ARGENTINA MEASURES AFFECTING THE

Transcription

1 In the World Trade Organization ARGENTINA MEASURES AFFECTING THE IMPORTATION OF GOODS Geneva, 24 September 2013

2 TABLE OF CONTENTS 1. INTRODUCTION THE DJAI SYSTEM RTR REQUIREMENTS CONCLUSIONS i -

3 TABLE OF CASES CITED Short Title Australia Automotive Leather II Brazil Aircraft Canada Dairy EC Countervailing Measures on DRAM Chips Indonesia Autos US Hot-Rolled Steel Full Case Title and Citation Panel Report, Australia Subsidies Provided to Producers and Exporters of Automotive Leather, WT/DS126/R, adopted 16 June 1999, DSR 1999:III, p. 951 Panel Report, Brazil Export Financing Programme for Aircraft, WT/DS46/R, adopted 20 August 1999, as modified by Appellate Body Report WT/DS46/AB/R, DSR 1999:III, p Appellate Body Report, Canada Measures Affecting the Importation of Milk and the Exportation of Dairy Products, WT/DS103/AB/R, WT/DS113/AB/R and Corr.1, adopted 27 October 1999, DSR 1999:V, p Panel Report, European Communities Countervailing Measures on Dynamic Random Access Memory Chips from Korea, WT/DS299/R, adopted 3 August 2005, DSR 2005:XVIII, p Panel Report, Indonesia Certain Measures Affecting the Automobile Industry, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R and Corr.1 and 2, adopted 23 July 1998, and Corr. 3 and 4, DSR 1998:VI, p Panel Report, United States Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/R, adopted 23 August 2001 modified by Appellate Body Report WT/DS184/AB/R, DSR 2001:X, p ii -

4 Madam Chairperson, distinguished members of the Panel. 1. INTRODUCTION 1. First of all, the European Union would like to thank you for agreeing to serve in this Panel. We will do our best to facilitate your task in the course of these proceedings. 2. At the outset, let us reassure you and our Argentine colleagues that this dispute is not "tainted with political intent". 1 The European Union does not intend to be "aggressive" or "offensive" in any of its submissions; nor do we aim at "casting discredit on [Argentina]" 2 or "placing Argentina on the same level as the worst totalitarian regimes in history". 3 The European Union acknowledges that Argentina is an important trade partner in the multilateral setting. And we also welcome Argentina's commitment to the multilateral disciplines of the WTO. 4 Bilateral investment and trade relations with Argentina are important for us as well. The EU and Argentina are engaged in the negotiation of an Association Agreement between the EU and MERCOSUR for some time now. 3. Nevertheless, the European Union, as well as other WTO Members, following the agreed WTO rules to solve trade disputes (i.e., the DSU), has brought before you a very precise matter which is of significant concern to our industries and negatively affects our trade interests. And we have done so by referring to the main features of Argentina's trade policy as described by Argentina itself. Indeed, terms such as "managed trade" ("comercio administrado"), as well as Argentina's trade policy objectives of eliminating trade balance deficits and achieving import substitution, have been reproduced from official sources in Argentina The essence of the commitments undertaken by all WTO Members under the covered agreements is to reduce "barriers to trade" and eliminate "discriminatory Argentina's first written submission, para. 7. Argentina's first written submission, para. 4. Argentina's first written submission, para. 6. Argentina's first written submission, para. 39. See e.g. European Union's first written submission, paras

5 treatment in international commerce". 6 Members have also committed to publish their trade measures "to contribute to the transparency of Members' trade policies and to the effectiveness of surveillance arrangements established to that end". 7 With respect to import licencing systems, WTO Members have also agreed on detailed rules in the Import Licensing Agreement. The European Union maintains that Argentina, through the Declaración Jurada Anticipada de Importación ("DJAI") and the various Restrictive Trade Related Requirements ("RTR requirements") imposed upon many economic operators in Argentina, infringes these fundamental principles as enshrined in Articles III:4, X:1, X:3 and XI:1 of the GATT 1994 as well as Articles 1.3, 1.4(a), 1.6, 3.2, 3.3 and 3.5(f) of the Import Licensing Agreement. 5. Today, the European Union will not repeat the arguments made in our first written submission against the DJAI requirement and the RTR requirements. Rather, we will address briefly some of the issues raised by Argentina in its first written submission. First, we will address the DJAI requirement. We will revert to the RTR requirements last. 2. THE DJAI SYSTEM 6. Madam Chairperson, distinguished members of the Panel, 7. In order to facilitate your task of following the debate today, the co-complainants have tried to put together separate, but complementary opening statements on the issue of the DJAI system. To maximise the efficiency of this first Hearing, the European Union will not address in detail all of the points raised by Argentina in its First Written Submission. We will do so in our Second Written Submission. We will focus our Opening Statement today on only some of the main themes raised by Argentina in its written submission. 8. When reading Argentina's First Written Submission, we have the impression that we are reading a scholarly article discussing how the WTO law should have been; but not how the WTO law actually is today. For example, Argentina argues 6 7 GATT 1994, Third Recital and, among others, Articles XI:1 and III:4. See also WTO Agreement, Third Recital. Decision on Notification Procedures, Second Recital; and Article X:1 of the GATT

