EU, U.S. step up WTO action in Argentina trade row

BRUSSELS/WASHINGTON Thu Dec 6, 2012 12:05pm EST

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BRUSSELS/WASHINGTON (Reuters) - The European Union and the United States stepped up their fight against Argentine trade practices on Thursday, formally requesting the World Trade Organization rule on whether the South American country's import restrictions are illegal.

The move followed similar challenges from Japan and Mexico, meaning Buenos Aires is now embroiled in disputes with four major trade partners, who say its rules discriminate against foreign goods at a time when trade is central to their hopes of an economic recovery.

"Argentina's import restrictions violate international trade rules and harm EU exports," EU trade chief Karel De Gucht said in a statement. "Today's decision ... is the EU's last resort to see Argentina's unfair trade practices lifted."

EU trade relations with Argentina have worsened since April, when President Cristina Fernandez seized control of oil firm YPF from its parent, Spain's Repsol.

U.S. Trade Representative Ron Kirk said Washington had also asked the Geneva-based WTO for a so-called dispute settlement panel, a process which can oblige a country to remove restrictions or face fines.

Argentina too initiated WTO cases on Thursday, accusing the EU of curbing imports of its biodiesel, and the United States of restricting imports of its lemons and beef.

Brussels and Washington say Argentina requires businesses to apply for import licenses to be able to sell to Latin America's third largest economy after Brazil and Mexico.

But Buenos Aires does not grant the licenses automatically as required by global trade rules, they say.

"Argentina's persistent use of protectionist measures broadly impacts all U.S. exporters of goods to Argentina," Kirk said.

The European Commission, which handles trade for the 27 EU member states, says EU exports affected by the restrictions range from luxury cars and mobile phones to clothes and food.

Since Argentina tightened restrictions earlier this year, the EU executive says a de facto barrier to all EU exports to Argentina has been erected.

Such exports were worth 8.3 billion euros in 2011.

(Additional reporting by Tom Miles; Editing by Sebastian Moffett and Andrew Osborn)

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