MercoPress. South Atlantic News Agency

Mercosur dispute: Argentina announces anti-dumping tariffs on Brazilian products

Trucks carrying fresh produce delayed at border crossings, a form of trade retaliation

Argentina announced it would slap anti-dumping tariffs for six months on gas compressors from Brazil, a decision which is expected to lead to new trade clashes among Mercosur largest members.

According to a resolution in the Official Gazette, Argentina will apply a 38% levy on the FOB value of the questioned item, while Argentine authorities analyze claims presented by the local company MNC Refrigeration.

The Ministry of Industry argued that these imports from Brazil are harming Argentina’s domestic manufacturers of the compressors.

The resolution further argues that the Brazilian compressors “managed to take over 53% of the market, while domestic production was left with a 27% share”.

“We have sufficient evidence to preliminarily determine the existence of a dumping margin in the export to Argentina of the gas compressor units (except air), including those used by abattoirs, originated in Brazil”.

The report goes on to say that investigations from Argentina’s commerce officials indicate that imports of these products manufactured in Brazil “were introduced in Argentina at inferior prices to those of similar domestic production with a growing price-differential”.

Marcelo Modenesi, president of MNC Refrigeration said that his company is “in perfect conditions to substitute imports in normal competition conditions and to amply supply the domestic market”, according to the Argentine Ministry of Industry release.

Although Mercosur main partners and committed to develop a “strategic relation”, Argentina and Brazil have repeatedly clashed over trade. Argentina which is barred from international money markets needs to work with the so called double surpluses which mean positive performances with the national budget and the trade balance.

Whenever the trade surplus seems at stake Argentina has imposed deferred import licences or other non-officially written measures to slow imports and keep a healthy margin.

Brazilian exporters have complained bitterly to their government and Brasilia at times has delayed trucks at the border carrying Argentine food stuffs and other exports or applied similar deferred import licences.

A precarious and complicated system was first agreed during the regular meetings of the two countries officials to address the issue, with Argentina allowed ‘to blow the whistle” whenever imports capture a domineering position in its domestic market.

Brazil demands that ‘its space” when such occasions occur, is not then filled with Asian imports (China).

This same policy has led to similar disputes with China, and one of the reasons for President Christina Kirchner visit to Beijing is precisely to try and lift the ban on Argentine soy-oil exports imposed in retaliation for Buenos Aires restrictions to Chinese imports.

The recent resumption of European Union Mercosur talks for a cooperation and trade agreement have been shadowed by EU claims that Argentina is applying “protectionist” measures against food imports from the EU.

EU officials have called for a review of the situation so as not to condition the EU/Mercosur trade talks.