6 extensively against the legal interpretations and findings of past panels, such as the report of the panel in India-Quantitative restrictions, 8 or in China-Raw Materials and Colombia-Ports of Entry. 9 Argentina is also presenting novel ideas on how Article XI of the GATT should be interpreted, which go against the way that the panels and the Appellate Body have interpreted this provision in the past. 9. In reality, Argentina is not asking you to apply the law to the facts of the present case. Argentina is asking you to change the law. 10. This is probably facilitating your task, because, through its defence, Argentina seems to acknowledge implicitly that its DJAI measure is inconsistent with WTO law, as it stands today. 11. Argentina' defence lies on one basic assertion: that Article XI:1 of the GATT does not cover all "prohibitions and restrictions", but only some of them. 10 This is a novel theory, which has never been accepted by any panel or Appellate Body report throughout the 65 years of the existence of the GATT. 12. It is also a theory which does not find any support in the text of Article XI:1 itself. The words "no prohibition or restriction" are general and absolute, just as is the title of the Article, which reads "general elimination". Moreover, the text of Article XI:1 lists the exceptions from that general rule: the "duties, taxes or other charges". The combination of these words clearly shows that Article XI:1 covers all "prohibitions and restrictions" and that the only measures that fall outside its scope are the "duties, taxes and other charges". Therefore, the text of Article XI:1 contradicts Argentina's theory. 13. The Appellate Body and the panels have consistently found that any type of measure, other than "duties, taxes or other charges", may fall within the scope of Article XI:1. We will not repeat today all of the past cases dealing with the definition of "measure", or the definition of "quantitative restriction" for purposes of Article XI:1. We refer you to paragraphs 239 to 251 of the European Union's First Written Submission for a concise presentation of the relevant jurisprudence See paragraphs 319 to 329 of Argentina's first written submission. See paragraphs 332 and 334 of Argentina's first written submission. This discussion does not relate to "duties, taxes and other charges", which are expressly excluded from the scope of Article XI:

7 14. However, we will draw your attention to the fact that Argentina's First Written Submission does not challenge our presentation of this jurisprudence. Argentina does not assert that we have presented, or interpreted, incorrectly the consistent WTO jurisprudence. Argentina simply asserts that this jurisprudence is wrong. Argentina is asking you to find that the panels have failed to properly interpret Article XI:1 in the past. As we have already mentioned, Argentina is not asking you to apply the law to the facts of this case. Argentina is asking you to change the law. 15. Argentina understands that it cannot find support for its theory in the text of Article XI:1, or in the reports of the Appellate Body and the panels. For this reason, Argentina seeks to appeal to your common sense. In paragraphs 177, 314 and 339 of its First Written Submission, Argentina asserts that you must accept that Article XI:1 does not cover "customs formalities", because otherwise the WTO Members would not be able to operate their customs systems and this would be an "absurd consequence". In paragraph 318 of its submission, Argentina asserts that it is unreasonable to accept that all "prohibitions and restrictions" fall within Article XI:1 of the GATT, because then "entirely ordinary formalities and requirements imposed in connection with importation would start with a presumption of illegality under Article XI:1". 16. Argentina is wrong. The text of the GATT provides an answer to its assertion. Article XX of the GATT provides in paragraph (d) for a "general exception" for measures that are necessary to secure compliance with domestic laws and regulations "relating to customs enforcement". This is conclusive evidence that Argentina's assertion is wrong. The fact that the drafters of the GATT needed to place the customs laws and regulations under the general exception of Article XX(d), conclusively establishes that customs laws and regulations may fall within the scope of Article XI:1, just like any other government measure. Therefore, it is not "unreasonable", or absurd" for you to accept that "customs formalities" may fall within the scope of Article XI:1 and, consequently, that they need to be defended under Article XX(d) of the GATT. This is precisely what the text of the GATT says. 17. There is one more point. The inclusion of customs laws and regulations in Article XX(d) of the GATT tells us something important about the burden of proof. If the - 4 -

