As builders and business owners, we deal with many situations where we are our own best advocates. For the most part, local issues—such as a zoning exception or an approval for a subdivision—demand local voices. And there is no one better suited to address local issues than an individual builder or a local association, although the expertise and resources of state associations and the NAHB are always available to provide support if needed.
But our industry is increasingly affected by issues—such as free trade—that can be addressed only through a strong and influential presence at the national level.
DUTY CALLS One such issue concerns cement from Mexico. Since 1990, the U.S. government has imposed anti-dumping duties on Mexican cement imports. These duties were $26 per metric ton in 2005, but they have been as high as $52 per metric ton. Simply put, the duties on cement from Mexico unfairly hinder new-home construction and drive up the cost of housing.
Even with U.S. cement manufacturers running at full capacity, the nation needed to import 25 percent of its cement supply last year in order to meet domestic needs, and there have been reports of shortages in at least 30 states. Under these circumstances, it's just common sense to relax the restrictions on cement imports from Mexico. Our neighbor to the south has excess capacity, and it takes only four days to bring cement into the United States from Mexico, compared with 40 days from producers in Asia.
And this is what we've been telling officials at the U.S. Department of Commerce, including Secretary Carlos Gutierrez, for over a year. In meetings with Secretary Gutierrez and other administration officials, we have urged ending the tariffs and explained how they affect affordability and availability of housing. We also have provided information about the states and geographic areas most affected by cement shortages.
GETTING TO YES We were very pleased earlier this year when the United States and Mexico announced an agreement in principle to settle the ongoing anti-dumping dispute. Under the proposed settlement, which could be finalized this spring, the United States would reduce duties on Mexican cement from $26 per metric ton to $3 per metric ton, and Mexican imports would be allowed to increase to 3 million metric tons annually, up from last year's level of approximately 2 million metric tons. Most important, after three years the quotas and duties would be eliminated.
The agreement is also structured so that Gulf Coast states, which have been hit particularly hard by shortages, would be able to significantly increase their shipments of Mexican cement. And, if necessary, the president can direct an additional 200,000 metric tons of cement to areas hit by natural disasters.
FAVORABLE OUTCOME This pact is vital to meeting consumer demand, which is expected to rise as the rebuilding efforts from hurricanes Katrina, Rita, and Wilma get under way.
Obviously, we are very pleased that Secretary Gutierrez heeded our concerns and showed a willingness to work with our industry and consider the needs of American consumers.
Throughout the process, builders have been pushing to resolve this dispute in a manner that leads to free trade, and we are pleased at the favorable outcome. We are equally pleased to be able to serve members' needs in such a positive manner. Few individual members have the resources or the inclination to pursue such a complex issue, making the NAHB's efforts at the national level all the more important.