Opening up Argentina’s import restrictions

11th September 2014

MGI World Opening up Argentina’s import restrictions

The European Union (EU) has welcomed a World Trade Organisation (WTO) ruling against Argentina’s use of import restrictions.

In a judgment, the WTO said 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.

Cristina Fernandez de Kirchner’s government will appeal the decision, which was the result of a complaint brought by the EU, US and Japan in 2012.

Argentina’s restrictive rules had been a major barrier to firms, who had to offset the value of their imports into Argentina with at least the equivalent in exports.

Buenos Aires had also imposed limits on firms’ imports, either in volume or in value and demanded they reach a certain level of local content in their domestic production. The rules also forced some to invest in Argentina; or keep any profits made in Argentina in the country.

These restrictions were introduced as part of the country’s so-called 'managed trade' policy, which aims to substitute imports for locally-sourced products and to reduce or eliminate the country's trade deficits with other countries or regions.

But the ruling means Argentina cannot apply this policy, which the European Commission says had imposed a “severe burden” on importers of EU products into Argentina while also impairing the capacity of foreign firms to operate in the country.

EU trade commissioner Karel De Gucht said it was vital to stand up to protectionism in all forms.

“This case sends an important signal that protectionism is not acceptable,” he added. “I call on Argentina to move quickly to comply with the ruling of the WTO panel and remove these illegal measures, and open the way for EU goods to compete fairly on the Argentinian market.”

The restrictions affected about €500 million of exports in 2011, according to EU figures, before an expansion of the restrictions in 2012 significantly increased this amount in the following years.

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