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Lafarge North America says it ‘applauds US government action against prohibited Canadian subsidies’

World Cement,

Lafarge North America has released a statement regarding McInnis Cement’s Port-Daniel–Gascons project, in which it applauds US government action against subsidies offered for the construction of the new plant:

'Lafarge North America applauds the Office of the United States Trade Representative, which earlier this week 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 US operations said: “The proposed McInnis Cement plant is both commercially unjustifiable and unnecessary. Existing producers in Quebec have significant unutilised 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 subsidised exports to take market share away from US producers, which, if successful, will cost US jobs,” said Peter Keeley, Lafarge North America’s Senior Vice President & General Counsel.

The extensive subsidies being offered to McInnis Cement have been questioned by United States Senators Sherrod Brown, Kirstin Gillibrand, Chuck Schumer, Benjamin Cardin and Barbara Mikulski, Congressional Cement Caucus Co-Chairmen Congressmen Charlie Dent and Jim Matheson, and others, including the legislatures of many of the states being targeted by McInnis Cement and the Canadian authorities.

US cement producers and their workers should not be forced to compete with subsidised cement from a plant that exists only because of subsidisation. 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 subsidisation of McInnis Cement, in order to defend the US industry and US jobs from these unfair trade practices.'

The project has sparked controversy in some quarters, leading to objections from other cement producers and the Cement Association of Canada.

Last week, McInnis Cement released a statement regarding its recently filed contestation, which it said was an ‘opportunity to set the record straight on several issues’.

Source: Lafarge North America press release.

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