UNITED STATES AND MEXICO SIGN
CEMENT AGREEMENT

Senior U.S., Mexican Officials Sign Landmark Agreement on Cement

WASHINGTON, D.C. - U.S. Commerce Secretary Carlos M. Gutierrez today joined U.S. Trade Representative Rob Portman and Mexico’s Secretary of Economy Sergio Garcia de Alba to sign the U.S.-Mexico Agreement on Cement. The Agreement successfully resolves the 16-year dispute over the U.S. antidumping duty order on imports of gray portland cement from Mexico.

"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. This Agreement demonstrates that we have the will and the means to resolve difficult disputes with our NAFTA partners."

The 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. It also establishes a limit of three million metric tons of imports of Mexican cement to enter the United States at an antidumping duty rate of $3 per metric ton, and allows for an increase in the event of disasters. The Agreement also includes elements for mutual trade liberalization, including provisions to help increase access for U.S. producers to the Mexican market. If the terms of the Agreement are adhered to over its three-year life, the Agreement will be terminated and the antidumping duty order revoked.

Background

As a result of an antidumping petition filed by the Southern Tier Cement Committee in 1989 and a subsequent antidumping duty investigation conducted by the Commerce Department, Commerce found that 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 U.S. Department of Commerce to reduce or eliminate the antidumping duties so that cement could be imported from Mexico more cost-effectively. The rebuilding needs following the hurricanes in 2005 led to renewed calls for lowering or suspending duties on Mexican cement.



Major provisions of the Agreement include:

•  resolution of litigation regarding outstanding claims for antidumping duties before U.S. courts and international tribunals;

•  a mechanism permitting imports of 3 million metric tons of Mexican cement to be distributed regionally throughout the southern tier of the United States with an antidumping duty of $3 per metric ton;

•  a provision permitting additional imports of up to 200,000 metric tons at the lower antidumping duty rate that may be instituted if the President determines increased imports of Mexican cement are warranted in responding to a disaster;

•  elements for mutual trade liberalization including general access for U.S. producers to the Mexican market;

•  a three-year duration; and

•  provisions that address the revocation of the antidumping duty order at the conclusion of the agreement.