Ethanol Blog

Earlier this month the U.S. Department of Commerce gave Argentina's biodiesel industry a second look on a decision to penalize the country's biodiesel exports to the United States with antidumping and countervailing duties.

On Wednesday, three biodiesel trade groups asked President Donald Trump to intervene.

The DOC earlier in November granted a request from the Argentinian government to initiate a review of the decision. Such a review typically takes 270 days to complete. That means it may be August 2019 before a final determination is made.

The DOC imposed final countervailing duty rates earlier this year ranging from 71.45% to 72.28% and antidumping duty rates ranging from 60.44% to 86.41%.

In Argentina's request for a review, the country said it has "decreased significantly the export tax on soybeans and other commodities in the soybean value chain, and imposed a new biodiesel export tax," that warrants a review by U.S. officials.

U.S. officials set the higher rates to essentially level the playing field for U.S. producers to compete with producers that receive government subsidies in Argentina and Indonesia. Biodiesel imports from Argentina and Indonesia grew by 464% from 2014 to 2016, according to the National Biodiesel Board, essentially erasing 18.3 percentage points of market share from U.S. producers.

In 2016, imports of biodiesel from Argentina and Indonesia were valued at an estimated $1.2 billion and $268 million, respectively, according to the DOC.

In a letter to Trump on Wednesday, leaders of the National Biodiesel Board, American Soybean Association and the National Renderers Association, said the DOC's action was "unprecedented" and urged the president to make sure the department takes a comprehensive look at the issue.

"Given the importance of this new remedy for American energy and agriculture against unfair imports, it is a mystery that commerce would open an expedited path for Argentina to reduce or remove the tariffs and resume their illegal imports," the letter said.

"This political concession to the government of Argentina would once again distort U.S. markets and undercut crop prices that are only now regaining stability, following other trade disruptions."

The groups said after the commerce department levied anti-dumping duties against Argentina earlier this year, "U.S. biodiesel producers responded, increasing production by 18%, expanding capacity, and providing an important domestic market for soybean oil at a time when America's farmers are especially vulnerable."

The groups said in the letter that they opposed commerce's initiation of the changed circumstances review. Instead, they said the DOC has well-established administrative review procedures for revisiting antidumping and countervailing duty rates.

The groups urged Trump in the letter to ensure the DOC would conduct a review that is "no less rigorous and transparent than the administrative reviews that commerce typically conducts in other cases. To do anything less would strike a devastating blow to U.S. biodiesel producers and soybean farmers."

The NBB said in a news release earlier this month that when the DOC set the duties, "domestic biodiesel producers stepped up their efforts, put substantial under-utilized production capacity back to work, and boosted homegrown biodiesel production. In these circumstances, it is a complete mystery why commerce would open a path to a resumption of unfairly traded imports. This action jeopardizes our industry's progress and the American jobs our industry supports, and it places added pressure on our nation's farmers who are already suffering from low commodity prices and uncertain trade conditions."

Read the letter here: http://kce.informz.net/…

Todd Neeley can be reached at todd.neeley@dtn.com

Follow me on Twitter @toddneeleyDTN

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