Seated, left to right--US Commerce Secretary Gutierrez, Mexican Secretary of Economy Garcia Alba and US Trade Representative Portman. (Photo by U.S. Commerce Dept.)

Ending a 16-year-long trade dispute, officials from the U.S. and Mexico have signed an agreement that boosts the amount of cement Mexico can sell in the U.S. and cuts duties sharply on those shipments.

The three-year agreement, signed in a ceremony March 6 at the Commerce Dept. headquarters in Washington, permits Mexico to export 3 million metric tons of cement annually to the U.S. southern tier. The first year is to start April 3.

It also allows exports of up to 200,000 additional metric tons if the U.S. President determines such shipments are needed to respond to a severe storm or other disaster. In 2005, U.S. imports of Mexican cement totaled 1.92 million metric tons.

The antidumping duty rate on the 3 million tons and any additional disaster relief cement shipments will be set at $3 per metric ton, a major cut from $26 now.

U.S. Commerce Secretary Carlos M. Gutierrez, who signed the agreement, said it is "an example of how open markets can benefit all parties." He said, "It will allow U.S. cement producers greater access to Mexican markets, while ensuring that our Gulf Coast communities have the resources necessary to rebuild."

U.S. Trade Representative Rob Portman, who also signed the pact, added, that it will boost the supply of cement to the U.S. at a time of increased demand, and particular need in the hurricane-battered Gulf Coast.

Mexico's signatory, Secretary of Economy Sergio Garcia de Alba said, "Mexico gains the possibility of increasing cement exports significantly."

The 3 million-ton allocation will be divided among eight U.S. regions In the first year, Arizona is to receive the largest share, 1.25 million tons, followed by New Mexico-El Paso, Texas, with 725,000 tons. New Orleans is to get 280,000 tons.

The agreement also calls for the U.S. and Mexico to divide equally the antidumping duties collected since 1990. A Commerce Dept. official estimated the collections at $250 million, plus $10 million to $20 million in accumulated interest.

Associated General Contractors' CEO Stephen E. Sandherr, said "The mild, dry weather this January meant that more cement was used than usual, making shortages even more likely than last year, when 32 states reported shortages by August. Increased ready access to more Mexican cement in some of those states will help contractors to keep working instead of having to lay off employees."