WTO rules against EU in Argentina biodiesel case

A World Trade Organisation (WTO) panel ruled Tuesday (29 March) that the EU broke WTO rules by miscalculating anti-dumping tariffs it imposed on Argentinian biodiesel.

“The European Union acted inconsistently with Article 2.2.1.1 of the Anti-Dumping Agreement by failing to calculate the cost of production of the product under investigation on the basis of the records kept by the producers,” a dispute settlement panel of the intergovernmental body said in a report.

If the European Commission finds producers from a third country export their goods to the EU at prices below the cost of production, for example to increase market share, it can impose anti-dumping duties.

To make sure that anti-dumping measures are not used as protectionist measures, WTO members agreed an Anti-Dumping Agreement in 1994, to set the rules for when anti-dumping measures are acceptable.

In 2013, the European Commission imposed them on imports of biodiesel from Argentina, after a complaint from the European Biodiesel Board, a Brussels-based lobby group for European biodiesel producers.

But Argentina challenged the anti-dumping measures at the WTO, of which most of the world’s countries are a member or an observer. The EU, as well as its member states, are WTO member.

In 2014, the WTO’s dispute settlement body set up a panel to resolve the issue. In its report, published Tuesday, it did not agree to all of Argentina’s complaints.

However, it did note that the EU’s method to determine the price of the import duties, was not entirely accurate.

In its calculation, the EU had failed to take into account the costs as reported by the producers, the dispute settlement panel said.

“The Panel considered that the reason stated by the EU authorities for disregarding producers’ costs – i.e. because the prices for the input were artificially lower than international prices due to an alleged distortion – does not constitute a legally sufficient basis under Article 2.2.1.1 for concluding that the producers’ records do not reasonably reflect the costs associated with the production and sale of biodiesel.”

The report noted that the EU acted “inconsistently” with the WTO agreement on anti-dumping, and “recommend[ed] that the European Union bring its measures into conformity with its obligations under the Anti-Dumping Agreement”.

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