U.S., Mexico cement agreement ending trade dispute

The United States and Mexico have worked out the final details of an agreement ending their 16-year trade dispute regarding cement.

The agreement U.S. Secretary of Commerce Carlos Gutierrez and Mexico Secretary of Economy Sergio Garcia de Alba signed March 6 allows the United States to import more Mexican cement and encourages U.S. cement exports to Mexico. The accord also lowers the $26-per-metric-ton duty on imported Mexican cement to $3 per metric ton.

Cement imports from Mexico are capped at 3 million metric tons per year for three years, up from the 2.2 metric tons that were imported in 2005. All limits will be removed in three years if both sides abide by the agreement.

The Associated General Contractors of America, an organization that has lobbied for a trade agreement between the United States and Mexico regarding concrete, hailed the lower tariff as a good first step for both contractors and consumers. However, the group hopes U.S. cement production will increase as well in the face of a two-year shortage in this country.

“We hope, now that this dispute has been settled, that domestic and foreign cement producers alike will work with contractors to add capacity throughout the U.S.,” said Stephen Sandherr, CEO of the AGC. “AGC is eager to begin removing roadblocks to the construction of cement plants and terminals.”

The dispute with Mexico began in 1989 when the Southern Tier Cement Committee filed an antidumping petition against Mexico. In its subsequent duty investigation, the U.S. Commerce Department concluded Mexican producers sold cement at less than fair value in the U.S. market. On August 30, 1990, an antidumping duty order on imports of gray Portland cement from Mexico went into effect.

In 2004, members of Congress, trade groups and cement consumers called on the Commerce Department to reduce or eliminate antidumping duties because the cement shortage in the United States. The devastation following Hurricanes Katrina and Rita led to renewed calls for lowering or suspending duties on Mexican cement.

Along with increasing the amount of cement that can be imported from Mexico, the new agreement settles all litigation regarding outstanding claims for duties before U.S. and international courts, and divides between the parties the deposits of estimated antidumping duties.

“This agreement addresses the concerns of producers and consumers on both sides of the border,” Gutierrez said. “The agreement contains provisions that will help increase access to the Mexican market for U.S. cement producers, and it also ensures that our Gulf Coast communities will have the resources necessary to rebuild.”

Other provisions of the agreement include:

· A clause permitting additional imports of up to 200,000 metric tons at the lower antidumping duty rate if the president determines increased imports of are warranted in responding to a disaster
· Elements for mutual trade liberalization including general access for U.S. producers to the Mexican market
· Terms addressing the revocation of the antidumping duty order at the conclusion of the agreement