Argentina complains to EU on Spanish blockage of biodiesel

20 August 2012 21:42  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Argentina is challenging the blockage of its biodiesel exports to Spain, the World Trade Organization (WTO) said on Monday.

Argentina filed the complaint against the EU. Although Spain is the target of the complaint, the EU represents its interests at the WTO.

The filing with the WTO comes after the EU filed a complaint against Argentina's import licensing rules, following the Argentine seizure of oil company YPF, a subsidiary of Spain's Repsol, in April.

Argentina is giving Spain 60 days to show its rules are not unfair.

Argentina says the rules, introduced in April, would  completely block its biodiesel exports to Spain.

Starting in April, Spain required all imported biodiesel to be sourced from EU producers. The measure effectively blocked imports of the fuel from Argentina, which had dominated Spain's biodiesel market.

Argentina has previously called the rules "protectionist", warning they could cost it $1bn/year (€810m/year) in lost export earnings.

Argentina's Foreign Ministry said in a statement that the Spanish rules were an attempt to stop developing countries gaining more control of global value chains and evolving beyond their role as suppliers of raw materials.

Although Spain is the target of the complaint, the EU represents its interests at the WTO.

Soybean-based biodiesel imports from Argentina were valued at about $944m in 2011, according to Spain's Renewable Energy Producers Association (APPA).

The biodiesel market in Argentina has been largely stalled and the soy methyl ester (SME) bid and offer range was assessed at $1,062-1,082/tonne FOB (free on board) out of Rosario, Argentina for September.

“The trade and investment climate in Argentina is clearly getting worse," EU trade commissioner Karel De Gucht said 25 May. "This leaves me no choice but to challenge Argentina's protectionist import regime."

The EU's complaint against Argentina followed a decision by President Cristina Fernandez to seize control of Argentina's biggest oil firm, YPF, a subsidiary of Spain's Repsol, in April.

($1 = €0.81)

By: Leela Landress
+1 713 525 2653

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