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U.S. Ready to Increase Mexican Cement Imports

Yet to be finalized, an accord announced by the U.S. and Mexico last week to settle a 16-year dispute on anti-dumping duties on Mexican cement imports will help to alleviate shortages of the building material that have been reported in more than 30 states.

“With U.S. capacity running at full tilt, the nation still must import more than 20% of its cement supply in order to meet domestic needs,” said NAHB President David Pressly. “Once finalized, this agreement will provide additional supplies of Mexican cement to the U.S. market. The pact is vital to meet consumer demand, which is expected to increase in the coming year as the rebuilding efforts from Hurricanes Katrina and Wilma get into full swing.”

Under the proposed settlement, which could be finalized this spring, the U.S. will reduce duties on Mexican cement from $26 to $3 per ton, and Mexican imports will be permitted to grow to 3 million metric tons annually, up from last year’s level of approximately 2 million tons. After three years, the quotas and duties would be entirely eliminated.

During the past year, NAHB has held several discussions with Commerce Department officials — including Secretary Carlos Gutierrez — urging the Administration to overturn the costly tariffs and outlining how cement shortages have led to construction delays and harmed housing affordability by increasing the cost of building projects. Data was also provided on states and geographic areas that have been most affected by the shortages.

“We are pleased that Commerce Secretary Gutierrez heeded our concerns, and showed a willingness to work with our industry and consider the needs of American consumers,” said Pressly. The accord is structured so that Florida and the Gulf region, areas facing cement shortages, will be able to significantly increase their shipments of Mexican cement. The negotiated framework also provides the flexibility to allow the President to direct an additional 200,000 metric tons of cement to areas hit by natural disasters.

High anti-dumping tariffs that have been in place since 1990 have limited supply from Mexico, which has excess capacity. Because of its close proximity to the U.S., it takes only four days to import cement from Mexico, compared with 40 days from Asia.

“Throughout the process, builders have been pushing to resolve this dispute in a manner that leads to free trade, and we are pleased that this framework will ultimately lead to this favorable outcome,” said Pressly. “We urge both governments to quickly finalize the accord so that we can achieve this important objective as soon as possible.”

Under the agreement, the 3 million tons would be distributed in eight areas, as follows:

· Alabama/Mississippi — 55,000 tons
· Arizona — 1.25 million tons
· California — 150,000 tons
· Florida — 200,000 tons (more than twice the state’s current allocation of 75,000 tons
· New Mexico/El Paso —
725,000 tons
· New Orleans — 280,000 tons
· Texas — 215,000 tons
· Rest of U.S. — 125,000 tons

For more information, e-mail Jason Lynn at NAHB, or call him at 800-368-5242 x8307; or contact Michael Carliner, x8376.

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