The World Trade Organization on Thursday rejected Argentina’s bid to overturn a ruling in favour of the United States, the European Union and Japan against the Buenos Aires licensing rules used to restrict imports.
The WTO’s appellate body recommended Argentina fix its trade rules after it upheld an earlier WTO panel report that Argentina’s import licensing requirement and other import restrictions breach international trade rules.
Reacting to the decision, Argentina said it would have no immediate impact on trade.
“It will not have an immediate practical impact on the system and administration of commerce or on trade dynamics” Commerce Secretary Augusto Costa said from Buenos Aires.
Faced with a struggling economy, Argentina’s government has limited imports in a bid to shield local industries and bolster its trade surplus. In 2012, the country imposed a system requiring prior approval of nearly every purchase from abroad, sparking the WTO case.
Furthermore firms eager to export to the country had to import Argentine goods in exchange. One of the most well-known examples was German carmaker Porsche, which was forced to commit to purchasing Argentine wine and olive oil in order to get roughly 100 of its cars into the country.
In 2013, the WTO had set up a panel of independent trade and legal experts to consider the complaints filed by Washington, Brussels and Tokyo.
The U.S. National Association of Manufacturers said Argentina should quickly scrap its “burdensome” import requirements and the administration said it would continue to make sure trading partners played fair.
“Argentina’s protectionist measures impact a broad segment of U.S. exports, potentially affecting billions of dollars in U.S. exports each year that support high-quality, middle-class American jobs,” U.S. Trade Representative Michael Froman said in a statement.
The European Commission said Argentina should stop requiring foreign companies to limit their imports, offset the value of imports with equivalent exports, invest in the country and keep their profits there, or use a certain amount of Argentine content in their products.
A U.S. trade official said as a result of the ruling, Argentina would have a “number of months” to fix its laws and make sure any import licenses were automatic and transparent.
But so far no deadline has been set and presidential elections in October mean the issue could wait for the next government. Argentina, Latin America’s No. 3 economy, is also locked in a dispute with U.S. investors over unpaid debt.
Ultimately, if the dispute cannot be resolved, trading partners could retaliate by restricting Argentine imports or seek financial compensation.
The United States exported nearly 11-billion dollars in goods to Argentina in the 11 months through last November, according to trade data. Key exports were computers, industrial and agricultural chemicals, agricultural and transportation equipment, machine tools, parts for oil field rigs, and refined fuel oil.
European exports to the country, mainly machinery, transport equipment and chemicals, totalled €10-billion Euros in 2013, trade data showed.