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WTO Judges to Probe Legality of Argentina’s Import Curbs

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Jan. 28 (Bloomberg) -- The World Trade Organization agreed to investigate Argentine import restrictions that the U.S., the European Union and Japan say violate global trade rules.

The three governments separately challenged Argentina’s policy of subjecting a growing number of products such as laptop computers, chemicals, cat litter and tractors to licensing regulations. These measures limit imports and discriminate between foreign and domestic products, the governments said. The WTO agreed today to set up a single panel to probe the U.S., EU and Japanese complaints.

Argentina also limits imports, balances imports with exports and compels importers to make or increase investments in production facilities in the Latin American country. It frequently raises the local content of goods manufactured domestically, requires importers to keep revenue in Argentina and imposes price controls on imported goods.

“Argentina’s trade policy has become rooted in unfair trade practices,” EU Trade Commissioner Karel De Gucht said on May 25, when the bloc filed its challenge. “These restrictive measures by Argentina are illegal under WTO rules. They harm our exports, they hurt our exporters and they cost us jobs.”

The challenge underscored the 27-nation bloc’s anger over Argentina’s takeover of a unit of Spanish oil company Repsol SA in April. The seizure, which couldn’t be challenged under WTO rules, is “an expression of the same worrying policy pursued by Argentina” in limiting imports, the EU said in May.

Fair Access

“Argentina’s persistent use of import restrictions broadly impacts all U.S. exporters of goods to Argentina,” U.S. Trade Representative Ron Kirk said on Dec. 7 when announcing plans to seek a dispute panel following an Aug. 21 complaint. “It is vital that our exporters obtain fair and equal access to foreign markets, as required by our trade agreements.”

Argentina responded to the complaints by challenging U.S. restrictions on Argentine meat and lemons and Spanish curbs on imported biofuels. The WTO agreed today to Argentina’s request for a panel of judges to be appointed to probe its complaint against the U.S.

On Dec. 12, Panama lodged a complaint against Argentina, the eighth against the Latin American nation since May. While the other complaints focus on measures affecting imports of products, Panama accused Argentina of discriminating on both goods and services trade through taxes, company registration rules and curbs on financial-services providers, among others.

Mexico also challenged Argentina’s import curbs, though it withdrew its planned request for WTO judges to rule on its complaint.

To contact the reporter on this story: Jennifer M. Freedman in Geneva at jfreedman@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net