ARGENTINA MEASURES AFFECTING THE IMPORTATION OF...

In the World Trade Organization

ARGENTINA – MEASURES AFFECTING THE

IMPORTATION OF GOODS

(DS438)

Second Written Submission

by the European Union

Geneva, 14 November 2013

Argentina – Measures Affecting Second Written Submission

The Importation of Goods by the European Union

(DS438)

________________________________________________________________________________________

- i -

TABLE OF CONTENTS

1. INTRODUCTION ........................................................................................................ 1

2. DJAI REQUIREMENT ............................................................................................... 2

2.1. Points that Argentina has Acknowledged ..................................................... 2

2.2. Points that Argentina Contests ..................................................................... 5

2.2.1. Issues relating to the GATT ............................................................. 5

2.2.1.1 Argentina's assertions in relation to Article XI:1 of the

GATT .................................................................................. 5

Argentina's assertions in relation to Article VIII of the GATT are 2.2.1.1.1

wrong .................................................................................................... 5

Argentina's distinction between "substantive" and "procedural" 2.2.1.1.2

provisions for purposes of Article XI of the GATT is wrong ............... 7

The notions of "prohibition" and "restriction" in Article XI of the 2.2.1.1.3

GATT ................................................................................................. 11

Is the DJAI a "customs formality"? .................................................... 14 2.2.1.1.4

Is the WCO SAFE Framework relevant for the Panel's analysis in the 2.2.1.1.5

present dispute? .................................................................................. 15

2.2.1.2 Argentina's assertions in relation to Article X:1 of the

GATT ................................................................................ 16

2.2.1.3 Argentina's assertions in relation to Article X:3(a) of the

GATT ................................................................................ 18

2.2.2. Issues relating to the Import Licensing Procedures Agreement ..... 19

2.2.2.1 The European Union's claims ............................................. 19

2.2.2.2 Argentina's defence in relation to the Import Licensing

Procedures Agreement........................................................ 20

The notion of "import license" in Article 1.1 of the Import Licensing 2.2.2.2.1

Procedures Agreement ........................................................................ 21

Is the DJAI "application and documentation" for "customs purposes"? . 2.2.2.2.2

......................................................................................................... 22

Argentina's assertions on the nature of the Import Licensing 2.2.2.2.3

Procedures Agreement as "lex specialis" ............................................ 24

Conclusion on the Import Licensing Procedures Agreement .............. 25 2.2.2.2.4

3. RESTRICTIVE TRADE-RELATED REQUIREMENTS ................................................ 25

3.1. The European Union has identified the precise content of the RTR

requirements as an overarching measure .................................................. 27

3.2. The RTR requirements as a single overarching measure is different from

the five requirements individually identified by the European Union ........ 30

3.3. The European Union has shown that the RTR requirements as an

overarching measure has a general and prospective application ............. 33

3.3.1. The RTR requirements as an overarching measure has general

application ...................................................................................... 34

3.3.2. The RTR requirements as an overarching measure has prospective

application ...................................................................................... 35



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3.3.3. Argentina's reliance on EC – Large Civil Aircraft is misplaced .... 37

3.4. EU's comments on Argentina's responses to the Panel's Questions after the

first meeting ................................................................................................ 39

3.4.1. Question 7 – Value of the Plan Estratégico Industrial 2020 ......... 39

3.4.2. Question 8 – Objectives pursued by Argentina through its managed

trade strategy .................................................................................. 40

3.4.3. Questions 13 and 14 - Value of certain evidence produced by means

of documents signed by a Notary Public, including affidavits ....... 41

3.4.4. Questions 16 to 17 – Argentina's refusal to provide certain

documents to the Panel ................................................................... 43

3.4.5. Question 26 – Nota de Pedido ........................................................ 44

3.4.6. Question 42 – Value of unofficial press clippings ......................... 45

3.5. EU's comments on the Panel's communication dated 6 November 2013 ... 46

4. CONCLUSION .......................................................................................................... 49



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- iii -

TABLE OF CASES CITED

Short Title Full Case Title and Citation

Argentina – Hides and

Leather

Panel Report, Argentina – Measures Affecting the Export of Bovine Hides

and Import of Finished Leather, WT/DS155/R and Corr.1, adopted 16

February 2001, DSR 2001:V, p. 1779

Australia – Automotive

Leather II

Panel Report, Australia – Subsidies Provided to Producers and Exporters

of Automotive Leather, WT/DS126/R, adopted 16 June 1999,

DSR 1999:III, p. 951

Brazil – Aircraft 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. 1221

Canada – Dairy 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. 2057

China – Raw Materials Appellate Body Reports, China – Measures Related to the Exportation of

Various Raw Materials, WT/DS394/AB/R / WT/DS395/AB/R /

WT/DS398/AB/R, adopted 22 February 2012

China – Raw Materials Panel Reports, China – Measures Related to the Exportation of Various

Raw Materials, WT/DS394/R / WT/DS395/R / WT/DS398/R / and Corr.1,

adopted 22 February 2012, as modified by Appellate Body Reports

WT/DS394/AB/R / WT/DS395/AB/R / WT/DS398/AB/R

EC – Bananas III Appellate Body Report, European Communities – Regime for the

Importation, Sale and Distribution of Bananas, WT/DS27/AB/R, adopted

25 September 1997, DSR 1997:II, p. 591

EC – IT Products Panel Reports, European Communities and its member States – Tariff

Treatment of Certain Information Technology Products, WT/DS375/R /

WT/DS376/R / WT/DS377/R, adopted 21 September 2010, DSR 2010:III,

p. 933

EC – Selected Customs

Matters

Appellate Body Report, European Communities – Selected Customs

Matters, WT/DS315/AB/R, adopted 11 December 2006, DSR 2006:IX, p.

3791

EC – Selected Customs

Matters

Panel Report, European Communities – Selected Customs Matters,

WT/DS315/R, adopted 11 December 2006, as modified by Appellate Body

Report WT/DS315/AB/R, DSR 2006:IX, p. 3915

EC and certain member

States – Large Civil Aircraft

Appellate Body Report, European Communities and Certain Member States

– Measures Affecting Trade in Large Civil Aircraft, WT/DS316/AB/R,

adopted 1 June 2011, DSR 2011:I, p. 7

EC and certain member

States – Large Civil Aircraft

Panel Report, European Communities and Certain Member States –

Measures Affecting Trade in Large Civil Aircraft, WT/DS316/R, adopted 1

June 2011, as modified by Appellate Body Report, WT/DS316/AB/R, DSR

2011:II, p. 685

Indonesia – Autos 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. 2201

Japan – Apples Panel Report, Japan – Measures Affecting the Importation of Apples,

WT/DS245/R, adopted 10 December 2003, upheld by Appellate Body

Report WT/DS245/AB/R, DSR 2003:IX, p. 4481



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- iv -

Short Title Full Case Title and Citation

Japan – Film Panel Report, Japan – Measures Affecting Consumer Photographic Film

and Paper, WT/DS44/R, adopted 22 April 1998, DSR 1998:IV, p. 1179

Thailand – Cigarettes

(Philippines)

Panel Report, Thailand – Customs and Fiscal Measures on Cigarettes from

the Philippines, WT/DS371/R, adopted 15 July 2011, as modified by

Appellate Body Report WT/DS371/AB/R, DSR 2011:IV, p. 2299

US – Continued Zeroing Appellate Body Report, United States – Continued Existence and

Application of Zeroing Methodology, WT/DS350/AB/R, adopted

19 February 2009, DSR 2009:III, p. 1291

US – COOL Appellate Body Reports, United States – Certain Country of Origin

Labelling (COOL) Requirements, WT/DS384/AB/R / WT/DS386/AB/R,

adopted 23 July 2012

US – COOL Panel Reports, United States – Certain Country of Origin Labelling (COOL)

Requirements, WT/DS384/R / WT/DS386/R, adopted 23 July 2012, as

modified by Appellate Body Reports WT/DS384/AB/R / WT/DS386/AB/R

US – Orange Juice (Brazil) Panel Report, United States – Anti-Dumping Administrative Reviews and

Other Measures Related to Imports of Certain Orange Juice from Brazil,

WT/DS382/R, adopted 17 June 2011, DSR 2011:VII, p. 3753

US – Shrimp (Viet Nam) Panel Report, United States – Anti-Dumping Measures on Certain Shrimp

from Viet Nam, WT/DS404/R, adopted 2 September 2011, DSR 2011:X,

p. 5301

US – Tuna II (Mexico) Panel Report, United States – Measures Concerning the Importation,

Marketing and Sale of Tuna and Tuna Products, WT/DS381/R, adopted

13 June 2012, as modified by Appellate Body Report WT/DS381/AB/R

US – Underwear Panel Report, United States – Restrictions on Imports of Cotton and

Man-made Fibre Underwear, WT/DS24/R, adopted 25 February 1997, as

modified by Appellate Body Report WT/DS24/AB/R, DSR 1997:I, p. 31



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________________________________________________________________________________________

- v -

TABLE OF EXHIBITS1

Exhibit No. Title

EU-423

Meaning of the term "overarching", OED on-line, available at

http://www.oed.com/view/Entry/134273?rskey=k7zK8q&result=2&isAdvanced=false#eid

and


EU-424

"Las petroleras Total Austral y Wintershall anunciaron a la Presidenta una inversión 2.100

millones de dólares", dated 22 February 2013, available at

http://www.presidencia.gov.ar/informacion/actividad-oficial/26365-las-petroleras-total-

austral-y-wintershall-anunciaron-a-la-presidenta-una-inversion-2100-millones-de-dolares

EU-425

"Inauguración de la fábrica de bicicletas López Hnos. en Chaco: Palabras de la Presidenta

de la Nación" dated 17 July 2013, available at

http://www.presidencia.gov.ar/discursos/26588-inauguracion-de-la-fabrica-de-bicicletas-

qlopez-hnosq-en-chaco-palabras-de-la-presidenta-de-la-nacion (Exhibit EU-425

EU-426

"Acto de inauguración de la Planta de Lavarropas Samsung en Cañuelas: Palabras de la

Presidenta de la Nación", dated 30 July 2013, available at

http://www.presidencia.gov.ar/discursos/26622-acto-de-inauguracion-de-la-planta-de-

lavarropas-samsung-en-canuelas-palabras-de-la-presidenta-de-la-nacion

EU-427

"Acto de inauguración de obras y empresas privadas: Palabras de la Presidenta de la

Nación" dated 3 May 2013, available at http://www.presidencia.gov.ar/discursos/26459-

acto-de-inauguracion-de-obras-y-empresas-privadas-palabras-de-la-presidenta-de-la-

nacion

EU-428

"Visita a la fábrica de tractores AGCO: Palabras de la Presidenta de la Nación" dated 1

October 2013, available at http://www.presidencia.gov.ar/discursos/26760-visita-a-la-

fabrica-de-tractores-agco-palabras-de-la-presidenta-de-la-nacion

EU-429

"'La propia virtuosidad del modelo es la que permite que aumente la recaudación', señaló

la Presidenta en Casa Rosada", dated 4 June 2013, available at

http://www.presidencia.gov.ar/informacion/actividad-oficial/26513-la-propia-virtuosidad-

del-modelo-es-la-que-permite-que-aumente-la-recaudacion-senalo-la-presidenta-en-casa-

rosada

EU-430

"Hola Guillermo, te estamos llamando, queremos importar…", El Cronista, dated 24 June

2013, available at http://www.cronista.com/columnistas/Hola-Guillermo-te-estamos-

llamando-queremos...-importar-20130624-0024.html

EU-431

"Giorgi destacó que las pymes ya controlan el 50% del mercado nacional de juguetes y

llamó a 'incorporar creatividad y diseño'", Ministerio de Industria, dated 20 septiembre

2013, available at http://www.industria.gob.ar/giorgi-destaco-que-las-pymes-ya-controlan-

el-50-del-mercado-nacional-de-juguetes-y-llamo-a-incorporar-creatividad-y-diseno/

EU-432

"El Ministerio de Industria realizó el Plenario de Foros del Plan Estratégico Industrial 20

