Mexican cement exports to the US could more than triple from current levels once quotas are eliminated in three years, said Kenneth Smith Ramos, Mexico’s lead trade negotiator for North America. On Monday, Smith travels to Washington with Economy Secretary Sergio Garcia de Alba for the signing of the agreement to end 15-year-old antidumping duties that the US has levied against Mexican cement. "Essentially what we will do is establish free trade in cement, which of course creates a lot of opportunities for us," said Smith in an interview.
Mexican cement exports to the U.S. totaled 1.8Mt last year. Smith said the industry could easily double the 3Mt that it will be allowed to ship this year, once the quotas are removed altogether. "With Mexico’s advantages - having this large border with the US, having a huge market of consumption of cement on the other side ... and the efficiency of our plants and costs - we can be an excellent provider of cement," he said. Smith also said he expects those companies to continue investing in the U.S., but also said that the agreement will open up the door for smaller Mexican cement makers to start exporting.
But Smith emphasised that the re-establishment of free trade works both ways, with US companies also able to ship to Mexico. The countries are creating a joint committee involving the private sector and the governments to explore trade opportunities, similar to existing groups for the steel and textile sectors.
While US construction companies pushed for letting more cement come across the border, the deal couldn’t have been done without the blessing of US cement producers. Joe Dorn, a partner at law firm King & Spalding in Washington who represents 23 cement companies in the southern US that make up the Southern Tier Cement Committee, said the cement industry was also very pleased with the agreement. "It worked out that everybody here is a winner," he said.
One of the main complaints of the US cement producers has been that the Mexican market was virtually closed, and Dorn said the agreement includes changes that would prevent another situation like the Mary Nour - a ship carrying Russian cement that was recently prevented by the Mexican government from unloading in Mexico for a year before giving up. Under the accord, the Mexican government has agreed to investigate any unfair practices and to make it easier to get on the registry to sell cement, he said. While Dorn doesn’t expect a lot of US cement exports to Mexico in the near term, due to the ongoing construction boom, he notes that it’s a cyclical business.