Much more Mexican cement will be allowed into the United States under an agreement in principle announced by the Bush Administration Jan. 20. Under the agreement, shipments of Mexican cement will increase to 3 million metric tons annually, up from 1.77 million metric tons imported in the first 11 months of 2005.

The deal will boost supplies of Mexican cement at a time when U.S. demand is already high and expected to surge to meet rebuilding needs from the Gulf Coast hurricanes.

"The agreement is a positive step toward resolving a 16-year dispute between the United States and Mexico," Commerce Secretary Carlos Gutierrez said in announcing the tentative deal.

"The timing couldn't be better," he said while conducting a daylong inspection trip to New Orleans.

Gutierrez said all the major issues had been resolved and some final details should be wrapped up quickly. He said the agreement will ensure that Gulf Coast communities have the cement they need to rebuild.

Under the agreement, Mexico will be able to increase shipments to 3 million metric tons annually, with the possibility that the shipments could be increased by an additional 200,000 metric tons if the president determines that a natural disaster warrants additional supplies from Mexico.

The Commerce Department, responding to complaints from domestic cement makers, ruled in 1990 that cement from Mexico was being sold in the United States at unfairly low prices - a practice known as dumping.

From 1986 through 1989 there was a surge in cement imports from Mexico that forced U.S. producers to lay off 19 percent of their work force and close six cement plants.

The government then imposed duties on Mexican cement shipments that have added approximately $26 to the price of a ton of cement. Under the proposed agreement, those tariffs will fall to $3 per ton.

The agreement would end in 2009, removing all penalty tariffs at that time, if the Mexican government fulfills its commitment to open the Mexican market to greater foreign supplies of cement.

U.S. producers opposed to removing the duties are represented by the Southern Tier Cement Committee, a coalition of 23 cement companies that operate 63 cement plants in 29 states.

They contend that Mexico keeps virtually all foreign cement out of the country, enabling Mexican producers to charge higher amounts, which then allows them to undercut the price of U.S. competitors in the American market.

Many domestic producers have taken a wait-and-see position about the proposed plan.

They have taken a lot of pressure from many contractors, non-concrete associations, government and politicians.

"We fully expect that the settlement between the two governments will become the first meaningful step towards opening the Mexican market to imports from other nations," said Charles T. Sunderland, chairman and chief executive of Ash Grove Cement Co.

U.S. construction companies, politicians and some associations have pressured the Bush Administration to reduce the barriers to Mexican cement imports to deal with supply shortages.

Ken Simonson, chief economist for the Associated General Contractors of America, a trade group for the builders, said he was hopeful that the deal, by boosting imports from Mexico, will relieve bottlenecks that have occurred trying to get cement shipments into the country from China and other Asian countries.

Simonson's group said supply shortages of cement peaked at 32 states last August at the height of the summer construction season.

But Portland Cement Association Chief Economist Ed Sullivan said he does not believe additional imports are necessary, even with the concrete required to rebuild New Orleans.

According to Sullivan, although re-building New Orleans could consume 650, 000 to 1.8 million tons of cement each year of an expected five-year process, additional imports will not be necessary to fill this need.

"The slightly more adverse economic environment early in 2006 will act to neutralize the additional cement consumption anticipated from the post-Katrina rebuilding efforts," he said.

The United States was expected to import 33 million tons of cement in 2005, roughly 27 percent of the cement consumed.

PCA's fall forecast projected 2006 imports to reach 35 million tons, in-line with earlier, pre-Katrina estimates.

Sullivan said residential construction is expected to decline due to rising mortgage rates in 2006; however, increases in commercial construction and public works construction will more than offset the residential slowdown and provide a net cement consumption gain in 2006.

But Stephen E. Sandherr, chief executive of AGC, said an agreement with Mexico will not threaten any domestic cement 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."