20 con empresarios", Ministerio de Industria, dated 23 septiembre 2013, available at

http://www.industria.gob.ar/el-ministerio-de-industria-realizo-el-plenario-de-foros-del-

plan-estrategico-industrial-20-20-con-empresarios/

1 The European Union incorporates hereto the Exhibits JE and the table of Exhibits JE included in

the second written submission of the United States and Japan in DS444 and DS445.



http://www.presidencia.gov.ar/informacion/actividad-oficial/26365-las-petroleras-total-austral-y-wintershall-anunciaron-a-la-presidenta-una-inversion-2100-millones-de-dolares


http://www.presidencia.gov.ar/discursos/26588-inauguracion-de-la-fabrica-de-bicicletas-qlopez-hnosq-en-chaco-palabras-de-la-presidenta-de-la-nacion


http://www.presidencia.gov.ar/discursos/26622-acto-de-inauguracion-de-la-planta-de-lavarropas-samsung-en-canuelas-palabras-de-la-presidenta-de-la-nacion


http://www.presidencia.gov.ar/discursos/26459-acto-de-inauguracion-de-obras-y-empresas-privadas-palabras-de-la-presidenta-de-la-nacion



http://www.presidencia.gov.ar/discursos/26760-visita-a-la-fabrica-de-tractores-agco-palabras-de-la-presidenta-de-la-nacion


http://www.presidencia.gov.ar/informacion/actividad-oficial/26513-la-propia-virtuosidad-del-modelo-es-la-que-permite-que-aumente-la-recaudacion-senalo-la-presidenta-en-casa-rosada



http://www.cronista.com/columnistas/Hola-Guillermo-te-estamos-llamando-queremos...-importar-20130624-0024.html


http://www.industria.gob.ar/giorgi-destaco-que-las-pymes-ya-controlan-el-50-del-mercado-nacional-de-juguetes-y-llamo-a-incorporar-creatividad-y-diseno/


http://www.industria.gob.ar/el-ministerio-de-industria-realizo-el-plenario-de-foros-del-plan-estrategico-industrial-20-20-con-empresarios/




(DS438)

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- vi -

Exhibit No. Title

EU-433

"Giorgi: 'Necesitamos legisladores que defiendan la industrialización como lo hace el

gobierno nacional'", Ministerio de Industria, dated 30 septiembre 2013, available at

http://www.industria.gob.ar/giorgi-necesitamos-legisladores-que-defiendan-la-

industrializacion-como-lo-hace-el-gobierno-nacional/

EU-434

"Ahora Moreno avala acuerdos entre privados para controlar importaciones", El Cronista,

dated 3 October 2013, available at http://www.cronista.com/economiapolitica/Ahora-

Moreno-avala-acuerdos-entre-privados-para-controlar-importaciones-20131003-

0087.html

EU-435 "1º Encuentro empresario por un acuerdo productivo", ADMIRA, dated 30 September

2013, available at http://www.adimra.com.ar/index.do?sid=33&nid=1325

EU-436 "ACUERDO PRODUCTIVO: 2do. Encuentro Empresario", ADMIRA, dated 9 October

2013, available at http://www.adimra.com.ar/index.do?sid=33&nid=1337

EU-437 "Sintonía fina, parte dos", Página 12, dated 10 October 2013, available at

http://www.pagina12.com.ar/diario/economia/2-230957-2013-10-10.html

EU-438

"Refuerzan presión sobre automotrices para que compren partes locales", El Cronista,

dated 23 October 2013, available at http://web4.cronista.com/economiapolitica/Refuerzan-

presion-sobre-automotrices-para-que-compren-partes-locales-20131023-0083.html

EU-439

Press Release from Cámara de Comercio Exterior de Córdoba, Cámara de Industriales

Metalúrgicos y de Componentes de Córdoba, and Unión Industrial de Córdoba, dated 3

June 2013, available at http://www.uic.org.ar/pagina.asp?id=2499

EU-440

"Se duplicó el cepo a las importaciones y ya tiene impacto en el empleo", La Nacion,

dated 14 October 2013, available at http://www.lanacion.com.ar/1628859-se-duplico-el-

cepo-a-las-importaciones-y-ya-tiene-impacto-en-el-empleo

EU-441 "Desbordado por el cepo a la importación", La Nacion, dated 9 September 2013, available

at http://www.lanacion.com.ar/1618064-desbordado-por-el-cepo-a-la-importacion

EU-442

"En sólo dos años, más de 20 empresas extranjeras se fueron de la Argentina", El

Cronista, dated 3 October 2013, available at http://www.cronista.com/negocios/En-solo-

dos-aos-mas-de-20-empresas-extranjeras-se-fueron-de-la-Argentina-20131003-0018.html

EU-443

Palabras de la Presidenta de la Nación Cristina Fernández con motivo de la

inauguración de la fábrica de bicicletas "LÓPEZ HNOS", en la provincia de Chaco,

dated 17 July 2013, available at http://www.presidencia.gob.ar/discursos/26588-

inauguracion-de-la-fabrica-de-bicicletas-qlopez-hnosq-en-chaco-palabras-de-la-

presidenta-de-la-nacion

EU-444

Inauguración de nueva planta de Fiat Argentina en Córdoba: Palabras de la Presidenta

de la Nación, dated 4 June 2013, available at

http://www.presidencia.gob.ar/discursos/26464-inauguracion-de-nueva-planta-de-fiat-

argentina-en-cordoba-palabras-de-la-presidenta-de-la-nacion

EU-445 Notaries de Geneve, "Activites du Notaire", available at http://www.notaires-

geneve.ch/fr/activites-notaire/generalites/l-acte-notarie/

EU-446 Samples of the Export Declaration Forms

EU-447 Overview of the evidence provided compared to statements taken from Clarin and La

Nación

http://www.industria.gob.ar/giorgi-necesitamos-legisladores-que-defiendan-la-industrializacion-como-lo-hace-el-gobierno-nacional/


http://www.cronista.com/economiapolitica/Ahora-Moreno-avala-acuerdos-entre-privados-para-controlar-importaciones-20131003-0087.html



http://www.adimra.com.ar/index.do?sid=33&nid=1325



http://web4.cronista.com/economiapolitica/Refuerzan-presion-sobre-automotrices-para-que-compren-partes-locales-20131023-0083.html


http://www.uic.org.ar/pagina.asp?id=2499

http://www.lanacion.com.ar/1628859-se-duplico-el-cepo-a-las-importaciones-y-ya-tiene-impacto-en-el-empleo


http://www.lanacion.com.ar/1618064-desbordado-por-el-cepo-a-la-importacion

http://www.cronista.com/negocios/En-solo-dos-aos-mas-de-20-empresas-extranjeras-se-fueron-de-la-Argentina-20131003-0018.html


http://www.presidencia.gob.ar/discursos/26588-inauguracion-de-la-fabrica-de-bicicletas-qlopez-hnosq-en-chaco-palabras-de-la-presidenta-de-la-nacion



http://www.presidencia.gob.ar/discursos/26464-inauguracion-de-nueva-planta-de-fiat-argentina-en-cordoba-palabras-de-la-presidenta-de-la-nacion


http://www.notaires-geneve.ch/fr/activites-notaire/generalites/l-acte-notarie/




(DS438)

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Exhibit No. Title

EU-448 Edelman Trust Barometer 2013, at slide 23 (available at http://edelman.com.ar/edelman-

trust-barometer-2013/)

http://edelman.com.ar/edelman-trust-barometer-2013/




(DS438)

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1. INTRODUCTION

1. Argentina's defence strategy in the present dispute appears to be based on two

main tactics. First, the avoidance of engaging in any serious debate over the facts

of the case. Second, putting forward various legal interpretations and assertions

that generally run against the text of the provisions at issue, as well as the manner

that they have been consistently interpreted by the Appellate Body and the Panels

in the past.

2. On the facts, the result of Argentina's tactics is that Argentina fails to contest the

main facts presented by the European Union. In relation to the DJAI, Argentina

does not contest (and actually confirms) the main factual elements of the structure,

operation and effects of the DJAI presented by the European Union. In relation to

the RTR requirements, Argentina actually acknowledges the existence of the facts

presented by the European Union and simply retorts that they should be viewed as

"unrelated 'one-off' actions". Argentina's avoidance to discuss the facts of this

case is also evidenced by its staunch refusal to provide meaningful answers to

many of the Panel's questions. Argentina's strategy simplifies the Panel's task.

The Panel can rely on the evidence presented by the European Union and also

draw appropriate inferences from Argentina's refusal to provide the requested

documents.

3. On the law, Argentina's various assertions find no support in the text of the

covered agreements, or in the WTO jurisprudence. Moreover, if Argentina's

assertions were accepted, this would create enormous loopholes in the disciplines

of, in particular, Article XI of the GATT and the Import Licensing Procedures

Agreement. This would be contrary to these provisions' object and purpose.

4. In its second written submission, the European Union will first address the DJAI

Requirement and then the RTR requirements. On the DJAI, the European Union

will first identify the factual points that Argentina does not contest and then

explain the reasons for which Argentina's legal assertions should be rejected. On

the RTR requirements, the European Union will discuss the reasons for which

Argentina's assertions are baseless and will provide comments on Argentina's

responses to the Panel's written questions. The European Union will also provide

some comments on the Panel's communication of 6 November 2013.



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5. The European Union concludes its second written submission with the request that

the Panel finds that Argentina has failed to comply with its obligations under the

covered agreements.

2. DJAI REQUIREMENT

2.1. POINTS THAT ARGENTINA HAS ACKNOWLEDGED

6. Through its first written submission, its oral statements during the first Hearing

and its responses to the written questions of the Panel, Argentina has

acknowledged the accuracy of a number of facts presented by the European Union

in its own submissions.

7. Argentina has generally confirmed the European Union's description of the DJAI

system's design, structure and operation.2 In particular, Argentina has confirmed

that DJAI clearance is a prerequisite for the importation into Argentina of virtually

all goods. Argentina has also confirmed that no importation can take place for as

long as the DJAI system in at the "observada", i.e., blocked status.3

8. Argentina has also confirmed that a number of Argentinean governmental entities

have the power to block imports through the DJAI system. However, Argentina

has failed to address a number of issues, such as (a) the role of the INTI;4 and (b)

the lack of publication of the legal instruments through which SEDRONAR,

SENASA and INV have been given the power to review and block imports

through the DJAI System.5 In addition, Argentina has made confusing statements

as to whether SENASA and INV actually have the power to review and block

imports through the DJAI System. For example, Argentina has stated that the

agreements between these governmental bodies and AFIP are "non-operative"6,

and that these governmental bodies "will" assess imports at some time in the

2 See Argentina's First Written Submission, paras. 218 to 238.

3 See, for example, Argentina's First Written Submission, paras. 232 to 234.

4 See the European Union's First Written Submission, in para. 42 and footnote 57, as well as the

European Union's response to the Question 27.

5 See the European Union's First Written Submission, in paras. 255 to 259. Argentina has provided

to the Panel the agreements between those entities and the AFIP, but has not provided any detail on

whether, when and where these instruments were published in accordance with the requirements of

Article X:1 of the GATT.

6 See Argentina's response to Question 29.



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future.7 Therefore, as a result of Argentina's failure to publish promptly all

relevant legal instruments in accordance with the provisions of Article X:1 of the

GATT, there is still uncertainty as to which governmental entities actually review

and block imports through the DJAI system. And this uncertainty persists even at

this stage of the dispute settlement proceedings, compounded by Argentina's

confusing statements in its First Written Submission and in its Responses to the

Panel's Questions.

