Indonesia Lodges WTO Challenge on EU Biodiesel Import Duties

Indonesia has filed a WTO complaint (DS480) against the EU’s anti-dumping duties on imported biodiesel.

The duties under scrutiny were confirmed by the EU last November, following a 15-month European Commission investigation into claims that Argentina and Indonesia were exporting their energy product to the 28-nation bloc at a price below its normal value, a practice known as “dumping.”

The investigation had been launched in July 2012 at the request of the European Biodiesel Board, a group of producers that represents over a quarter of the EU’s total biodiesel production.

The November 2013 duties were set at an average of 24.6 percent for Argentine producers and 18.9 percent for Indonesian ones, with the duties set to apply for five years. However, under the EU’s “lesser duty rule,” the actual duties imposed for these companies are between 22 and 25.7 percent for Argentina, and between 8.8 and 20.5 percent for Indonesia, in order to reflect the actual “injury margin.”

European officials stressed at the time that the duties were not meant to penalise the two countries, but rather to correct for the negative effects felt by domestic industry as a result of this alleged dumping.

Argentina and Indonesia together make up 90 percent of the EU’s biodiesel imports, as well as over 20 percent of the 28-nation bloc’s market share. The two countries are the world’s top suppliers of the fuel.

Sources familiar with the Indonesian complaint– which will be made publicly available in the coming days – say that Jakarta is also challenging certain provisions from a November 2009 Council Regulation regarding anti-dumping measures on imports from outside the EU.

Argentina complaint at panel stage

Argentina had already filed a complaint (DS473) at the global trade arbiter on the subject in January. The South American country had claimed that the duties were not only calculated unfairly, but also that they were imposed to protect an EU market that was not able to be competitive on its own.

A panel has already been established in the Argentina case, though sources say it has not yet been composed. Should Indonesia’s complaint also advance to the panel stage, the two disputes would likely be heard jointly.

Under WTO dispute settlement rules, Brussels and Jakarta must now conduct consultations for a minimum of 60 days, in an effort to reach a mutually acceptable result. Should these discussions prove unsuccessful, Indonesia may then ask that a WTO panel be established to hear the case.