European Union files WTO complaint against Argentina for trade barriers

The European Union has filed a suit against Argentina's import restrictions with the World Trade Organization (WTO), European Union Trade Commissioner Karel De Gucht said today. The EU's executive Commission said the case followed restrictive measures by Argentina, including an import licensing regime and an obligation on companies to balance imports with exports.

Argentina is currently limiting imports with a "trade balancing" policy that required importers to export goods of the same value. As a first step in the case, the European Union is "requesting consultations", or formally demanding negotiations to try to settle the matter.

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.

"Argentina's import restrictions violate international trade rules and must be removed," De Gucht said in a statement. "These measures are causing very real damage to EU companies,” he stressed.

De Gucht also criticized the investor’s mood in Argentina. "The trade and investment climate in Argentina is clearly getting worse," De Gucht said.

The WTO process is likely to take about a year, but either side could appeal, which would then add another three months or more. The time scales can stretch in such cases and many take years to resolve.

The import restrictions have already prompted criticism of Argentina from at least 14 of its trade partners, including the United States, Japan, South Korea and Australia.

In April, De Gucht wrote to Argentine Foreign Minister Hector Timerman saying bilateral contracts had failed to resolve the problem.

The EU exports more than 11 billion euros' ($13.8 billion) worth of goods and services to Argentina each year, importing a similar amount in return, but complained that "Argentina's restrictive measures are extending to more and more sectors."

Brussels is initially seeking direct talks with Buenos Aires and has 60 days under WTO case rules in which to try and resolve the dispute.