9. Most importantly, Argentina has confirmed that the Secretariat for Domestic Trade

has the power to block the imports of all goods through the DJAI system.8

Likewise, Argentina has implicitly acknowledged the Secretariat for Domestic

Trade's broad discretion in blocking imports and the lack of publication of a

specific list of reasons for which this Secretariat may block imports.9 Argentina's

responses in Questions 24 and 25 actually serve to illustrate these points: (a)

Argentina fails to explain how the supposed "legislative mandate" of the

Secretariat for Domestic Trade, described in its response to Question 25, is

reflected in the DJAI related mandate of the Secretariat as described in Resolution

1/2012;10

and (b) Argentina fails to explain how this supposed "legislative

mandate" is related to the information that the Secretariat actually requires from

importers, once their imports are blocked through the placing of an "observation"

in the DJAI system and which is described in the relevant Note circulated by the

Secretariat for Domestic Trade.11

10. At this point, the European Union would like to take the opportunity to make a

clarification in relation to the terminology used to describe that Note circulated by

the Secretariat for Domestic Trade. The European Union has described the content

of that Note in paragraphs 65 to 68 of its First Written Submission. The European

Union has also highlighted the fact that this Note informs applicants, whose

imports have been blocked through the placing of an "observation" in the DJAI

7 See Argentina's First Written Submission, in para. 230.

8 See, for example, Argentina's First Written Submission, paras. 227 and 231.

9 See, for example, Argentina's responses to Question 22, Question 24 and Question 25.

10 See the European Union's First Written Submission in para. 41.

11 See the European Union's First Written Submission, in paras. 65 to 68.



(DS438)

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system, that they must provide to the Secretariat information on their prospective

exports, as well as on the prices of all their imported goods over a specific time

period, in order to have the "observation" lifted and the imports authorised.

11. The European Union has submitted a copy of this Note as Exhibit EU-413. The

European Union has also submitted a number of websites and other public sources

confirming the existence of this Note, as well as the fact that it had been released

by the Secretariat for Domestic Trade. On the Exhibit is can be seen that the title

of the Note is "DJAI Observada". The European Union has referred to this Note

as the "Note circulated by the Secretariat for Domestic Trade".12

The European

Union has also included within a parenthesis the words "nota de pedido".

12. The European Union has noted that some of our co-complainants have used the

term "nota de pedido" in order to describe a different document, which has been

submitted to the Panel as Exhibit JE-314. This document is very different from

the "Note circulated by the Secretariat for Domestic Trade", i.e., Exhibit EU-413,

which is the document discussed in paragraphs 65 to 68 of the European Union's

First Written Submission.

13. In order to avoid any potential confusion between these documents, the European

Union will refer to Exhibit EU-413 as "Nota de pedido DJAI Observada" and not

as "nota de pedido" in the remaining stages of these proceedings.

14. In conclusion, the European Union considers that Argentina's submissions and

statements in these proceedings, in combination with the evidence placed at the

disposal of the Panel, have served to establish the facts that justify the European

Union's claims under Article X:1, Article X:3(a) and Article XI:1 of the GATT,

irrespective of whether the DJAI system is considered an "import license", or not.

The European Union respectfully requests the Panel to draw the relevant

conclusions and find that Argentina has failed to comply with its obligations under

the covered agreements.

12 See the title preceding para. 65 of the European Union's First Written Submission.



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2.2. POINTS THAT ARGENTINA CONTESTS

15. The European Union notes that Argentina does not contest the main facts

presented by the European Union. In particular, Argentina does not contest the

structure and operation of the DJAI system; the powers of the various

governmental entities that use it and, most importantly, the powers of the

Secretariat for Domestic Trade; the effects of the placing of an "observation"; the

timeframes that are triggered by the placing of an "observation" in the DJAI

system; the important numbers of imports that have been blocked or delayed

through the placing of an "observation" in the DJAI system; etc.

16. Argentina has based its defence on a number of legal interpretations and

assertions. These legal interpretations and assertions are wrong and should be

rejected, for the reasons discussed by the European Union in the following

paragraphs.

2.2.1. Issues relating to the GATT

2.2.1.1 Argentina's assertions in relation to Article XI:1 of the

GATT

17. Argentina's defence is based on one main assertion: that a type of measures that

Argentina calls "customs formalities" fall outside the scope of Article XI of the

GATT, because they allegedly fall only within the scope of Article VIII of the

GATT.13

Argentina further asserts that Article XI of the GATT covers only

"substantive" provisions and not "procedural" provisions. According to Argentina,

the latter fall only within the scope of Article VIII of the GATT. These assertions

run against both the text of the relevant provisions of the GATT and the consistent

jurisprudence of past Panels and the Appellate Body.

Argentina's assertions in relation to Article VIII of 2.2.1.1.1

the GATT are wrong

18. Argentina asserts that "it cannot be the case that customs formalities that are

permitted under Article VIII are prohibited quantitative restrictions under Article

XI".14

Argentina also asserts that "the potential trade-restrictive effects of customs

13 See, for example, Argentina's First Written Submission, in paras. 176 to 182.




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formalities are governed by Article VIII" and "because Article VIII contemplates

by its terms that such effects may occur, it cannot be the case that these same

effects render a customs formality a prohibited quantitative restriction under

Article XI. Otherwise, Members could not maintain customs formalities, because

they would be prohibited under Article XI".15

Argentina's assertions are wrong for

a number of reasons.

19. First, Argentina fails to explain which provision of Article VIII of the GATT

allegedly "permits" those "customs formalities".

20. Second, the text of Article VIII does not even mention the term "customs

formalities". Article VIII:3 simply provides that there should not be "substantial

penalties" for "minor breaches of customs regulations or procedural requirements".

There is no reference to "customs formalities".

21. Third, no provision of Article VIII states that "import and export formalities" are

"permitted". Article VIII:1(c) simply imposes on WTO Members the obligation to

"minimize their incidence and complexity". Therefore, the text of Article VIII

does not provide for any alleged "permission".

22. There is nothing in the context, or the object and the effect of Article VIII, or of

Article XI of the GATT, that would provide for any such "permission". As

Canada and Australia have already mentioned in their Third Party interventions,

the Article VIII:1(c) obligation does not constitute a "comprehensive regime for

the regulation" of "import and export formalities". Argentina's assertion, if

accepted, would open an enormous loophole in the GATT and "would result in the

trade restrictive effects of customs formalities effectively being unreviewable

under the GATT".16

23. Fourth, the fact that "import and export formalities", as well as other "quantitative

restrictions" and "licensing" are mentioned in the text of Article VIII of the GATT

does not mean that these measures fall only within the scope of Article VIII and

fall outside the scope of Article XI of the GATT. The "restrictions on the


16 See Canada's Oral Statement in para. 13, referring to Australia's Third Party Written Submission, in

para. 30.



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importation of goods" are also mentioned in other provisions of the GATT, such as

Article XIII. For example, Article XIII:1 reads: "no prohibition or restriction shall

be applied…on the importation of any product…unless the importation of the like

product of all third countries…is similarly prohibited or restricted." Likewise,

Article XIII:2 reads: "In applying import restrictions to any product, the [WTO

Members] shall aim at a distribution of trade…".

24. The fact that Article XIII provides a very elaborate set of rules on how import

restrictions should be administered does not imply that such import restrictions are

"permitted" by Article XIII and fall outside the scope of Article XI of the GATT.

If that erroneous interpretation was accepted, then Article XI would have no scope:

all measures mentioned in Article XI would fall within the scope of Article XIII

(and/or Article VIII) of the GATT and Article XI would be made redundant.

However, such an outcome would be contrary to the rules of interpretation

recognised by the Appellate Body, which provide that all provisions in the covered

agreements should be given meaning.

25. The proper interpretation of Article XI, Article XIII and Article VIII:1(c), which

would give meaning to all three Articles, is that import prohibitions and

restrictions are generally prohibited by Article XI:1 of the GATT. WTO Members

may impose such import prohibitions or restrictions, only if they are justified by

one of the exceptions provided in the GATT, such as those contained in Article

XI:2. Article XX, Article XXI, etc. In the event that a WTO Member is authorised

to impose such import restrictions by virtue of some exception, then the WTO

Member must further ensure that these measures and their administration also

comply with the provisions of Article XIII and Article VIII:1(c) of the GATT.

26. Therefore, Argentina's erroneous assertion must be rejected. Article XI of the

GATT covers "customs formalities", just like it covers all other measures other

than duties, taxes and other charges.

Argentina's distinction between "substantive" and 2.2.1.1.2

"procedural" provisions for purposes of Article XI

of the GATT is wrong

27. Argentina asserts that "Article XI prohibits quantitative restrictions, but not the

means by which they are made effective". According to Argentina, "to the extent

that quantitative restrictions are made effective through import formalities and



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requirements, those formalities and requirements are subject to the separate

disciplines of Article VIII".17

28. Argentina also asserts that "the fact that the Members negotiated separate

disciplines in respect of the trade effects of import licensing procedures [in the

Import Licensing Agreement] indicates that these trade effects are not of the same

type that can be analysed as potential quantitative restrictions under Article XI"

and that this means that the "effects of import formalities and requirements are

distinct from the effects of substantive rules of importation that may limit or

restrict trade".18

29. In summary, Argentina asserts that "Article XI relates to substantive rules of

importation that limit or restrict trade, whereas Article VIII and the ILP Agreement

relate to import procedures, including the trade effects of those procedures".19

30. Argentina's assertions are wrong. This is made clear by the considerations

mentioned in the preceding paragraphs in relation to Argentina's alleged

"permission" of "customs formalities", as well as by the following considerations.

31. First, there is nothing in the text of Article XI:1 of the GATT that could support

Argentina's erroneous assertion. Quite to the contrary, the text of Article XI of the

GATT expressly provides that it covers all measures that may restrict imports,

with the exception of duties, taxes and other charges.

32. It is noted that the title of Article XI reads "general elimination of quantitative

restrictions". Likewise, Article XI:1 uses language which is all-encompassing. It

reads: "no prohibition or restriction", as well as "other measures". The

combination of the fact that the text of Article XI uses such general and all-

encompassing language with the fact that Article XI:1 contains its own exception

(i.e., duties, taxes and other charges), confirms that all measures may fall within

the scope of Article XI, irrespective of whether they could be characterised as

"substantive" or "procedural".






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33. Second, Argentina is wrong when it draws a distinction between, on the one hand,

"quantitative restrictions" and, on the other hand, the "means by which they are

made effective".

34. The text of Article XI:1 reads: "…made effective through quotas, import or export

licenses or other measures". If Argentina's erroneous assertion was accepted, then

"quotas" should be considered as a "means" by which some other, undefined

"quantitative restriction" would allegedly be "made effective".

35. The consequence would be that quotas would fall outside the scope of Article XI

of the GATT and would fall only within the scope of Article VIII of the GATT.

However, this outcome is denied by the Report of the Panel, on which Argentina

relies in support of its erroneous assertion:20

China-Raw Materials. In that case,

the Panel found that the quotas imposed by China on the exportation of the

relevant goods were prohibited by Article XI of the GATT.21

Therefore, the

consistent WTO dispute settlement jurisprudence (including the Panel Reports on

which Argentina relies) confirms that there is no difference between the

"prohibitions or restrictions" and the "means by which they are made effective".

Article XI:1 of the GATT applies to both of them.

36. Third, Argentina's interpretation of the findings of the Panel in China-Raw

Materials is wrong.22

Argentina asserts that the Panel in that case allegedly

"recognizes that the trade-restrictive effects of substantive rules…cannot be

attributed to the procedures that are used to implement those rules".23

This

assertion is wrong for a number of reasons.

37. Firstly, the Panel in China-Raw Materials did not find that the challenged export

licences constituted a "procedure". The Panel does not even use the word

"procedure" in the relevant Sections of its Report.24

Quite to the contrary, the

Panel considered the export licenses simply as a type of measure that may fall

within the scope of Article XI:1 of the GATT, where, by their nature, they have a

20 See Argentina's First Written Submission, in paras. 180, 186 and 187.

21 Panel Report, China-Raw Materials, paras. 7.205 and 7.206; 8.10(a) and (b); and footnote 313.

22 See Argentina's First Written Submission, in paras. 186 and 187.


24 Panel Report, China-Raw Materials, paras. 7.891 to 7.959.



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limiting or restrictive effect.25

This finding is fully consistent with the legal

interpretation of Article XI:1 of the GATT proposed by the European Union,

which focuses the analysis on whether the challenged measure (a) is a

governmental measure; and (b) prohibits or restricts the importation of goods.26

Consequently, the basis, on which Argentina's assertion lies, is false.

