In 2012, the European Union initiated two investigations: one for alleged dumping of biodiesel exports and the other for subsidies, both involving the Argentine Republic and Indonesia as investigated origins.
It was submitted on behalf of a number of Union producers which, together, represented more than 60% of the total production of biodiesel thereof.
The investigation of dumping covered the period from 1 July 2011 to 30 June 2012, while the analysis of trends relevant for the assessment of injury covered from 1 January 2009 to the end of the dumping period. investigation.
As a result of the above, on May 27, 2013, the same European Commission decided to impose a provisional anti-dumping duty of between €65,24 to €104,92 per ton on imports of biodiesel originating in Argentina, by application of Regulation (EU) No. 490/2013.
In October 2013, the same Commission decided to suspend the investigation that had been initiated into subsidies on biodiesel imports originally from Argentina. This occurred after the European biodiesel board decided to withdraw its claim and doubts were raised as to whether the differentials between export duties applied to foreign sales of biodiesel and crude soybean oil in Argentina could be considered subsidies under the terms of the Agreement on Subsidies and Countervailing Measures. of the World Trade Organization.
Although the EU declined to move forward with the subsidy investigation, the same did not happen with the other ongoing investigation. In November 2013, they established definitive anti-dumping duties for five years that range between €216 and €245 per net ton of biofuel originating in Argentina, and between €76 and €178 per net ton of biofuel originating in Indonesia.
In practice, the European decision implied the virtual closure of the European market to Argentine biodiesel. It should be taken into account that in 2011, biodiesel exports to the European Union totaled 1.847 million dollars, equivalent to 13 percent of the country's shipments to the European market and which positioned Argentina as the bloc's leading supplier. Between January and August 2013 they were reduced to only 390 million dollars due to the restrictive measures applied by the EU.
What was observed by the European Commission was that the internal prices of the main raw material used by Argentine biodiesel producers, soybeans and soybean oil, were artificially lower than international prices due to the distortion created by taxes on production. export (retentions) that our country applies and, therefore, the costs of the main raw material were not reasonably reflected in the records of the Argentine producers investigated.
Since it was observed that some production costs and, specifically, the costs of the main raw material (soybean y soy oil in Argentina and crude palm oil in Indonesia) were distorted, these costs were calculated on the basis of reference prices published by the competent authorities of the countries concerned. These prices reflect the level of international prices.
Reference Prices: they are official FOB prices or indices that act as the tax base for export duties that levy exports for consumption. In practice they operate as minimum FOB export values.
Given the establishment of anti-dumping measures, in December 2013 Argentina requested consultations with the EU within the framework of the Dispute Settlement Body (DSB) of the World Trade Organization (WTO).
The consultations They are the main non-judicial/diplomatic instrument of the WTO dispute settlement system. They allow the parties to clarify the facts of the matter and the claims of the claimant, dispelling possible misunderstandings regarding the real nature of the measure in dispute.
In this sense, consultations serve to lay the foundations for a solution or to carry out the procedure under the Dispute Settlement Understanding (DSU).
The primary objective of the DSU is for Members to resolve differences among themselves in a manner consistent with the WTO Agreements. Consequently, bilateral consultations between the parties are the first stage of the formal dispute settlement system.
These consultations give the parties the opportunity to discuss the issue and find a satisfactory solution without resorting to litigation. Only when these mandatory consultations have not provided a satisfactory solution within 60 days may the claimant request resolution by a panel.
La Argentine claim In this case, it is based on criticism of the way biodiesel production costs are calculated, that the antidumping duty exceeds the calculated dumping margin, that there are flaws in the evidence used to determine injury, and problems in determining the causal relationship between the imports and the alleged dumping.
In this regard, the association of Argentine biofuel export producers (Change) and the Argentine authorities argued that an adjustment of the costs incurred by the companies is only possible when the records, and not the costs incurred by the companies, do not reasonably reflect the costs related to the production and sale of the product concerned.
For its part, in mid-2014 the Court of Justice of the European Union notified the European Commission of its acceptance of the claim made by Argentine biodiesel supplier companies in relation to the antidumping measures in force since November 2013.
This acceptance opens the possibility of discussing the legality of these measures, for which it is expected that the first results of the process will be obtained in 2015.
This acceptance of the claim is not accidental, especially if the context in which these measures are developed is analyzed. That is to say the disparity condition regarding the development and operation of the Argentine biodiesel industry compared to the European one.
Argentina has the most modern biodiesel industry in the world, it is one of the world leaders in biodiesel and meets the highest quality standards in technical, environmental and economic terms.
What differentiates this sector in the international context?
Among the advantages that position the Argentina Among the main biodiesel producers on the planet, it is the world's main producer of soybean oil, the main input for biodiesel.
Likewise, Argentine export companies have clear competitive advantages, such as having a significant amount of soybeans, proximity to soybean cultivation areas, direct access to private deep-water ports that allow exports without higher transportation costs, as well as very efficient production scales, aspects that are not are available to European producers.
For its part, the European biodiesel industry emerged as a basically regulated industry, either by energy, climate and environmental policy regulations, or by tax benefits and incentives set to increase domestic demand for biofuels (Directive on renewable energies and Directive on fuel quality).
Likewise, agricultural producers of biodiesel raw materials also receive funds through the Common Agricultural Policy.
The Common Agricultural Policy is one of the most important agricultural policies in the world. It is responsible for generating subsidies and investments to stimulate the agricultural sector of all those countries that make up the Union.
All these incentives contribute to making an industry profitable that otherwise would not be profitable, but this scaffolding of measures has also led to an oversizing of the industry with mismatches between production and consumption, turning this situation into a vicious circle.
Under this scenario, it becomes essential for the European Union to use tariff and para-tariff barriers in order to maintain an industry that would otherwise become extinct.
Likewise, at this point it is important to clarify the great weight that the European biodiesel market has worldwide, involving around 12.000 million euros, the European Union is the largest producer, with 41% of global production.
In the European domestic market, biodiesel acquired greater development and represents 70% of the biofuels market for transport. Germany, France, Spain and Italy are the main producers within the European Union.
In conclusion, it can be argued that the application of antidumping duties to biodiesel originating in Argentina and Indonesia is not an isolated measure but responds to a broader policy of clearly protectionist nature applied by the EU, given the competitive advantages that countries have. such as Argentina and Indonesia and the lack of efficiency of Union producers when it comes to competing on the one hand and the great weight that this sector has for the European Union on the other.
Therefore, the damage caused by imports under fair conditions should not be the subject of anti-dumping measures or countervailing measures.