Argentina joined the United States and 13 other economies in a statement calling for action on excess industrial capacity, which the signatories say pressures producers in other countries. The declaration commits participating governments to examine production in selected manufacturing sectors and address policies they say sustain excess capacity.
Who Signed On
The US Trade Representative's office announced the statement Wednesday, Oct. 7, on the margins of a meeting of the Organisation for Economic Cooperation and Development Trade Committee. The announcement followed discussions at the previous week's G20 trade ministers' meeting in Milwaukee, Wisconsin.
The 15 signatories are Argentina, Australia, Canada, the European Union, France, Germany, India, Italy, Japan, Mexico, Poland, South Korea, Türkiye, the United Kingdom and the United States. Their governments have committed to examining excess capacity and production, then working through dedicated sectoral platforms.
The declaration identifies automobiles and electric vehicles, batteries, semiconductors and solar panels as initial areas of focus. Those sectors will come before the platforms named in the statement. The announcement offers no further details on how the platforms will operate or what measures participating economies will take after their examination.
China, Brazil, Indonesia, Russia, Saudi Arabia and South Africa didn’t sign. The declaration doesn’t name China directly, though excess industrial capacity has long been a source of tension between Beijing, the United States and other major economies.
The Policy Dispute
The declaration says industrial capacity persistently exceeds global demand because of what it calls non-market policies and practices. The United States has argued that excess production sustained by such policies distorts global markets and pressures producers in other countries.
That’s the stated basis for the signatories’ call to address policies and practices that perpetuate structural excess capacity. Their initiative centers on government action and coordination among participating economies: they’ll examine production and work through sector-specific platforms.
The US Trade Representative’s office presented the statement after trade officials discussed the issue at the G20 meeting and the OECD Trade Committee meeting. Those meetings brought the issue into a process involving governments that signed the declaration, while six economies named in the announcement remained outside it.
What the Statement Commits To
The stated response is an examination of excess capacity and production in the selected sectors, followed by work through dedicated platforms. The declaration specifies no production limits, penalties or timetable for further action in the information released by the USTR.
Nor does the announcement identify particular companies, quantify the capacity at issue or provide figures for the pressure on producers in other countries. It describes the concern in structural terms, linking persistent excess capacity to non-market policies and practices, and names manufacturing sectors for initial discussion.
The statement records a shared position among 15 signatories and a commitment to keep examining the issue. Its announced next step is sectoral work, not a specific production rule. The economies that signed include major manufacturing countries as well as the European Union; the countries listed as non-signatories include China and Brazil. The source statement gives no account of workers, labor organizations or any organized response to the initiative.