8 defending party considers that the complainants are attacking a domestic measure which is a reasonable law or regulation relating to customs enforcement, then the defending party has the burden of invoking the general exception of Article XX(d) and of proving that the conditions for the application of this exception are satisfied. And, this is precisely the burden that Argentina is trying to avoid in the present case. 18. Throughout its First Written Submission, Argentina is trying to reverse this burden. Instead of invoking and proving Article XX(d), Argentina is asserting in paragraph 183 of its First Written Submission that the complainants have the burden to prove that (a) the DJAI has a trade restrictive effect in addition to the trade restrictive effect of an unknown measure that the DJAI is supposed to be implementing and (b) that this trade restrictive effect is greater than the effect that would ordinarily be associated with a requirement of the nature of the DJAI. This statement contains obvious factual and legal errors, which we will discuss in detail in our Second Written Submission. However, these assertions also show Argentina's efforts to reverse the burden of proof. Argentina seeks to pass on to the complainants the burden to prove some type of a reverse version of the conditions of Article XX(d). Madame Chairperson, Argentina's baseless assertions must be rejected. 19. Argentina has extensively argued that the DJAI System is not an import licensing regime, but some other type of measure which Argentina calls "customs formalities". The European Union considers that the DJAI System is an import licensing regime and will address these issues in detail in its Second Written Submission. 20. At this stage, we would like simply to draw your attention to paragraphs 237 to 251 of the European Union's First Written Submission. The European Union has explained in these paragraphs the reasons for which the DJAI System breaches Article XI:1 of the GATT irrespective of whether it is an import licensing regime, or some "other measure". Therefore, Argentina's assertions on the "characterisation" of the DJAI System cannot bring the result that Argentina is seeking: even if Argentina was right and the DJAI System was considered as something different than an import licensing system, the DJAI System would still - 5 -

9 be inconsistent with Article XI:1 of the GATT. In these circumstances, it is not clear whether the Panel needs to analyse further those assertions of Argentina. 21. Finally, Argentina has devoted a large part of its First Written Submission to the presentation of its views on Article VIII of the GATT. This provision is not related to the present case and its interpretation is not within the terms of reference of the Panel, because it is not included in any of the Panel Requests through which this Panel was established. The European Union does not consider that there is any merit in Argentina's assertions. Moreover, the European Union considers that Argentina seeks to embark into a long discussion on the interpretation of Article VIII simply in order to disorient the debate in the present case and detract the Panel's attention from the legal provisions that are within the Panel's terms of reference. 22. For these reasons, our comment will be brief: the fact that Article VIII imposes some additional obligations on "formalities and requirements in connection with importation" does not mean that these formalities and requirements can never fall within the scope of other provisions of the GATT, such as Article XI:1. To paraphrase one of Argentina's expressions, it would be an "absurd consequence" to find that these requirements and formalities are exempted from Article XI:1 of the GATT, just because Article VIII:1(c) provides that their "incidence and complexity" should be "minimized". 23. It follows that the basis of Argentina's defence in law, which is Argentina's interpretation of Article XI:1, is clearly unfounded. Given that Argentina has not advanced any defence under Article XX of the GATT, our debate could probably be concluded here. 24. However, for the sake of completeness, we will discuss briefly Argentina's description of the facts in its First Written Submission. 25. Paragraphs 218 to 238 of Argentina's First Written Submission confirm, in essence, the description of the design, structure and operation of the DJAI System, as outlined in paragraphs 36 to 52 of the European Union's First Written Submission. However, Argentina should be asked to clarify and confirm a few points of fact

