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What is behind the European trade measures against Argentine biodiesel?

Publication date: 
Mar 2015
Ivana Doporto Miguez y María Victoria Lottici
The biofuel sector in Argentina, specifically the biodiesel sector, has become one of the most affected by an intensified use of trade measures with a clear protectionist character by the European Union. The antidumping rights imposed by the UE against Argentine biodiesel in 2013 brought about almost a 90% loss of Argentine exports of biodiesel, amounting to US$ 1.9 billion in 2011. Nevertheless, the measures taken up by the European Commission are not exclusively intended to act against the Argentine biodiesel but they respond to an overall protection strategy favouring the European biofuel industry against third party competition, both from developed and developing countries. In turn, the environmental standards –some of them established and others under discussion– of the EU Renewable Energies Directive and the Fuel Quality Directive have become, in practice, non-tariff barriers since they increase the costs of Argentine exports to that market destination. Moreover, to the default values for soy biodiesel set forth in the European legislation adds the controversial accounting of emissions derived from indirect land use change (ILUC) and the limits to first generation biodiesel consumption, which uses raw materials derived from food in its elaboration. The underlying risk of the application of these environmental standards –which pretend to seek a legitimate environmental goal– is that they are set up as disguised barriers to trade with a clear protectionist nature, since these measures attempt to strongly restrict trade and change the competitive relationship between substitute products, at the same time as they have weak connections with the environmental goal declared.
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