U.S. to launch probe into Argentina, Indonesia biodiesel imports

By Eric Walsh and Fransiska Nangoy

WASHINGTON/JAKARTA (Reuters) - The United States said on Thursday it would start an investigation into imports of biodiesel from Indonesia and Argentina for possible dumping and subsidisation.

The U.S. International Trade Commission is scheduled to make a preliminary decision by May 8 on whether such imports hurt U.S. producers, the U.S. commerce department said in a statement.

The step, just days ahead of a visit to Indonesia by U.S. Vice President Mike Pence, comes after some U.S. biodiesel producers last month asked their government to impose anti-dumping duties on imports of biodiesel from Argentina and Indonesia that they say have flooded the U.S. market and violated trade agreements.

"The Indonesian government, especially the trade ministry, will be cooperative in the investigation by providing arguments and supportive data and documents to show that there was no dumping or subsidies," Oke Nurwan, Indonesia's director general for foreign trade, told Reuters.

Indonesia's biodiesel group said it had asked its government to bring up the issue during Pence's visit to Jakarta next week.

Argentine biodiesel exporters and manufacturers have also rebuffed the accusation.

"Now they have to prove everything that they are claiming, which is a sham. It's a protectionist measure," said Claudio Molina, head of Argentina's Biofuels Association, a trade group known by its Spanish acronym AABH.

"We hope that the United States offers a fair process, which will show that there is no dumping or subsidies of Argentine biodiesel," he added.

Argentina is the world's No. 1 exporter of soyoil, used to make biodiesel. Indonesia is the world's top producer of palm oil, which can also be used to churn out the fuel. Both countries rely heavily on resource exports.

Total U.S. biodiesel imports rose to a record 916 million gallons (3.5 billion liters) in 2016, according to U.S. government data published in March. Argentina represented about two-thirds of U.S. foreign imports, followed by Indonesia and Canada.

Indonesia is also facing pressure in Europe, with its government filing a WTO complain against European Union anti-dumping duties on Indonesian biodiesel.

Meanwhile, the European parliament voted last week to call on the EU to phase out use of palm oil in biodiesel by 2020. Indonesia, along with Malaysia, plans to send a joint mission to Europe next month to prevent the adoption of that resolution.

(Reporting by Eric Walsh in Washington and Fransiska Nangoy in Jakarta, additional reporting by Maxilmiliano Rizzi in Buenos Aires; Writing by Kanupriya Kapoor; Editing by Eric Beech, Joseph Radford and Bernard Orr)