10 26. First, Argentina has not provided a complete list of all the governmental entities that have the right to block imports through the DJAI system. Paragraph 227 of Argentina's First Written Submission does not mention the Directorate General for Revenues from Social Security ("DGRSS") and there is no reference to the National Institute of Industrial Technology ("INTI"). It would be good if Argentina could confirm whether these entities participate in the DJAI system, or not. 27. Second, in paragraph 230 of its First Written Submission, Argentina states that INV and SENASA "will" assess certain imports "once their instruments of accession are in force". It would be good if Argentina could confirm whether the laws, regulations or administrative rulings through which these entities were affiliated to the DJAI system have actually been published, 11 as well as what are the powers of these entities in the DJAI system. 28. Third, in paragraph 230 of its First Written Submission, Argentina makes certain statements in relation to the powers of SEDRONAR in the DJAI system. However, Argentina fails to provide the missing information outlined in paragraphs 255 to 259 of the European Union's First Written Submission. In particular, Argentina does not tell us (a) whether, when and where the law, regulation or administrative ruling through which SEDRONAR was affiliated to the DJAI system was published; when SEDRONAR started having the power to block imports; where one can find the list of goods the importation of which SEDRONAR can review; what is the time period within which SEDRONAR may impose an Observation; and where one can find the publication of the grounds on the basis of which SEDRONAR can block imports Fourth, in paragraphs 228 and 229 of its First Written Submission, Argentina asserts that the "participation of each agency is within its statutory authority". In support of this assertion, Argentina provides certain documents as Exhibits, listed The European Union has argued that they have not been published and that this constitutes a violation of Article X:1 of the GATT. The European Union has argued that there is no such publication and that this constitutes a violation of Article X:1 of the GATT

11 in footnote 115. It would be good if Argentina could point us at the specific reference to the DJAI system in these documents. 30. Fifth and most importantly, Argentina's First Written Submission omits to discuss in detail one important fact in relation to the design, structure and operation of the DJAI system. The role of the Secretariat for Domestic Trade. 31. Paragraphs 239 to 261 of Argentina's First Written Submission contain an extensive discussion of the WCO and of the SAFE Framework. However, nowhere in Argentina's First Written Submissions can we find an explanation of how the Secretariat for Domestic Trade fits in with the principles and procedures of the SAFE Framework and of the WCO. What is the "high-risk" element of imports which the Secretariat for Domestic Trade should be analysing on the basis of its "statutory authority", as described in paragraph 231 of Argentina's First Written Submission? 32. Moreover, Argentina fails to address the evidence discussed in paragraphs 53 to 67 of the European Union's First Written Submission. All of this evidence relates to the Secretariat for Domestic Trade's position and role in the design, structure and operation of the DJAI system. And it establishes that Argentina's reliance on the WCO and the SAFE Framework are baseless. 33. Madam Chairperson, members of the Panel, we will stop our discussion of the DJAI system at this point, in order to allow our co-complainants the time and opportunity to present their views on the relevant issues and in order to avoid repetition. We look forward to your questions on this issue. 3. RTR REQUIREMENTS 34. Moving on to the other measures of concern to the European Union's interests, the European Union recalls that it has brought before the Panel the measure adopted by Argentina which prohibit or restrict the importation of products and/or the use of imported products in Argentina. Specifically, the European Union has challenged the existence of an overarching measure adopted by the Argentine Government, which is not officially published, by which Argentina requires economic operators to take one or more of the following actions: - 8 -

12 the one-to-one requirement, whereby Argentina requires to export a certain value of goods from Argentina related to the value of imports as a condition to import products into Argentina; the import reduction requirement, whereby Argentina requires to limit the volume of imported products as a condition to continue importing some products into Argentina; the price control requirement, whereby Argentina requires to freeze or reduce the prices of products sold locally as a condition to import products into Argentina; the import substitution requirement, whereby Argentina requires to increase the local content of domestically produced goods, by replacing imports with domestic products, either as a condition to import products into Argentina or, more generally, as a condition to do business in Argentina and/or to obtain an advantage; and the investment requirement, whereby Argentina requires to make investments in Argentina and/or to refrain from repatriating profits abroad, as a condition to imports products into Argentina. 35. The European Union has provided the Panel with multiple examples of instances where Argentina has imposed these requirements on operators participating in the economic and trade environment in Argentina. The European Union also challenges as separate measures some of those instances, in the event that the Panel finds that the overarching measure, as described, does not exist. 36. Quite tellingly, in its first written submission, Argentina does not address at all the facts described in the European Union's first written submission. Rather, Argentina avoids entering into the rebuttal of the facts submitted by adducing procedural reasons to exclude the RTR requirements from the scope of these proceedings. 13 Argentina also takes issue with the validity and relevance of the evidence submitted in the form of information provided 13 Argentina's first written submission, paras

