Mexico nears cement deal with US

Mexico nears cement deal with US
Published: 11 January 2006

Mexico is close to a deal with Washington to end a 15-year cement fight over US duties after cement shortages in the United States forced the neighbours to end the dispute.

A Mexican government source said Tuesday the deal would triple Mexican cement exports to the United States, opening the door for more business for the world’s No. 3 player Cemex.

The source said negotiations were 90 percent complete and should be finished within a week. "I think we’ve sorted out the most difficult parts," he said.

Mexican and US negotiators are meeting in Mexico City to try to end the cement fight over US anti-dumping duties. A deal will also benefit rebuilding work along the U.S. Gulf Coast, which was devastated by Hurricane Katrina last year.

The US cement deficit is well over 20Mta, a factor driving up prices. The US construction industry wants an end to the Mexican duties, which they blame for shortages in two-thirds of US states.

Any final agreement is expected to replace a US anti-dumping duty that has averaged about 63 per cent annually over the past 15 years with a quota on Mexican cement exports that could be phased out over three to five years.

The Mexican government source did not speak in percentage terms but said talks were heading toward Mexico paying US import duties of between US$3 and $5/t cement entering the United States, compared with US$59 currently.

"I think there’s a real will in the United States to put an end to this whole thing," the source said of the dispute, which has led Mexico to bombard the United States with lawsuits claiming the duties broke global trade rules.

Mexico has long argued the duties are illegal under the North American Free Trade Agreement and World Trade Organization regulations.

"We understand that progress is being made and wish the negotiators good luck on both sides," said Joe Dorn, counsel for the Southern Tier Cement Committee comprised of 23 US companies.