Cemex S.A.B. De C.V.

CEMEX S.A.B. de C.V. (Cemex) is the third largest cement producer in the world, behind France's Lafarge S.A. and Switzerland's Holcim Ltd. Cemex initially started as a small cement company in 1906 and gradually evolved into Mexico's number one cement producer. In the early 1990's, Cemex commenced an aggressive expansion campaign through the acquisition of competitors around the world. Today, Cemex's operations span over fifty countries and collectively boast annual production capacities of 160 million metric tons of aggregates, 70 million cubic meters of ready-mix concrete, and 98 million metric tons of cement (CEMEX Company Figures, 2007).

In 2005, Cemex had net sales of over $15.3 billion distributed between sales of cement (72%), ready-mix concrete (15%), aggregates (9%), and others (4%). Cemex holds over $26.7 billion in assets and has become the world's largest trader of cement with established trade relations with over sixty countries. Over half of Cemex's 2005 sales were distributed in North America, split between the United States (27%) and Mexico (21%). Nearly 40% of Cemex's 2005 sales took place in Europe, with 10% in Spain, 10% in the United Kingdom, and 18% spread around the rest of the continent. The remaining 14% of 2005 sales were distributed throughout the rest of the world (CEMEX Company Figures, 2007; CEMEX History, 2007).

The United States is one of world's largest markets for cement products. American cement manufacturers have generally been unable to meet the demand for cement products in the domestic market and imports from foreign manufacturers have traditionally made up for the shortfall. Mexican cement manufacturers gradually emerged to be the leading cement exporters to the United States, given their close proximity and their ability to produce cement products at relatively lower costs. By the late 1980s, Mexican cement manufacturers, led by Cemex, aggressively gained a significant share of the American cement market by offering low cost cement solutions to end users concentrated throughout the southwest United States and Florida. The cement products offered by Cemex and other Mexican cement manufacturers consistently sold at considerable marginal discounts when compared to their American competitors. American cement producers that had to share their market with their Mexican counterparts were simply unable to compete with the lower priced Mexican cement products (Cook, 1995).

Consequently, a coalition of American cement producers and labor unions affected by competitors from Mexico filed an antidumping petition with the U.S. Department of Commerce and the U.S. International Trade Commission. The coalition, known as the Southern Tier Cement Committee (STCC), complained that Mexican cement producers were dumping their products into the southern region of the United States. In response to the STCC's petition, an antidumping investigation was initiated on September 28, 1989. On April 6, 1990, U.S. Department of Commerce officials advised the U.S. International Trade Commission that they had determined that cement imports from Mexico were being sold in the United States at less than fair market value. On August 23, 1990, the U.S. International Trade Commission determined that the American cement industry was being materially injured by imports of gray portland cement and cement clinker (a concrete intermediary) from Mexico that were being sold at less than fair value. One week later, the U.S. Department of Commerce ordered antidumping duties effective on imports of gray portland cement and cement clinker from Mexico (Cook, 1995; USITC, 2000; Cement Americas Staff, 2006).

Following its investigation, the U.S. Department of Commerce concluded that Mexican cement products imported to the United States were being dumped at margins ranging from 3.69% to 57.96% (Cook, 1995). The findings of the U.S. Department of Commerce were challenged by both the STCC and Cemex. The STCC disagreed with the marginal rates found by the U.S. Department of Commerce, claiming that those margins were far too low. Cemex also disagreed with the U.S. Department of Commerce's findings as a whole and appealed the antidumping decision to the U.S. Court of International Trade. The court refused to hear Cemex's appeal (Cook, 1995).

Since the U.S. Court of International Trade chose not to review Cemex's appeal, the General Agreement on Tariffs and Trade (GATT) Committee on Antidumping Practices created a panel to assess the validity of the United States' antidumping investigation in relation to established GATT treaty terms. In October 1992, the panel found that United States' antidumping investigation was not in agreement with GATT Article 5:1 since the United States failed to identify that their antidumping petition was on behalf of all the regional cement producers. In turn, the GATT panel concluded that the antidumping duties being imposed on Mexican cement products were in violation of GATT Article 1, which called for Most Favored Nation status for all GATT members. As such, the panel recommended that the United States cease all antidumping duties and promptly reimburse any duties already paid. Neither the United States nor Mexico acted on the GATT panel's recommendations, but both governments agreed to work toward a mutually acceptable solution to the cement antidumping dispute (Cook, 1995).

The U.S. Department of Commerce and the U.S. International Trade Commission continued to regularly review the government's antidumping policy following the initial investigation. From 1990 to 2005, the U.S. Department of Commerce completed fourteen administrative reviews and two five-year reviews and consistently determined that antidumping duties on Mexican cement products needed to be maintained. During that time period, the U.S. Department of Commerce found that the antidumping margins for Cemex and other Mexican cement producers averaged 60% (USTR, 2004; USITC, 2006). The U.S. International Trade Commission also completed two five-year reviews of the government's antidumping policies on imports of Mexican cement products. The U.S. International Trade Commission concurred with the Department of Commerce's findings- antidumping duties imposed on Mexican gray portland cement and cement clinker were to be maintained (USITC, 2006).

Mexico disputed the findings of both the U.S. Department of Commerce and the U.S. International Trade Commission through forums offered by the World Trade Organization (WTO) and the North American Free Trade Agreement (NAFTA). Under the WTO's dispute settlement process, Mexico challenged the findings of the five-year reviews of both the Department of Commerce and the International Trade Commission. Mexico also challenged the determinations of the Department of Commerce's fifth through eleventh administrative