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Argentina’s Import Restrictions Again Rejected by WTO

Tuesday, January 20, 2015
Sandler, Travis & Rosenberg Trade Report

The World Trade Organization’s Appellate Body issued Jan. 15 a ruling upholding a dispute settlement panel decision that Argentina’s import licensing requirement and other import restrictions violate WTO rules. However, any changes in those measures are not likely to be immediately forthcoming.

One of the measures challenged in this dispute is the Declaración Jurada Anticipada de Importación (DJAI), which requires firms to secure approval by Argentine authorities before importing any goods. The case also targeted requirements to (1) offset the value of imports with at least the equivalent value in exports, (2) limit the volume of imports and/or reduce their price, (3) refrain from repatriating funds from Argentina to another country, (4) make or increase investments in Argentina (including in production facilities), or (5) incorporate a certain amount of local content into domestically produced goods. The U.S. claims that these measures potentially affect billions of dollars a year in U.S. exports, which include energy products, electronics and machinery, pharmaceuticals, precision instruments and medical devices, miscellaneous chemicals, motor vehicles and vehicle parts, and agricultural products.

A press release from the Office of the U.S. Trade Representative states that the Appellate Body upheld the dispute settlement panel’s finding that the DJAI requirement restricts market access for imported products, creates uncertainty as to whether importation will be allowed, does not allow companies to import as much as they desire, and imposes a significant burden on importation and is therefore inconsistent with Article XI:1 of the General Agreement on Tariffs and Trade 1994.  The Appellate Body also affirmed the panel’s finding that the other restrictive trade-related requirements outlined above are inconsistent with Article XI:1 of the GATT 1994 as restrictions on the importation of goods.

According to Samanta Madsen, manager of customs and trade advisory services for Sandler & Travis Trade Advisory Services in Argentina, Argentinian officials have said that they will now review the Appellate Body ruling and that there will be no immediate changes to the measures at issue. Instead, Argentina is likely to seek talks with the United States and the European Union on how to resolve the dispute.

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