The World Trade Organization ruled last week that certain conditions which Argentina imposes on firms wishing to import goods into the country break WTO law.

The EU, Japan and the US launched a WTO dispute settlement case in May 2012. Initial consultations with Argentina in July 2012 did not bring an amicable solution. As a result, the WTO set up a panel in January 2013.

The practices complained of include offseting the value of imports into Argentina with the equivalent in exports; reaching a certain level of local content in their domestic production; a requirement to

invest in Argentina; and keeping profits made in Argentina in the country.

The WTO panel ruled that Argentina may not require local importers or foreign firms to accept practices forced upon them by the Argentinean authorities as a condition for being allowed to import goods into the country.

“I’ve made standing up to protectionism one of the hallmarks of my term as EU Trade Commissioner,” said EU Trade Commissioner Karel De Gucht. “This case sends an important signal that protectionism is not acceptable. I call on Argentina to move quickly to comply with the ruling of the WTO panel and remove these illegal measures, and open the way for EU goods to compete fairly on the Argentinian market.”

The WTO panel also ruled against a procedure known as the Advanced Sworn Import Declaration (Declaración Jurada Anticipada de Importación or DJAI, which requires firms to secure approval by the Argentine authorities before importing goods.

Argentina introduced the measures as part of a managed trade policy which aimed to substitute imports for locally-sourced products and to reduce the country’s trade deficits with other countries.

The parties now have 60 days in which to appeal against the panel’s ruling. If there is no appeal, Argentina will have to bring itself into compliance by changing these measures within a reasonable period of time. That period of time will either be negotiated between Argentina, the EU, the US and Japan, or fixed by a WTO arbitrator.