Is Argentina Penny-wise and Pound Foolish with Its Trade Policies?
Following the spectacular festivities celebrating Argentina’s bicentennial on May 25, the government of President Cristina Fernández de Kirchner returned to earth to tackle urgent matters that it had postponed for that celebration. One key issue was a conflict that began in April when China suspended purchases of Argentina soy oil. At present, 77% of Chinese soy oil imports come from Argentina, which has 55% of the global market.Last week, an Argentine trade mission traveled to China but did not get the hoped-for results. The Chinese government declined to renew purchases of Argentine soy oil until Argentine soy oil exporters comply with certain Chinese health regulations. At the heart of the conflict is China’s so-called “rule for specific vegetable oils.” This regulation strictly defines standards for the allowable level of residual solvents. According to China’s Ministry of Commerce, Argentine imports contained 300 parts per million (ppm) of residuals of hexane, a chemical used in t
