EU Embraces WTO Ruling Against Argentina

Written by | Monday, August 25th, 2014

EU Trade Commissioner, Karel De Gucht, has recently welcomed a ruling of the World Trade Organization (WTO) against Argentina. Buenos Aires broke WTO trade rules by imposing a myriad of hurdles for the goods sold by the country’s trade partners, including the European Union, the United Sates, and Japan. In the ruling, Geneva-based WTO said that Argentina ought to “bring the inconsistent measures into conformity with its obligations”. Commissioner De Gucht welcomed the ruling made by an independent WTO panel commenting that it is one of the hallmarks of his term to stand up to protectionism. In his opinion, the Argentine case is an important lesson learned that protectionism is not acceptable. The Commissioner also called on Buenos Aires to act swiftly and comply with the ruling of the WTO and get rid of “these illegal measures”.  

EU28 officially complained about the illicit practices already two years ago together with Japan and the U.S. The ruling of 22 August comes up with a clear verdict: Argentina must not demand from foreign companies of local importers to accept various measures imposed upon them as a prerequisite for obtaining a permission to import goods into the country. Such practices include, for instance, limiting imports in value or in volume, investing in Argentina, reaching a certain level of local content in their domestic productions, keeping any profits made in Argentina in the country or offsetting the value of their imports with at least the equivalent of exports. The WTO also castigated the so-called Advanced Sworn Import Declaration, which requires companies to arrange an approval by the country’s authorities before importing goods.

The EU, Japan, and the U.S. filed an official complaint against these Argentine practices in May 2012. Because the initial talks did not yield any solution, the WTO set up a panel in January 2013 to deal with the complaint. All parties now have 60 days to appeal against the ruling if they wish. If there is no appeal or an eventual appeal is completed, Buenos Aires will have to comply with this ruling and change the problematic measures. The EU is Argentina’s second largest trade partner after Brazil accounting for about 16 percent of Argentina’s total volume of trade in 2013. The EU exports to Argentina include mainly manufactured goods, such as machinery and transport equipment (46 percent) and chemicals (18 percent) to Argentina based on 2013 data.

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