38. Secondly, the Panel in China-Raw Materials found that licenses would constitute a

"quantitative restriction" that would breach Article XI:1 of the GATT, where the

licensing authorities retained some discretion on whether to grant the licenses or

not.27

39. In that particular case, the facts showed that the Chinese authorities always granted

the export licenses for those goods that were also subject to export quotas.28

If the

applicant had already obtained the export quota (usually through a quota bidding

procedure), the Chinese implementing regulations obliged the Chinese authorities

automatically to issue an export license.29

In other words, the facts of that case

showed that the export licenses relating to goods subject to export quotas were in

reality "automatic". In light of these facts, it is not surprising that the Panel

concluded that these automatic licenses did not constitute a "quantitative

restriction".30

40. In contrast, the facts of that case also showed that the Chinese authorities did retain

the discretion to refuse the grant of the export licenses that were imposed on goods

which were not subject to export quotas. On the facts of the case, the Panel found

that this discretion stemmed from the power of the Chinese authorities to request

undefined documents from the applicants.31

The Panel went on to confirm the

consistent jurisprudence on Article XI:1 of the GATT on "discretionary", or "non-

25 Panel Report, China-Raw Materials, para. 7.957.

26 See the European Union's First Written Submission, in para. 240.



29 Panel Report, China-Raw Materials, paras. 7.941 and 7.942.

30 Panel Report, China Raw Materials, para. 7.916.

31 Panel Report, China-Raw Materials, paras. 7.947 and 7.948.



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automatic" licenses, and found that these export licenses breached Article XI:1 of

the GATT.32

41. In the present case, the facts are very similar to the facts of that latter category of

export licenses in China-Raw Materials, i.e., the export licenses imposed on goods

that were not subject to export quotas. Argentina imposes the DJAI system on all

goods to be imported into Argentina. Argentina has not asserted that it imposes

any quota on these goods in addition to the DJAI. And, Argentina's legislation

allows to the Secretariat for Domestic Trade the discretion to block imports on the

basis of undefined criteria. As the Panel in China-Raw Materials found, the

"authority to deny the license is ever present because the conditions for granting it

are subject to the demands of the particular governmental entity". Therefore, "this

uncertainty amounts to a restriction…that is inconsistent with Article XI:1" of the

GATT.33

42. In conclusion, Argentina's assertions are wrong and should be rejected. The

European Union has already presented in its First Written Submission the proper

interpretation of Article XI:1 of the GATT, as consistently followed by both the

Appellate Body and the Panels in the past.34

The European Union respectfully

requests the Panel to apply this correct legal interpretation on the facts of the

present case and to find that the DJAI system breaches Article XI:1 of the GATT.

The notions of "prohibition" and "restriction" in Article 2.2.1.1.3

XI of the GATT

43. Argentina asserts that "a proper interpretation of Article XI:1 requires…a showing

that the measure at issue limits imports or exports in a quantifiable way and that

this quantitative limitation on imports or export is a result of the measure".35

Argentina also asserts that the co-complainants "have presented no evidence at all

that the DJAI procedure has had a quantifiable limiting effect on imports into

Argentina, let alone a quantifiable limiting effect that can be separated and







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distinguished from the alleged RTRRs that the DJAI procedure is allegedly used to

implement".36

44. The European Union does not understand what Argentina means by a "showing"

that the measure limits imports in a "quantifiable way". A "prohibition" or

"restriction" on imports would normally always have an impact on the quantity of

the goods that could be imported. For example, an import ban would clearly have

an impact on the quantity of the goods that could be imported. Argentina fails to

explain how this impact could be "quantified". Argentina also fails to explain how

this impact should be "shown", other than by simply submitting to the Panel the

text of the domestic measure that imposes the import ban.

45. The European Union has already presented a concise description of the WTO

jurisprudence on the notion of "quantitative restriction" for purposes of Article XI

of the GATT.37

The scope of the term is broad and applies to conditions that are

"limiting"; measures that create uncertainties and affect investment plans; as well

as measures that restrict market access.

46. Argentina seems to disagree with the consistent WTO jurisprudence on this

matter.38

Argentina seems to attempt to interpret a certain statement from the

Appellate Body Report in China-Raw Materials as "casting doubt on prior panel

reports",39

including the Panel Report in China-Raw Materials, which has

summarised and applied the WTO jurisprudence on this issue.40

47. If Argentina asserts that the Appellate Body Report in China-Raw Materials has

introduced a notion of "restriction", which is different from the interpretation

given to that term by the Panel in the same case (consistently with the

interpretation of other panels in previous cases), then Argentina is wrong.

48. The Appellate Body made the statement to which Argentina refers, in the context

of its analysis of Article XI:2(a) of the GATT. The Appellate Body found that the

36 Se Argentina's First Written Submission, in para. 337.


38 See Argentina' First Written Submission, in paras. 332 and 334.





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words "prohibitions" and "restrictions" "refer to the same types of measures in

both paragraph 1 and subparagraph 2(a)" of Article XI of the GATT.41

The

Appellate Body also found that "if a restriction does not fall within the scope of

Article XI:1, then Article XI:2 will also not apply to it".42

In other words, the

Appellate Body found that a measure could be analysed under Article XI:2(a),

only if it fell within the scope of Article XI:1 of the GATT.

49. On the facts of that case, the Appellate Body noted the Panel's finding that the

relevant measures breached Article XI:1 of the GATT,43

and went on to uphold the

Panel's conclusion that the challenged measures were not justified by Article

XI:2(a) of the GATT.44

50. This means that the Appellate Body actually approved the Panel's interpretation of

the notions of "prohibition" and "restriction" in Article XI:1 of the GATT. This is

because the Appellate Body found that a measure could be analysed under Article

XI:2(a) of the GATT only if it fell within the scope of Article XI:1 of the GATT.

If the Appellate Body disagreed with the Panel's interpretation of Article XI:1 of

the GATT, then it would have found that there is no reason to analyse the measure

under Article XI:2(a): the measure would fall outside the scope of both Article

XI:1 and Article XI:2(a).

51. However, this is not what the Appellate Body did. Quite to the contrary, the

Appellate Body found that the measure was a "restriction" which fell within the

scope of Article XI:2(a) of the GATT and, consequently, within the scope of

Article XI:1 of the GATT.

52. Therefore, the Appellate Body's Report in China-Raw Materials actually confirms

the Panel's interpretation of the notion of "restriction" in Article XI:1 of the

GATT. That Panel interpretation is fully consistent both with the interpretation

followed by the other panels in previous cases and with the interpretation

suggested by the European Union in the present case.

41 With the exception that Article XI:2(a) is limited to export restrictions, while Article XI:1 covers

both import and export restrictions. Appellate Body Report, China-Raw Materials, para. 321.

42 Appellate Body Report, China-Raw Materials, para. 321.

43 Appellate Body Report, China-Raw Materials, para. 309.

44 Appellate Body Report, China Raw Materials, para. 344.



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53. In light of these consideration, the European Union respectfully requests the Panel

to reject Argentina's erroneous assertions and to find that the DJAI constitutes a

"quantitative restriction" which is inconsistent with Article XI:1 of the GATT.

Is the DJAI a "customs formality"? 2.2.1.1.4

54. Article XI of the GATT covers all measures (with the exception of duties, taxes

and charges). This includes both "import formalities and requirements" and what

Argentina calls "customs formalities". Consequently, the Panel does not need to

determine whether the DJAI requirement constitutes a "customs formality", or not.

Even if the DJAI system was a "customs formality", it would still fall within the

scope of Article XI of the GATT and would be contrary to Article XI:1 of the

GATT as an "other measure".45

55. In any event, the facts of this case establish that the DJAI requirement is not a

"customs formality". The European Union has summarised in its first written

submission the facts that support this conclusion.46

56. As a reminder, the DJAI requirement does not constitute a "customs formality"

because it has been introduced and is implemented through a number of legal

instruments that are different from Argentina's customs' legislation; it involves a

number of governmental entities that are not related to the customs procedures

(such as the Secretariat for Domestic Trade); following the blocking of an import,

it involves the submission of documents and information that have nothing to do

with customs procedures (such as information on quantities exported by the

importer, the importer's prices for unrelated goods, etc.); and it has different legal

effects that the customs procedures, i.e., a DJAI authorisation is not the same as

customs clearance. The last point is implicitly acknowledged by Argentina in its

Response to Question 30, where Argentina lists the additional documents and

information that the importer needs to submit to the Customs Authorities in order

to receive customs clearance.47


46 See the European Union's First Written Submission, in paras. 34 and 281.

47 See Argentina's Response to Question 30(a) and (b).



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Is the WCO SAFE Framework relevant for the Panel's 2.2.1.1.5

analysis in the present dispute?

57. Argentina devoted a large part of its first written submission to the discussion of

various WCO initiatives, such as the SAFE Framework. The European Union

notes that the United States has already presented a comprehensive discussion of

the relevant WCO documents, which clearly establish that the DJAI system has

nothing to do with the SAFE Framework. In order to avoid repetition, the

European Union incorporates by reference into this Submission the relevant

sections of the United States' submissions and statements.

58. In any event, the European Union considers that the Panel does not need to embark

into a lengthy analysis and discussion of the SAFE Framework, or any other WCO

initiative in the present case.

59. The European Union does not exclude that the WCO standards and initiatives

might be relevant in a different case, where the defending party would raise a

defence under Article XX(d) of the GATT and sought to demonstrate that the

challenged measures were necessary in order to secure compliance with customs

laws and regulations which are not inconsistent with the GATT. It cannot be

excluded that compliance with such WCO standards and initiatives could be a fact

that would be relevant for the Panel's assessment of whether the challenged

measures were indeed "necessary" in the sense of Article XX(d).

60. However, in the present case, Argentina does not raise any defence under Article

XX of the GATT. In these circumstances, Argentina's alleged compliance with the

SAFE Framework is not relevant for the Panel's analysis of the DJAI system under

Article XI:1 of the GATT. This is because, even if the DJAI system had common

elements with the SAFE Framework (which it does not, as shown by the United

States), this fact would still not bring the DJAI system outside the scope of Article

XI:1 of the GATT. The DJAI system would still be inconsistent with Article XI:1

of the GATT, because it meets the conditions outlined in paragraphs 239 to 251 of

the European Union's first written submission.

61. Consequently, Argentina's assertions are both legally and factually baseless and

should be rejected in their entirety.



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2.2.1.2 Argentina's assertions in relation to Article X:1 of the

GATT

62. Argentina's defence is based on two assertions. First, that the legal instruments

that Argentina has failed to publish do not constitute "measures of general

application", which fall within the scope of Article X:1 of the GATT.48

Second,

that Argentina has actually published (a) the "statutory regulatory authority of each

agency that participates" in the DJAI system; and (b) a "standardised model" of the

agreement pursuant to which each agency may accede to the system.49

63. In relation to its first assertion, Argentina is simply factually wrong. It asserts that

the European Union's challenge is directed against the "observations that each

agency may make" in relation to each specific import application, depending on

the "good as it relates to the agency's regulatory authority".50

However, this is not

what the European Union is challenging under Article X:1 of the GATT.

64. The European Union's first written submission lists the types of legal instruments

that Argentina has failed to publish in accordance with Article X:1 of the GATT.

These do not include the "observations that each agency may make" in a "specific

case". Quite to the contrary, the European Union challenges Argentina's failure to

publish, in accordance with Article X:1 of the GATT, the complete list of

governmental bodies that may block imports; the legal instruments through which

certain governmental bodies have been given the power to block imports; the list

of goods the importation of which each governmental body can block; the

conditions on the basis of which the 180 days deadline may be extended, etc.51

65. Therefore, Argentina's assertion does not even relate to the claim that the

European Union is advancing and it should be rejected as irrelevant.



50 It is interesting to note that, inadvertently, Argentina acknowledges the lack of transparency

surrounding each individual decision to block a particular importation! This Argentina

acknowledgment should be read in conjunction with the judgments of the Argentinean courts,

which have confirmed that applications have been blocked in the DJAI system for long periods and

that applicants cannot discover the reasons for which their imports have been blocked.




