MercoPress. South Atlantic News Agency

EU anti dumping measures force Argentina to eliminate taxes on bio-diesel

“We are in a trade war” Cristina Fernandez said in announcing the measure

Argentine President Cristina Fernandez on Monday asked Congress to eliminate some of the taxes paid by biodiesel manufacturers in a bid to support an industry hard hit by European Union anti-dumping measures, which was the country's main export market.

 Argentine biodiesel exports are expected to plunge as much as 39% this year compared to 2013 due to tariffs imposed by the European Union, according to the Argentine industry sources.

The proposal would eliminate the 22% tax on biodiesel for power generation and the 19% levy on liquid fuels. The tax cut would last only as long as Europe's sanctions do, according to the proposal. Apparently the EU measure will be enforced during five years.

“We are in a trade war” Cristina Fernandez said in announcing the measure, which will be sent to Congress in the next few days.

In November 2013 the EU made official the tariff increase to Argentine and Indonesia bio-diesel imports. The alleged 'anti-dumping' measure implemented by the EU was formally challenged at the World Trade Organization and imposed a levy between 216 and 245 Euros per ton (25%), which in cost terms closed the market to the Argentine export.

Argentina is one of the world's leading producers and exporters of bio-diesel and the EU was its main client, with annual sales of 1.5 billion dollars.

The EU argued that Argentine bio-diesel benefitted from access to the industry's inputs with “artificially low prices”.