Argentina's government is negotiating a minimum price for its biodiesel exports to the United States that it hopes could replace punitive tariffs implemented last month, a foreign ministry official told Reuters on Thursday.

An agreement was being sought with the U.S. Commerce Department that would establish a floor for the value of Argentine biodiesel, saidHoracio Reyser, secretary of international economic relations at the foreign ministry.

Reyser said that an eventual agreement would need the approval of producers of the U.S. National Biodiesel Board.In August, Washington said it would impose steep duties - as much as 64.17 percent - on biodiesel imports from Argentina, arguing that they were unfairly subsidized and undercutting U.S. producers.

"I think there should be no problem (in reaching an agreement), but that will depend on the acceptance of the private sector," Reyser said, adding that if the negotiations did not succeed Argentina reserved the right to challenge the U.S. tariffs at the World Trade Organization (WTO).

Exporters said the tariffs resulted in the immediate stoppage of biodiesel exports to the United States, which imported 90 percent of Argentina's biodiesel in 2016.

The U.S. Department of Commerce did not immediately respond to request for comment. The U.S. Embassy in Argentina declined to comment.

Argentine biofuels chamber Carbio said it supported the negotiations for a minimum price.

The United States argues that the price of Argentine biodiesel is distorted as a result of the high taxes that the country applies to its exports of soybeans and soybean oil, which allow Argentine biodiesel producers to access the raw materials used to make biodiesel at a lower price.

Argentina successfully disputed tariffs imposed on its biodiesel by the European Union at the WTO. The EU this month lowered tariffs, but producers have threatened a new challenge.

Source: The Reuters