13 by certain sources of information in Argentina, in particular Clarin and La Nación newspapers We have already addressed Argentina's request for a preliminary ruling on this matter in our response of 10 September. And we thank the Panel for clarifying that the RTR requirements fall within the Panel's terms of reference. We are looking forward to engaging with Argentina on a substantive debate about those requirements. 38. With respect to Argentina's arguments about the validity and relevance of the evidence submitted, we would like to make two brief comments at this stage. 39. First, contrary to what Argentina appears to suggest, the European Union is not supporting its claims on evidence consisting on "press releases and newspaper articles which cannot be considered as anything more than journalistic opinion tinged with ideology". 15 Unfortunately, due to the lack of transparency, i.e., the absence of publication of the overarching measure the European Union is challenging, we have to rely on a variety of evidence, including newspapers, to show the existence of such a measure. 40. In this respect, and in addition to information contained in newspapers from various sources, the European Union has provided, inter alia, official press releases by the Argentine authorities, official documents produced by the Argentine authorities, a document made by a notary public confirming the existence of the RTR requirements, and surveys by different industry associations speaking to the same facts. Argentina does not appear to challenge the validity and reliability of any of those documents. 41. Second, the European Union notes Argentina's request to withdraw all information taken from Clarín and La Nación newspapers from the record of these panel proceedings. 16 In this respect, the European Union notes that such information is only a minimal part of all the evidence provided in this Argentina's first written submission, paras Argentina's first written submission, para. 8. Argentina's first written submission, paras 33 and

14 case. Further, the European Union does not wish to enter into the reasons expressed by Argentina to support its request and whether they could justify such a decision by the Panel. In this respect, however, the European Union observes that the Panel is free to admit and evaluate evidence of every kind, and to ascribe to it the weight the Panel sees fit. 17 The European Union further notes that it has only cited twice the information provided by Clarin in its first written submission. And most of the references made to specific sets of facts contained in information provided by Clarin and La Nación have been confirmed by other sources, including other means of communication (newspapers, radios, TVs, magazines, blogs, etc) as well as official press releases by the Argentine authorities. 42. This is important when evaluating the value of the information contained in those articles from newspapers. We agree with Argentina 18 that, with respect to the information provided in newspapers, a distinction should be made between the facts described therein and the journalistic colouring of these facts. 19 However, the information provided by those newspapers in this case confirms that an event or fact took place in the past, thereby confirming the existence of the overarching measure as well as the separate measures the European Union is challenging in this case. Moreover, such an event or fact, or similar events or facts, are reported in very similar terms in other sources of information, such as other newspapers or official press releases. Thus, the European Union considers that the Panel should ascribe a value to the information provided by those newspapers (as well as others) when considering the totality of the evidence put forward about the existence and content of the measures it is challenging as RTR requirements. 43. In this respect, the European Union also notes that previous panels and the Appellate Body have taken into account evidence provided by newspapers, 20 without the need to demonstrate factual assertions through contemporaneous Panel Report, US Hot-Rolled Steel, para ("[I]nternational tribunals are generally free to admit and evaluate evidence of every kind, and to ascribe to it the weight that they see fit"). Argentina's first written submission, para. 8. See Panel Report, EC Countervailing Measures on DRAM Chips, para See e.g. Appellate Body Report, Canada Dairy, para. 141, footnote 128; and Panel Report, Brazil Aircraft, para

15 sources of information. 21 Specially, panels have been inclined to accept the information provided by newspapers in cases like the present one, where the respondent did not challenge the truth of the facts reported. 22 The European Union would also invite the Panel to draw the necessary inferences, where appropriate, from Argentina's refusal to engage in the rebuttal and substantive discussion of the facts and arguments raised in its first written submission about the RTR requirements. 44. Finally, the European Union observes that in numerous press releases published by official authorities in Argentina, mainly the Ministry of Industry and the Ministry of Economy, references are made to agreements being signed between the relevant Argentine authorities and economic operators, containing the RTR requirements the European Union is challenging in this case. The European Union has seen many of those agreements and their content. However, the European Union has not been authorised by those economic operators to disclose them in these proceedings. Therefore, the European Union invites the Panel to seek those agreements directly from Argentina, if necessary by following the BCI proceedings already foreseen in the Panel's Working Procedures. We believe that such a request would facilitate the Panel's tasks of making an objective assessment of the matter. 4. CONCLUSIONS 45. In sum, the European Union requests the Panel to find that the DJAI system as well as the RTR requirements are inconsistent with the covered agreements as explained in our first written submission. Thank you for your attention. We remain at your disposal to reply to any questions you may have. * * * Panel Report, Indonesia Autos, para Panel Report, Australia Automotive Leather II, para. 9.65, footnote