US Challenges Argentina Trade Restrictions, Mexico Joins in

United States Trade Representative Ron Kirk announced on 21 August that the U.S. Government is requesting consultations with the Government of Argentina under the dispute settlement provisions of the World Trade Organization (WTO) concerning trade restrictive measures applied to all goods imported into Argentina. These measures include the broad use of non-transparent import licensing requirements that have the effect of unfairly restricting U.S. exports. In addition, Argentina further disadvantages U.S. exports by requiring importers to agree to export as much as they import or undertake other burdensome commitments in exchange for authorization to import goods.

“Argentina’s protectionist measures adversely affect a broad segment of U.S. industry, which exports billions of dollars in goods each year to Argentina. These exports support jobs and businesses here at home,” said Ambassador Kirk. The Obama Administration insists that all of our trading partners play by the rules and uphold their WTO obligations so that American workers receive the benefits negotiated in our agreements. The Interagency Trade Enforcement Center (ITEC) was established by the President earlier this year to strengthen further the United States’ ability to enforce trade agreements. The ITEC provided key support for this enforcement action and will continue to do so,” Ambassador Kirk added.

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.

Consultations are the first step in the WTO dispute settlement process. Under WTO rules, if the matter is not resolved through consultations within 60 days, the United States may request the establishment of a WTO dispute settlement panel. Japan also requested WTO consultations with Argentina on this matter today, and the European Union requested consultations in May of this year.