BUENOS AIRES, July 15 (UPI) -- Argentina slapped new anti-dumping tariffs on neighbor and Mercosur partner Brazil as the government faced Chinese retaliation on similar measures to curb cheap imports from China.
The anti-dumping tariff targeted Brazilian gas compressions and would remain in force for six months, officials said, giving a new twist to talks on forging a trade pact between the European Union and Mercosur trade pact partners that include Argentina and Brazil.
Brazil has been leading the talks to give Mercosur a share of the European agriculture market.
An official notification said Buenos Aires would apply a 38 percent levy on the freight-on-board value of the compressors to discourage Brazil from exporting the item while Argentina sought to protect comparable indigenous product.
Ministry of Industry officials said the tariff decision was triggered by reports the Brazilian imports are harming Argentina's manufacturers of the compressors. Instances cited by officials showed the Brazilian compressors captured 53 percent of the market, while domestic producers were left with the remaining 37 percent of the market share.
Officials said they had sufficient "evidence" to determine the existence of a dumping margin in the Brazilian exports, citing reports Brazilian prices were heavily discounted to wean customers away from the local manufactures.
Earlier this year Argentina came under fire from both China and the EU for introducing restrictive practices, some so "unofficial" and secretive that their existence was denied by the government.
EU officials countered they had evidence suggesting restrictive practices were in force against European exports and China reacted to the curbs by hitting back on Argentina's major earner -- soybean oil exports. China suspended soybean oil imports from Argentina, worth $2 billion a year, and turned instead to the United States and other suppliers.
The dispute clouded President Cristina Fernandez de Kirchner's achievements during a state visit to China that ends Thursday. Although Fernandez and Chinese President Hu Jintao signed numerous agreements on closer collaboration, an agreement that could restore soybean oil exports to China wasn't among them.
The dispute over compressors between the Mercosur partners compounds outstanding issues in ongoing negotiations between the EU and the Latin American trade pact.
Latin America's friends, led by Spain, pushed for a new deal, despite bitter opposition from European farmers, that could offer cash-strapped EU lucrative new markets in the region, in return for opening the EU to agricultural produce from South America.
However, so incensed were the European negotiators over Argentine curbs they complained to the World Trade Organization. Analysts said Mercosur, which groups countries with a combined consumer market of more than 700 million people, was at risk of losing out in the tussles.
Brazil has already blocked Argentine imports in retaliation against previous Argentine curbs on its exports.