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NEWS UPDATES Asean Affairs     March 27, 2017  





New biodiesel dumping claim weighs on RI’s shoulders

As though adding insult to injury, American biodiesel producers have followed the European Union’s (EU) lead in accusing Indonesia of dumping practices, less than a week before the latter’s first meeting to clear its name with the WTO.

The United States-based commercial trade association National Biodiesel Board (NBB), along with dozens of its fellow biodiesel producers, filed a petition on Thursday with the US Department of Commerce and the US International Trade Commission to impose anti-dumping and countervailing duties on imports of biodiesel from Argentina and Indonesia.

The group, under the name the NBB Fair Trade Coalition, says imported biodiesel from Argentina and Indonesia has flooded the US market and violated trade agreements, something that has been firmly denied by Indonesian biodiesel players.

“This might just be a protectionist move by US biodiesel producers. They want to protect their domestic industry by accusing us of dumping practices. This is unfair,” Indonesia’s Biofuel Producers Association (Aprobi) chairman Paulus Tjakrawan said on Friday.

Previously, NBB chief executive officer Donnell Rehagen said in a statement reported by Reuters that the trade group’s move was “to create a level playing field to give markets, consumers and retailers access to the benefits of true and fair competition”.

However, Paulus said it was no coincidence that such an allegation had arisen less than a week before Indonesia’s meeting with the WTO. Indonesia is preparing to file a complaint against EU anti-dumping duties on its biodiesel exports to the WTO in Geneva on March 29 to 30.

In November 2013, the EU set duties from 8.8 percent to 20.5 percent for Indonesian producers and between 22 percent and 25.7 percent for Argentine producers, to apply for five years in both cases.

“Considering the NBB’s timing to petition the US government, we feel this is a way to support the EU in the context of our meeting with the WTO,” Paulus went on to say.

Indonesia sold US$982.52 million worth of biodiesel to the 28 member bloc in 2012, a year before the duties were erected. Sales dropped by about half in 2013 after the tariffs were imposed.

Accumulative exports plunged by 96.5 percent to $14.7 million in 2015 before climbing to $29.8 million in 2016, data from the Trade Ministry show. Meanwhile, Indonesia’s annual biodiesel exports to the US surged by 117 percent in the 2014-2016 period to 350,176 tons of biodiesel a year, or 93.75 percent of Indonesia’s total biodiesel exports last year.

“If such a petition is approved by the US government, we will certainly see a significant drop in our biodiesel exports,” Indonesian Vegetable Oil Refiners Association (GIMNI) executive director Sahat Sinaga said.

“It’s going to be impossible for us to reach the target of exporting 500,000 tons of biodiesel in 2017.”

Therefore, Aprobi plans to gather together Indonesia’s biodiesel producers and exporters this Monday to coordinate their moves and support the government’s plan to annul the NBB Fair Trade Coalition’s petition.

One of the issues raised in the trade group’s petition is the existence of the Indonesian Oil Palm Estate Fund (BPDP-KS). The trade group also mentions the Indonesian government’s efforts to impose a 15 percent biodiesel blending policy in 2015 and a 20 percent blending policy last year.

Since mid-2015, palm oil exporters have been levied $50 per ton for crude palm oil (CPO) shipments and $30 for processed palm oil products when CPO prices stand below $750 a ton in a bid to help pay for biodiesel subsidies, replanting, research and development for oil palm farmers.

Nonetheless, Rapolo Hutabarat, the corporate affairs manager at Musim Mas Group, one of Indonesia’s largest integrated palm oil companies and a member of Aprobi, said the US had also been offering various subsidies to its farmers.

Rapolo mentioned the subsidies for corn farmers, including direct payments, counter cyclical payments and marketing assistance loans from the US government to help such farmers develop their businesses.

“So actually, they are also doing the same thing as we are by giving subsidies to farmers,” he said.


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