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Argentinian Import Restrictions Struck Down at WTO

Monday, August 25, 2014
Sandler, Travis & Rosenberg Trade Report

The U.S. and the European Union announced Aug. 22 that the World Trade Organization has ruled against various import restrictions imposed by Argentina. One of the measures challenged in this dispute is an import licensing requirement (the Declaración Jurada Anticipada de Importación or DJAI) that 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. claimed that these measures potentially affect billions of dollars a year in U.S. exports, which are led by computers, industrial and agricultural chemicals, agricultural and transportation equipment, machine tools, parts for oil field rigs, and refined fuel oil.

According to a press release from the Office of the U.S. Trade Representative, the WTO dispute settlement panel found that the DJAI requirement is inconsistent with WTO rules because it 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. Similarly, the panel found that the other requirements outlined above impose conditions on importation that have a limiting effect on imports and are characterized by a lack of transparency and predictability, which further discourages importation. The “clear verdict,” said EU Trade Commissioner Karel De Gucht, is that “Argentina may not require local importers or foreign firms to accept various practices forced upon them by the Argentinean authorities as a condition for being allowed to import goods into the country.”

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