Argentina insists on key river tolls amid criticism from neighbors

By Daniela Desantis

ASUNCION (Reuters) -Argentina must collect tolls on a crucial waterway, the country's energy chief said on Monday after meeting with Paraguayan officials, as a multi-nation conflict over fees for ships carrying grains and other exports intensifies.

Paraguay, Brazil, Bolivia and Uruguay are urging Argentina to stop applying the tolls, arguing they restrict navigation on South America's mighty Paraguay-Parana rivers.

"Argentina's view is that we need to charge this toll," Energy Secretary Flavia Royon told reporters after returning from talks in Paraguay with the country's foreign minister.

But she appeared to suggest there was room for negotiation.

"The conversation recognized that its necessary to charge a toll for functionality, but to also have a mechanism for dialogue over its amount and how it's implemented," she added.

Brazil, Paraguay, Bolivia and Uruguay issued a joint statement on Sunday blasting as "unilateral and arbitrary" Argentina's decision to seize a barge from Mercurio Group, a Paraguayan shipping company, to collect a toll, adding its actions could affect supply and prices.

The barge was released on Monday after paying the toll, a company spokesperson told local radio.

Argentine authorities say tolls on the Paraguay-Parana waterway, a key transport route to the sea for inland areas of Paraguay, Bolivia and southern Brazil, are needed to maintain the 3,400 km (2,110 mile) channel that ends at Buenos Aires.

Argentina uses the Parana to ship its own massive farm exports, especially processed soybeans, corn and wheat. But the country recently saw its main cash-crops battered by drought, and has imported over 7 million metric tons of soybeans in the first seven months of this year, around half from Paraguay and most of the rest from Brazil, according to official data.

Paraguay recently announced it will go to the Mercosur trade bloc Permanent Review Court to resolve the dispute.

(Reporting by Daniela Desantis in Asuncion; Additional reporting by Maximilian Heath and Lucila Sigal in Buenos Aires; Writing by Valentine Hilaire; editing by Timothy Gardner and Stephen Coates)