It seems to be the great battle between Europe and South America, and it is curious to see who is going to come out on top of this whole thing. This past September, the European Union eliminated tariff obstacles on biofuel from Argentina, without a WTO complaint. Currently, Argentina biodiesel is facing anti-dumping tariffs if enters the European Union market, but there is the possibility of having some relief in the new future.
Though this is a European issue, it is best to start out looking at how Argentina has been dealing with its Northern neighbors, the United States. The U.S. Commerce Department made the choice to set ultimate anti-subsidy responsibilities on biodiesel imports from Argentina, shows them and the world, that the United States market is closed to Argentine producer as stated this past Thursday, November 9, 2017. Because of this, Argentina has been betting on the European biodiesel market because of the United States imposed duties.
Argentina was in a dispute over anti-dumping tariffs that the EU had slapped onto Argentinian bio-diesel, however, the World Trade Organization (WTO) last year ruled in favor of Argentina.
Being that Argentina is the world’s biggest soybean manufacturer, Argentina is the de facto dominant producer of soybeans which are an amazing protein crop. If they decide to impose an export tax on their soybean products, the only person to pay for this is the consumer in the markets. It is also important to note that Argentine biodiesel is produced from inexpensive duty-free soybean, and thus is not conditional on the export tax.
The European Commission has only 45 days to specify whether an enquiry should be opened but it could possibly speed up the process because of the necessity of the situation that they are facing: Argentina could possibly flood the European Union with soybean based biodiesel which is made from genetically modified organisms, commonly known as GMOs.
Not only has the United States and the European Union been quite harsh to Argentina and their biodiesel, so to have been Peru its neighbor and Australia. Both nations have imposed heavy tariff barriers on the country, making it almost impossible for Argentina to makes its case to the World Trade Organization. It will be interesting to see how this plays out over the next couple of weeks and months. Will things change? Who’s to say, but it is clear that Argentina may be on the losing side of this battle.
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