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66. In addition, Argentina asserts that "there is no 'universal' set of criteria that applies

to all goods".52

Argentina's assertion is factually inaccurate. Argentina itself has

published in the Manual for DJAI Operations the "set of criteria" on the basis of

which AFIP may block imports.53

The fact that Argentina has been able to publish

a "universal set of criteria" on the basis of which one governmental body would

block imports conclusively establishes that Argentina is also able to publish

similar "sets of criteria" for the other bodies and, most importantly, for the

Secretariat for Domestic Trade.

67. Argentina's second assertion is actually an admission of the European Union's

claim. Argentina expressly acknowledges that it has not published the actual

agreements that establish each agency's powers in relation to the DJAI system; it

has only published a "standardised model". Therefore, Argentina acknowledges

that it has not published the relevant legal instruments in accordance with Article

X:1 of the GATT.

68. Moreover, Argentina acknowledges that the only documents that have been

published are the "statutory regulatory authorities" of the participating

governmental bodies. However, these legal instruments contain no reference to

the respective body's powers in the DJAI system.54

Therefore, they provide no

information on the operation of the DJAI system.

69. The fact that Argentina has failed to publish, in accordance with Article X:1 of the

GATT, all legal instruments that are pertinent for the operation of the DJAI system

is confirmed by the confusion that still persists at this stage of these dispute

settlement proceedings as to which bodies actually review and block imports.55

It

is also confirmed by the fact that Argentina has not been able to provide any

specific response to the claims contained in paragraphs 253 to 265 of the European

Union's first written submission.


53 See the European Union's First Written Submission, in paras. 259 and 260.

54 They have generally been issued before the introduction of the DJAI system.

55 Argentina has indicated that the relevant agreements are "non-operative" for at least two bodies in

its Response to Question 29, while on the DJAI web site it has announced that these bodies have

the right to review imports; see Exhibit JE 42 and Exhibit JE 43.



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70. Consequently, the European Union respectfully requests the Panel to find that

Argentina has acted inconsistently with its obligations under Article X:1 of the

GATT.

2.2.1.3 Argentina's assertions in relation to Article X:3(a) of the

GATT

71. Argentina's main defence is to assert that the European Union's claims under

Article X:3(a) of the GATT relate to "substantive rules" and not to the

"administration" of rules.56

Argentina's assertion is wrong for a number of

reasons.

72. First, Argentina's assertion contradicts the entire content of Argentina's

submissions in the present case. Argentina repeatedly asserts that the DJAI system

is a "procedure" and not a "substantive rule".57

It is instructive for the coherence

of Argentina's arguments that the DJAI is presented as a "procedure" when

Argentina looks at it from the angle of Article XI of the GATT,58

but becomes a

"substantive rule", when Argentina looks at it from the angle of Article X:3(a) of

the GATT.

73. In any event, a complaining party may challenge under Article X:3(a) even the

substance of a domestic measure, where that measure is administrative in nature.59

In applying this principle to the facts before it, the panel in Argentina-Hides

concluded that the identified legal instrument in that case was administrative in

nature, because it provided for a "certain manner of applying the substantive

rules".60

Therefore, even if Argentina was right in its assertion that the DJAI was

simply a "procedure" applying in a certain manner Argentina's customs legislation,

as well as in its assertion that the European Union was challenging the

"substantive rules" of the DJAI, then the European Union's claims would still be

properly brought under Article X:3(a) of the GATT.


57 See, for example, Argentina's First Written Submission, in para. 297.

58 See Argentina's Response to Question 21.

59 Appellate Body Report, EC-Selected Customs Matters, in para. 200. Panel Report, Argentina-

Hides and Leather, paras. 11.70 and 11.71.

60 Panel Report, Argentina-Hides and Leather, para. 11.72.



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74. Second, the European Union is actually challenging the administration of the

DJAI. The European Union's first written submission has explained the reasons

for which, in particular, the Secretariat for Domestic Trade administers the DJAI

in a manner that is not predictable and consistent and, ultimately, not uniform,

impartial and reasonable.61

75. The European Union has made particular reference to the Secretariat for Domestic

Trade's use of the DJAI as a tool to require unrelated documents and information

(which are not even provided for in the DJAI legislation), such as information on

the importer's exports and past prices on unrelated goods. The European Union

has also referred to the Secretariat's use of the DJAI as a tool to require importers

to undertake various trade-restrictive commitments, in order to allow them to

import into Argentina. And, the European Union has highlighted the absence of

any "adequate safeguards" (such as the publication of the grounds or conditions on

the basis of which the Secretariat for Domestic Trade would block imports), which

could ensure that the DJAI would not be administered to the advantage of some

and the disadvantage of others.

76. Argentina has not denied any of these facts, nor has it provided any evidence to

refute the European Union's claims. Consequently, the European Union

respectfully request the Panel to find that Argentina has acted inconsistently with

its obligations under Article X:3(a) of the GATT.

2.2.2. Issues relating to the Import Licensing Procedures Agreement

2.2.2.1 The European Union's claims

77. The European Union has argued that the DJAI system is a non-automatic import

licensing regime, which is inconsistent with a number of provisions of the Import

Licensing Procedures Agreement.62

In particular, the European Union has claimed

that Argentina has acted inconsistently with its obligations under Articles 1.3,

1.4(a), 1.6, 3.2, 3.3 and 3.5(f) of the Import Licensing Procedures Agreement.

78. Argentina does not present any specific response to the European Union's claims

under these provisions of the Import Licensing Procedures Agreement. Argentina





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only raises defences based on the general scope of the Import Licensing

Procedures Agreement. 63

Therefore, Argentina's first written submission and oral

statements do not contain anything in relation to these specific claims that the

European Union needs to rebut in its second written submission. The European

Union will discuss the "scope" assertions of Argentina in the next section of this

submission.

79. In relation to Article 3.2 of the Import Licensing Procedures Agreement, the

European Union has stated that it does not consider that the DJAI is used in order

to implement some other quantitative restriction, which could be justified by the

covered agreements. Quite to the contrary, the European Union has argued that

the DJAI itself is the restriction.64

In its submissions, Argentina has not asserted

that the DJAI is used to implement any other quantitative restriction. Therefore,

the European Union does not consider that there is any need to discuss further the

application of Article 3.2 of the Import Licensing Procedures Agreement in the

present dispute.

2.2.2.2 Argentina's defence in relation to the Import Licensing

Procedures Agreement

80. Argentina's defence is based on two main assertions addressing the scope of the

Import Licensing Procedures Agreement.

81. First, Argentina asserts that the co-complainants have followed an "overly

expansive" interpretation of the term "import license" in "Article 1.1 of the ILP

Agreement".65

82. Second, Argentina asserts that, in any event, the "application and documentation"

which the DJAI "collects and processes is clearly for customs purposes" and,

therefore, the DJAI is "not covered by the ILP Agreement under any

circumstances".66

63 See Argentina's First Written Submission, in paras. 276, 277 and 295.

64 See the European Union's First Written Submission in para. 312.





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83. Argentina also asserts that "the Panel has to begin its analysis with the

complainants' claims under the ILP Agreement", which allegedly "operates as lex

specialis in relation to the provisions of both Article VIII and XI with respect to

customs formalities".67

The notion of "import license" in Article 1.1 of the 2.2.2.2.1

Import Licensing Procedures Agreement

84. Argentina's assertion on the alleged "overly expansive" interpretation of Article

1.1 of the Import Licensing Procedure Agreement is wrong for a number of

reasons.

85. First, Argentina's definition of "import license" is circular. On the one hand,

Argentina accepts that Article 1.1 of the Import Licensing Procedures Agreement

provides context for the interpretation of the term "import license".68

However, on

the other hand, Argentina asserts that the scope of Article 1.1 of the Import

Licensing Procedures Agreement should be limited only to "import licensing

regimes".69

In other words, Argentina asserts that Article 1.1 of the Import

Licensing Procedures Agreement defines "import licenses" as "import licensing

regimes". This is tautology, which deprives the text of Article 1.1 of the Import

Licensing Procedures Agreement of any interpretative value.

86. Second, the European Union notes that the footnote to Article 1.1 expressly

expands the notion of "import licensing" to administrative procedures that are not

called "licensing". This shows that the determination of whether a set of

administrative procedures constitutes an "import license" does not depend on

whether the domestic legislation actually calls it an "import license".

87. Moreover, the European Union notes the absence of a comma after the words

"import licensing regimes" in the body of Article 1.1. This shows that the words

"requiring the submission of an application or other documentation" are directly

linked to, and inform the meaning of, the words "import licensing regimes".


68 See, for example, Argentina's First Written Submission, in paras. 280 and 281.




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88. The proper understanding of this phrase is that the "regimes" that are covered by

Article 1.1 are those which require the submission of an application or other

documentation, as a prior condition for importation. Those "regimes" do not need

to fulfil any other condition in order to fall within the scope of Article 1.1.

89. Third, Argentina is wrong when it asserts that these "regimes" need to be related to

the administration of "quantitative restrictions or other similar measures".70

90. Firstly, there is no reference to "quantitative restrictions" in the text of Article 1.1.

Secondly, Article 3.3 of the Import Licensing Procedures Agreement expressly

provides that non-automatic import licensing may be used "for purposes other than

the implementation of quantitative restrictions". This shows that the "regimes" of

Article 1.1 do not need to be related to the administration of quantitative

restrictions, contrary to Argentina's erroneous assertion. Thirdly, and most

importantly, Article 1.1 expressly mentions the "submission of an application or

other documentation" as the only "prior condition" preventing the importation.

91. In light of these considerations, the European Union respectfully requests the

Panel to reject Argentina's baseless assertions and to find that the DJAI is an

import license, for the reasons outlined in paragraphs 281 to 283 of the European

Union's first written submission.

Is the DJAI "application and documentation" for 2.2.2.2.2

"customs purposes"?

92. The European Union has already discussed the reasons for which the DJAI system

is separate from Argentina's customs procedures.71

In particular, the European

Union has explained that (a) the DJAI legislation is different from Argentina's

customs legislation; (b) the DJAI involves a number of governmental bodies that

do not have customs mandate, such as the Secretariat for Domestic Trade; (c) once

an importation has been blocked through the placing of an "observation" in the

DJAI, the documents and other information that must be submitted is different to

that submitted for customs purposes (e.g., documentation and information on

exports and prices of unrelated goods submitted to the Secretariat for Domestic


71 See, for example, Section 2.2.1.1.4 in this Submission and the further references to the European

Union's First Written Submission.



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Trade); and (d) the legal effects of a DJAI authorisation are different from

customs' clearance.

93. Argentina has not denied that the DJAI legislation is separate from its customs

legislation.72

Argentina has also not denied the involvement on non-customs

governmental bodies in the DJAI system. Argentina has simply chosen to focus its

first written submission to a discussion of AFIP's powers and to be absolutely

silent as to the role of the Secretariat for Domestic Trade, which is not even

mentioned in the relevant section of Argentina's submission.73

94. Likewise, Argentina has not denied that, when the Secretariat for Domestic Trade

blocks a particular importation, it requires the applicant to provide it with

documents and information on the applicant's exports and prices of unrelated

goods. Argentina has simply asserted that these documents and information are

for "customs clearance purposes" and "entirely within the parameters of the SAFE

Framework and WCO Data Model".74

These assertions are wrong. No WCO

document includes in its "parameters" information on the importer's exports and

prices on unrelated goods.

95. Argentina has also acknowledged, in essence, that the legal effects of a DJAI

authorisation are different from the legal effects of customs clearance.75

96. There is one more element which helps establish that the DJAI is not "an advance

electronic information procedure adopted in response to the SAFE Framework

standards and best practices for the implementation of a robust customs control

system based on the concepts of risk assessment and management".76

97. As was discussed during the First Hearing, the purpose of "advanced electronic

information procedures" that are based on "risk assessment and management" is to

expedite and facilitate the selection of the cargoes that should be inspected

physically by the customs officials of the importing country, upon the cargoes'

72 See, for example, Argentina's First Written Submission, in paras. 288 to 296.

73 See Argentina's First Written Submission, in paras. 288 to 296.


75 See Argentina's Response to Question 30.




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arrival at the ports of the importing country. However, this is not what the DJAI

achieves. Quite to the contrary, the DJAI prevents the arrival of the cargoes into

the ports of Argentina.

