Argentina's garlic faces unfair competition from China in Brazil
This time it faces a couple of headaches because of the unfair competition from China, which is trying to avoid an anti-dumping duty in the neighboring country by triangulating its merchandise through Uruguay without declaring it, and by sending the garlic without stating its origin or without a brand.
In the last week, the regional chamber that groups the exporters from Mendoza, Asocamen, collected complaints from its most active garlic marketers in the neighboring country and transferred it to the provincial government.
The Executive, in turn, opened two channels to process actions that allow quick action with the main Mercosur partner, both through the embassy of that country and at the Chancellery and Ministry of Agribusiness.
Currently, the Chinese garlic must pay U.S. $ 7.80 per box of 10 kilos to enter Brazil, so the final price for said box would reach U.S. $21.30 including the AEC (Common External Tariff) agreed by the countries of the Mercosur for products that aren't produced by them.
This shrinks the price difference with the product exported by Mendoza. However, the maneuvers made by Chinese exporters to avoid paying the tax widen that difference again.
Currently, Brazil imports some 16 million boxes per year. Of that amount, Argentina and China contribute 45% each, and Spain contributes the remaining 10%.
The difference are the prices: until July, according to data from Brazil, China placed its garlic at US $ 19.45 per box and the Spanish at US $19.32, while the Argentine did not manage to sell it at less than US $ 25.74.
According to the manager of Asocam, Guillermo San Martin, "30% of the total Chinese imports enter without paying the anti-dumping fee. Of that volume, 8 out of 10 boxes do not pay duty thanks to the injunctions and because they can't be identified, and the remaining 20% are smuggled through Uruguay."
While Mendoza packers adjust to norms set by the Brazilian importers of the Association of Garlic Producers of Brazil (Anapa), Asocam has identified at least 3 anti-dumping modalities promoted by China in recent weeks, which could even be reported to the WTO.
Since this week, the Federal Revenue of Brazil, equivalent to Argentina's AFIP, is already in the know. ■