According to Argentine media, it would be due to 'Changed Circumstances.' Report: US Reviewing Biodiesel Duties on Argentina

According to Argentine media, it would be due to 'Changed Circumstances.'
Monday, November 12, 2018

Different news sites have reported that the United States’ Department of Commerce (DOC) has began a process to review countervailing duty orders on Argentine biodiesel exports, imposed in November 2017 after determining that local producers were receiving “unfair” subsidies.

The report indicates that the reason behind opening the reviewing process are “circumstances that have changed” concerning the activity. According to Infobae, they are the Macri administration’s decision to reinstate taxes on exports and biodiesel among them.

In September this year, and as a result of the economic crisis the country is going through, the government announced it would impose an AR $4 tax on each dollar of primary exports and services as well as an additional AR $3 on other exports until 2020.

Biodiesel exports are currently subjected to a 15 percent tax, plus this extra AR $3 per US dollar worth of exports which, given the exchange rate of AR $35.66 per US dollar at the moment this article is being written, represents an additional 11.8 percent.

El Cronista reported that even though US law establishes that duties can only be reviewed after being in place for two years, the DOC determined there was”good cause” to do so before – an exception to the rule included in the law.

The process that led to the instating of the duties was kicked off in March 2013, 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.

Before the duties were imposed, biodiesel accounted for a significant percentage of Argentine exports to the US.  An estimate by the Argentine Chamber of Commerce (CAC) 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.

However, exports decreased in 2017 after the US instated transitory duties of more than 50 percent in August of that year. Instead of the 1.5 million tons exported to the United States in 2016, approximately 1.03 million tons were dispatched to the United States at the end of 2017.

No Argentine biodiesel has made its way to the United States since October 2017. According to a report by the US’ Department of Agriculture, Argentine biodiesel exports are set to decrease by 28 percent when compared to 2017. Perhaps the most significant silver lining has to do with the fact that exports to the European Union recovered, after this market reduced its own tariffs on Argentine biodiesel as a result of a World Trade Organization ruling favorable to Argentina in a dispute over the same matter.

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