Argentina and the European Union (EU) entered into a deal to solve a dispute over biofuel exports from the South American country to the 28-member-state bloc, the Argentine Ministry of Foreign Affairs said at the end of last month.
The agreement had determined price and export quotas to be announced in February, the ministry said in a statement. The deal also marks the conclusion of a long-lasting trade dispute and could give a firm support for boosting Argentina’s critical soybean sector. Argentina is the world’s top producer of soybean oil, the main ingredient used for producing biodiesel.
EU countries backed a proposal to impose anti-subsidy duties on biodiesel imports from Argentina, except for producers that agree to sell at a minimum price, Reuters reported, citing a source with the European Commission.
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Argentina regarded the agreement as a victory for the country’s biofuels sector, with a statement from the foreign ministry saying EU was expected to approve and settle on the details of the deal over the days ahead.
“To find a solution to the commercial dispute, with the support of the national government, the Argentine Chamber of Biofuels (CARBIO) offered a price and volume commitment to allow the restart of exports,” according to the statement.
The European Commission, which takes charge of trade issues in the EU, said earlier in January it had told interested parties that it was willing to accept price undertaking from Argentine producers, allowing them to be exempted from additional duties.
The 28 member states of EU all voted for the measures at a collective conference on January 30, the European Commission source said.
The Commission, with the support of its members, is set to apply anti-subsidy taxes, normally in place for five years, by Feb 28.
The European Biodiesel Board, which is representative of EU producers, said the deal would allow Argentine exporters to reach an annual export up to about 1.2 million tons of biodiesel without paying duties.
The deal, with a option of minimum price, would mirror that used to allow Chinese solar cell producers to export to Europe after a major dispute over alleged dumping that threatened to spiral into a trade war.
For Argentine biodiesel imports, it was reported the commission has proposed duties in the range from 25.0 to 33.4 percent depending on the companies.
Exporters include the Argentine arms of Louis Dreyfus Corp, Bunge Ltd and Cargill Inc as well as Molinos Rio de la Plata SA.