Argentine Import Ban Complicates EU, Mercosur Talks

7 July 2010

Allegations of an Argentine import ban against EU food products are continuing to generate tension between the European Union and Mercosur, South America's largest trade bloc. The two parties met last week in Buenos Aires to discuss a potential EU-Mercosur trade pact, despite the opposition of some EU member states.

Argentina is currently under fire for allegedly imposing an informal ban on food imports - a subject that raised similar tensions between the South American country and its largest trading partner, Brazil, last month.

While there is no formal documentation of the ban, João Aguiar Machado - Deputy Director General for Trade at the European Commission - insisted at a 2 July press conference that the embargo does exist.

Argentine officials, however, deny that a ban is in effect. "I reaffirm that there does not exist any ban of any type of EU imports," said, Minister of Industry Débora Giorgi, according to a report in the Argentine newspaper Clarín.

She also insisted that all trade measures being taken by the Argentine government fall within WTO rules and regulations. The Argentine government has warned, however, that it will block imports that constitute "disloyal competition."

Argentine Industry Secretary Eduardo Bianchi took an even stronger tone. "If there is anyone who is protectionist, that would be the European Union," he said, according to Clarín. He accused the European Union of using "sophisticated mechanisms" to hide its agricultural subsidies, and criticised the EU's own high tariffs on imports.

EU calling for WTO involvement

Deputy Director General for Trade at the European Commission, João Aguiar Machado threatened last week that he would complain about the ban to the WTO's Council for Trade in Goods. That promise was fulfilled at the council's meeting on 5 July, when the EU expressed its unease over an internal Argentine government note that mentioned the restriction of food imports from the EU and other importers.

Australia, Canada, Colombia, Japan, Switzerland, and the US all cited similar concerns regarding the consistency of these measures with WTO regulations, according to the WTO. Argentina defended itself at the meeting, claiming that the note was purely for surveillance purposes and noting that food imports from the EU to Argentina increased from January through May of this year.

While Machado acknowledged at a 2 July press conference that the problem is, primarily, a bilateral one, he emphasised that the ban does have "implications at the bi-regional negotiations level," alluding to the Mercosur-EU talks. He added that it was important to "alert [Argentina] that it is advisable to find a solution," according to Clarín.

Argentine Commerce Secretary Guillermo Moreno released a letter on 23 April stating that he would be reviewing foreign purchases in an effort to assess the competitiveness of the Argentine market. New import controls were first announced - in verbal form only - in May.

The recently re-launched Mercosur-EU talks are likely to face other problems, mainly as a result of internal EU dissent over a potential free trade accord between the two regions.

Karel De Gucht, the European Trade Commissioner, noted that the talks were likely to be complicated, given that the "level of ambition depends on the political will of the EU itself to come to that kind of agreement," according to BusinessWeek. The nine European countries that have already taken a public stance against the pact include France, Ireland, and Poland.

European farmers have also expressed intense opposition towards the trade pact, out of concern that they will lose their subsidies while at the same time facing competition from Mercosur's cheaper imports.

ICTSD reporting; "EU-Mercosur Free-Trade Accord Is ‘Not Clear Cut,' De Gucht Says," BUSINESSWEEK, 29 June 2010; "Argentina contraataca: ‘La proteccionista es Europa," CLARÍN, 1 July 2010; "Importaciones: la Unión Europea lleva sus quejas contra Argentina a la OMC," CLARÍN, 2 July 2010; "La UE igual pide que se levantan las trabas," CLARÍN, 3 July 2010; "EU takes Argentina's ‘restrictive measures' on trade to the WTO," MERCOPRESS, 5 July 2010.

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