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Argentina takes Chile to WTO on Chilean safeguards on dairy products

Wednesday, January 3rd 2007 - 20:00 UTC
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Argentina has filed a dispute complaint against Chile before the World Trade Organization (WTO) after Chile in mid December imposed a 23-percent additional safeguard on some dairy products imported from Argentina.

"The Argentine government considers that the imposed safeguard is incompatible with the obligations the Republic of Chile has within the regulations of the 1994 General Agreement on Tariffs and Trade (GATT) and the WTO's Safeguards Agreement," the Argentine Foreign Ministry said in a statement. The complaint was filed in late December. On December 14 Chile decreed a definitive 23-percent safeguard on liquid milk, powder milk, and Gouda cheese coming from Argentina. The safeguard was provisionally in force since October 6 as a consequence of an investigation conducted by the Distortions Committee from Chile's Central Bank. The probe had bee requested by Chile's National Federation of Milk Producers (Fedeleche), that claimed an alleged damage to the dairy sector as a consequence of increasing Argentine dairy products imports. Fedeleche had even requested a safeguard as high a 31.5 percent" to discourage imports of dairy products... and to restore normality into the domestic trade of fresh milk and dairy products in general." In the face of the Chilean safeguard, Argentina "has started proceeds established by the WTO to settling disputes, once it verified the violation of rules established within the framework of the organization of which both countries are members," the Argentine Foreign Ministry said. That is why Chile has been requested to hold consultations regarding the proceedings governing the settling of disputes within the framework of 1994 GATT and the WTO's Safeguards Agreement. Argentina argues that Chile applies safeguards only to Argentine imports, in "flagrant violation" of WTO rules. Under the Safeguards Agreement safeguards are applied with disregard of the origin of the products. Argentina also claimed that the Chile provided no evidence of increasing imports, or that an increase caused or threatened to cause serious injury to Chilean producers, or that there may be a direct link between growing imports and actual or threatened damage, and of any unforeseen development warranting exceptional action such as safeguards, as required under the Safeguards Agreements. When Chilean authorities started their investigation in August, Argentina warned that if safeguards were to be applied, Argentina would resort ton the WTO. In early December the WTO ruled in favour of Argentina in a dispute about Chile's price bands for imports of wheat and grain flour. Last year Argentina and Chile engaged in a tough dispute after an energy shortage in Argentina caused it to suspend agreed natural gas exports to Chile.

Categories: Economy, Argentina.

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