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EU challenges Argentina’s import restrictions

EU challenges Argentina’s import restrictions

ARGENTINA

The EU today launched a challenge to Argentina’s import restrictions at the World Trade Organisation in Geneva. Under WTO dispute settlement procedures, the EU is first requesting consultations with Argentina in a bid to have these protectionist measures – which include Argentina’s import licensing regime as well as the obligation on companies to balance imports with exports – lifted.  This is a first step in the WTO dispute settlement system. If no solution is found within 60 days, then the EU can request a WTO Panel to be established to rule on the legality of Argentina’s actions.
Exports of goods to Argentina amounted to € 8.3 billion in 2011 and imports of goods from Argentina to the EU were worth € 10.7 billion. The restrictions which were in place in 2011 affected about € 500 million of EU exports to Argentina.

“Argentina’s import restrictions violate international trade rules and must be removed. These measures are causing very real damage to EU companies – hurting jobs and our economy as a whole”, said EU Trade Commissioner Karel De Gucht. “The trade and investment climate in Argentina is clearly getting worse. This leaves me no choice but to challenge Argentina’s protectionist import regime and ensure that the rules for free and fair trade are upheld.”

The EU has clear concerns in respect of Argentina’s import measures which run contrary to WTO rules for a transparent, free and fair trading system. These include:

  1. Argentina subjects the import of all goods to a pre-registration and pre-approval regime, called the “Declaración Jurada Anticipada de Importación”. Since February 2012, this pre-approval requirement is applied to all imports.
  2. Hundreds of goods also need an import license. On the basis of these procedures, imports are systematically delayed or refused on non-transparent grounds. In early 2011, more than 600 product types were affected by this licence regime, such as electrical machinery, auto parts and chemical products.
  3. Argentina requires importers to balance imports with exports, or to increase the local content of the products they manufacture in Argentina, or not to transfer revenues abroad. This practice is systematic, non-written and non –transparent. Acceptance by importers to undertake this practice appears to be a condition for obtaining the license allowing imports of their goods. These measures delay or block goods at the border and inflict major losses to industry in the EU and worldwide.

The restrictions which were in place in 2011 affected about €500 million of exports in the same year. As of 2012, the extension of the measures to all products raised the magnitude of the potentially affected trade to all EU exports to Argentina, which amounted to €8.3 billion in 2011. The long-term impact of a negative trade and investment climate is significantly higher.
The EU, together with other major world trading partners, has raised the issue with Argentina repeatedly over the past years without success.

(The above is an excerpt from the report – for the full report go here)

 

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