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DISPUTE SETTLEMENT: DISPUTE DS155

Argentina — Measures Affecting the Export of Bovine Hides and the Import of Finished Leather

This summary has been prepared by the Secretariat under its own responsibility. The summary is for general information only and is not intended to affect the rights and obligations of Members.

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See also: One-page summary of key findings of this dispute

Appellate Body and Panel Reports Adopted

Complaint by the European Communities.

On 24 December 1998, the EC requested consultations with Argentina concerning certain measures taken by Argentina on the export of bovine hides and the import of finished leather. The EC alleged that the de facto export prohibition on raw and semi-tanned bovine hides (which is implemented in part through the authorization granted by the Argentinian authorities to the Argentinian tanning industry to participate in customs control procedures of hides before export) is in violation of GATT Articles; XI:1 (which outlaws de jure export prohibitions and measures of equivalent effect); and X:3(a) (which requires uniform and impartial administration of laws and regulations) to the extent that personnel of the Argentinian Chamber for the tanning industry are authorized to assist Argentinian customs authorities. The EC also claimed that the “additional value added tax” of 9 per cent on imports of products into Argentina and the “advance turnover tax” of 3 per cent based on the price of imported goods imposed on operators when importing goods into Argentina are in violation of GATT Article III:2 (which prohibits tax discrimination of foreign products which are like, directly competitive or substitutable to domestic products).

On 31 May 1999, the EC requested the establishment of a panel. At its meeting on 16 June 1999, the DSB deferred the establishment of a panel. Further to a second request to establish a panel by the EC, the DSB established a panel at its meeting on 26 July 1999. On 31 January 2000, the Panel was composed. The Panel circulated its report on 19 December 2000. The Panel concluded that:

• it has not been proved that Resolution (ANA) No. 2235/96 is inconsistent with Argentina’s obligations under Article XI:1 of the GATT 1994;
   
• Resolution (ANA) No. 2235/96 is inconsistent with Argentina’s obligations under Article X:3(a) of the GATT 1994;
   
• General Resolution (DGI) No. 3431/91 is inconsistent with Article III:2, first sentence, of the GATT 1994;
   
• General Resolution (DGI) No. 3543/92 is inconsistent with Article III:2, first sentence, of the GATT 1994;
   
• General Resolutions (DGI) No. 3431/91 and 3543/92, although they fall within the terms of paragraph (d) of Article XX of the GATT 1994, fail to meet the requirements of the chapeau of Article XX and are therefore not justified under Article XX as a whole;
   
• there is nullification or impairment of the benefits accruing to the European Communities under the GATT 1994.

The DSB adopted the Panel Report on 16 February 2001.

Implementation Status of Adopted Reports

At the DSB meeting of 12 March 2001, Argentina stated its intention to implement the DSB‘›s recommendations and indicated that it would need a reasonable period of time to do so. On 14 May 2001, the EC requested that the reasonable period of time be determined through binding arbitration pursuant to Article 21.3(c). On 31 August 2001, the Arbitrator circulated its award whereby the reasonable period of time was fixed at 12 months and 12 days from 16 February 2001. This period was therefore to expire on 28 February 2002.

In view of the concrete action undertaken by Argentina to comply with the DSB recommendations and rulings during the reasonable period of time in this dispute, and in light of the economic problems that Argentina is currently facing, the parties agreed on the following procedures: the parties would pursue their discussions on compliance by Argentina with the DSB recommendations and rulings; and the EC would retain the right to make a request for authorization to suspend concessions or other obligations under the DSU at any time after the expiry of the reasonable period of time, but only after completion of proceedings under Article 21.5 DSU. On 25 February 2002, the parties requested the DSB to circulate their agreement on procedures under Articles 21 and 22 of the DSU. On 8 March 2002, the parties notified the DSB of their agreement.

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