June 16, 2004

Brazil May Propose Joint Exporter WTO Case On China Soy Ban

Brazilian soy exporters have contacted their Argentine and U.S. counterparts about the possibility of contesting the legality of China's ban on its soybean imports at the World Trade Organization, an industry head said Tuesday.

"We are studying along with the U.S. and Argentina a way of questioning China's position in international territory, the WTO," said Carlo Lovatelli, president of the Brazilian Vegetable Oil Industries Association, or Abiove, speaking in the country's capital of Brasilia.

China suspended Brazilian soybean imports from 15 companies on Monday after finding fungicide-contaminated seeds, taking the number of companies on the blacklist to 23 and effectively stopping shipments to Brazil's main buyer.

Last year Brazil exported 6.1 million metric tons of soybeans to China.

Brazil, Argentina and U.S. are the world's leading soy producers and shippers.

The Brazilian soy exporters allege the ban breaks international trade rules as they are arbitrary, punishing Brazil but not other countries.

Lovatelli said the bans were obviously motivated by a Chinese attempt to stem the flow of imports and renegotiate contracts, which were closed when international prices were at much higher levels.

Lovatelli said U.S. and Argentine industry officials were sympathetic to the idea as they are aware that China may ban their imports next.