EU files WTO complaint against Argentina

In the wake of last month’s spat over Argentina’s expropriation of Spanish energy holdings comes yet another economic dispute between Argentina and the EU.

On 25 May 2012, the EU filed a WTO complaint (DS438 Argentina–Measures Affecting the Importation of Goods) against Argentina regarding its import licensing rules. Argentina requires importers to obtain certain licenses before their goods can be put into circulation on the Argentinian market. The EU alleges that approval of these licenses “is being systematically delayed or refused by the Argentinian authorities on non-transparent grounds.”

Additionally, the EU alleges that Argentina “often requires” importers to agree to limit imports, balance them with exports, increase their local investments, control prices, not transfer benefits abroad, and/or meet local content requirements. The Argentinian authorities refuse to issue import licenses if these conditions are not met.

In the EU’s view, these measures are trade restrictive and discriminate between domestic and foreign goods, and are therefore in violation of the GATT, the Agreement on Trade-Related Investment Measures (TRIMs Agreement), the Agreement on Import Licensing Procedures (ILP Agreement), the Agreement on Agriculture, and the Safeguards Agreement.

The filing of this complaint initiates a 60 day consultation period, after which the EU may request a Panel ruling on the disputed measures.

While the complaint is not directly related to the Spain/Argentina expropriation row, the WTO dispute follows on growing charges by EU businesses and officials (not to mention those of Argentina’s other trading partners) that the trade and investment climate in Argentina is declining. According to EU Trade Commissioner Karel De Gucht:

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. 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 exported €8.3 billion worth of goods to Argentina last year, primarily in the form of manufactured goods such as machinery, transport equipment, and chemicals. Overall, Argentina ranks as the EU’s 32nd major trade partner.

Whether the EU’s WTO complaint or its ongoing diplomatic efforts will be enough to pressure Argentina to alter its economic policies remains to be seen.