Steel-Producing Nations Agree to Reduce Output

The U.S., Japan and 37 other steel-producing nations agreed Tuesday to cut world output of the metal by almost 10% during the next decade to eliminate a glut that has sent prices to their lowest level in 20 years.

The agreement, reached after two days of talks here, was prompted by the slowdown in the global economy that has depressed demand from car makers, builders and other steel consumers.

The U.S. said the accord would boost a domestic industry that has seen 18 steelmakers file for bankruptcy protection since 1997.

“It’s an important step forward in addressing what has been an intractable problem in the steel sector for many years,” said Faryar Shirzad, an assistant U.S. Commerce secretary who participated in the meetings.

The agreement comes as President Bush considers measures to protect the U.S. steel industry, including import tariffs or quotas.

It’s unclear how the accord will affect Bush’s decision, expected early next year. But the European Union put Bush on notice that its participation in the agreement depends on the U.S. not imposing import restrictions.

Steel-producing countries said they plan to cut as much as 97.5 million metric tons from annual global capacity of 1.06 billion.

The size of the proposed cutback surprised some analysts, who said the initiative may lead to higher steel prices--though others expressed doubt about the plan.