98. The DJAI legislation provides that the DJAI application should be launched before

the purchase order is even issued by the importer. Moreover, DJAI clearance is a

pre-requisite even for the Central Bank's authorisation of the opening of a relevant

line of credit, the issuance of an L/C or the payment in foreign currency.

Therefore, the DJAI does not help Argentina's customs authorities to decide which

cargo they will physically inspect in the ports of Argentina; the DJAI simply stops

the imports from taking place even before the cargo leaves the exporting country's

ports. As identified during the First Hearing, this element alone suffices to

establish that the DJAI is not for "customs purposes".

99. In these circumstances, it is clear that the DJAI "application and documentation"

are not for "customs purposes". The claims brought by the European Union under

the Import Licensing Procedures Agreement are fully justified.

Argentina's assertions on the nature of the Import 2.2.2.2.3

Licensing Procedures Agreement as "lex specialis"

100. The European Union has already provided its views on the proper order of analysis

of the various claims presented by the co-complainants.77

101. Argentina has made several confusing and baseless assertions on this issue,

including the statement that the Import Licensing Procedures Agreement "operates

as lex specialis in relation to the provisions of both Article VIII and XI with

respect to customs formalities".78

(sic) It is difficult to see how the "ILP

Agreement" can operate as "lex specialis in respect to customs formalities", when

Argentina expressly acknowledges that customs matters are excluded from that

Agreement's scope.79

77 See the European Union's Response to Question 20.





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102. In any event, the Appellate Body has confirmed that both the GATT and the

Import Licensing Procedures Agreement may apply on specific measures. For

example, in EC-Bananas III, the Appellate Body expressly stated:

We agree, therefore, with the Panel that both the Licensing

Agreement and the relevant provisions of GATT 1994…apply to

the EC import licensing procedures.80

103. Consequently, Argentina's assertions are legally baseless and should be rejected.

104. As suggested by the European Union, the Panel should first examine the European

Union's claims under the GATT.

105. Moreover, as also suggested by the European Union, if the Panel finds that the

DJAI constitutes a non-automatic import license, then the Panel should analyse the

European Union's claims under Article 1.3 of the Import Licensing Procedures

Agreement, before the claims under Article X:3(a) of the GATT.81

Conclusion on the Import Licensing Procedures 2.2.2.2.4

Agreement

106. Argentina has not raised any defence in relation to the claims brought by the

European Union under specific Articles of the Import Licensing Procedures

Agreement. Given that Argentina's assertions in relation to the scope of the Import

Licensing Procedures Agreement and the nature of the DJAI fail, the European

Union respectfully requests the Panel to find that Argentina has acted

inconsistently with its obligations under the relevant Articles of the Import

Licensing Procedures Agreement.

3. RESTRICTIVE TRADE-RELATED REQUIREMENTS

107. As a preliminary remark, the European Union would like to note that, even at this

advanced stage of the proceedings, Argentina has failed to engage in rebutting the

evidence provided by the European Union showing the existence of the RTR

requirements, despite of the fact that the Panel has posed several questions directly

to Argentina. The European Union requests the Panel to draw appropriate

inferences from Argentina's refusal to provide the requested documents. Further,

80 Appellate Body Report, EC-Bananas III, para. 203. Emphasis in the original statement of the

Appellate Body.

81 Appellate Body Report, EC-Bananas III, paras. 203 and 204.



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and importantly, the European Union observes that Argentina has actually

recognised the facts as evidenced by the European Union when acknowledging

their existence as "unrelated 'one-off' actions".82

However, Argentina disagrees

with the legal characterisation of those actions as a single, unwritten overarching

measure with precise content, and with general and prospective operation.83

108. Specifically, Argentina argues that the European Union has failed to establish the

precise content of the RTR requirements as an overarching measure. In Argentina's

view, the European Union needs to show the existence of each of the RTR

requirements as well as the existence of an overarching measure which is different

from the content of the various individual RTR requirements that supposedly

comprise it.84

In this respect, Argentina considers that, at most, the evidence on the

record demonstrates a series of unrelated "one-off" actions whose content varies so

widely that it is insufficient to demonstrate the content of a series of distinct

requirements, let alone a single "overarching" RTRR measure.85

109. In addition, Argentina argues that the European Union has failed to show that the

RTR requirements as an overarching measure has general and prospective

application. According to Argentina, the European Union has not demonstrated the

existence of a generally applicable rule or norm governing the importation or sale

of all goods in Argentina. Further, Argentina argues that there is no evidence that

the alleged "overarching" RTRR measure is meant to have prospective application.

At most, Argentina considers that the evidence would reflect nothing more than a

number of "one-off" actions, not a prospective measure. Argentina posits that the

alleged commitments described by the European Union do not have normative

content at all since they neither require nor commit prospective courses of action.86

82 Argentina's opening oral statement at the first substantive meeting, paras. 46 – 48.

83 Argentina's comments on the Panel's proposed special procedures, dated 30 October 2013, p. 2.

84 Argentina's opening oral statement at the first substantive meeting, paras. 44 and 46.

85 Argentina's opening oral statement at the first substantive meeting, para. 45.




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110. Finally, Argentina argues that the same reasons provided by the European Union

in the context of the EC – Large Civil Aircraft show that the European Union has

failed to prove the existence of the RTR requirements as an overarching measure.87

111. The European Union will show below that Argentina's arguments are without

merit. The European Union has identified the RTR requirements as an overarching

measure with sufficient precision. Such unwritten measure is not simply a series of

distinct and unrelated actions; rather, the imposition of RTR requirements on

economic operators is part of a systemic approach adopted by Argentina to

prohibit or restrict the importation of products and/or the use of imported products

in Argentina with a view to achieving its trade balancing and import substitution

objectives. Moreover, such a systemic approach is not "incidental" but part of a

"rule or norm" with general and prospective application. The European Union will

also provide comments on Argentina's responses to some of the Panel's Questions

after the first meeting. Finally, the European Union will address the Panel's

communication dated 6 November 2013 about its decision not to adopt special

procedures under Article 13 of the DSU.

3.1. THE EUROPEAN UNION HAS IDENTIFIED THE PRECISE CONTENT OF THE RTR

REQUIREMENTS AS AN OVERARCHING MEASURE

112. Argentina's assertion that the European Union has failed to establish the precise

content of the RTR requirements as an overarching measure must fail. Following

the description of the measures at issue as identified in the EU Panel Request, the

European Union included Section 4.2.1 in its first written submission,88

with the

title "Measures at issue". There, the European Union describes the measures at

issue as including (1) the RTR requirements as an overarching measure, and (2) 23

separate measures where Argentina has imposed one or more of the RTR

requirements.89

113. More specifically, with respect to the RTR requirements as an overarching

measure, the European Union described the measure at issue as follows:


88 See EU's first written submission, paras. 325 – 326.

89 See EU's Response to Question 1, paras. 3 – 4.



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In this dispute, the European Union challenges the overarching

measure established by Argentina with a view to eliminating trade

balance deficits and/or substituting imports, whereby Argentina

imposes upon economic operators one or more of the following

requirements that prohibit or restrict the importation of products

and/or the use of imported products in Argentina:

(1) 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;

(2) the import reduction requirement, whereby Argentina

requires to limit the volume of imported products as a

condition to continue importing some products into

Argentina;

(3) 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;

(4) 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;

(5) the investment requirement, whereby Argentina

requires to make investments in Argentina and/or to

refrain from repatriating profits abroad, as condition to

imports products into Argentina.

This overarching measure applies to many economic operators

and sectors in Argentina, which are required to agree with the

suggested commitments. The Argentine Government decides to

impose one or more of these requirements depending on how the

economic operator or sector in Argentina can best contribute to

achieving Argentina's trade balance and import substitution

objectives.

The European Union submits that each of these requirements, on

its own as well as any combination thereof, is inconsistent with

Articles XI:1 and/or III:4 of the GATT 1994 and, consequently,

so is the overarching measure. Since these requirements have not

been published promptly in a manner to enable governments and

traders to become acquainted with them, the European Union

submits that Argentina also violated its obligations under Article

X:1 of the GATT 1994.90

90 EU's first written submission, paras. 325 – 327. See also EU's opening oral statement, first meeting

with the parties, para. 34, where the European Union described the RTR requirements as an

overarching measure in identical terms.



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114. From this description, it becomes obvious that the European Union is challenging

a measure attributed to Argentina ("measure established by Argentina"), whereby

Argentina requires certain economic operators to undertake one or more of the five

actions described before (and referred to as "RTR requirements") that prohibit or

restrict the importation of products and/or the use of imported products in

Argentina. The European Union further identifies the objectives pursued by the

overarching measure, as eliminating trade balance deficits and/or substituting

imported products by domestic products. The European Union further confirms

that the measure has a general scope, since Argentina decides to impose one or

more of those requirements depending on how the economic operator or sector in

Argentina can best contribute to achieving Argentina's trade balance and import

substitution objectives. In this sense, the measure at issue is "overarching", "all-

embracing" or "in extended use"91

in Argentina since the RTR requirements apply

to a range of situations, to a variety of economic operators and sectors, as

evidenced in the EU's first written submission. Thus, the RTR requirements are not

isolated cases, but an overarching measure applied to a wide range of situations,

and has become the "rule" for companies doing business in Argentina ("Argentina

imposes…", "Argentina requires…", and "Argentina applies").92

Such a "rule" will

apply or will likely apply in the future in Argentina, insofar as Argentina continues

pursuing its trade balancing and import substitution objectives. This is why the

European Union "challenges the overarching measure established by Argentina".

Challenging each of the RTR requirements as isolated cases will not get rid of the

problem faced by the EU industry. Finally, the European Union indicates that the

measure is unwritten, in the sense that "these requirements have not been

published".

115. In sum, the European Union has identified with precision the RTR requirements as

an overarching measure. The European Union has attributed to Argentina an

91 See the meaning of the term "overarching" in OED on-line, available at

http://www.oed.com/view/Entry/134273?rskey=k7zK8q&result=2&isAdvanced=false#eid and

http://www.oed.com/view/Entry/257894?rskey=k7zK8q&result=1&isAdvanced=false#eid (Exhibit

EU-423).

92 The use of the present tense speaks to the fact that Argentina not only imposed such requirement in

the past, but also currently applies them and that it is likely that Argentina will continue requiring

economic operators to undertake one or more of the RTR requirements in the future.





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unwritten (i.e. not published) measure with the category of a rule whereby, with a

view to achieving two concrete objectives (trade balancing and import

substitution), economic operators are required to comply with one or more of the

five type of actions mentioned by the European Union ("RTR requirements"),

depending on their contribution to achieving those objectives. By identifying the

specific actions (RTR requirements) that prohibit or restrict the importation of

products and/or the use of imported products in Argentina, the objectives pursued

by the overarching measure, the unwritten nature of the measure and its general

and prospective application, all attributable to Argentina, the European Union

considers that it has identified the measure at issue with sufficient precision.

3.2. THE RTR REQUIREMENTS AS A SINGLE OVERARCHING MEASURE IS DIFFERENT

FROM THE FIVE REQUIREMENTS INDIVIDUALLY IDENTIFIED BY THE EUROPEAN

UNION

116. Contrary to what Argentina states, the RTR requirements as an overarching

measure is not simply a series of distinct and unrelated actions; rather, the

imposition of RTR requirements on economic operators is part of a systemic

approach adopted by Argentina to prohibit or restrict the importation of products

and/or the use of imported products in Argentina with a view to achieving its trade

balancing and import substitution objectives.

117. As Argentina observes, the existence of the overarching measure depends on

showing, inter alia, that Argentina has imposed one or more of the five RTR

requirements mentioned before. However, this is not the same as saying that the

content of each RTR requirement is the same as the content of the RTR

requirements as an overarching measure. The content of the overarching measure

is different from the five types of RTR requirements. Indeed, the overarching

measure implies the existence of a single unwritten measure whereby Argentina

seeks to impose certain trade-restrictive actions on economic operators with a view

to achieving two specific objectives, i.e., eliminating trade balance deficits and

achieving the substitution of imported products by domestic products.

