·
15
economies — including the United States, India, EU, Japan,
China-exposed major industrial economies, Canada, Mexico, South Korea, UK and
Türkiye — have agreed to cooperate against structural excess capacity and
production in key manufacturing sectors.
·
Background: The
initiative follows discussions at the G20
Trade Ministers’ meeting in Milwaukee on September 30–October 1, 2026,
during the U.S. G20 presidency.
·
Core
concern: The ministers say persistent excess
capacity can:
o depress global prices;
o displace domestic production;
o discourage market-based investment;
o undermine exports and competition;
o destroy jobs; and
o increase dependence on a single country,
creating vulnerability to economic
coercion and export restrictions.
·
Five
priority sectors identified:
1. Automobiles and Electric Vehicles (EVs)
2. Batteries
3. Chemicals
4. Foundational Semiconductors
5. Solar Panels
·
Non-market
practices targeted: The statement calls on countries to
eliminate policies and practices that distort markets and contribute to
structural overcapacity, including government policies or interventions that
sustain production beyond market demand.
·
Collective
approach: Instead of relying solely on individual
trade-defence measures, the participating economies intend to share information, coordinate policies
and take complementary action where possible.
·
New sectoral
platforms: Dedicated platforms will be established
for the five priority sectors to examine the causes and effects of excess
capacity and develop possible responses.
·
Immediate
next step: Senior officials began discussions on the
sidelines of the OECD
Trade Committee meeting.
·
Before
December 2026: Officials are expected to:
o
develop
terms of reference;
o
share
non-confidential data on excess capacity and production;
o
assess
its impact on the identified sectors;
o
identify
information gaps; and
o
examine
possible coordinated or complementary measures.
·
Broader
participation: The 15 members have invited other OECD and non-OECD countries
to join the initiative.
·
India
is a participant in the initiative and will therefore be involved in
discussions on excess capacity in chemicals,
semiconductors, batteries, EVs and solar panels.
·
The
initiative could lead to greater international scrutiny of subsidies, state support, production
incentives and other non-market practices in these sectors.
·
It
also creates a platform for India to exchange data and coordinate with major
trading partners on the impact of excess production on domestic industry, employment, prices
and trade flows.
·
The
statement does not yet
announce specific tariffs or other trade restrictions. The
immediate focus is information-sharing, sectoral analysis and development of
coordinated responses.
[ABS News Service/08.10.2026]
The
United States and 14 other members of the Organization for Economic Cooperation
and Development agreed yesterday to combat excess capacity and production in
major manufacturing sectors.
The
countries met on the sidelines of an OECD trade committee meeting. Washington
promoted the joint statement as a follow-up to its efforts on excess capacity
at the G20 trade ministers meeting last week.
The
OECD trade officials issued a joint statement expressing their resolve to work
together in “new, dedicated sectoral platforms to examine and take effective actions
that address structural excess capacity and production in several key sectors
of concern,” according to the US Trade Representative’s Office.
The
Joint Ministerial Statement also calls on all countries to take steps to end
the use of non-market policies and practices that distort markets and
perpetuate structural excess capacity and production.
Signing
the statement were the trade ministers of Argentina, Australia, Canada, the European
Union, France, Germany, India, Italy, Japan, the Republic of Korea, Mexico,
Poland, Türkiye, the United Kingdom and the United States.
“Left
unchecked, these issues will continue to cripple domestic industries, displace
local production, and hinder our ability to raise the standard of living for
workers and their families,” US Trade Representative Jamieson Greer said.
Joint Ministerial
Statement
Following
is the text of the Joint Ministerial Statement:
G20
Trade Ministers who met in Milwaukee, Wisconsin on September 30 and October 1,
2026 discussed structural excess capacity and production in certain
manufacturing sectors. On that occasion, we, the Trade Ministers of Argentina,
Australia, Canada, the European Union, France, Germany, India, Italy, Japan,
the Republic of Korea, Mexico, Poland, Türkiye, the United Kingdom, and the
United States, welcomed the U.S. G20 Presidency’s focus on this issue as one of
its key priorities, given increasing international recognition that structural
excess capacity and production poses a fundamental challenge for the global
economy and individual economies.
