EU ready to accept deal to exempt duties on Argentine biodiesel

BRUSSELS (Reuters) - The European Commission is willing to accept a deal with producers of Argentine biodiesel to settle a long-running trade dispute over imports of the product into Europe.

FILE PHOTO: European Union flags outside the EU Commission headquarters in Brussels, Belgium November 14, 2018. REUTERS/Francois Lenoir/File Photo

The Commission, which oversees trade policy in the 28-member European Union, said it had communicated to interested parties last week that it was willing to accept undertakings from producers that they would sell at a minimum price.

“This would exclude these producers from possible anti-subsidy duties to be imposed by the European Commission, while restoring the level playing field for European producers,” a Commission spokesperson said by email on Monday.

Those interested parties have until Friday Jan. 18 to comment on the proposal, with EU countries due to be consulted on the issue on Jan. 30. The deadline for definite duties, which are typically in place for five years, is Feb. 28.

A lawyer representing one of the parties in the case said the Commission had not made clear what the minimum price would be, nor what potential volume would be allowed in.

The scheme with a minimum price would mirror that used to allow Chinese solar panel producers to export to the bloc after a major dispute over alleged dumping that threatened to spiral into a trade war.

For Argentine biodiesel, the Commission has proposed duties of between 25.0 and 33.4 percent depending on the companies, a document seen by Reuters in December showed.

Exporters include the Argentine arms of Bunge Ltd, Cargill Inc [CARG.UL] and Louis Dreyfus Corp [LOUDR.UL], as well as Molinos Rio de la Plata SA.

“We would be willing to settle for a minimum value,” said Luis Zubizarreta, president of the Argentine Chamber of Biofuels (CARBIO).

“There is a good dialogue (with the EU) and it seems like the way to benefit everyone,” Zubizarreta added.

An Argentine industry source with knowledge of the relationships told Reuters that, if successful, the agreement would be implemented from February and last for “several years.”

The Commission began investigating Argentine, as well as Indonesian, biodiesel imports in 2012 following a request by EU producers of fuels made from vegetable and recycled oil.

The EU case was based on export duties both countries impose on the raw material, soybeans for Argentina and palm oil for Indonesia. The EU view was that this gave an unfair advantage to biodiesel producers there, allowing them to sell at unfairly low prices.

It imposed anti-dumping duties in 2013, but then had to remove most in March 2018 after successful challenges at the World Trade Organization and the European Court of Justice.

The Commission opened its current anti-subsidy investigation a year ago.

Reporting by Philip Blenkinsop; additional reporting by Maximilian Heath in Buenos Aires; writing by Cassandra Garrison; Editing by Mark Potter and Marguerita Choy