By DOUG SCHMITZ

Iowa Correspondent

WASHINGTON, D.C. — The U.S. International Trade Commission (ITC) on Dec. 5 voted 4-0 in favor of the National Biodiesel Board (NBB) Fair Trade Coalition’s position that the industry has suffered injury due to unfairly subsidized imports of biodiesel from Argentina and Indonesia.

Donnell Rehagen, NBB CEO, said this affirmative vote on injury, coupled with October’s final countervailing duties (CVD) determination by the U.S. Department of Commerce (DOC), paves the way for final CVD orders by the end of December.

“This unanimous vote is important progress to addressing the harm by this unfair trade on biodiesel,” he said. “U.S. energy policy sought to create a level playing field for domestic and imported biodiesel, but foreign government subsidies have made it nearly impossible for U.S. producers to compete.

“We are gratified that countervailing duty orders will contribute to leveling the playing field such that the domestic industry has the opportunity to produce at the levels it knows it can.”

In November, U.S. producers testified on the volume and price effects of biodiesel imports from Argentina and Indonesia, and the related impacts to the industry, at a hearing before ITC commissioners. According to the NBB, if the DOC makes an affirmative final determination on dumping, the ITC will still need to vote early next year on the question of dumping.

In March, the NBB Fair Trade Coalition filed petitions with the DOC and ITC to address a flood of subsidized and dumped imports from Argentina and Indonesia that has resulted in market share losses and depressed prices for domestic producers.

From 2014-16, the NBB stated U.S. biodiesel imports from Argentina and Indonesia surged by 464 percent, taking 18.3 percentage points of market share from U.S. manufacturers. Imports of biodiesel from Argentina again jumped 144.5 percent following the filing of the petitions.

NBB officials said these surging, low-priced imports prevented producers from earning adequate returns on their substantial investments and caused U.S. producers to pull back on further investments to serve a growing market.

Under the CVD law, U.S. businesses and workers have a transparent, quasi-judicial and internationally-accepted mechanism to seek relief from the market-distorting effects caused by unfair subsidization of imports into the United States, establishing an opportunity to compete on a level playing field.

For the purpose of CVD investigations, a countervailable subsidy is financial assistance from a foreign government that benefits the production of goods from foreign companies and is limited to specific enterprises or industries, or is contingent either upon export performance or upon the use of domestic goods over imported goods, according to the ITC.

In the Argentina CVD investigation, the DOC has calculated subsidy rates of 72.28 percent for Louis Dreyfus Co. (LDC) Argentina S.A. and 71.45 percent for Vicentin S.A.I.C., one of Argentina’s largest agricultural exporters.

The subsidy rates for both respondents were determined partially on the basis of adverse facts available due to the failure to provide certain information as requested by the DOC, which has determined a rate of 71.87 percent for all other Argentinean producers and exporters.

In the Indonesia CVD investigation, the DOC has calculated subsidy rates of 34.45 percent for Wilmar International, Ltd. and 64.73 percent for P.T. Musim Mas.  The department determined a rate of 38.75 percent for all other Indonesian producers and exports.

On Nov. 9, the coalition won a preliminary antidumping determination from the DOC, which found that biodiesel imports from Argentina and Indonesia are sold into the United States below fair value.

“The unfair government subsidization of products is something the Department takes very seriously,” said Commerce Secretary Wilbur Ross. “While the United States is committed to free, fair and reciprocal trade with all countries, the Trump administration will stand up for American workers and companies being unfairly harmed.”

Currently, the U.S. biodiesel industry supports roughly 64,000 jobs nationwide.

In addition, the DOC affirmed its earlier decision that these countries unfairly subsidize biodiesel, last month. As a result, importers of Argentinean and Indonesian biodiesel will be required to pay two sets of cash deposits on biodiesel imported from those countries. If the ITC makes an affirmative injury determination, the DOC will instruct U.S. Customs and Border Protection (CBP) to continue the collection of cash deposits equal to the applicable subsidy rates.

Since the department also found critical circumstances no longer exist in the Argentina investigation with respect to Vicentin S.A.I.C., and LDC Argentina S.A., it will instruct CBP to terminate the retroactive suspension of liquidation ordered at the preliminary determination, and will release any cash deposits that were required during that period.

“U.S. agriculture and its farmers are strong supporters of rules-based trade,” said Dave Miller, Iowa Farm Bureau Federation director of research and commodity service. “It is one reason farmers have been such vocal advocates of multilateral trade agreements such as the WTO (World Trade Organization), NAFTA, et cetera.”

However, he said an important part of these agreements is having a mechanism to address trade disputes and trade issues such as illegal dumping of commodities in international trade. “This is not a complaint against biodiesel imports. It is a complaint against illegal activities under internationally agreed-to rules, which allow remedies against activities which violate those rules.

“Farmers want trade – imports and exports – but farmers want that trade to be in conformity with the rules of trade,” he added.