US, Mexico said to be near anti-dumping resolution

US, Mexico said to be near anti-dumping resolution
Published: 30 August 2005

Mexico and the United States could be on the verge of resolving a 15-year dispute over Washington’s antidumping duties on Mexican cement, amid growing political pressure in the United States to increase imports to help alleviate shortages that have spread to most states. The Commerce Department imposed duties of as much as 60 per cent on Mexican cement in 1990, after a group of US and foreign cement makers complained their plants in the southern United States were being hurt by Mexican cement being “dumped,” or sold for below fair-market value.

Mexico submitted its settlement offer to the White House in June, and Mexican and US trade officials now are in negotiations over the offer, said a lawyer involved in the talks and two other people familiar with the situation. Mexico is proposing that its cement exports to the United States be regulated by a quota system, in lieu of the duties, said Joe Dorn, a Washington lawyer who represents a group of manufacturers whose complaints triggered the duties. Mr. Dorn declined to be more specific about the quotas.

But US Commerce Secretary Carlos Gutierrez said in an Aug. 3 letter to Republican Representative Pete Sessions of Texas that his staff recently met with Mexican government officials in Geneva “about the possibility of settling this dispute.” Mr. Gutierrez also told Mr. Sessions, who was among several law makers who recently have pressed to lift the duties, that additional meetings between the two sides are planned in Mexico City “to discuss the proposed settlement agreement.”

The cement shortages this year appear to be worsening as the building season progresses. As of this month, shortages had hit 32 states, up from 23 states in June, according to surveys by the Associated General Contractors of America, an industry trade group in Alexandria, Va.

That is why there has been a push by some to ease the Mexican restrictions. Democratic Governor Bill Richardson of New Mexico, for example, joined Republican governors Kenny Guinn of Nevada, Jon Huntsman of Utah and Mike Rounds of South Dakota in sending a letter Aug. 10 to Mr. Gutierrez seeking a resolution. “We are importing cement from as far as Asia, when there is a significant supply right across our Southern border,” the governors’ letter said.

Officials of Grupo Cementos de Chihuahua SA said they have two plants in the Mexican state of Chihuahua that have enough capacity to more than meet the needs of neighbouring New Mexico. But they said a duty of as much as US$50 a ton on cement makes it prohibitively costly for them to ship much more across the border. As long as the duties are in place, “there’s no profit left in imported cement,” said Enrique Escalante, president and chief executive officer of GCC of America, a US subsidiary of Grupo Cementos based in El Paso, Tex.

Some are skeptical Mexican cement can help much, though. Rail-transport constraints in the United States, for instance, could impede Mexican cement from being shipped very far into the American interior, said Ed Sullivan, chief economist for the Portland Cement Association, an industry trade group in Skokie, Ill. Some competitors also said increased cement from Mexico would reduce the incentive for US plants to add production capacity.