BUENOS AIRES (Reuters) - Argentina is betting on the reopening of the European market to maintain demand for its biodiesel exports after the United States imposed steep duties on imports, the leader of an industry group said on Wednesday.
A day earlier Argentine producers said they would halt exports to the United States as a result of the U.S. Commerce Department’s decision to slap countervailing duties of up to 64.17 percent on the imports from the South American country.
The World Trade Organization last year ruled in favor of Argentina in a dispute over anti-dumping tariffs the European Union had applied to Argentine biodiesel, but the European Commission has not yet removed the tariffs.
Luis Zubizarreta, president of Argentina’s Carbio biodiesel industry group which includes companies like Bunge and Cargill, told Reuters a decision should be imminent.
“We are confident that in a few weeks we will have this market open. It could compensate,” he said in an interview.
The European Union was once Argentina’s biggest biodiesel market but that shifted to the United States after the EU set duties in November 2013 of between 22 percent and 25.7 percent for Argentina producers.
In 2016, 90 percent of the 1.6 million tonnes of biodiesel Argentina exported went to the United States, Argentine government data shows.
The U.S. imposition of even harsher tariffs surprised Argentina’s producers, Carbio said in a Tuesday statement, after U.S. Vice President Mike Pence pledged to boost two-way trade in a visit to Buenos Aires last week.
Another industry group, the Argentine Chamber of Oil Industry (Ciara), said that the recovery of the European market would prevent oversupply and falling prices of soybean oil - the input used to produce biodiesel in Argentina.
Argentina is the world’s top soy oil exporter.
Zubizarreta, of Carbio, said he hoped the U.S. Department of Commerce would reverse its preliminary decision on the tariffs, insisting Argentina does not subsidize biodiesel exports.
Carbio referenced the “established precedent” of the WTO as evidence Argentina was not dumping biodiesel in a Tuesday statement.
Peru, the second-largest export market for Argentine biodiesel, also placed anti-dumping tariffs on biodiesel imports last October.
A source from the Argentine Foreign Ministry said the Argentine government also held out hope of reversing the tariff measure and would cooperate in the final phase of the investigation carried out by the U.S. government.
Writing by Luc Cohen and Caroline Stauffer