Representatives from the government, the private sector and the technical community spoke at an important seminar on “Trade and the Environment”, organized by the Argentine Council on International Relations, on August 15, 2024. Its objective was to analyze the impact of the European Union (EU) green policies on Argentina's trade.
After the opening of the seminar by Carola Ramon (Vice President of CARI), Maria Esther Bondanza (Director of the CARI Committee on Environmental Studies and Human Development) referred to the events that occurred in the European Union that led to the European Green Deal, that is, a set of policies and measures that seek to “reduce greenhouse gas emissions and preserve Europe’s natural environment.”
Later, a very interesting intervention took place by Marta Gabrieloni (Director of Energy, Natural Resources and Technology of the Argentine Foreign Ministry), who referred to “EU environmental standards and the multilateral trading system”.
According to its approach, “the EU has established a roadmap with the Green Deal that does not involve commitments to climate change but rather a framework of changes in production and consumption. This impacts the interior of the European bloc and third exporting countries, with its implications for the multilateral trading system.”
In particular, the official referred to the regulations on deforestation-free products (in force since June 29, 2023; some of its provisions will apply from December 30, 2024) and border adjustment mechanisms (its definitive regime will apply from 2026, while the current transitional phase covers from 2023 to 2026).
El deforestation regulations - explained Gabrieloni - aims to ensure that all trade (imports from the EU) must be free of deforestation and forest degradation. This will mean that imports must be covered by a due diligence declaration; it applies to cocoa, coffee, cattle, rubber, wood, palm oil and soybeans.
The company also clarified the concepts of “deforestation and forest degradation” and considered this an element that “must be defined within the regulations.” It added that the “due diligence declaration” must include the collection of information (product description, quantity, country and region of production, geolocation of the plot, among others), risk assessment measures and risk reduction measures.
Additionally, Gabrieloni explained the regulations regarding the Carbon Border Adjustment Mechanism, which aims to levy a tax based on the implicit carbon emissions of certain goods imported into the EU. “The EU pursues the dual objective of decarbonising its industry and promoting clean industrial production in third countries in order to tackle climate change.” The sectors involved in this measure are: aluminium, cement, electricity, hydrogen, iron, steel and fertilisers.
"The regulation has already entered into force and has different phases for the implementation of the respective obligations, which exporters must comply with," he stressed.
For its part, Gustavo Idigoras, President of the Argentine Chamber of the Oil Industry (CIARA), developed the Business vision of the agro-industrial sector which contributes 7 out of 10 net dollars to Argentina. “The discussion of food security or food insecurity has lost ground. There is a new debate concerned about environmental and social security. This implies a new challenge,” he said.
Based on this concept, he stated that “the private sector has decided to work as a value chain, that is, all producers and exporters in the beef and soybean sector share the vision and digital traceability, using the publicly available information as a base (provided by SENASA, AFIP, etc.).”
At the same time, Idígoras made it clear that "the world (EU) is leading to the 'de-commoditization' of commodities. The only problem is that the demands require a very high cost."
In the face of changes in global trade, Augustin Tejeda Rodriguez, who serves as Undersecretary of Agri-Food Markets and International Insertion of the Secretariat of Bioeconomy, presented a strategy to position Argentina, taking advantage of its strengths and competitive advantages.
To this end, the Government is implementing policies. The first necessary condition is the stabilization of the economy. “There is a change of vision: exporting to grow.” In this sense, he said that “the goal is the elimination of distorting taxes and restrictions to facilitate trade, where the policy agenda for international insertion is marked by the opening of markets, the defense of the multilateral system and adaptation to new demands and requirements.”
As an example, Tejeda Rodríguez recalled the elimination of export duties on dairy and pork products, the reduction of export duties on animal protein chains, the reduction to 0% of import tariffs on fertilizers, and the reduction of more than 50% in tariffs on herbicides. In the multilateral trading system, Argentina has questioned the proposed EU regulations that are not compatible with the WTO. And the country - together with the members of the Southern Agricultural Council (CAS) - issued a Declaration requesting the European Commission to postpone the implementation of Regulation (EU) 2023/1115.
In addition, the Undersecretary stated that Argentina is taking another offensive approach through policies to mitigate the impact of new requirements and differentiation of value attributes. This is “a strategy worked on in coordination with the region and the private sector to take advantage of the opportunities of the international market and overcome the challenges,” he concluded.
The fruitful CARI seminar concluded with comments from Gloria Baez (CARI member), who made clear the need to continue “working together” in the face of the “challenge and opportunity” presented by the European Union’s green policies.
The subsequent debate was also very rich and enlightening. Among the many attendees at the hybrid event, we must highlight the virtual presence of Diplomat Jorge Riaboi and Agricultural Engineer Marcelo Regúnaga.
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