Discussion
in the G20 was fitting given that grouping has played an important role in
discussing and pledging action to address this serious challenge. In Shanghai
in 2016, G20 Trade Ministers
released a statement expressing concern about excess capacity in certain
industries and its negative impacts on trade and workers. Trade Ministers
decided by consensus to participate in an OECD Steel Committee meeting that led
to the creation of the Global Forum on Steel Excess Capacity (GFSEC) as a
cooperative platform dedicated to developing and implementing collective
solutions to address structural excess capacity and production and enhance
market function in the steel sector. A few months later, at the Hangzhou Summit
in 2016, G20 Leaders unanimously stated: “We recognize that the structural
problems, including excess capacity in some industries, exacerbated by a weak
global economic recovery and depressed market demand, have caused a negative
impact on trade and workers. We recognize that excess capacity in steel and
other industries is a global issue which requires collective responses. We also
recognize that subsidies and other types of support from government or
government sponsored institutions can cause market distortions and contribute
to global excess capacity and therefore require attention. We commit to enhance
communication and cooperation, and take effective steps to address the
challenges so as to enhance market function and encourage adjustment.”
Despite
those commitments, and the efforts undertaken by some G20 members, structural
excess capacity and production has worsened since 2016, harming an array of domestic
industries and their supply chains.
During
the course of the U.S. G20 presidency, members discussed instances of
structural excess capacity and production in economies that persistently
exceeded global demand; would not have existed under market conditions, and
were created, sustained, or contributed to by government policies or
interventions. In particular, structural excess capacity and production leads
to overproduction and over concentration of production; deters market-based investment,
production, and capacity building; and undermines market-based exports. We
acknowledge that structural excess capacity and production in any country poses
significant challenges for all of its trading partners as it distorts prices
and production patterns, deters new entrants, and stymies innovation and
competition. Moreover, such structural
excess capacity and production in a country can deepen trading partner
dependence on that country’s products, thereby increasing trading partner
vulnerability to economic coercion, including arbitrary export restrictions. We
are united in our concern with these distortions and other adverse impacts.
During
the course of our discussions this year, members expressed concerns about
existing or future projected structural excess capacity and production in many
sectors, including but not limited to:
·
Autos
and Electric Vehicles (EVs); (ii) Batteries; (iii) Chemicals, (iv) Foundational
Semiconductors, and (v) Solar Panels. We are concerned that, absent timely and
effective actions, structural excess capacity and production in these sectors
will cripple our domestic industries, displace local production, destroy jobs,
undermine our economies, hinder efforts to develop and industrialize, and
ultimately lower the standard of living for our people.
We
call on all countries to take steps to eliminate structural excess capacity and
production in their economies, including by ending the use of non-market
policies and practices that distort markets and contribute to the problem. We
note that in the absence of such steps, an increasing number of countries are
taking action to defend their industries, workers, and economies from
distortions resulting from such policies and practices. At the same time, we
recognize that such individual efforts will be more effective if concerned countries
cooperate, share information, and take complementary action, wherever possible.
To
that end, we are resolved to work together in new, dedicated sectoral platforms
to further examine and take effective actions that address structural excess
capacity and production in key sectors of concern, starting with Autos and EVs,
Batteries, Chemicals, Foundational Semiconductors, and Solar Panels.
Our
senior officials are meeting today on the margins of the OECD Trade Committee to
begin our work. We invite other countries within and beyond the OECD membership
to join us. We are committed to meeting before December 2026, at the technical
level, to develop terms of reference; share non-confidential information and
data on structural excess capacity and production, its impact on these sectors,
and efforts to mitigate the damage; and identify information gaps, drawing upon
work of the OECD and other sources as appropriate. We commit to exploring
effective and, whenever possible, complementary actions to defend our economies
from the negative impact on trade and workers created by structural excess
capacity and production. Working together, we aim to create the conditions
necessary so that market oriented competition in affected sectors can thrive
once again.