Argentina Import Controls Come Under Fire at WTO

4 April 2012

Buenos Aires' trade policies fell under harsh scrutiny at the WTO last week, when the US, EU, Japan, and 11 other members openly criticised the South American country for its strict import controls.

Friday's joint statement, which was read out at a meeting of WTO Council on Trade in Goods by US Ambassador Michael Punke, decried Argentina's import policies as "unbefitting any WTO member, particularly a member of the G-20 who has committed to refrain from raising new barriers to trade and investment."

"In light of the shared goal of making every effort to sustain global economic growth, Argentina's measures, which clearly limit the growth-enhancing prospects for trade, are particularly troubling," the statement said.

The statement was also backed by Australia, the EU, Israel, Japan, Korea, Mexico, New Zealand, Norway, Panama, Switzerland, Chinese Taipei, Thailand, and Turkey.

The criticism referred specifically to the increased number of products that have been subject to non-automatic import licensing since 2008, along with a new policy implemented earlier this year that requires all Argentine companies to file affidavits and wait for government approval before they can import. (See Bridges Weekly, 18 January 2012)

The new policy, which was announced in January and entered into force on 1 February, has already drawn a cautious response from Argentina's partners in the South American customs union Mercosur; however, none of Argentina's Mercosur partners, which include Brazil, Paraguay, and Uruguay, signed onto the joint statement (See Bridges Weekly, 8 February 2012)

The February import policy is Buenos Aires' latest attempt to combat a falling trade surplus and protect both its stock of international reserves and local industry.  The country's overall trade balance dropped by 13 percent to US$10 billion during the first 11 months of 2011.

The products currently requiring an import license to enter Argentina include 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, among others, the group claimed.

"The lack of transparency in Argentina's implementation and administration of its import licensing regime creates profound uncertainty both for exporters and potential exporters to Argentina, as well as for investors in Argentina," the 14-member group argued.

Other countries that raised concerns at the meeting over Argentina's import controls included Chile, Colombia, Malaysia, Peru, Singapore, and Hong Kong, trade sources said. For its part, China commented that it hoped the measures were only temporary.

Argentina lambasts statement

"We received this news with profound surprise and discomfort," Cecilia Nahón, Argentina's Secretary for International Economic Relations, told the Goods Council in response to the criticism, in comments reported by Argentine newspaper La Nación.

"We reject this declaration, as it is not based on objective data," she added, arguing that the declaration could have "grave systemic consequences" for developing countries that might see themselves as threatened or otherwise unable to use legitimate trade policy instruments.

Shortly after the meeting, the Argentine Foreign Ministry issued a statement defending Buenos Aires' policies.

The foreign ministry promised that the Argentine government would "continue exercising the sovereign control of its trade policies," while staying in line with WTO rules. Buenos Aires would reject "any type of external interference," the ministry added.

"It's noteworthy that the initiative was launched by countries that have increased their exports to Argentina by 25 percent, surpassing their average level of exports to the rest of the world," the foreign ministry continued, noting that Argentina was the G-20 country that increased its imports the most this past year.

"It is also telling that none of the countries participating in the Goods Council session have presented a specific case in which Argentina has violated the rules of the WTO and that the signatories [of the statement] are basing their complaints on vague stories published by the local press," the foreign ministry argued.

Following the complaint at Goods Council meeting, several imports that had been awaiting government approval received a green light from Argentine customs authorities, according to Argentine newspaper Clarín.

"There are companies that had been blocked for some time, and Friday at the last minute their requests were authorised," Miguel Ponce of the Argentine Chamber of Importers told Clarín. "While there isn't any concrete information, we hope this means that the [approval] process will be accelerated."

ICTSD reporting; "Tras las quejas de 40 países ante la OMC, Aduana libera las importaciones," CLARÍN, 1 April 2012; "El Gobierno respondió ratificando su política," CLARÍN, 31 March 2012; "Queja de EE.UU. y Europa por las trabas a las importaciones," CLARÍN, 31 March 2012; "Dura queja de 40 países por las trabas a las importaciones," LA NACIÓN, 30 March 2012.

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