U.S., Mexico Reach Agreement on Cement Trade

The AGC praised the agreement and called for additional U.S. production.

Commerce Dept. Statement on Mexican Cement Trade Agreement

U.S. Commerce Secretary Carlos M. Gutierrez released the following statement in mid-January following the agreement in principle reached between the U.S. and Mexico that will resolve a sixteen-year dispute and liberalize trade in cement between the two countries:

"The agreement is a positive step toward resolving a 16-year dispute between the U.S. and Mexico. The decision underscores the strong trading relationship with one of our NAFTA trading partners and our ability to resolve trade disputes in a constructive manner.

"The agreement will help ensure that Gulf Coast communities have the resources to rebuild and it will help U.S. cement producers access the Mexican market.

"This is an important achievement for the Bush administration because it will increase the availability of cement for American home builders and buyers. Liberalizing trade in cement between the U.S. and Mexico will encourage businesses to build, and it will help to create jobs and new opportunities for our citizens.

"We will continue to work with our counterparts to finalize the text of the agreement in order to ensure that outstanding issues are resolved."

AGC Response to Trade Agreement

According to a statement released by the Associated General Contractors of America, the recent announcement by the U.S. Commerce Department will lead to a dramatically lower duty on Mexican cement and eliminate the duty in three years. "This is welcome news for contractors and consumers alike," said Stephen E. Sandherr, CEO of the AGC.

"We thank U.S. Commerce Secretary Gutierrez for having responded to AGC's concerns and look forward to a final agreement," Sandherr said. "Last year, 32 states experienced cement shortages. The strong outlook for highway and building construction in 2006 means this year's shortages could be even more severe and widespread. It is essential to allow cement in from 'next door' on the same terms that we now import it from China, Thailand and other more distant locations."

The agreement provides an important 'safety value'--a disaster provision of an additional 200,000 metric tons to be instituted if the President determines that a natural disaster warrants an increase in the import of Mexican cement.

"Imports from Mexico would be capped at 3 million metric tons per year, and would be subject to a duty of $3 per metric ton, offering significant relief over the $26 duty now in effect," Sandherr said. "The tonnage would be a modest improvement over the 2.1 or 2.2 million metric tons that were imported from Mexico in 2005, and, most important, all limits would be removed in three years if both sides abide by the agreement."

Sandherr added: "An agreement with Mexico will not threaten any domestic firms, which will continue to sell every pound they make. In a market that uses 130 million tons of cement, of which U.S. firms are able to supply only 95 million, an extra million or so from Mexico will not harm U.S. firms. Instead, an agreement will shorten delivery times compared to the weeks it takes to bring cement across the ocean, and through congested ports and rail lines."

Calhoun LNG Secures Contractor

Houston-based Gulf Coast LNG Partners LP recently announced two major accomplishments relating to the proposed Calhoun LNG Regasification Terminal at The Port of Port Lavaca - Point Comfort in Calhoun County. GCLP has entered into a memorandum of understanding with Tractebel Gas Engineering GmbH for the detailed engineering, procurement and construction of the proposed Calhoun LNG Terminal. Additionally, GCLP secured the remaining funding that will allow it to complete all of the development efforts necessary for the Calhoun LNG Terminal to reach project financing.

Tractebel will work with GCLP through a detailed, open-book engineering design process to provide a full-service lump sum turnkey EPC contract for the project. Tractebel is a subsidiary of Tractebel Engineering, a division of SUEZ Energie Services under parent Suez Group, one of the world's largest utility companies.

"Contracting with Tractebel represents a major step in accelerating the development of our facility," said Rafael Garcia, executive vice president of asset development. "Tractebel Gas Engineering is one of the world leaders in the design and construction of LNG Terminals. Partnering with Tractebel shows our commitment to advance a premier regasification project in the heart of the Gulf Coast marketplace."

Tractebel's involvement emphasizes the industry's confidence in the Calhoun LNG Project. "Tractebel identified the Calhoun LNG Project as a solid project and is excited to be involved in it," said Richard Gadd, director of proposals LNG for Tractebel.

Pending timely permitting approvals, full operation is set for late 2009 or early 2010.