On 25 May the EU 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 measures - which negatively affect the EU's trade and investment - lifted.
The restrictive measures include Argentina's import licensing regime and notably the procedures to obtain an import licence as well as the obligation on companies to balance imports with exports. 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.
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:
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.
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.
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.
Trade facts and figures
Trade in goods (directly impacted by the restrictive measures and subject to this WTO case)
EU goods exports to Argentina 2011: €8.3 billion
EU goods imports from Argentina 2011: €10.7 billion
EU imports from Argentina primarily consist of agricultural products (food and live animals, 53%), chemicals (16%) and raw materials (14%), while the EU mainly exports manufactured goods such as machinery and transport equipment, such as cars and car parts (50%) and chemicals (20%) to Argentina.
Trade in commercial services
EU services exports to Argentina 2010: €3 billion
EU services imports from Argentina 2010: €2.1 billion
The EU has a surplus in services trade with Argentina of € 0.9 billion
Argentina's restrictive measures are extending to more and more sectors; in this regard, the EU is also closely monitoring the services sector and evaluating the extent to which it is affected.
Next steps in WTO dispute settlement procedures
The request for consultations formally initiates a dispute under the WTO dispute settlement understanding. Consultations give the EU and Argentina the opportunity to discuss the matter and to find a satisfactory solution without resorting to litigation.
If these consultations do not reach a satisfactory solution within 60 days, the EU may request that a WTO Panel be established to rule on the legality of Argentina's measures.