MercoPress. South Atlantic News Agency

Chilean safeguards on Argentine dairy imports

Chile expects to impose safeguards to dairy produce imports from Argentina beginning September.

Agriculture minister Alvaro Rojas said Wednesday the safeguards presentation to be made before the Anti-distortions Committee is being ironed out and could range between 15 and 35% for at least one year with the possibility of a further twelve months extension.

Chilean farmers and the Senate Agriculture Committee have been requesting the Agriculture ministry to intervene following the jump in Argentine dairy imports.

According to the Agriculture Research and Policies Office during the first five months of 2006, dairy imports from Argentina increased 230%, reaching 28.6 million US dollars compared to 8.6 million in the same period last year.

Chilean farmers claim this is because of "disloyal" competition from Argentina since essential inputs such as energy is highly subsidized while Chile has to pay additional taxes on Argentine natural gas with a direct impact on domestic costs.

However minister Rojas last week underlined that safeguards are not intended to harm Argentina, nor should they be interpreted as "retaliation" because of the natural gas controversy.

"We must not "gasify" the milk dispute" he said and insisted that it was necessary to follow the safeguards path because of the "distortions" that the Chilean dairy farm sector is suffering.

In related news the Chilean Agriculture Ministry reported that beef imports dropped 37.4% during the first half of 2006, totalling 40.550 tons compared to 64.844 tons in the same period last year.

Uruguay figures as the main supplier with 17.750 tons, followed by Paraguay, 14.768 tons and lastly Argentina with 7.967 tons. Paraguay's shipments soared 85% while Argentina's decreased 44% compared to the same period in 2005.