The government in Mexico has control over many of the industries of that nation. It uses this monopoly to help it’s people by regulating costs in the domestic market and also by using its status as a huge corporation to muscle overseas markets as well. Recently, one of Mexico’s largest companies has been getting some heat from the international community about it’s price-setting for cement and cement clinker–an unrefined component of cement. CEMEX and it’s close affiliate GCC Cemento have been able to set incredibly low prices on their cement export because their national market for cement is closed to imports of cement from other countries (USA 2004, 3). This allows Mexico and CEMEX to use a process called “dumping” when exporting their cement. According to the Japanese Ministry of Economy Trade and Industry, dumping is defined as “a situation in which the export price of a product is lower than its selling price in the exporting country” (Japan 2001, 269-288).
    What this means for Mexico is that it can basically control overseas markets for cement because of the limited competition in companies fighting with CEMEX for cement trade. This limited competition allows Mexico to undercut any price that smaller multinational corporations might try and set for their cement. This “dumping” of cement on other countries is clearly a violation of regulations agreed upon by Mexico as a member of the World Trade Organization (WTO).
    The Japanese METI continues by saying that “where it is demonstrated that the dumped imports are causing injury to the competing industry in the importing country within the meaning of the WTO Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (GATT) 1994...the importing country can impose anti-dumping measures to provide relief to domestic industries injured by imports” (Japan 2001, 269-288).
    These “anti-dumping measures” are also known as “zeroing” by foreign markets importing goods with allegedly dumping-level prices. Zeroing is a process by which the importer of a product offsets the low price of the seller by putting export tariffs on the product which the exporting country must pay in order to be allowed access to the foreign market (www.freedictionary.com 2006, 1).
    In recent years Mexico and CEMEX have been receiving a lot of pressure from foreign markets about their alleged dumping practices when exporting cement. CEMEX knows that it is undercutting the price on cement that any other company could set and it also knows that because of this many nations that it exports to have been practicing zeroing in order to offset the low price and (hopefully) maintain their own domestic cement businesses. The practice of zeroing (setting tariffs on Mexican cement) for many countries (Ecuador, Guatemala, and the US for example)  has been disputed by Mexico as unfair trading. Many of these disputes have been put forth formally to the World Trade Organization and entered into it’s dispute resolution process (www.wto.org 2003, 1).
    The US in particular has been opposed to Mexico’s dumping procedures. The US has measured the worth of the Mexican cement and has imposed what is known as an ad valorem tariff to offset the low price. Ad valorem–from the Latin meaning according to the value–is a legal term that is used now as a way of showing the difference between the selling price of something and it’s actual value (www.lectlaw.com 2006, 1). This number is not easily attained or agreed upon by the nations who are involved in such conflicts.
    According to the UNITED STATES – ANTI-DUMPING MEASURES ON CEMENT FROM MEXICO report the ad valorem tariff on Mexican cement has been between 60 and 80 percent for over ten years (USA 2004, 3). What this means is that CEMEX has been exporting cement into the US at less than half its actual worth (according to the US). This egregiously violates the fair trade rules agreed upon by the US and by Mexico when they both became members of the WTO. This practice of dumping by Mexico has, over the years, put considerable strain on US cement makers. For various reasons–such as the cost of living in the US, the costs of maintaining a unionized labor force, and stricter regulations on pollution and working conditions in the US–the United States cement producers have no way to compete with Mexico’s cheaper cement without the compensatory zeroing tariffs.
    The WTO’s dispute claims system had been reviewing the case for a number of years to try and decide a reasonable outcome for both the US and Mexico when Mexico asked that the panel reviewing the case dismiss it. This happens when the two countries come to an agreement about the price-setting on their own without the help of the WTO dispute review panel. Although the WTO dispute claim website is unclear as to what the terms of the agreement were, because Mexico retracted the claim, it is apparent that the price of the “dumped,” cheap cement on US markets will be changed to better reflect the ad valorem value.

WORKS CITED PAGE:

USA. United States Anti-Dumping Measures on Cement from Mexico. 2004.
http://www.ustr.gov/assets/Trade_Agreements/Monitoring_Enforcement/Dispute_Settlement/WTO/Dispute_Settlement_Listings/asset_upload_file952_6635.pdf#search=%22anti%20dumping%20measures%20cement%20mexico%22 (Accessed 10/2006).

Japan. Anti-dumping Measures. 2001.
http://www.meti.go.jp/english/report/downloadfiles/gCT0216e.pdf#search=%22anti%20dumping%20measures%20cement%20mexico%22 (Accessed 10/2006).

The Free Dictionary. 2006.
http://www.thefreedictionary.com/zeroing (Accessed 10/2006).

World Trade Organization. Dispute Settlement Site. 2006.
www.wto.org 2003 (Accessed 10/2006)

The ‘Lectronic Law Library’s Lexicon. 2006.
www.lectlaw.com (Accessed 10/2006).