MercoPress. South Atlantic News Agency

Chile stamps 23% “provisional tariff” on Argentine dairy produce

Chile took this week the first step to impose a 23% provisional safeguard tariff on imports of liquid and powder milk, and Gouda cheese from Argentina.

The imported goods Distortion Committee resolution is expected to be formalized and become effective, in the coming days when President Michelle Bachelet stamps her signature on the official decree, until a decision on a definitive safeguard is reached.

The provisional safeguard will enable to contain "the fall in prices to Chilean farmers and correct current subsidies in the Argentina industry related to prices of the main inputs in the feeding of dairy cattle", said an official release from Chile's Ministry of Agriculture.

The resolution is also geared to compensate the "lower energy costs in Argentina" which help to reduce transport costs and dairy equipment operations.

Chilean dairy farmers were demanding a safeguard tariff in the range of 31.5% for imports of fluid and powder milk, and Gouda cheese to neutralize what has been described an "explosive" increase in Argentine dairy imports.

The two countries are not going through the best of neighborly relations following the recurrent natural gas provision restrictions imposed by Argentina on Chile.

However Chilean Agriculture minister Alvaro Rojas said the safeguards on Argentine dairy farm produce are in no way linked with the energy controversy.

"Countries can appeal to those instruments they feel are best suited to be useful for their purposes", said minister Rojas.

Chile has an estimated 16.000 dairy farmers mostly concentrated in the south of the country.