WTO Panel Finds Argentine Import Restrictions Violate Trade Rules
The World Trade Organization ruled against several Argentine trade-restrictive import measures on Aug. 22, in a move that U.S. and other officials described as a victory in preserving fundamental trade liberalization principles outlined in Article 11 of the General Agreement on Tariffs and Trade (GATT) (here). That article aims to prohibit and restrict trade-inhibiting import measures, such as quotas and licenses. The panel report determined Argentina violated WTO rules by demanding foreign companies export a certain amount of goods from the Argentina in order to get import authorization, limiting the volume of U.S. exports to the country and reducing sales prices of U.S. exports, requiring importers to invest in production facilities, and imposing local content requirement, among other measures, said a U.S. Trade Representative lawyer during an Aug. 22 teleconference with reporters.
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Parties involved in the dispute have 60 days to appeal the ruling, and if there are no appeals, the WTO adopts the panel report, said the lawyer. The ruling marks another Obama administration win in its campaign to remove trade-restrictive measures that U.S. companies face in exporting products abroad, said USTR Michael Froman during the teleconference. "If we’re unable to resolve matters through direct dialogue, as we tried to do with Argentina, we’ll take whatever actions are necessary to enforce the rules of the road,” said Froman. The WTO panel issued findings related to complaints by the U.S., European Union and Japan, but more than a dozen countries also acted as co-complainants in the case. EU officials lauded the panel report. “This case sends an important signal that protectionism is not acceptable,” said EU Trade Commissioner Karel De Gucht. “I call on Argentina to move quickly to comply with the ruling of the WTO panel and remove these illegal measures, and open the way for EU goods to compete fairly on the Argentinian market.”
The trade-restrictive measures remain in effect today, even as U.S. exports to Argentina have increased recently, said USTR lawyers during the conference call. USTR's lawyers did not specify precisely when the U.S. and other complainants will be authorized to apply retaliatory measures if Argentina fails or chooses not to bring its import regime into compliance with WTO rules. The WTO adjudicators did not rule on U.S. arguments that some of the measures violated Article 10 of the GATT because the panel was able to shoot those restrictions down as violations of Article 11, in exercise of “judicial economy.” Article 10 relates to customs valuation, duty and tax rates, and other laws, regulations and rulings (here). U.S. exports to Argentina spiked roughly three-fold in the last decade, USTR says (here).