Argentina and China: Causes of the Dispute Concerning the Soybean Oil

Abstract

This article explores the causes of the Chinese government’s decision to ban imports of crude soybean oil from Argentina and its impact on the external sector of this South American country. This is considered a paratariff measure, as a retaliatory action to the antidumping policy and import controls imposed by the Argentine government on Chinese products, with the Chinese purpose to promote its crushing industry, employment and value-added to product. Measure taken under the misperception of Argentina as “winner”, produced by the Chinese official statistics on trade, and strained bilateral environment, due to the international arrest warrant issued by an Argentine judge on Jiang Ze Min and Luo Gang for human rights violation in China. This trade dispute has changed China’s image in the Argentine government and public opinion, but has not generated the expected impact on its agro-export model. In this regard, although the asymmetries are favorable to China, when the analysis goes from the global level to the micro-study of a specific international regime, such as the global market of soybeans and its byproducts, Argentina reversed the situation of power through trade counter-measures, being sensitive to the disruption of interdependence. Instead, China appears to be vulnerable to modify the external dependence of food, because of lack of natural conditions (land and water) that prevent from expanding the agricultural frontier.