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Joint Press Release with the Ministry of Foreign AffairsRelease of WTO Panel report on the import restrictions by Argentina

On August 22 (Geneva time), 2014, the World Trade Organization (WTO) released the panel report on the import restrictions imposed by the Argentine Republic (“Argentina”), an issue that has been examined by the WTO at the request of Japan, the U.S. and the EU. The report presents a ruling that fully supports Japan’s claim that Argentina’s import restrictions are inconsistent with Article XI:1 (General Elimination of Quantitative Restrictions) of the General Agreement on Tariffs and Trade (GATT).

1. Background

Since November 2008, Argentina has imposed a series of import restrictions, including a trade balancing requirement, the Advance Sworn Import Declaration Procedure, and non-automatic import licenses, on the importation of a wide range of goods. In response, Japan, jointly with the U.S., requested consultations with Argentina under the WTO Agreement in August 2012, and the consultations were held in September 2012. Based on the results of the consultations, Japan requested the WTO to establish a panel concerning the import restrictions under the WTO Agreement in December 2012, jointly with the U.S. and the EU. Accordingly, the panel was established in January 2013.

*Note: The EU separately requested consultations with Argentina under the WTO Agreement in May 2012, and the consultations were held in July 2012.

References:
METI News Release (August 21, 2012):
http://www.meti.go.jp/english/press/2012/0821_01.html
METI News Release (January 28, 2013):
http://www.meti.go.jp/english/press/2013/0128_01.html

Following its establishment, the panel held meetings (oral hearings) in September and December 2013, and the WTO finally released a panel report, which fully supports Japan’s claims that Argentina’s import restrictions are inconsistent with Article XI:1 (General Elimination of Quantitative Restrictions) of the GATT.

Reference: Article XI (General Elimination of Quantitative Restrictions) of the GATT (excerpts)
1. No prohibitions or restrictions other than duties, taxes or other charges, whether made effective through quotas, import or export licenses or other measures, shall be instituted or maintained by any contracting party on the importation of any product of the territory of any other contracting party or on the exportation or sale for export of any product destined for the territory of any other contracting party.

2. Major import restrictions imposed by Argentina

1) Trade balancing requirement

Under this measure, when importers intend to import a certain amount of goods to Argentina, the government of Argentina requires the importers to export the same amount of Argentine products in terms of value, in exchange for permitting the imports. If such importers do not satisfy the requirement, the government may not approve such importers’ declaration under the Advance Sworn Import Declaration procedure in Item 2) below, or may not issue a license under the non-automatic import licenses in Item 3) below.

2) Advanced Sworn Import Declaration procedure

This system requires importers to declare an import list, amounts and values to Argentina's Federal Public Revenue Administration etc. and obtain their approval prior to importing goods. The details of the requirements are not publicized and the government operates them arbitrarily.

3) Non-automatic import licenses

The details of the requirements for issuing the licenses were undefined, and Argentina operated the requirements arbitrarily. However, Argentina abolished this procedure immediately before the panel was established.

3. Details of the decision

The report fully supports Japan’s claims and recommends Argentina to rectify the restrictions in conformity with the WTO Agreement. The following are the major points of the panel’s ruling:

  • Argentina’s Advanced Sworn Import Declaration constitutes a restriction on the importation of goods and thus inconsistent with Article XI:1 of the GATT; and
  • Argentina’s trade balancing requirement constitutes a restriction on the importation of goods with general and prospective application, and, accordingly, it is inconsistent with Article XI:1 of the GATT.

4. Future schedule

Parties concerned may appeal to the WTO Appellate Body within sixty days from the release of the report. If no appeal is filed, the panel’s decision in the report will become WTO’s final decision.

Reference: WTO Panel under the WTO Agreement
A member may request the establishment of a panel (first instance proceeding), which is a quasi-judicial independent body, to examine a measure in question and make rulings based on the measure's compliance with the WTO Agreement and to make recommendation regarding correction of the measure which is found to be inconsistent with the WTO agreement, if consultations between the governments fail to settle the dispute. A party which is not satisfied with the panel rulings may appeal to the WTO Appellate Body (appellate proceeding).

Release Date

August 22, 2014

Division in Charge

  • Information on WTO dispute settlements in general
    WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy Bureau
  • Information on the Japan-Argentina economic relationship:
    Latin America and Caribbean Office, Trade Policy Bureau
Ministry of Economy, Trade and Industry
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