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Trump Considers Allowing In Argentine Biodiesel, Beef

Argentina would have to release U.S. soybean traits sooner under the deal.

PORTO ALEGRE, Brazil -- President Trump has conditioned the entrance of Argentinian biodiesel and beef into the American market.

In May, the U.S. officially announced that it suspected antidumping of Argentinian biodiesel, and it would suspend those biodiesel imports until it ends an investigation.

Separately, Argentina’s beef had a prior allowance for imports set by the Obama administration, but it is now under revision by Trump’s White House.

In the meantime, as the Argentinian authorities pressure to get the biodiesel barrier lifted, U.S. officials have come up with a trade compromise.

The U.S. is willing to reopen its borders to Argentina’s biodiesel if that South American country approved seed developed by U.S. companies on a quicker time frame.

The deals that could theoretically hurt domestic sales for U.S. meat producers and impact the U.S. biodiesel market are seen as two very differrent cases, according to Don Roose, president of US Commodities Inc. (West Des Moines, Iowa).

The trade practice is seen as unfair on biodiesel imports, as the U.S. program was to be a program to use oil products – not end products – to meet the standards. Thus, the imports of U.S. vegoil will probably need to increase to satisfy the biodiesel mandate. The beef imports from Argentina are a completely different situation. For now, the U.S. believes the trade practices are fair, explains Roose in an email to Agriculture.com.

The conditions, confirmed by U.S. Trade Secretary Wilbur Ross, are the faster approvals of seed and changing the criteria for the releases. The result of those negotiations would be known after a meeting between Ross and Argentina Production Minister Francisco Cabrera.

The government of Argentina already sent a bill to Congress last year with a new seed law that would get faster releases and would enforce payments of royalties. Currently, Argentinian farmers are not used to paying royalties when they do personal use of the seeds they grew. The new law would impose fines.

Regarding the biodiesel dispute, Cargill and Louis Dreyfus, the same companies that have biofuel plants in Argentina and the U.S., have issued arguments in favor of the imports, testifying in the case at the U.S. Department of Commerce.

For both companies, the American biodiesel market grows because of the official mandate of incorporating biofuels and the imports are in line to follow U.S. legislation. They do not see any “unfair competition.”

Nearly 90% of Argentina's biodiesel exports go to the U.S. with a value of $ 1.2 billion in 2016. The sales had grown 150% in that year compared with 2015.

“The biodiesel industry in Argentina would be seriously hurt if the U.S. decides to cut biodiesel imports,” analyzed Pablo Adreani, a market expert from AgriPac, a consultancy in the city of Córdoba, for Agriculture.com. Even with the investigation, the imports continued this year with a volume of 504,000 metric tons. For Adreani, the imports would continue until a decision is made and would reach 608,840 tons by the end of June.

Argentinian beef was banned in the U.S. in 2001 because of a mad cow disease outbreak of that time.The average volume exported annually was 35,000 tons with a quota of 20,000 tons duty-free. The beef was then used for hamburgers, but experts now see a possibility of exporting higher value and niche products, like kosher.