Monday, August 20, 2012

WTO says Argentina formally filed complaint over Spanish biodiesel

Argentina has formally filed a complaint against the European Union, the World Trade Organization said today, challenging Spanish rules that the South American country argues discriminate against its biodiesel exports.

The dispute comes after the EU filed a complaint against Argentina's import licencing rules, and signals a worsening of trade relations since Argentina seized control of oil company YPF, a subsidiary of Spain's Repsol, in April.

By "requesting consultations" at the WTO, Argentina is giving Spain 60 days to show its rules are not unfair. If it remains dissatisfied after that period it can ask the WTO to set up an adjudication panel which could force Spain to change its law if it is found to violate the world trade body's rules.

Argentina says the rules, introduced in April, would completely block its biodiesel exports to Spain. It has previously called the rules "protectionist", warning they could cost it $1 billion per year in lost export earnings.

Spain's rules are part of the Renewable Energy Directive which is being implemented in all of the EU's 27 member states. It aims to increase biofuel use - in line with national targets - and to increase the security of energy supplies.

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.