BRUSSELS, July 27 (Reuters) - The European Union postponed a vote on Thursday designed to set its response to Argentina's successful World Trade Organization challenge to EU anti-dumping duties on biodiesel imports, sources familiar with the planned vote said.
The EU set duties in November 2013 of 8.8 percent to 20.5 percent for Indonesian producers and between 22 percent and 25.7 percent for Argentine producers, in both cases to apply for five years.
The WTO upheld Argentina's complaint in an appeal ruling in October 2016. The major biodiesel exporter had called the EU measures protectionist and said they cost the country almost $1.6 billion in lost sales per year.
The EU's case was based on Argentina's imposition of an export duty on the raw material, soybeans, which it argued allowed domestic producers to "dump" biodiesel at unfairly low prices.
The European Commission proposed lowering the duties, but a majority of representatives from EU members decided to postpone their vote on the issue. Their committee next meets on September 7.
Indonesia, which uses palm oil to make biodiesel, has a case pending at the WTO.
An EU court also annulled the duties last year, although the EU has appealed.
That court said the prices of the raw materials - palm oil or soybeans - were not regulated and that the EU had failed to establish that there was appreciable distortion of the prices as a result of the differential export tax system.
The exporters include the Argentine arms of Cargill , Bunge as well as Molinos Rio de la Plata and Indonesia's Ciliandra Perkasa.
Some trade lawyers say the ruling could have far wider implications and determine future EU trade relations with China.
The European Union, in trying not to treat China as a special case, has said it could use international benchmark prices to work out the costs of producers, for example of steel, to assess whether manufacturers there are dumping product or benefiting from unfair subsidies. (Reporting By Philip Blenkinsop, editing by Pritha Sarkar)