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Reduction of export duties
Export duties on the soybean complex would fall to 18% in the fifth year after the agreement comes into force, with a further reduction of 1% per year until reaching a maximum of 14% in the tenth year.
This could free up to US$1.8 billion annually for the soybean chain by reducing the tax burden.
The agreement includes soybean meal and pellets, biodiesel, soybean oil, and soybeans, among others.
Elimination of import tariffs in the EU
The agreement represents improvements in the conditions of access of Argentine products to the common European market, with product-by-product tariff elimination schemes.
Products such as soybean meal (Argentina's main export, representing two-thirds of the volume exported to the EU), glycerin, and soybeans will maintain tariffs at 0%.
The EU levies higher tariffs on Argentine soybean oil, penalizing it at higher rates the more it is processed. Crude oil for industrial uses currently has the lowest tariff, and with the agreement it would go from 3.2% to 0% upon entry into force. Crude oil for other uses (excluding these industrial uses) is currently at 6.4%, while refined oil for industrial uses has a tariff of 5.1% and refined oil for other non-industrial uses has a tariff of 9.6%. The latter three will enter a phase-out process of five annual elimination periods from the date the agreement enters into force, until it reaches zero. The reductions will be of the same magnitude in all periods.
Finally, biodiesel receives the longest phase-out schedule. Its share will be reduced to zero in 11 years.
The reduction of export duties together with the tariff relief is expected to underpin Argentina's insertion in the European market. Better access conditions for the soybean complex may deepen Argentina's insertion in the strategic European common market.
January 17, 2025/ Rosario Stock Exchange/ Argentina.
www.bcr.com.ar