118. That Argentina is pursuing those objectives stands from the multiple official

statements the European Union has put on the record and that Argentina does not



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appear to contest. Indeed, in its response to Question 8, Argentina does not provide

any evidence that the official statements cited therein are incorrect.93

To give an

example, Argentina does not dispute that the Plan Estratégico Industrial 2020

confirms the fact that Argentina is pursuing to substitute imports and increase

exports as basic policies of its industrialisation.94

With respect to the automotive

sector, the Plan Estratégico Industrial 2020 also states that "the application of

non-automatic import licenses is one of the instruments that have allowed the

sector to substitute imports".95

Argentina has not disputed its policy of "managed

trade" either.96

Thus, it is undisputed that Argentina employs multiple instruments,

93 And the European Union can provide the Panel with more similar statements about Argentina's

objectives, such as self-sufficiency ("Las petroleras Total Austral y Wintershall anunciaron a la

Presidenta una inversión 2.100 millones de dólares", dated 22 February 2013, available at

http://www.presidencia.gov.ar/informacion/actividad-oficial/26365-las-petroleras-total-austral-y-

wintershall-anunciaron-a-la-presidenta-una-inversion-2100-millones-de-dolares (Exhibit EU-424)

("otro paso en firme hacia el desarrollo en escala del sector, pero principalmente hacia el logro del

autoabastecimiento energético de la Argentina"); and import substitution ("Inauguración de la

fábrica de bicicletas López Hnos. en Chaco: Palabras de la Presidenta de la Nación" dated 17 July

2013, available at http://www.presidencia.gov.ar/discursos/26588-inauguracion-de-la-fabrica-de-

bicicletas-qlopez-hnosq-en-chaco-palabras-de-la-presidenta-de-la-nacion (Exhibit EU-425) ("Y

aquí, hoy, sumando - como decimos con Débora Giorgi - fierro con fierro la integración de todas

las bicicletas, que me vieron recorrer es 60 por ciento fierros nacionales y tenemos que llegar a 70,

como estamos comprometidos. Y cuando podamos ciento por ciento de fierro nacionales, que esa es

la verdadera industria"); "Acto de inauguración de la Planta de Lavarropas Samsung en Cañuelas:

Palabras de la Presidenta de la Nación", dated 30 July 2013, available at

http://www.presidencia.gov.ar/discursos/26622-acto-de-inauguracion-de-la-planta-de-lavarropas-

samsung-en-canuelas-palabras-de-la-presidenta-de-la-nacion (Exhibit EU-426) ("…estamos muy

contentos de estar inaugurando esta planta de lavarropas modernísimos, los pueden ver, aquí, a mis

espaldas. Hoy tienen una integración del 30 por ciento, y me prometieron que a fin de año van a

llegar al 40 por ciento… primer trimestre, del año que viene, 60 por ciento de integración nacional.

(…) y tiene que ver todo esto que estamos haciendo acá, esto que estamos haciendo acá, lo que se

hace en la ciudad de Buenos Aires, lo que se hizo y se está haciendo en Santo Tomé, en Paraná, lo

que hice el otro día también en Siderar, lo que hicimos en Beltrame, toda esta política pública tan

activa, en generar sustitución de importaciones, en hacer fuerza y dar préstamos para que la gente

produzca en el país, en lograr que jóvenes argentinos tengan su primer trabajo industrial. (…)

Donde haya un argentino, donde haya un empresario, donde haya un empresario argentino, una

empresaria argentina dispuesta a invertir, dispuesta a producir cosas en el país, dispuesto a sustituir

importaciones, no tengan dudas, ahí va a estar el Gobierno nacional poniendo todo lo que hay que

poner para que cada vez haya más industria, cada vez haya más trabajo, cada vez haya más

trabajadores").

94 See Plan Estratégico Industrial 2020 (Exhibit JE-749), pp. 33 and 41.

95 See Plan Estratégico Industrial 2020 (Exhibit JE-749), p. 148. See also id. p. 223

96 See e.g. European Union's first written submission, paras 1 – 6. See also "Acto de inauguración de

obras y empresas privadas: Palabras de la Presidenta de la Nación" dated 3 May 2013, available at

http://www.presidencia.gov.ar/discursos/26459-acto-de-inauguracion-de-obras-y-empresas-

privadas-palabras-de-la-presidenta-de-la-nacion (Exhibit EU-427) ("Debido a esta política de

convicción, de persuasión que tenemos sobre todos los empresarios y administración de nuestro

comercio, de administración de que queremos que las cosas que se consumen y usan en la

Argentina, por lo menos una parte importante de ellas, se haga aquí, en la Argentina para generar

trabajo para los argentinos y para sostener, sobre todo, en este tipo de industrias de altísimo valor











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including the limitation of imports, in order to pursue its objectives of eliminating

trade balance deficits and achieving import substitution.97

The objectives of

eliminating trade balance deficits and replacing imported products by domestic

products could not be achieved by "unrelated 'one-off'’ actions", as Argentina

asserts, but through a coordinated action.

119. The panel in Japan – Apples similarly treated nine inter-related and cumulative

legal and administrative requirements actually applied by Japan to the importation

of US apple fruit as comprising one single sanitary and phytosanitary measure for

the purpose of evaluating the US complaint against those requirements.98

In

following the same approach, the implementation panel explained that the original

panel had treated "the requirements imposed by Japan as several elements of one

single measure, essentially because all the requirements were presented as part of a

systemic approach".99

In the present case, the imposition of RTR requirements on

economic operators is part of a systemic approach and coordinated action seeking

agregado, hemos logrado – para esta primera etapa – la inversión de más de 20 millones de pesos.

El objetivo, para el año 2013, contempla – lo que decía Débora – 2 millones y medio de unidades y

ha creado 21 nuevos puestos de trabajo. (…) Y estamos muy contentos porque, además, el 75 por

ciento de la producción se va a exportar y con la creación de esto y las exportaciones esta empresa

va a equilibrar su balanza comercial, que hasta ahora era deficitaria para el país"); and "Visita a la

fábrica de tractores AGCO: Palabras de la Presidenta de la Nación" dated 1 October 2013, available

at http://www.presidencia.gov.ar/discursos/26760-visita-a-la-fabrica-de-tractores-agco-palabras-de-

la-presidenta-de-la-nacion (Exhibit EU-428) ("Y la verdad que esta empresa, de capitales de origen

norteamericano, que es una de las líderes del mundo, en materia agrícola, hemos logrado con una

política industrial, con una política también de administración de comercio, con una política

también de persuasión y conocimiento de los empresarios de que invirtieran acá, de estar hoy

produciendo un tracto que tiene el 80 por ciento de componentes nacionales y haberse firmado, hoy

además, este acuerdo con una empresa líder, de origen alemán, productoras de las cabinas. Para

que ustedes tengan una idea, las cabinas representan en los tractores – en el tema de fierro por fierro

– el 20 por ciento de su componente nacional, o sea que prácticamente cuando podamos ponerle

también las cabinas, de origen nacional, estaremos casi, casi alcanzando el ciento por ciento de

proveedores nacionales de piezas locales de un tractor absolutamente nacional").

97 See "'La propia virtuosidad del modelo es la que permite que aumente la recaudación', señaló la

Presidenta en Casa Rosada", dated 4 June 2013, available at

http://www.presidencia.gov.ar/informacion/actividad-oficial/26513-la-propia-virtuosidad-del-

modelo-es-la-que-permite-que-aumente-la-recaudacion-senalo-la-presidenta-en-casa-rosada

(Exhibit EU-429) ("….este modelo basado en 'la producción, el trabajo, la inclusión social, el valor

agregado, el aumento exportaciones, la sustitución de importación para tener balanza comercial

robusta reinvertir y pagar la deuda monstruosa que pudimos reestructurar' fue el que permitió este

'crecimiento federal'").

98 Panel Report, Japan – Apples, paras 8.15 – 8.16.

99 Panel Report, Japan – Apples (Article 21.5 – US), para. 8.29. See also Panel Report, US – COOL,

para. 7.51.







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to achieve the trade balance and import substitution objectives pursued by

Argentina.

120. Thus, contrary to what Argentina suggests, the RTR requirements as a single

overarching measure are not merely actions whose content varies so widely that it

is insufficient to demonstrate the content of a series of distinct requirements, let

alone a single "overarching" RTRR measure.100

The imposition of such RTR

requirements is part of a systemic approach adopted by Argentina to prohibit or

restrict the importation of products and/or the use of imported products in

Argentina with a view to achieving its trade balancing and import substitution

objectives.

121. Consequently, in order to show the existence of the RTR requirements as an

overarching measure, the European Union has demonstrated that as part of a

systemic approach Argentina requires economic operators to undertake one or

more of the five type of actions referred to as RTR requirements (i.e. one or any

combination thereof). Those actions are connected in view of the two specific

objectives pursued by Argentina and the fact that they seek to prohibit or restrict

the importation of products and/or the use of imported products in Argentina. The

Argentine Government decides to impose one or more of these RTR requirements

depending on how the economic operator or sector in Argentina can best

contribute to achieving Argentina's trade balance and import substitution

objectives.101

3.3. THE EUROPEAN UNION HAS SHOWN THAT THE RTR REQUIREMENTS AS AN

OVERARCHING MEASURE HAS A GENERAL AND PROSPECTIVE APPLICATION

122. As part of its challenge of the RTR requirements as an overarching measure, the

European Union is challenging the existence of an unwritten measure which has a


101 To be clear, the European Union is not challenging each of the RTR requirements disconnected

from an overarching measure. Rather, the European Union has identified a single measure whereby

Argentina imposes one or more of the five types of RTR requirements mentioned before. In this

respect, the European Union has to demonstrate (and has indeed demonstrated in its first written

submission) that Argentina indeed requires economic operators in Argentina to undertake one or

more of the five actions described as RTR requirements. The European Union has also shown that

the imposition of those requirements is more than "unrelated 'one-off' actions". It is part of a

systemic approach and coordinated efforts by Argentina to achieve its trade balance and import

substitution objectives.



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general and prospective application, rather than a set of unrelated actions taken by

Argentina.102

In other words, the European Union is challenging the "rule or norm"

that is not expressed in the form of a written document whereby Argentina requires

economic operators to undertake one or more of the five types of actions (referred

to as RTR requirements) with a view to achieving its trade balancing and import

substitution objectives.

3.3.1. The RTR requirements as an overarching measure has general

application

123. The European Union has shown that the RTR requirements as an overarching

measure is a generally applicable rule or norm governing the importation and/or

sale of goods in Argentina. Contrary to what Argentina asserts, the European

Union does not need to show that such a rule applies to the importation and/or sale

of "all" goods in Argentina. As explained before, the European Union has not

defined the measure at issue in that manner. Rather, the European Union has stated

that the Argentine Government decides to impose one or more of these

requirements depending on how the economic operator or sector in Argentina can

best contribute to achieving Argentina's trade balance and import substitution

objectives.103

In this sense, the overarching measure potentially applies to all

goods in Argentina. This does not mean that such a measure indeed applies to all

goods in Argentina in the sense that all goods are subject to one or more RTR

requirements.

124. In any event, for a measure to be of "general application" it is not necessary that

such a measure applies to all goods in Argentina. In this respect, the panel in US –

Underwear found that insofar as the restraint at issue affected an unidentified

number of economic operators, the administrative order was a measure of general

102 For the sake of clarity, the European Union notes that in the alternative, should the Panel find that

the RTR requirements as an overarching measure does not exist, the European Union also

challenges 23 actions taken by Argentina where Argentina has imposed one or more of the RTR

requirements on specific operators at a particular moment in the past. With respect to those 23

measures, the European Union is not asking the Panel to find the existence of a general rule or

norm with prospective application, but merely that a particular action was taken by Argentina

contrary to its obligations under Articles XI:1 and/or III:4 of the GATT 1994.

