On August 22, 2014, a World Trade Organization (WTO) dispute settlement panel ruled in favor of the United States in a dispute challenging various restrictions imposed by Argentina against the importation of U.S. goods. One of the measures challenged by the United States was Argentina’s import licensing requirement (the Declaración Jurada Anticipada de Importación (“DJAI”)), which requires firms to obtain approval in advance from Argentine authorities to import goods into Argentina. The dispute also targeted various trade-related requirements as conditions to import, such as (1) offsetting the value of the goods to be imported with, at least, an equivalent value of exports; (2) limiting the volume of imports and/or reductions in their prices; (3) incorporating a certain level of local content into domestically produced goods; (4) making or increasing investments in Argentina (including in production facilities); and (5) refraining from repatriation of funds in Argentina to another country.
According to a press release from the Office of the U.S. Trade Representative, the WTO dispute settlement panel found that the DJAI is inconsistent with basic rules of the WTO, because it restricts market access for imported products, creates uncertainty as to whether importation will be allowed, does not permit companies to import as much as they desire, and imposes a significant burden on importation. The panel also determined that the other requirements discussed above impose conditions on importation that have a limiting effect on imports and are characterized by a lack of transparency and predictability, which further discourages importation.
The panel’s report makes clear that Argentina may not require foreign firms to accept various practices as a condition for being allowed to import into Argentina. This is a significant victory for the United States, which exports billions of dollars a year to Argentina. Key U.S. exports affected by Argentina’s import restrictions include computers, industrial and agricultural chemicals, agricultural and transportation equipment, machine tools, parts for oil field rigs, and refined fuel oil.
The panel’s report will be adopted within 60 days of the report’s issuance at the request of any party unless it is appealed to the WTO Appellate Body. We anticipate that Argentina will likely do so.