The European Union launched a challenge at the World Trade Organization on Friday against Argentinian import restrictions after Buenos Aires seized Spanish oil assets.
“Argentina’s import restrictions violate international trade rules and must be removed,” said EU trade commissioner Karel De Gucht on announcing the case had been filed against a “protectionist import regime (that is) … clearly getting worse.”
The EU exports more than 11 billion euros worth of goods and services to Argentina each year, importing a similar amount in return, but complained that “Argentina’s restrictive measures are extending to more and more sectors.”
Announcing the move, EU officials highlighted procedures to obtain an import licence as well as an obligation on companies to balance imports with exports.
Brussels is initially seeking direct talks with Buenos Aires and has 60 days under WTO case rules in which to try and resolve the dispute.
Thereafter, the WTO would usually be asked to rule on the legality of Argentina’s actions. Such cases invariably take years.
Argentina earlier this month formally nationalised YPF, majority owned by Spanish energy giant Repsol.
Spanish Prime Minister Mariano Rajoy said the seizure would trigger a “tremendous” loss in international investor confidence in the country.
YPF accounts for 34 percent of Argentina’s domestic oil production, 25 percent of domestic gas production and 54 percent of domestic refining, according to the Argentine Oil Institute.
Argentine President Cristina Kirchner argued the move was justified because Argentina faces sharp rises in its bill for imported oil and Repsol has failed to make agreed investments needed to expand domestic production.
Repsol has said it wants at least $10 billion in compensation and on Friday cancelled its contract to supply liquid natural gas to Argentina.
Buenos Aires said Repsol is leaving a $9 billion debt, while in just over a decade it earned more than $15.7 billion, most of it sent overseas and not reinvested in the country.
EU takes Argentina trade fight to WTO
