U.S., Mexico negotiators resolve sticking points on cement deal

WASHINGTON — Negotiators from the United States and Mexico have resolved the final sticking points in a deal that will end a 16-year dispute between the two nations over cement, officials said Friday.

The United States began imposing penalty duties on Mexican cement back in 1990 after ruling the cement was being sold in this country at unfairly low prices, a practice known as dumping.

The agreement will take effect in April. It will clear the way for imports of cement from Mexico to increase from 2.2 million metric tons last year to 3 million metric tons annually. The U.S. tariffs, which have added $26 to the price of each ton of cement, will drop to $3 per ton over the next three years.

All penalty tariffs and quotas on Mexican cement would be lifted after April 3, 2009, as long as Mexico lives up to commitments to open its home market to increased competition.

U.S. officials said the agreement would be signed during a ceremony today in Washington to be attended by U.S. Commerce Secretary Carlos Gutierrez, U.S. Trade Representative Rob Portman and Garcia de Alba, Mexico's secretary of the economy.

Gutierrez announced in January that the two countries had reached an agreement in principle, but negotiators have spent a number of weeks ironing out remaining differences.

Both U.S. cement companies and American users of cement said they were satisfied with the deal.

"This is an agreement where all sides can claim victory," said Joseph Dorn, a Washington attorney who represented the Southern Tier Cement Committee, a coalition of 23 cement companies that operate 63 plants in 29 states.

Dorn said American firms would win through provisions that will open the Mexican cement market to increased foreign competition. U.S. companies contended that Mexico was protecting its domestic cement industry, which allowed them to undercut prices in the United States.

U.S. construction companies had pressed the Bush administration to cut the barriers, contending that 32 states suffered cement shortages during last summer's building season, shortages that pushed the price of cement up by 12 percent last year.

They warned that those shortages could worsen this year with the amount of rebuilding expected along the hurricane-devastated Gulf Coast.

The deal allows the president to increase imports of Mexican cement by another 200,000 metric tons each year by declaring that a natural disaster, such as a hurricane, warrants additional shipments from Mexico.

Ken Simonson, chief economist for the Associated General Contractors of America, a trade group for builders, said the key part of the agreement was the lifting of quotas and tariffs in 2009.

"If the quota is eliminated in three years, that would provide relief from shortages and the steep price increases we have seen," Simonson said.

He said until then there would continue to be price pressures because of expected heavy demand for cement.

Currently, Mexico is the country's seventh largest foreign supplier of cement with Canada, China and Thailand holding the top three spots.