Argentina has filed a complaint against the European Union at the World Trade Organization to challenge Spanish rules that the South American country argues discriminate against its biodiesel exports, the WTO said on Monday.
The dispute comes after the EU filed a complaint against Argentina’s import licensing rules, and underscores a deterioration in 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 fair. If it remains dissatisfied after that period it can ask the WTO to set up an adjudication panel which could force Spain to bring any discriminatory laws into line with the world trade body’s rules.
Argentina says the trade restriction, 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.
An Argentine trade official told Reuters in June that the biodiesel trade was equivalent to 20-30 percent of exports to Spain. He said Indonesia, another major biodiesel producer, was also opposed to the Spanish rules.