Today, the United States confirmed countervailing duties as high as 72 percent on Argentine biodiesel exports, following through on its findings from November 2017 that producers receive “unfair” subsidies.
The duties were published today in the Federal Register and also apply to Indonesian exports. The application of the countervailing duties caps off a process that began in March 2017 when US producers petitioned US authorities against Argentine producers, arguing that lower export taxes on biodiesel compared to other agricultural-based exports was a form of an unfair subsidy. That argument was immediately rejected by Argentine producers and authorities. This issue is parallel to a second complaint about alleged dumping by producers.
The Argentine exports of biodiesel to the United States in 2017 were down compared to the previous year after transitory duties of more than 50 percent were instated in August. Instead of the 1.5 million tons exported to the United States in 2016, approximately 1.03 million tons had been dispatched to the United States at the end of 2017.
While the United States increased duties, the European Union in 2017 reduced its own tariffs on Argentine biodiesel after the World Trade Organization ruled in favor of Argentina in a dispute over biodiesel exports. Exports to the EU jumped to 650,000 tons in 2017, making up for some of the reduction in US imports. Before the duties were instated, about 90 percent of Argentine bio diesel exports went to the US. That trade was worth about US $1.1 billion in 2016.
President Mauricio Macri’s government has made appeals to the Trump administration defending Argentine producers and rejecting that they’re unfairly subsidized or that they are engaging in dumping. Those demonstrations were motivated in part by the importance of Argentine biodiesel in exports to the United State. An estimate by the Argentine Chamber of Commerce (CAC) has indicated that 25 percent of all exports to the United States in 2016 were bio diesel and that there had been growth of 150 percent in exports to the US of bio diesel compared to 2015.
After November 2017’s finding by the US Department of Commerce that Argentina and Indonesia were providing “unfair subsidies” to its producers, the Foreign Ministry issued a statement saying that bilateral efforts had been hurt “by the lack of interest in an agreement shown by the US industry, which took an unacceptable position, based on preliminary duties that were unjustifiably high. “
At the time, the government denied that Argentine producers were receiving any kind of benefits and reserved the right to take the matter before the World Trade Organization (WTO).
Biodiesel, made primarily from soybean oil in Argentina, is used as a motor fuel.