Argentina Criticized in WTO Trade Review

U.S., EU and others says Argentina has too many restrictive trade barriers.

GENEVA — Argentina’s trading partners, led by the U.S., the European Union, China and Turkey, called on the South American nation at a World Trade Organization forum to remove problematic and costly import restrictive barriers, including on textiles and apparel.

“We simply cannot accept these type of measures that hurt U.S. exporters, as well as traders in many other countries,” said the U.S. delegation during a two-day review of Argentina’s trade regime hosted by the WTO secretariat last week.

The U.S. said Argentina has heavily increased its reliance on “import substitution” — developing domestic production capacity in order to displace imports — for its growth strategy and noted that in pursuit of this policy, “it has imposed a range of measures, in addition to the use of import licenses aimed at curbing imports. These include increasing the value-added tax on imports of consumer goods.”

Similarly, the EU’s ambassador to the WTO, Angelos Pangratis, said the 27-nation trade bloc believes the import substitution policy undertaken by Argentina is not in conformity with WTO rules. Since February 2012, Argentina has required a sworn advance import declaration for all imports. These are used to make consistency checks, and government agencies must make any necessary comments within 72 hours of the registration of the declaration.

On Jan. 28, a WTO dispute panel was established following requests by the U.S., EU and Japan to examine their complaints that some of Argentina’s measures breach global trade rules.

Yi Xiaozhun, China’s WTO ambassador, said his country was “particularly concerned” by the import restrictions and argued that the use of such measures relating to imports “can add to production costs, thereby increasing the cost of exportable goods.”

WTO members were also critical of the recent hikes in import and export duties.

The Turkish delegation emphasized that Argentina’s average MFN, or most-favored nation, tariff increased to 11.4 percent in 2012, up from 10.4 percent in 2006, and noted that some important sectors, such as textiles and apparel, “are enjoying the highest tariff protection.”

A report compiled by the WTO and used as the reference for the review session shows that in 2012, for 790 textile lines, tariffs averaged 22.7 percent, and for 250 apparel lines, tariffs averaged 35 percent, substantially higher than the 11.5 percent average tariff for all industrial goods.

WTO delegations acknowledged that Argentina had in recent years drastically reduced its debt and substantially increased per-capita income, and that merchandise exports in 2011 reached $84 billion, or nearly double from $46.5 billion in 2006, and imports had climbed to $70.7 billion from $32.5 billion in 2006.

In 2012, U.S.-Argentine two-way trade in goods reached $14.7 billion, up 42 percent from $10.3 billion in 2007, said the U.S. delegation.