Lafarge North America issued a statement applauding the Office of the United States Trade Representative, which recently confronted Canadian trade officials at a meeting of the Subsidies Committee of the World Trade Organization (WTO) about the enormous subsidies pledged for the construction of a cement facility in Quebec.
John Stull, president and CEO of Lafarge North America’s U.S. operations said, “The proposed McInnis Cement plant is both commercially unjustifiable and unnecessary. Existing producers in Quebec have significant unutilized capacity, yet the new plant has a planned production capacity greater than Quebec consumes in a year. The project is only moving forward because of the distorted economics resulting from government support of more than $450 million – approximately half of the projected construction costs. These flawed economics are put into focus if one considers that when complete, by most estimations the plant will employ at best a couple of hundred people, meaning that each permanent job will cost the government well in excess of $1 million.”
“The justification offered by government and McInnis Cement officials for this tremendous outlay of public funds is that the plant will export almost all of its production to the United States. The WTO agreements, however, expressly prohibit subsidies contingent on exports. Moreover, cement producers in the United States have only begun to recover from the financial crisis, and these facilities and their workers are now under threat of needing to compete with cement from a facility with no appreciable domestic demand and nearly half a billion dollars in subsidies. Clearly, the plan is to use subsidized exports to take market share away from U.S. producers, which, if successful, will cost U.S. jobs,” said Peter Keeley, senior vice president & general counsel, Lafarge North America.
The extensive subsidies being offered to McInnis Cement have been questioned by Senators Sherrod Brown (D-Ohio), Kirstin Gillibrand (D-N.Y.), Chuck Schumer (D-N.Y.), Benjamin Cardin (D-Md.) and Barbara Mikulski (D-Md.); Congressional Cement Caucus Co-Chairmen Congressmen Charlie Dent (R-Penn.) and Jim Matheson (D-Utah); and others, including the legislatures of many of the states being targeted by McInnis Cement and the Canadian authorities.
“U.S. cement producers and their workers should not be forced to compete with subsidized cement from a plant that exists only because of subsidization,” proclaimed Lafarge’s statement. “For this reason, Lafarge North America applauds the recent actions of the United States Trade Representative at the WTO and urges the United States to formally challenge the subsidization of McInnis Cement, in order to defend the U.S. industry and U.S. jobs from these unfair trade practices.”