIIS below:

The purpose of their agreement is to establish a Global Steel Supply Chain Partnership as a framework for collaboration among the three associations.

World economies are becoming increasingly interconnected and interdependent. The efficiency and effectiveness of the global steel supply chain are more vitally important than ever, especially in light of the changing demand situation, developments in emerging markets, the potential for border delays, unwarranted trade restrictions, and transportation and logistics costs and related issues.

Recent analytic work by the Organization for Economic Cooperation and Development (OECD) finds that generally, between 30 percent and 60 percent of G 20 country exports are comprised of imported inputs, or are used as inputs by others.

Supplying key economic sectors with adequate amounts of high-quality steel requires a vibrant international steel trade.

Approximately 400 million tons of steel consumed in the world in 2013, representing about 30 percent of global steel supply, have crossed a national border.

According to the OECD, restricting access to foreign steel adversely affects the productivity and competitiveness of domestic firms.

The OECD further determined that in the case of intermediate inputs, “…trade restrictive policies are more likely to produce firm closures and job losses—the very outcomes they were designed to prevent.”

For these and related reasons, the three associations share a strong interest in creating a new worldwide partnership of like-minded organizations aimed at advancing free and responsible global trade in steel through efficient and effective global steel supply chains.

Acting in the spirit of partnership and cooperation, to fulfill the purpose of their agreement, AIIS, EUROMETAL-STSG and ISTA have identified the following non-exclusive list of areas of activity for the Partnership:

1. Develop strategies and actions to more effectively engage with relevant international organizations in order to advance free trade in steel. Relevant international organizations include, but are not limited to, the World Trade Organization (WTO), the World Customs Organization (WCO), the Organization for Economic Cooperation and Development (OECD), the relevant European Union institutions, and, where appropriate, in matters pertaining to North America, the North American Free Trade Agreement, and the Asia-Pacific Economic Cooperation (APEC) forum.

2. In the context of the Transatlantic Trade and Investment Partnership (TTIP) negotiations, advocate the elimination of tariffs and non-tariff trade barriers impairing the efficiency and effectiveness of international steel supply chains and trade;

3. Advance the common interest of the three associations with respect to major pending steel trade cases, and in other related matters.

The three associations shall, on a regular basis, keep each other informed of and consult on matters of common interest, which in their opinion are likely to lead to mutual collaboration. They shall share and compare such information as general assessments of economic trends, steel market analyses, information regarding the steel business environment, trends in international steel trade flows, and information regarding structural changes in the steel industry.

The three associations will convene meetings and conferences in regard to the objectives of the Partnership and they may, when appropriate, decide to issue joint statements on issues of common interests.

The Partnership is open to like-minded organizations acting in all stages of global steel supply chains.
Richard Chriss, Executive Director AIIS: “Steel is a strategic asset, and so is information. Our Global Steel Supply Chain Partnership is designed to cultivate more timely and relevant information so our members can make better and more cost effective decisions, which ultimately will promote innovation within our industry. It is also designed to better focus attention on steel supply chain issues in the multilateral trading system.”

‘ISTA looks forward to partnering more closely with EUROMETAL and AIIS on the international steel trade challenges which have become more and more prevalent over the past several months’, commented Jeffrey Kabel, ISTA Chairman. ‘As ISTA extends its presence to the Far East with the formation of ISTA Singapore we hope to be able to offer further leverage to this partnership alongside our long-time presence in the UK, Europe and other regions.’

‘International steel trade is highly beneficial for the efficiency and effectiveness of global steel supply chains in automotive, white goods, yellow goods, mechanical engineering and oil & gas exploration and production. In times of overcapacities and of a rising number of barriers to steel trade, it is our concern to give voice to steel distribution, SSC and steel trade, in order to highlight the benefits of global steel supply chains’, added Georges Kirps, EUROMETAL Director General.

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