Saturday, June 2, 2012

EU request for consultation against Argentina - Details

I had blogged about EUs request for consultation with Argentina here. The details of the request are available now on the WTO website. The EU request alleges that Argentinian import licensing measures violate provisions of the GATT, TRIMS, Import Licensing Procedures Agreement, Agreement on Agriculture and Safeguards Agreement. While the main thrust appears to be the violation of the ILP Agreement, it would be interesting to see Argentina's counter defending its measures within the confines of the WTO law.
"My authorities have instructed me to request consultations with the Government of the Republic of Argentina ("Argentina"), pursuant to Articles 1 and 4 of the Understanding on Rules and Procedures Governing the Settlement of Disputes, Article XXII of the General Agreement on Tariffs and Trade, 1994 (GATT 1994), Article 19 of the Agreement on Agriculture, Article 6 of the Agreement on Import Licensing Procedures and (the ILP Agreement) Article 8 of the Agreement on Trade Related Investment Measures (the TRIMS Agreement) and Article 14 of the Agreement on Safeguards, with respect to certain measures imposed by Argentina on the importation of goods into Argentina.

Argentina subjects the importation of goods into Argentina to the presentation for approval (validación) of a so-called Declaración Jurada Anticipada de Importación (DJAI). The relevant legal instruments are listed in Annex I.

Argentina subjects the importation of certain goods into Argentina to various types of licenses: Licencias No Automáticas de Importación in the form of Certificados de Importación (CIs); Licencias Automáticas Previas de Importación (LAPI); and Certificados de Libre Circulación (CLCs). The legal instruments providing for these measures are listed in Annex II, Annex III and Annex IV, respectively.

Argentina often requires the importers of goods to undertake certain commitments, including, inter alia, to limit their imports, to balance them with exports, to make or increase their investments in production facilities in Argentina, to increase the local content of the products they manufacture in Argentina, not to transfer benefits abroad and/or to control their prices.

The issuance of LAPIs, CIs and CLCs and the approval of DJAIs is being systematically delayed or refused by the Argentinean authorities on non-transparent grounds. Often the Argentinean authorities make the issuance of LAPIs, CIs and CLC and the approval of DJIAs conditional upon the importers undertaking to comply with the trade restrictive commitments mentioned above.

These measures restrict imports of goods and discriminate between imported and domestic goods. They do not appear to be related to the implementation of any measure justified under the WTO Agreement, but instead aimed at advancing the Argentinean Government's stated policies of re-industrialization, import substitution and elimination of trade balance deficits.

The legal measures through which Argentina imposes these restrictions include, but are not limited to, the legal instruments listed in the Annexes, as well as any amendments, replacements, extensions, implementing measures or related measures.

Argentina's measures appear to be inconsistent with Argentina's obligations under the following provisions of the covered agreements:

(i) Articles III:4, VIII; X:1, X:3 and XI:1 of the GATT 1994;

(ii) Article 2 of the TRIMs Agreement;

(iii) Articles 1.2, 1.3, 1.4, 1.5, 1.6, 1.7, 2.2, 3.2, 3.3, 3.4 and 3.5 of the ILP Agreement.
(iv) Article 4.2 of the Agreement on Agriculture;
(v) Article 11 of the Safeguards Agreement.

Argentina's measures appear to nullify or impair the benefits accruing to the European Union directly or indirectly under the covered agreements.

The European Union reserves the right to raise additional measures and claims regarding these matters in the course of the consultations.

The European Union looks forward to receiving in due course a reply from Argentina to this request. The European Union is ready to consider with Argentina mutually convenient dates to hold consultations."
Would be watching this space keenly to see the Argentinian defence.The main line of challenge seems to be the violation of the "national treatment" principle in the GATT and TRIMS and market access in the Agreement of Agriculture. Would the Argentinian defence be within an exception in the Agreements or a non-violation of the provisions per se?

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