Major Car Markets Drive WTO Case Against Argentine Auto-Import Restrictions

The U.S., Europe and Japan team to push ahead with a World Trade Organization dispute complaint against Argentina’s use of import licenses and other measures to restrict vehicle and auto parts from entering the country, despite the government’s claim that the restrictions have been removed.

The WTO agreed on Jan. 28 to a request from Washington, Brussels and Tokyo to establish a disputes panel to rule whether Argentina’s restrictions violate global trade rules.

The three major car markets are targeting Argentina’s decision to subject imports to non-automatic import-licensing requirements, which they argue result in systematic delays or refusals to accept imports.

The restrictions date back to March 2011, when Argentina imposed new requirements on 600 products, including vehicles and auto parts, and were extended to all imported goods in February 2012.

The U.S., EU and Japan also charge that Argentina has been asking importers to undertake certain commitments such as limiting their imports, balancing them with exports and making or increasing their investment in production facilities in Argentina. Importers that refuse to cooperate see the issuance of import licenses delayed or refused.

Argentina insists to WTO member governments that it has repealed all non-automatic import licenses, effective Jan. 25, and claims this is a “positive solution” to the dispute, asking its opponents to call off their WTO action.

The government points to Resolution 11/2013 in particular, issued by Argentina’s Ministry of Economy and Public Finance, saying it repealed 17 previous resolutions adopted since 1999 imposing non-automatic import licenses on imported vehicles and auto parts, as well as motorcycles, tires, metallurgical products, bolts and screws, textiles and other products used to make autos.

Argentina also says that following talks with the European Union, it decided to repeal automatic import licenses that had been the target of the EU’s complaint.

But the government didn’t help its case by withdrawing these measures a day after announcing it was raising import duties on 100 items, including some of the products covered by Resolution 11/2013, such as motorcycles and tires. Autos and auto parts are not among the goods targeted by the tariff hike.

Argentine diplomats tell the WTO the three complaining countries have seen “remarkable growth” in their exports to Argentina in recent years, and this undermines any concerns the measures in question are import-restrictive.

However, opponents say they are not convinced the actions taken by Argentina address the problem and that the Argentines still are breaking global trade rules by their import restrictions. The U.S., EU and Japan say they are proceeding with their plan to bring Argentina before a disputes panel, while seeking further details.

“With respect to the purported repeal of the measure, we appreciate the information provided but are not in a position to share Argentina’s assessment,” a U.S. official tells WardsAuto.

The complainants can suspend the WTO panel proceedings at any time should they determine Argentina has addressed their concerns.

Representatives of the three complainant nations will meet with Argentine counterparts to discuss the appointment of experts to the 3-member panel, which normally has six to nine months to issue a ruling. The ruling has to be complied with or the WTO can authorize punitive duties payable until a member country meets its obligations the trade group’s agreements.