Concluding remarks by the Chairperson

This fourth Trade Policy Review of Argentina has provided an excellent opportunity to improve our understanding of Argentina's trade and investment policies. I would like to thank Ms Beatriz Paglieri, Secretary of External Trade in the Ministry of Economy, Ambassador Augusto Costa, Secretary of International Economic Relations in the Ministry of External Relations and Worship, and the whole of the Argentinian delegation, for their constructive engagement in this meeting and their strong commitment to this exercise. I would also like to thank Ambassador Trung Thanh Nguyen, Permanent Representative of Viet Nam to the WTO, for his intervention as discussant. Argentina's written answers to the large number of advanced written questions have been well appreciated by Members. Members look forward to receiving answers to any questions as soon as possible.

Members congratulated Argentina for having weathered the global crisis well, achieving high GDP growth rates of around 9% in both 2010 and 2011. They also welcomed the important progress made with respect to social inclusion, improved income distribution, poverty alleviation and reduction in unemployment during the period of review. However, more recently, it was also noted that GDP growth slowed to an annual rate of 2.4% in the first half of 2012, while inflation accelerated. The latter could pose a problem for future growth, by undermining Argentina's external competiveness and hampering Argentina's goal of social inclusion. Members hoped Argentina would address the challenge of maintaining strong and sustainable growth and reducing inflation without resorting to trade restrictive policies, an issue that had already been flagged at the time of the previous TPR in 2007.

Members highlighted Argentina's active participation in the multilateral trading system and in the Doha Development Agenda, particularly in the areas of agriculture and development-related issues. Argentina was commended for its strong engagement and commitment to the finalisation of the DDA, as well as its growing role in South-South cooperation, Aid for Trade and initiatives in support of LDCs. Members noted that, as a large exporter of commodities, Argentina had benefitted considerably from its participation in the multilateral trading system, doubling its exports during the review period. They encouraged Argentina to continue enhancing its role in the multilateral trading system.

It was noted that during the period under review, Argentina continued to actively use trade policy to achieve macroeconomic and social goals. For instance, export taxes had been used to ensure domestic supply at low prices and to enhance fiscal revenue, while import licensing and import-export compensation agreements had been used to improve the trade balance and promote domestic production. Members were interested in hearing from Argentina whether it did not consider that relying on export taxes for revenue purposes introduced distortions in the allocation of domestic resources and resulted in an alteration of its comparative advantage. Some Members expressed concerns regarding the impact of these taxes on international prices particularly considering that Argentina is a major world exporter of some of the commodities that are subject to these taxes. In general, Members prompted Argentina to adopt and implement trade measures in a more transparent and predictable manner as it is uncertainty itself which could stifle growth, investment, and trade.

Members noted Argentina's increased recourse to import-restricting measures, mainly anti‑dumping, reference prices, and, especially, import licensing, during the period under review. They expressed concern about the introduction, in early 2012, of a new Advance Import Sworn Declaration, to be submitted before importation. The use of import licensing had been denounced by some WTO Members and had been brought before the DSB, as well as the resort to import/export compensation agreements. Members welcomed Argentina's removal of most import licences in 2012 and in early 2013, and asked about its plans to take further steps in this direction. In general, Members questioned the transparency of the application of import-restricting measures and felt that these could have an adverse impact on trade. Argentina was urged to remove them and to apply WTO rules-based measures. The Argentinian authorities in their responses considered that Argentina's policies were within WTO rules.

Other areas for attention brought up by Members during the review, either through the question and answer process or through their statements include the following. We have taken note of the comments provided today by Ambassador Costa in this regard, including his clarification that Argentina is not seeking self-sufficiency.

• Tariffs: Although Members appreciated Argentina's elimination of specific duties during the period under review, they noted that the average applied tariff rate had increased during the period under review and that the percentage of duty-free tariff lines had fallen. A few also referred to some applied tariffs whish seem to be higher that the bound levels. They enquired about the consistency of recent tariff increase with G-20's pledge to resist protectionism.
• Trade balancing requirements: Members sought more information about the nature of these requirements and their legislative basis, including whether they were published in the Official Journal, the means through which they were communicated to private companies, the implications for companies that did not comply with these requirements, and the justification of these practices within the WTO Agreements.
• Foreign direct investment: While Members noted that Argentina applies a generally open FDI regime, with almost no restrictions on entry and the application of national treatment for most sectors, concerns were raised including related to: limitations to repatriate dividends and in general to remit capital abroad; the criteria to nationalize industries and plans for future nationalization of enterprises; and the impact of the import substitution policy on FDI and its compatibility with the TRIMs Agreement.
• Horizontal incentives schemes: Members noted that Argentina maintained several such schemes, aimed at reducing the initial cost of investment, or fostering regional development or R&D. It was also noted that Argentina provides credit guarantees and official credit, sometimes at preferential or fixed rates, and that, in some cases, incentive schemes were contingent on local value added requirements. Members urged Argentina to notify these programmes to the WTO.
• Government procurement: Members inquired about Argentina's plans for accession to the GPA, and a number of questions were raised about the general rules and procedures regarding government procurement, including with respect to the use of domestic preferential margins.
• Intellectual property: Argentina was requested to clarify some issues in this area, particularly with respect to the patentability of pharmaceuticals, and delays in processing patent applications.
• Services: Members noted that the different services sectors were relatively open to foreign investment. They encouraged Argentina to enhance competition in some service sectors, such as telecommunications, and to better reflect the generally open services' regime in the country's commitments in WTO.

In conclusion, Members generally commended Argentina for its economic performance during this review, while cautioning it against rising inflation. Members welcome Argentina's resolve to reduce public debt, increase employment, enhance its productive capacity and manufacturing competitiveness, fighting poverty, improving income distribution, etc. It is not these objectives, but the manner in which Argentina is — and has been — using some specific trade policy measures to further these objectives that Members have raised questions or expressed concerns about. As in the previous review in 2007, this includes the use and impact of export taxes, the granting of incentives contingent on local content and use of import licences, and Members have once again in this review asked Argentina to reassess the efficiency of applying these measures.

The participation of a large number of delegations in this meeting and the large number of questions posed during this Trade Policy Review indicated the clear importance of Argentina as a trading partner for WTO Members. Similarly, it is telling that so many Members underlined the importance of their two-way trade with Argentina, while stressing that this trade — despite many times impressive growth in the last few years — still fell short of its full potential. I hope, therefore, that this review will be of use for Argentina to reflect on its importance in, and responsibility for, the multilateral trading system so that it will continue to shape its trade policy accordingly both for its own benefit as well as for the benefit of all who are part of the system. In closing, I would like to thank the Argentinian delegation, all the other delegations, the discussant and the Secretariat for this successful review of the trade policies of Argentina.