The European Union filed a request for consultations at the World Trade Organization (“WTO”) on May 25, 2012, formally initiating a dispute with respect to various import policies that have been imposed by the Argentine government.  The European Union seeks to challenge three Argentine policies: (1) non-automatic import licensing requirements affecting goods under more than 600 tariff lines; (2) pre-importation approval requirements affecting all imports; and (3) requirements imposed on importers to balance their imports with exports, increase the local content of their products, or refrain from transferring their revenue abroad.[1]  EU Trade Commissioner Karel De Gucht has stated that these measures “violate international trade rules and must be removed. . . .  This leaves me no choice but to challenge Argentina’s protectionist import regime and ensure that the rules for free and fair trade are upheld.”[2]  

While to date no other WTO Member has filed a request for consultations concerning these measures, the European Union is not Argentina’s only trading partner to voice concerns with respect to Argentina’s import policies.  As Stewart and Stewart reported in a trade flow published on February 28, 2012, a number of Argentina’s trading partners have also raised these new policies with Argentina both bilaterally and multilaterally at the WTO.  Indeed, various countries, including the United States, have posed questions to Argentina regarding the WTO-consistency of these measures before the WTO’s Import Licensing Committee,[3] and, in March 2012, the United States, the European Union, and twelve other WTO Members issued a joint statement before the Council for Trade in Goods expressing their “continuing and deepening concerns regarding the nature and application of trade-restrictive measures taken by Argentina . . . .”[4]  

Likewise, members of the business community have vocalized their apprehension concerning these policies.  In February 2012, a group of U.S. trade and business associations expressed its concerns regarding these measures and how they may affect U.S. exports to Argentina in a letter to USTR Ron Kirk.[5]  And in April 2012, the International Chamber of Commerce wrote a letter to the Argentine Foreign Trade Secretary requesting that the Argentine Government “reconsider and rescind” the newly enacted import approval process due to concerns over “the negative impact of these measures on the capability of companies to function efficiently.”[6] 

Given these concerns,[7] the United States should consider filing a request for consultations with Argentina, and we assume that the U.S. is actively considering whether to do so and that there may well be a number of “me too” requests in the coming weeks from other WTO members.  The United States business community has a lot at stake.  Specifically, the United States exported more than $8.5 billion of goods to Argentina in 2011.[8]  The broad measures imposed by Argentina that restrict the ability of U.S. goods to enter and compete in the Argentine market have had, and will continue to have, serious consequences for U.S. exporters and for importers within Argentina that depend on U.S. products.

Moreover, based on the large number of countries expressing concern with Argentina’s policies and the widespread discontent in the international business community, we expect that many WTO Members  will seek to participate in the European Union consultations and (if not resolved through consultations) the eventual WTO panel proceeding as third parties.  Sometimes, broad participation is the result of active encouragement from certain lead WTO complainants.  In other cases, the concerns about a Member’s actions are naturally broad-based because of the reach of the measures involved.  We believe that Argentina’s actions are of the latter type – adversely affecting exporters in many countries around the world.  Thus, a great deal of global scrutiny through participation is likely. 

Time for businesses to flag the specifics of the actions taken and the resulting adverse effects

While it is easy to assume that someone else will come forward with the factual information necessary for the responsible authorities to identify the full extent of the problem, in fact every government needs the active support of its business community to marshal the facts to define the metes and bounds of the challenges being faced.  Businesses acting confidentially with USTR or other governments directly, through outside resources such as outside counsel, or through collective and anonymous communications via trade associations need to provide concerned governments with the specifics of the problems experienced in Argentina so that governments can present the most comprehensive picture of the trade distortions being created by Argentina’s policies.  There is still time to get the relevant information to the responsible government agencies.

For more information on the request for consultations that has been filed or for more information on supplying information to the U.S. government, contact Terence Stewart (tstewart@stewartlaw.com), Philip Butler (pbutler@stewartlaw.com), or Stephanie Manaker (smanaker@stewartlaw.com).