MercoPress. South Atlantic News Agency

US Court backs DOC change of mind regarding Argentine biodiesel trade

“It is bad news,” Zubizarreta said.

The United States Court of International Trade Wednesday upheld tariffs or Argentine biodiesel which ensued a redefinition by the Department of Commerce which had at first stood against them.

Judge Gary S. Katzmann ruled that the DOC had not exceeded the limits of the Tariff Act of 1930, and that it was therefore allowed to change its mind between preliminary and final determinations in a changed circumstances review.

“The court concludes that Commerce was not mistaken in reviewing its initial decision that there was a change in circumstances,” the judge argued.

In his view, there had been in fact a change in circumstances, which allowed for the newer assessment.

Argentine sales of biodiesel to the United States amount to US $ 1,200 million, rendering it the most significant product shipped to that country in terms of revenues.

“It is bad news,” Argentine Chamber of Biofuels (CARBIO) CEO Luis Zubizarreta said. “We consider that the sentence is unfair and we are analyzing the possibility of appealing. Together with the Argentine Government, we have been working to reopen the United States and Peru markets, since it is very important for the national agribusiness to have these markets, because it allows us to diversify our exports,” hee added.

The case stems from when in 2016 US biodiesel producers complained to the Government of then President Donald Trump seeking retaliatory measures against imported biodiesel, which was affecting their own production. The US producers also maintained among other arguments that Argentine export taxes on soybeans allowed the processing industry to buy the raw material at a lower price.

Since the beginning of 2018, the United States had decided to apply antidumping and countervailing duties that, when combined, meant tariffs for Argentine biodiesel were above 130%.

After the regime in Argentina was modified to increase export taxes on biodiesel to discourage exports, US producers made a presentation citing a “change of circumstances” which the judge eventually found pertaining to the issue.

In July 2019, a preliminary decision eliminating anti-dumping duties but maintaining the countervailing duties was made, but it was later reversed and both tariffs were kept at their original level. The DOC had found that the “change in circumstances” was not relevant enough to modify the tariff regime.

Argentina's Foreign Ministry also “regretted the judicial decision” Wednesday and vowed to work with companies to reverse the negative ruling on tariffs and that it could even seek the World Trade Organization's assistance to defend exporters.

“Argentina regrets the US court decision, which grants unusual deference to the contradictory decision of the US Department of Commerce. Said decision is appealable before a higher judicial instance (the corresponding Federal Circuit Court) within the next 60 days. The Argentine government will work jointly with the private sector of our country to reverse this decision,” the Foreign Ministry explained through a statement.

“Argentine biodiesel exports, arising from one of the most competitive soybean complexes in the world, do not receive or need any subsidy. Export duties, far from being a desired instrument, have been and are an unavoidable fiscal tool in times of economic emergency such as the present one,” the Ministry added.

“The countervailing duties imposed are at odds with the rules of international trade. Even more serious as they remain in the framework of a global economic crisis such as that produced by the pandemic. In this sense, Argentina reserves the right to resort to the dispute settlement system of the World Trade Organization (WTO) in order to defend the rights of its exporters,” the document went on.

“The United States has imposed countervailing and anti-dumping duties on biodiesel imports from Argentina which, as a whole, reach a level of 146% ad valorem and, naturally, prevent Argentine biodiesel from any access to a market that - until 2016 - represented exports from our country worth approximately 1.3 billion dollars,” according to the statement.

“Subsequently, the US Department of Commerce initiated a review of the duties imposed and reached a preliminary decision to lift them. However, in a highly controversial decision from a technical point of view, it later contradicted its previous arguments and reversed their preliminary decision, although the objective conditions had not been altered in the least,” the Argentine Government maintained.

Biodiesel's is a fundamental market for the soy production chain. The US market has a high demand and Argentina has proven to be very competitive.