MercoPress. South Atlantic News Agency

Argentina to appeal Chilean safeguard tariff on dairy exports

Argentine dairy farmers will appeal the Chilean decision to impose a 23% safeguard tariff until next December on Argentine milk and cheese imports. Chilean farmers claim Argentina is involved in “disloyal competition” practices which have helped boost dairy exports several times.

Raul Roccatagliata from Argentina's Rural Society International Negotiations Department is quoted in Saturday's Buenos Aires press refuting Chilean arguments of "disloyal competition" from Argentina's dairy industry.

"We will put forward a strong case in the hearing with Chilean businessmen scheduled for next November 7 because the CIF (Cost includes freight) value of Argentine dairy exports are not below international prices", said Mr. Roccatagliata.

He added that the real problem is that Chile has considerably increased its domestic milk production over last year.

Apparently the Argentine Foreign Affairs and Trade ministry will be supporting exporters following the same argument because when Chile announced a few weeks ago it was considering limiting imports, it also admitted that to impose safeguards it must be proved that "the increase in imports has caused or threatens to cause a serious damage to the production sector involved".

Argentine undisclosed sources added that "official data from Chile show that milk production and the elaboration of different by-products has increased considerably in the first five months of 2006 compared to the same period a year ago".

The Chilean decision has come as a significant setback for Argentine dairy farmers since according to the Buenos Aires press Chile currently "absorbs 60% of all liquid milk exports".

Regarding Gouda cheese which was specifically pointed out in the Chilean resolution, the volume exported to Chile represents 23% of all exports, but in value is far more important.

If both sides can't reach an agreement by next December, Chilean safeguards could become definitive.

In Chile the National Agriculture Society considered the safeguards imposed on Argentine dairy produce as "positive", but "a bit too late".

"We appreciate the willingness of the government in imposing a technical measure which is positive", said Luis Schmidt, the organization's president. However he added that "we consider it a bit late, we would have liked a more accelerated process".

Chilean dairy farmers requested a couple of months ago a blanket 31.5% safeguard tariff on all Argentine dairy imports.

When Chile originally announced its intention of imposing safeguards, Argentina warned it would appeal to the World Trade Organization.