* Growing discontent over Argentine trade policies
* EU’s case could take a year
* Containers piling up in Buenos Aires
* Argentina’s Fernandez defends her trade policies
By Sebastian Moffett and Tom Miles
BRUSSELS/GENEVA, May 25 (Reuters) – The European Union filed
a suit against Argentina’s import restrictions with the World
Trade Organization (WTO) on Friday, intensifying the disputes
between the South American nation and its trading partners.
The EU’s executive Commission said the case followed
measures by Argentina that include an import licensing regime
and an obligation on companies to balance imports with exports.
“Argentina’s import restrictions violate international trade
rules and must be removed,” said EU Trade Commissioner Karel De
Gucht. “These measures are causing very real damage to EU
companies – hurting jobs and our economy as a whole.”
The case raises pressure on Argentina, which is being
criticized by a growing number of its trading partners on an
increasing number of issues.
At the WTO’s Trade and Goods Council on March 30, 19 WTO
members – including the United States, Japan, South Korea and
Australia – expressed concern about Argentina’s restrictive
trade measures.
The suit was not a response to a decision by President
Cristina Fernandez in April to seize control of Argentina’s
biggest oil firm, YPF, a subsidiary of Spain’s Repsol.
But De Gucht said that decision demonstrated the difficulties of
dealing with Argentina.
“The trade and investment climate in Argentina has steadily
become worse over the years, and the recent expropriation of
Repsol by the Argentinian state is clear proof,” De Gucht told a
news conference. “Argentina’s trade policy has become rooted in
unfair trade practices.”
As a first step to fight the import procedures, the European
Union is “requesting consultations,” or formally demanding
negotiations to try to settle the matter. The WTO confirmed it
had received the EU’s request.
If talking does not work, 60 days after the initial
complaint the European Union can ask the WTO to set up a panel
of three arbitrators to judge the case.
The process is likely to take about a year, but either side
could appeal, which would add three months or more. The time
scales can stretch in such cases and many take years to resolve.
In speech by Fernandez on Friday, the 59-year-old Peronist
leader defended her policies and accused Europe of maintaining
import duties of higher than 100 percent for some products.
“We have a policy that protects our work, our businesses,
our economy,” Fernandez said. “It’s as if this is considered
legal protectionism when it is done by developed countries and
populist protectionism when it is done by emerging countries.”
ARGENTINA EXPECTED EU MOVE
Argentina’s measures are part of a campaign to support its
economy and reindustrialise the country.
If the European Union wins, the WTO might tell Argentina to
bring its regulations into line with WTO rules, but it would be
up to the European Union to make sure Argentina complies.
That could turn into a further trade case that could add
another year or more to the dispute.
An Argentine trade official said the EU move was not a
surprise, and it was awaiting more details.
“It was expected,” the official said. “For the time being we
did not receive any formal notification.”
WTO members have the right to ask importers to apply for an
import licence, but they are supposed to grant one
automatically. In Argentina, however, a lot of licences labelled
“automatic” suffer long delays, according to the Commission,
which is not compatible with WTO rules.
EU exports to Argentina include cars, motorcycles, textiles,
toys and footwear, and last year were worth 8.3 billion euros.
In 2011, Argentina’s non-automatic import licences affected EU
exports worth about 500 million euros, the Commission said.
Argentina tightened its procedures in February 2012, with a
new requirement for pre-approval of all imports. That means all
EU exports to Argentina are now affected, a Commission official
said, adding that in April the value of EU exports to Argentina
was down four percent on the same month in 2011.
Three times as many containers have been stopped at Buenos
Aires terminals since the latest measures were put in place, she
said.
The Commission says importers of some goods are required to
limit their imports, balance them with exports or invest in
production facilities in Argentina.
U.S. Ambassador to the WTO Michael Punke led criticism of
Argentina’s practices at the March 30 WTO meeting, calling them
“unbefitting” of a member of the WTO and the G20 group of
nations. Argentina’s top trade official said at the time that
Punke’s allegations had “no basis in objective facts”.
