Chile dairy sector seeks protection from imports

Chilean dairy farmers and the country's main agriculture organisation, the National Agriculture Association (SNA), are demanding safeguards against dairy imports from Uruguay and Argentina, arguing unfair competition.

The SNA requested that a 31.5 percent tariff be imposed on dairy imports from Uruguay and Argentina because the dairy sectors there are heavily subsidised.

Trade relations between Argentina, Uruguay and Chile are ruled by MERCOSUR, of which Chile is only an associate member, not a full member like the other two. Chile currently imposes a 0.2 percent tariff on all produce imported from MERCOSUR.

The Chilean dairy industry warned that about 13,000 jobs could be threatened if no measures are taken to restrict imports and protect domestic production, which will bring unemployment in the sector to 22 percent.

The safeguard should be imposed before September 1 when the spring-summer season begins in the austral hemisphere, said Dieter Konow, president of the Chilean Federation of Dairy Producers, Fedeleche.

Chilean farmers said Argentine farmers receive subsidies of 0.04 US cents per litre of milk monthly, which enables them to sell their produce cheaper than in Chile where no such support exists.