The U.S. Commerce Department (Commerce) recently announced its final results in the 14th administrative review of the antidumping order on gray portland cement from Mexico. Commerce calculated a dumping margin of 42% on imports of cement during August 2003-July 2004.
“What this means is that the Mexican producers charged prices to its customers in Mexico that were 42% higher than it charged its customers in the U.S.,” said Joe Dorn, spokesman for the Southern Tier Cement Committee (STCC).
Commerce issued the antidumping order in August 1990, following findings by Commerce that cement from Mexico was being sold at dumped prices in the southern tier of the U.S. and by the U.S. International Trade Commission that the dumped imports had materially injured U.S. cement producers and their workers. In each year since the antidumping order, Commerce has conducted an administrative review to update the dumping margin calculation. Commerce has completed fourteen administrative reviews, in which it has determined dumping margins ranging from a high of 109% to a low of 37%.
The root cause of the long-lived dumping problem is the closed Mexican cement market. Mexico imports virtually no cement. This allows Mexican producers to receive among the highest prices in the world for cement sold in Mexico, where per capita income ranks 80th in the world. They use the high prices and profits received on sales in Mexico to subsidize their exports to the U.S. and to undersell U.S. producers, threatening domestic production and thousands of American jobs.
A striking example of Mexican protectionism is the Mary Nour, a vessel that was prevented from offloading a single shipment of cement from Russia into Mexico. After trying for a year to obtain authority from the Mexican government to offload at two Mexican ports, the ship was forced instead to sail for Africa. While Mexico blocks cement imports, the U.S. has the most open cement market in the world. In 2004, the U.S. received over 26-million metric tons of cement imports from over 30 countries.
The STCC has been working with the U.S. government for many years to see whether an acceptable settlement of the cement dispute can be negotiated with Mexico. A major issue is whether the Mexican government will give U.S. and other foreign producers meaningful access to the closed Mexican market.
Currently, the STCC is working with the U.S. Commerce Department in support of the Department’s negotiations for a bilateral agreement with Mexico. The potential agreement would sharply reduce the existing tariffs, would prevent a surge of Mexican cement imports into the southern U.S. and would open up the Mexican market to imports. “We are hopeful that the two governments will be able to reach an agreement in the near future that will be beneficial to U.S. cement producers and their workers,” said Dorn.