PARIS -- The world's major steel-making countries vowed Thursday to eliminate government subsidies in the steel sector, which they blamed for having created excessive and inefficient production capacity in the global industry.

As a first step representatives from steel producing nations meeting here called for a freeze on public aid to steel companies as a means of curbing production capacity.

Conferring under the auspices of the Organization for Economic Cooperation and Development (OECD), delegates also pledged to make the elimination of all steel subsidies a priority.

A working group is scheduled to convene here February 24 and 25 to discuss the details of an accord on reducing or ending subsidies, which the OECD hopes can be in place before the next ministerial meeting of the World Trade Organization, scheduled for September 2003 in Cancun, Mexico.

After three days of discussions here participants in addition expressed support for measures to reduce the production capacity of their steel companies by 140 million tons from 1998 to 2005.

They also asked a second working group to conduct a feasibility study of approaches to closing steel plants, including an assessment of the costs involved in shutting down facilities.

The meeting was chaired by Herwig Schlogl, OECD deputy secretary general, who said the gathering had provided fresh impetus to efforts aimed at eliminating market distortions.

But he acknowledged that the campaign to cut subsidies would be painful and difficult for some producers.

The U.S. industry for example is struggling for survival, with U.S. officials putting global over-capacity at 200 million tons. Under enormous pressure from the steel lobby, President George W. Bush last March approved three-year tariffs on certain steel imports in a bid to shield the U.S. industry from foreign competition while it restructures.

In a statement after the talks here the OECD said, "the underlying situation in steel remains serious" despite some signs of recovery in certain markets.

"While market conditions have improved in certain areas some restructuring is under way, the recovery is viewed as fragile, with many firms continuing to struggle to maintain, or return to, profitability," the statement said.

The meeting here this week marked the first official appearance at an OECD function of China, which was admitted to the World Trade Organization a year ago.