WTO Panel Rules Against Argentina Regarding Certain Measures Affecting The Importation Of Goods

Keywords: WTO Argentina, World Trade Organization, imports, Trade-Related Requirements, international trade

On August 22, 2014, a World Trade Organization (WTO) dispute settlement panel circulated its decision in Argentina – Measures Affecting the Importation of Goods (WT/DS438/R, WT/DS444/R, WT/DS445/R). The United States, the European Union and Japan (the complainants) challenged two separate, broadly defined measures, alleging that each restricted imports in a manner inconsistent with Argentina's WTO obligations.

Trade-Related Requirements Measure

The panel first examined a set of five actions, referred to as the Trade-Related Requirements (TRRs). The complainants described the TRRs as a single measure that violated various provisions of the General Agreement on Tariffs and Trade (GATT) 1994, including Articles XI:1 and III:4. The panel found initially that, as part of a policy seeking to eliminate trade balance deficits and substitute imports for domestically-produced goods, Argentina required importers and other economic operators to undertake one or more of the following TRRs: (i) offset the value of their imports with, at least, an equivalent value of exports; (ii) limit their imports, either in volume or value; (iii) reach a certain level of local content in domestically produced goods; (iv) make or increase investments in Argentina; and (v) refrain from repatriating funds from Argentina. Notably, the TRRs were not contained in any law, regulation or other written measure. Thus, the panel focused first on the standard for identifying and challenging "unwritten" measures, followed by a detailed examination of the evidence in the record establishing the existence of each of the TRRs.

The panel next ruled that the TRRs constituted a single measure, which it examined first under Article XI:1 of the GATT 1994. Article XI:1 prohibits WTO Members from imposing "prohibitions or restrictions" on the importation of any product, including in the form of "other measures." The panel found that the TRRs measure fell within the broad scope of the term "other measures."

The panel then analyzed whether the TRRs measure constituted a prohibition or restriction, including in the form of a "limiting condition" that has restrictive effects on importation. Noting that companies were not allowed to import unless they achieved a trade balance or export surplus, the panel identified numerous restrictions imposed by the TRRs measure on the manner in which...

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