There’s likely to be an elephant in the room when U.S. Vice-President Mike Pence swings through Buenos Aires on a trade tour next month, because August is expected to mark the end of real access to the lucrative U.S. market for Argentine biodiesel.

So who would be surprised if the issue were not on the Argentines’ agenda when meeting with Pence? What the Argentines estimate is a $1 million market is set to dry up, at least until a WTO dumping case is resolved.

The U.S., by the way, is not the first government to complain about the 23% to 29% Argentine export subsidies for biodiesel, subsidies not enjoyed by soybeans themselves, soymeal or soy oil. The E.U. won its 2013 case against Argentine and Indonesian biodiesel dumping, though Argentina clawed back some reductions in the 24.6% E.U. tariff on appeal.

The U.S.’ filing with the WTO, urged by the National Biodiesel Board, also included Malaysia’s palm oil-base biodiesel.

The gist of it

The U.S. points out that Argentine government taxes its soybean oil processors 27% on their soy oil exports but biodiesel producers pay just 6.38%. Turning soy oil into biodiesel can save exporters as much as $130 per tonne, says revistaforexport.com, and that differential is the problem because all Argentine biodiesel is made from soy oil.

That’s a pretty good incentive to ship out biodiesel rather than cooking oil, wouldn’t you say?

The case is supposed to be resolved this coming January, and I, for one, think the U.S. is in a pretty good position to win, just as the E.U. did. And that would mean Uncle Sam could maintain raised tariffs on Argentine biodiesel for five years to compensate for Buenos Aires’ export subsidies, likely pricing the imported product out of the market.

Look at it this way: before the E.U. action, that trade bloc was Argentina’s number-one biodiesel customer. After that case and the new tariffs, the U.S. has become the South American country’s top biodiesel market. Raised U.S. tariffs are going to hurt.

For now, though, the Argentines will just have to be happy with the reported $268.2 million of biodiesel exports to the United State in the first four months of this year—the latest reporting period. That, and still try to be nice to Mr. Pence at those upcoming trade meetings.

The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.