India, US, 13 Other Economies Call for Action on Excess Industrial Capacity

India and 13 other economies, including the United States, European Union, Japan and South Korea, have called for coordinated global action to tackle structural excess industrial capacity, warning that overproduction can distort markets, hurt domestic industries and worsen supply-demand imbalances.

The countries issued a joint statement on Wednesday on the sidelines of the Organisation for Economic Co-operation and Development (OECD) Trade Committee deliberations in Washington. They called on governments to eliminate structural excess capacity and production, including by ending non-market policies and practices that distort competition.

“ We call on all countries to take steps to eliminate structural excess capacity and production in their economies,” the statement said.

Building on discussions held at the G20 Trade Ministerial in Milwaukee, the economies agreed to work through new dedicated sectoral platforms to examine and address excess capacity and production in several key sectors, according to the US Trade Representative (USTR).

The signatories are Argentina, Australia, Canada, the European Union, France, Germany, India, Italy, Japan, South Korea, Mexico, Poland, Turkiye, the United Kingdom and the United States.

However, six G20 members — China, Brazil, Indonesia, Russia, Saudi Arabia and South Africa — did not sign the statement. The G20 trade ministerial in Milwaukee had failed to reach consensus on issues including forced labour and excess industrial capacity.

USTR Jamieson Greer said several economies had raised concerns during the US G20 presidency over structural excess capacity and production that persistently exceeded global demand and was sustained by foreign governments' non-market policies and practices.

“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,” Greer said.

He added that the Trump administration would continue engaging with US trading partners to protect American industries, workers and the economy from distortions arising from such policies.

The joint effort comes amid growing concerns among major economies over the impact of state support, excess production and trade distortions on global manufacturing and competition.