Latin American firms eye Katrina rebuilding
Makers of construction materials seek to breach trade barriers
SAO PAULO, Brazil - From Mexican cement to Brazilian plywood, Latin American makers of construction materials see a business opportunity in the rebuilding efforts following Hurricane Katrina — and a chance to breach trade barriers that limit U.S. sales of their goods.
Many exporters hope Katrina will accomplish what Latin American politicians and business leaders have failed to do: Convince American authorities to lower or eliminate tariffs on imports from emerging economies.
Even if the trade doors slam shut after the U.S. Gulf Coast rebuilds, exporters see the current opening as a chance to build long-term business relationships with American buyers.
Already, Brazil's wood industry is poised to ramp up production, betting exports to the U.S. like plywood and floor boards could increase $500 million this year alone.
Mexican, Colombian and Chilean manufacturers of cement, bathroom fixtures, windows and ceramic tiles are hoping to tap into demand they say could last years during the rebuilding process.
U.S. officials signaled this week they may reduce high tariffs on Mexican cement and Canadian lumber, though any such effort is sure to draw opposition from some American lumber and cement producers who contend imports are being sold in the United States at unfairly low prices.
But trade experts believe the U.S. will be forced to reduce the trade barriers for at least a year or two to meet demand and stem price increases.
"That will mean Canada for lumber, and Latin America also has a lot of the most relevant supplies that are needed in the United States," said Gary Hufbauer, an economist and senior fellow at Institute for International Economics in Washington, D.C. "There will be tariff relief."
Brazil's wood industry was hurting before the hurricane struck, with manufacturers of everything from doors to window frames cutting production after the dollar weakened substantially against Brazil's currency and made Brazilian products more expensive in the United States.
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