Chile decided on Tuesday to increase to 33%, and during three months, safeguard tariffs on Argentina wheat flour, reported in Santiago the Minister of Agriculture Alvaro Rojas.
The measure which will be effective until next April means Argentine wheat flour imports will have to pay 33% tariff instead of 16.2%. "With this corrective measure we have achieved that the international wheat price is also to the benefit of Chilean farmers", said Rojas. According to official figures 89.000 Chilean farmers every year till 300.000 hectares of wheat. Last October Chilean authorities imposed safeguards on Argentine gouda cheese and powder milk, to which Argentina reacted by presenting the case before the World Trade Organization claiming the decision ignored existent contracts. The Chilean authorities argued that Argentine imports were an unfavorable competition for Chilean farmers since dairy products in Argentina were "subsidized" indirectly, particularly regarding energy. Meantime reports from Buenos Aires indicate that Argentina has requested consultation with Chile in the framework of the World Trade Organization following the definitive increase in tariffs to 23% for Argentine dairy products. The case goes back to October but a month ago Chile made the transitory safeguard definitive, which has made Argentina present the case once again before the WTO Disputes Settlement Panel. Argentina argues that Chile is violating WTO regulations since the tariffs are discriminatory, and only apply to Argentine dairy produce. Chile claims it has a right to protect itself because since last August Chilean dairy farmers had lost the equivalent of 42 million US dollars because of the low prices of Argentine milk and cheese.