April 7, 2006

 

Argentina expresses concern over new EU corn import rules

 

 

Argentina's government is very concerned about a recent move by the European Union to restrict Argentine corn imports and make it easier to import corn from competing Eastern European countries.

 

Argentina sells about 2.5 million tonnes of corn to the EU annually, mainly to Portugal and Spain. Shipments to these countries account for about 25 percent of Argentina's total corn exports.

 

However, the EU decided last year to modify its rules to allow for lower tariffs on corn imported from Eastern European countries like Bulgaria, Hungary, Romania and Serbia and Montenegro. The new rules went into effect two weeks ago.

 

As a result, the EU froze at 700,000 tonnes the amount of corn that EU members can import from non-European countries, according to Gustavo Idigoras, Argentina's agricultural attache in Brussels.

 

"This is a very serious problem," Idigoras said on the sidelines of a grain and oilseed conference in Buenos Aires late Wednesday. "We've protested this with the EU and we will continue to do so, very strongly."

 

Idigoras said Argentine Foreign Minister Jorge Taiana raised the issue last week in a meeting here with EU Trade Commissioner Peter Mandelson. Idigoras expects the EU to answer Argentina's concerns within the next 15 days.

 

"We're waiting for an answer," he said. "This is a very important market for us."

 

If the EU does not change its position, Argentine corn exports to Spain and Portugal could be reduced to nearly nothing in the years ahead, Idigoras said. After all, Eastern European producers can ship corn to the EU at lower prices than can Argentines, who have to ship from South America. Higher tariffs, and quotas on Argentine corn, would easily make Argentine corn exports unreasonably expensive for European buyers.

 

The rule change was so abrupt that it forced an Argentine shipment of corn to the EU to turn around in the middle of the ocean and be diverted to another destination, Idigoras said.

 

Argentina is the world's second largest corn exporter behind the US.