United States Requests WTO Panel in Case Against Argentina’s Widespread Use of Import Restrictions

UNITED STATES TRADE REPRESENTATIVE
Washington, D.C.
December 5, 2012  

United States Trade Representative Ron Kirk announced today that the United States has requested the World Trade Organization (WTO) to establish a dispute settlement panel regarding Argentina’s trade restrictive measures applied to all U.S. goods imported into Argentina.  These measures include the broad use of non-transparent and discretionary import licensing requirements that have the effect of unfairly restricting U.S. exports.  Argentina further disadvantages U.S. exports by requiring importers to agree to undertake burdensome trade balancing commitments in exchange for authorization to import goods.  The European Union, Mexico and Japan have also requested the establishment of panels on these matters.

“Argentina’s persistent use of protectionist measures broadly impacts all U.S. exporters of goods to Argentina,” said Ambassador Kirk. “It is vital to American workers that our exporters obtain fair and equal access to foreign markets, as required by our trade agreements.  Today’s step reflects the Obama Administration’s commitment to ensuring that our trading partners play by the rules so that our companies can compete on a level playing field.”

The United States requested formal consultations with Argentina on August 21, 2012.  The United States and Argentina held consultations on September 20-21, 2012, but the consultations did not resolve the dispute.

Background

Since 2008, Argentina has greatly expanded the list of products subject to non-automatic import licensing requirements.  Import licenses are required for approximately 600 eight-digit tariff lines in Argentina’s goods schedule.  The affected products include, but are not limited to, laptops, home appliances, air conditioners, tractors, machinery and tools, autos and auto parts, plastics, chemicals, tires, toys, footwear, textiles and apparel, luggage, bicycles and paper products.  In February 2012, Argentina adopted an additional licensing requirement that applies to all imports of goods into the country.

In conjunction with these licensing requirements, Argentina has adopted informal trade balancing requirements and other schemes, whereby companies seeking to obtain authorization to import products must agree to export goods of an equal or greater value, make investments in Argentina, lower prices of imported goods and/or refrain from repatriating profits.

Through these measures, Argentina appears to have acted inconsistently with its WTO obligations.  In particular the measures appear to violate Article XI:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994), which generally prohibits restrictions on imports of goods, including those made effective through import licenses.  The measures also appear to violate various provisions of the Agreement on Import Licensing Procedures which contains requirements related to the administrative procedures used to implement import licensing regimes.