Spain has taken a step back with import restrictions on Argentina’s bio-diesel applied in a reprisal move after Argentine president Cristina Fernandez decided to seize control of energy company YPF, subsidiary of Spanish Repsol, earlier this year.
According to a statement by the Argentine Foreign Ministry, Spain has now amended its bio-diesel legislation. This following a formal complaint by Argentina at the World Trade Organization last August, says the release.
“To avoid an eventual sanction by the WTO, the King of Spain has enacted a new ministerial order (…) which, among other changes, eliminates the ban on bio-diesel imports from outside the European Union”, the official document reads.
Argentina is the world’s biggest exporter of bio-diesel. In 2011, Argentina’s bio-diesel sales to Spain accounted for 20 to 30% of its total exports to the European country. That means a 1.1 billion dollar loss in earnings if Madrid persisted in “protectionist” and “discriminatory” rules.
But Buenos Aires has also been challenged for “protectionism” at the WTO by the European Union, the US and Japan, increasing trade barriers to protect Latin America’s N° 3 economy in a context of global crisis.
A recent report by Argentina’s national statistics bureau, INDEC, shows that the bio-diesel industry has produced more than 2 million tons in the third quarter of 2012, with exports reaching 79.100 tons out of the 133.000 tons produced in September this year.
However, figures also indicate a 36% annual decrease in production and an export decline of more than 50%. This, compared to the 208.434 tons produced and the 158.554 tons exported in September last year.
Meanwhile, the Foreign Ministry has also said Argentina will oversee the implementation of the new rules to guarantee Argentine bio-diesel access in the European markets. The Foreign ministry also warned that “if necessary” it will turn to the WTO Dispute Settlement Body again.