Trading complaints with Argentina

Sep 7, 2012

There is some name calling going on in the world of trade. In what appears to be a tit-for-tat strategy, Argentina is pointing fingers at the U.S. and saying “unscientific” on the heels of the U.S. saying “protectionist.”

Argentina contacted the World Trade Organization (WTO) at the end of August seeking WTO consultation regarding what it alleges are illegal and unscientific trade barriers to Argentinean beef in the U.S. This move came just a week after the U.S. and Japan filed complaints with WTO alleging Argentinean import licensing rules are protectionist.

In the official request for WTO consultation (translated from the original Spanish), Argentina accuses the U.S. of using unscientific and inconsistent sanitary rationale for blocking imports of Argentinean beef.

“For more than ten years, the United States has maintained the prohibition on imports of fresh (chilled or frozen) bovine meat from Argentina… The maintenance of that prohibition lacks scientific justification in view of the reinstatement, internationally, of Argentina’s sanitary status as a zone free of foot-and-mouth disease (FMD).”

In 2001, the U.S. suspended beef imports from Argentina after an outbreak of FMD in 2000. Argentina alleges the U.S. has willfully ignored Argentina’s World Organisation for Animal Health (OIE) designation as an FMD-free zone it claims was reestablished in 2002.

According to OIE, three different zones in Argentina have been listed as an FMDfree zone where vaccination either is or is not practiced. Two of these zones have been so designated since 2007 and one since 2010. Available information with OIE is counter to Argentina’s claim the country has been OIE-cleared as an FMD-free zone since 2002.

OIE makes the distinction between entire countries which are FMD-free and zones within member countries which are FMDfree. As Argentina has zones recognized as FMD-free rather than being listed as an entire country with that status, areas outside of the designated zones are still known to possess FMD infection. The U.S. is listed as an FMD-free country, as are neighbor nations of Canada and Mexico. Great care has been taken to ensure FMD does not reach livestock here.

Nkenge Harmon of the U.S. Trade Representative’s office told Reuters the move was disappointing and appears to be part of a larger pattern in Argentina’s trade relations.

“We are concerned with a disturbing trend in which countries engaged in actions that are inconsistent with their WTO obligations retaliate with counter-complaints rather than fix the underlying problem raised in complaint,” she said, in reference to the aforementioned earlier complaint the U.S. and Japan leveled against Argentina for protectionist import rules.

“Furthermore, the fundamental openness of the U.S. market to agricultural products is reflected in trade data. In 2011, U.S. imports of agricultural products from Argentina topped $1.64 billion. U.S. agricultural exports to Argentina that same year totaled $153 million.”

This is not the only recent example of what appears to be Argentina’s call-and-respond strategy in dealing with WTO complaints. When earlier in the summer the EU complained to WTO about Argentina’s import restrictions, a week later Argentina leveled a counter complaint that the EU (specifically Spain) had a “de facto prohibition on imports of biodiesel.”

The general accusation of Argentina as having protectionist trade restrictions is nothing new either. Back in March, 14 different WTO member nations—including the U.S., Australia, Japan, Mexico and the EU—sent a joint statement regarding the issue. In the statement, the international trade behaviors of Argentina over the past years, specifically relating to the use of import licensing rules and trade balancing requirements, were outlined and described in detail.

Argentinean President Cristina Kirchner has been upping trade restrictions and widening import rules aggressively since 2011. She has publicly stated that “managed trade” policies are necessary to bolster domestic production from inexpensive imports.

The U.S. has 60 days following the request for consultation to resolve the issue over FMD-related restrictions on Argentinean beef. If a resolution isn’t reached via direct negotiations by then, Argentina can seek a dispute settlement panel. — Kerry Halladay, WLJ Editor