* Argentina targets US rules on lemon, beef, EU on biodiesel
* Accuses developed countries of holding poorer nations back
* Argentina seen as rule-breaker since 2002 default
* State seizure of majority stake in YPF in May hurt ties
By Tom Miles and Hugh Bronstein
GENEVA/BUENOS AIRES, Aug 21 The United States
and Japan assailed Argentina's import rules as protectionist at
the World Trade Organization on Tuesday, putting more pressure
on the country to revamp policies that many trading partners say
violate global norms.
The two complaints mirrored litigation brought by the
European Union in May and triggered a swift reaction from
Argentina's center-left government, which vowed to challenge
U.S. rules on lemon and beef imports.
Argentina is seen by many fellow Group of 20 nations as a
chronic rule-breaker since it staged the world's biggest
sovereign debt default in 2002. It remains locked out of global
credit markets and relies on export revenue for hard currency.
President Cristina Fernandez's government has angered trade
partners by moving to slash imports and riled historic ally
Spain with the takeover of energy company YPF.
The disputes at the WTO reflect mounting frustration with
the country's unorthodox policies.
"Argentina's protectionist measures adversely affect a broad
segment of U.S. industry, which exports billions of dollars in
goods each year to Argentina. These exports support jobs and
businesses here at home," U.S. Trade Representative Ron Kirk
said in an emailed statement.
"The Obama Administration insists that all of our trading
partners play by the rules and uphold their WTO obligations so
that American workers receive the benefits negotiated in our
agreements," the Kirk statement added.
Argentina began requiring prior state approval for nearly
all purchases abroad in February. Imports have since fallen
compared with last year's levels, boosting the prized trade
surplus but causing some shortages of goods and parts and
sharply reducing capital goods imports.
EU and U.S. officials say Argentina has effectively
restricted all imports since the new system came into place.
Argentina's Foreign Ministry did not comment directly on the
U.S. and Japanese complaints, but instead advised that it would
file a complaint with the WTO over Washington's policies it says
hamper lemon and fresh beef imports.
On Monday, Argentina hit the EU with a separate WTO
complaint, alleging discriminatory treatment by Spain against
Argentine shipments of biodiesel.
"This measure, like others taken by the European Union and
other developed countries for decades, effectively aims to keep
our industries from rising along the value chain, limiting the
role of developing countries to the provision of raw materials,"
the Foreign Ministry said in a statement.
It also rejected the "offensive" against Argentina's trade
policies, which it described as "legitimate measures adopted in
the context of a global crisis that originated and has its
epicenter in developed countries."
RELYING ON TRADE SURPLUS
More than 20 WTO members have criticized Argentina's import
rules, contributing to a sharp worsening of its international
trade relationships since Fernandez seized control of YPF from
Spain's Repsol in May.
The South American country has also been questioned over its
widely discredited inflation data, its refusal to honor U.S.
court judgments in favor of creditors affected by the 2002
default, and its reluctance to repay the Paris Club of creditor
Despite chagrin with her government abroad, Fernandez won a
landslide re-election last year on promises to keep stoking high
growth and increase the state's role in the economy, despite
complaints from investors that her policies made it difficult to
import products necessary to keep local businesses running.
Latin America's No. 3 economy relies heavily on a robust
trade surplus, which is used to help fatten central bank foreign
reserves tapped to pay government debt. The government has also
moved to curb imports to protect local jobs, while imposing
capital and currency controls to keep dollars in the country.
"Import growth has halted, which we should have done long
before," Foreign Trade Secretary Beatriz Paglieri was quoted as
saying on the presidential website last weekend.
The EU has said the country's import licensing rules were
unjustified and "aimed at advancing the Argentinean Government's
stated policies of re-industrialization, import substitution and
elimination of trade balance deficits."
WTO members have the right to ask importers to apply for an
import license, but they are supposed to grant them
automatically. In Argentina, however, many licenses labeled
"automatic" suffer long delays, according to the European
Argentina has also been criticized for a policy of "trade
balancing," which forces an importer to guarantee an equal value
of exports. That has spawned offbeat deals whereby a car
producer, for example, must ship a large amount of rice out of
the country in return for a consignment of vehicle components.
"Argentina may claim that companies enter into these
arrangements voluntarily, but many of the (WTO) members
supporting this statement share concerns that it may be
operating otherwise," U.S. Ambassador to the WTO Michael Punke
said in March, in a statement backed by 13 WTO members.
An official at Argentina's Foreign Ministry disagreed with
the government's exports-for-imports policy, saying it was
"This is a lost cause from the start," the official said on
condition of anonymity. "There's no way to defend trade curbs
that impose a dollar-for-dollar policy. In this case, the law is
Argentina is the second nation to be hit by a triple
complaint by Japan, the EU and the United States this year. On
March 13, the three joined forces to hit China with a trade suit
over exports of rare earths and other metals.
The number of trade disputes launched at the WTO so far this
year has jumped to 18, already more than double the eight that
were filed last year.
Argentina now has 60 days to satisfy Japan and the United
States that its policies comply with WTO rules or face a
possible escalation of the dispute. Afterward, the complainants
can ask the WTO to adjudicate, which could end in Argentina
being forced to repeal any laws found to contravene WTO rules.
The European Union has not said whether it will ask the WTO
to set up an adjudication panel on its dispute with Argentina.