Gov. Mike Rounds Joins Colleagues to Ask US Commerce Secretary for Assistance on Mexican Cement Tariffs

Letter

Gov. Mike Rounds Joins Colleagues to Ask US Commerce Secretary for Assistance on Mexican Cement Tariffs

Governors Mike Rounds, Bill Richardson (New Mexico), Jon Huntsman (Utah), and Kenny Guinn (Nevada), have jointly asked U.S. Commerce Secretary for immediate help in attacking the existing tariff order restricting Mexican cement entering the United States.

"A joint message with fellow state Governors addressing this issue with Secretary Gutiérrez highlights the economic importance nationwide," said Gov. Rounds. "The cement shortage facing our states can be addressed by resolving the U.S.-Mexico cement trade issue to provide immediate access to this critical supply of cement."

South Dakota and other states are experiencing cement and concrete shortages affecting both the price and scheduling of important private and public construction projects.

A tariff was instituted in 1990 to prevent dumping inexpensive Mexican cement into the United States market. Since then international and domestic cement markets have changed dramatically, affected by international demand related to Asian construction, tsunami recovery, and unprecedented demand in the United States.

*Letter to U.S. Commerce Secretary follows.

August 10, 2005

The Honorable Carlos Gutiérrez
Secretary of Commerce
Office of the Secretary
United States Department of Commerce
14th and Constitution Avenue, N.W.
Washington, D.C. 20230

Dear Secretary Gutiérrez:

We are writing to request your help, as quickly as possible, with a situation that threatens to force layoffs, slow economic growth, and pose lasting damage to the construction industry in western states.

As you are no doubt aware, there is a serious shortage of cement in many states across the country. There are various reasons for this shortage, including unprecedented demand for cement in Asia, Europe, and here in the United States. In addition, the antidumping duty order on Mexican cement, implemented more than 15 years ago, is exacerbating the shortage and blocking a possible solution.

The effects of the shortage are rippling through the construction industry. Concrete producers are being forced to reduce their allotments to their customers, meaning the possibility of costly delays or even the cancellation of construction contracts. If this shortage continues, thousands of jobs and millions of dollars in broken contracts will be at risk, and many small construction businesses could be forced out of business. Public projects will increase in cost while failing to meet construction schedules.

Market conditions have changed dramatically since the antidumping order was imposed more than 15 years ago. United States demands have exceeded the industry's capacity for over a decade and companies originally supporting the order have become fully integrated with the Mexican cement industry. We are importing cement from as far as Asia when there is a significant supply right across our Southern border.

As Governors we are working hard to create jobs for our citizens and grow our economies, and the construction industry is key to our continued success. Therefore, we respectfully request that you take the appropriate steps to resolve U.S.-Mexico cement trade issues in order to provide immediate access to this critical supply of cement. We are hopeful that you will do this before the reconsideration period expires in October.

We stand ready to assist you in any way, and we appreciate your prompt attention to this matter.

Sincerely,

Mike Rounds Kenny Quinn
Governor of South Dakota Governor of Nevada

Bill Richardson Jon Huntsman
Governor of New Mexico Governor of Utah

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