EU Slaps Duties On US Biodiesel

by Ulrika Lomas, Tax-News.com, Brussels

13 March 2009

Against the backdrop of rising global trade tensions and the threat of protectionism, the European Commission has issued a statement justifying its decision to impose countervailing duties on imports of US biodiesel.

"Anti-dumping and anti-subsidy measures are not about protectionism, they are about fighting unfair trade," EU Spokesperson for Trade Lutz Guellner argued in a statement on March 12.

"This decision was taken on the basis of clear evidence that unfair subsidisation and dumping of US biodiesel has taken place, and that this is harming otherwise competitive EU industry, with potentially dire long term effects," Guellner added.

The investigation into US biodiesel was launched by the EC on June 13, 2008 following complaints received from industry. According to the Commission, the investigations confirmed evidence provided by the European Biodiesel Board that US producers of biodiesel exported the fuel to the Community at dumped prices, received "countervailable" federal subsidies (primarily in the form of tax credits) and received state subsidies. The EC contends that these subsidized exports were "causing material injury to the biodiesel industry in the EU".

The level of the measures, which are applied together, is set at between EUR211.20 (USD271) and EUR237 per tonne for the anti-subsidy duties and between EUR23.60 and EUR208.20 per tonne for the anti-dumping measures.

The measures will come into effect from March 13 and will be in place for four months while the EC's investigation continues. At the end of this time, the Commission will make a final recommendation to EU member states on whether or not to impose so-called 'definitive' duties in this case, which if imposed would normally last for five years.

The Office of the US Trade Representative, which negotiates on behalf of the US government on trade issues, has yet to issue official comment on the European Commission's decision. However, the department remains in a state of transition as Congress deliberates on President Obama's nomination of former Dallas Mayor Ron Kirk to succeed Susan Schwab as the US Trade Representative. The office is currently headed up by Deputy USTR, Peter Allgeier.

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