103 See e.g. EU's first written submission, para. 325.



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application.104

In the present case, the European Union has shown that this

overarching measure applies to many economic operators and sectors in Argentina

(such as automobiles, auto parts, motorcycles, trucks, tires, metallurgical products,

agricultural machinery, retail apparel, books and other publications), which are

required to comply with one or more of the RTR requirements. Argentina has not

denied the existence of any of them.

125. Consequently, the European Union has shown that the RTR requirements as an

overarching measure amounts to a measure of general application.

3.3.2. The RTR requirements as an overarching measure has

prospective application

126. Moreover, the European Union has shown that the RTR requirements as an

overarching measure is a "rule" with prospective application. Contrary to what

Argentina argues, the RTR requirements are not isolated or unrelated "one-off"

actions. As mentioned before,105

they are part of a systemic approach and

coordinated efforts to achieve Argentina's trade balancing and import substitution

objectives. Until Argentina does not announce a change in its policy objectives, it

should be presumed that Argentina will continue taking similar actions which

prohibit or restrict the importation of products and/or the use of imported products

in Argentina with a view to achieving its trade balancing and import substitution

objectives.

127. The evidence that the European Union has put before the Panel to demonstrate the

prospective application of the unwritten rule is manifold. The evidence consists of

104 Panel Report, US – Underwear, para. 7.65 (cited with approval by the Appellate Body in EC –

Poultry, para. 113) ("The mere fact that the restraint at issue was an administrative order does not

prevent us from concluding that the restraint was a measure of general application. Nor does the

fact that it was a country-specific measure exclude the possibility of it being a measure of general

application. If, for instance, the restraint was addressed to a specific company or applied to a

specific shipment, it would not have qualified as a measure of general application. However, to the

extent that the restraint affects an unidentified number of economic operators, including domestic

and foreign producers, we find it to be a measure of general application"). See also Panel Report,

Japan – Film, para. 10.385 (agreeing with the Panel Report in US – Underwear) and Panel Report,

EC – IT Products, para. 7.159 ("[W]e consider that the CNEN amendments at issue in this dispute

are of 'general application' because the application of a CNEN is not limited to a single import or a

single importer. Rather, they set forth rules or norms that are intended to have general and

prospective application. The objective of the CNEN is to ensure the uniform application of the

Common Customs Tariff to all products falling under a specific CN code upon importation into the

EU").

105 See paras. 117 – 119 above.



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considerably more than a string of cases, or repeat action, based on which the

Panel could simply "divine" the existence of a measure in the abstract.106

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, documents

made by public notaries and surveys by different industry associations speaking to

the existence of the overarching measure as part of a systemic approach and

coordinated efforts by the Argentine authorities to achieve their stated objectives.

128. In any event, "repeated course of action" can, in certain circumstances, be evidence

of an unwritten measure with future applicability. Indeed, when completing the

analysis and assessing the existence of the measures asserted by the European

Communities in US – Continued Zeroing, the Appellate Body emphasised that it

was looking for evidence of future applicability. Thus, the Appellate Body

assessed the "repeated course of action" as evidence of an unwritten measure that

would "likely continue to be applied".107

Similarly, in Thailand – Cigarettes, the

panel noted that "the actual application of an unwritten general rule will clearly

qualify as evidence of the existence of such a rule".108

Thus, the fact that Argentina

has repeatedly imposed various RTR requirements on a variety of economic

operators in Argentina also speaks to the existence of an unwritten rule with

prospective application. In this respect, the European Union observes that

Argentina has not contested the facts as evidenced by the European Union; nor has

Argentina stated that the same actions, still taking place today,109

will not continue

also in the future.

106 Appellate Body Report, US – Continued Zeroing, para. 204.

107 Appellate Body Report, US – Continued Zeroing, para. 191 ("Thus, in each of the above four cases,

the Panel's findings indicate that the zeroing methodology was repeatedly used in a string of

determinations, made sequentially in periodic reviews and sunset reviews over an extended period

of time. The density of factual findings in these cases, regarding the continued use of the zeroing

methodology in a string of successive proceedings pertaining to the same anti-dumping duty order,

provides a sufficient basis for us to conclude that the zeroing methodology would likely continue to

be applied in successive proceedings whereby the duties in these four cases are maintained"). See

also Panel Report, US – Orange Juice (Brazil), para 7.41.

108 Panel Report, Thailand – Cigarettes (Philippines), para. 7.129.

109 See e.g. "Hola Guillermo, te estamos llamando, queremos importar…", El Cronista, dated 24 June

2013, available at http://www.cronista.com/columnistas/Hola-Guillermo-te-estamos-llamando-

queremos...-importar-20130624-0024.html (Exhibit EU-430); "Giorgi destacó que las pymes ya

controlan el 50% del mercado nacional de juguetes y llamó a 'incorporar creatividad y diseño'",





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129. In addition, the European Union observes that Argentina wrongly posits that the

alleged commitments described by the European Union do not have normative

content at all since they neither require nor commit prospective courses of action.

This is incorrect. As a matter of fact, the agreements signed between economic

operators and the Argentine authorities as well as the commitments provided by

many economic operators all require a prospective course of action. Indeed, they

all require the economic operators concerned to undertake e.g. to even out their

trade balance in a future period of time (including the current year), to replace

imported products by domestic products (e.g. auto parts) or achieve a particular

threshold of local content (e.g. motorbikes, electronic goods) in a particular period

of time in the future, or to make a series of investments in the future.

3.3.3. Argentina's reliance on EC – Large Civil Aircraft is misplaced

130. Finally, contrary to what Argentina asserts, the panel in EC – Large Civil Aircraft

does not support Argentina's arguments in this case. First, Argentina is relying on

a section of the panel report that was declared moot by the Appellate Body.

Indeed, the Appellate Body found that the alleged unwritten LA/MSF Programme

was not within the Panel's terms of reference because it was not identified in the

Ministerio de Industria, dated 20 septiembre 2013, available at http://www.industria.gob.ar/giorgi-

destaco-que-las-pymes-ya-controlan-el-50-del-mercado-nacional-de-juguetes-y-llamo-a-incorporar-

creatividad-y-diseno/ (Exhibit EU-431); "El Ministerio de Industria realizó el Plenario de Foros del

Plan Estratégico Industrial 20 20 con empresarios", Ministerio de Industria, dated 23 septiembre

2013, available at http://www.industria.gob.ar/el-ministerio-de-industria-realizo-el-plenario-de-

foros-del-plan-estrategico-industrial-20-20-con-empresarios/ (Exhibit EU-432); "Giorgi:

'Necesitamos legisladores que defiendan la industrialización como lo hace el gobierno nacional'",

Ministerio de Industria, dated 30 septiembre 2013, available at http://www.industria.gob.ar/giorgi-

necesitamos-legisladores-que-defiendan-la-industrializacion-como-lo-hace-el-gobierno-nacional/

(Exhibit EU- 433); "Ahora Moreno avala acuerdos entre privados para controlar importaciones", El

Cronista, dated 3 October 2013, available at http://www.cronista.com/economiapolitica/Ahora-

Moreno-avala-acuerdos-entre-privados-para-controlar-importaciones-20131003-0087.html (Exhibit

EU- 434); "1º Encuentro empresario por un acuerdo productivo", ADIMRA, dated 30 September

2013, available at http://www.adimra.com.ar/index.do?sid=33&nid=1325 (Exhibit EU-435);

"ACUERDO PRODUCTIVO: 2do. Encuentro Empresario", ADIMRA, dated 9 October 2013,

available at http://www.adimra.com.ar/index.do?sid=33&nid=1337 (Exhibit EU-436); "Sintonía

fina, parte dos", Página 12, dated 10 October 2013, available at

http://www.pagina12.com.ar/diario/economia/2-230957-2013-10-10.html Exhibit EU-437);

"Refuerzan presión sobre automotrices para que compren partes locales", El Cronista, dated 23

October 2013, available at http://web4.cronista.com/economiapolitica/Refuerzan-presion-sobre-

automotrices-para-que-compren-partes-locales-20131023-0083.html (Exhibit EU-438). The

European Union also refers to the information contained in Exhibits JE-755 and JE-759 – JE-771,

which provide recent information about the current situation in Argentina.

















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request for the establishment of a panel, as required by Article 6.2 of the DSU.110

Having found that the alleged unwritten LA/MSF Programme was not within the

Panel's terms of reference, the Appellate Body declared moot and of no legal effect

the Panel's finding, in paragraphs 7.579, 7.580, and 8.3(a)(iv) of the Panel Report,

that the United States failed to establish the existence of an unwritten LA/MSF

Programme measure constituting a specific subsidy within the meaning of Articles

1 and 2 of the SCM Agreement.111

Thus, by implication, the entire section in

which Argentina is relying in this case was declared moot.

131. In any event, the European Union is very aware of the consequences of

challenging the RTR requirements as a single unwritten measure. However, unlike

the United States in EC – Large Civil Aircraft, the European Union has met its

burden of showing the existence of such an overarching measure as described by

the European Union.

132. Indeed, in EC – Large Civil Aircraft, the panel found that the alleged unwritten

LA/MSF Programme as described by the United States did not exist. The United

States had described the alleged unwritten LA/MSF Programme as a measure that

"creates expectations among the public and among private actors, demonstrating

that it has normative value".112

Specifically, the panel found that the United States

failed to show that "LA/MSF, by definition, involves below-market financing" and

that "any LA/MSF granted in the future will involve non-commercial interest

rates".113

The panel reasoned that below-market interest rates were not an explicit

feature of the LA/MSF contracts; that there was nothing inherent in the LA/MSF

contracts rendering them a form of financing that by definition will always involve

below-market interest rates; and that interest rate advantage obtained by Airbus

varied across the different LA/MSF contracts, in general diminishing with every

new model of LCA. According to the panel, "to the extent that past instances of

LA/MSF might be argued to evidence a broader co-ordinated financing

programme, they do not support a conclusion that such a programme would

110 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 795.

111 Appellate Body Report, EC and certain member States – Large Civil Aircraft, para. 795.

112 Panel Report, EC – Large Civil Aircraft, para. 7.575.




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necessarily involve the provision of loans in the future at below-market interest

rates".114

133. In the present case, the European Union has shown that Argentina imposes one or

more of the five types of RTR requirements as part of a systemic and coordinated

approach to prohibit or restrict the importation of products and/or the use of

imported products in Argentina with a view to achieving its trade balancing and

import substitution objectives. Thus, the European Union has demonstrated all the

elements of the precise content of the RTR requirements as a single unwritten

measure.

3.4. EU'S COMMENTS ON ARGENTINA'S RESPONSES TO THE PANEL'S QUESTIONS

AFTER THE FIRST MEETING

134. The European Union will provide below comments on some of the responses

given by Argentina to the Panel's Questions after the first meeting.

3.4.1. Question 7 – Value of the Plan Estratégico Industrial 2020

135. Argentina criticises the value that the European Union grants to the Plan

Estratégico Industrial 2020 as establishing basic guidelines of Argentina's

industrial policy over the current decade. However, this is what the document in

question indisputably states several times.115

Argentina does not dispute the

content of the pages the European Union has referred to either.

136. Argentina further argues that the objectives described therein are pursued in a

manner that is consistent with the covered agreements. The European Union does

not question the fact that Argentina can use instruments such as anti-dumping

duties, in order to defend its industry against injurious dumping. The European

Union does not question either any natural process where a domestic industry

increases its competitiveness and it is able to replace imports on a qualitative basis.


115 See Plan Estratégico Industrial 2020, pp. 33, 34, 36, 38, 82, 86, 91, 93, 102, 103, 109, 115, 117,

118, 125, 128, 132, 134, 135, 136, 148, 149, 151, 152, 153, 159, 161, 162, 166, 169, 175, 178, 179,

187, 188, 190, 196, 210, 211, 215, 218, 225, 226, 229, 230, 235, 243, 247, 248, 257, 272, 273, 274,

and 281 (Exhibit JE-749). See also Casa Rosada, Plan Estratégico Industrial 2020. Institucional,

available at http://www.youtube.com/watch?v=ZYhDt7glAM4, and Casa Rosada, 4 October 2011,

Presentación Plan Estratégico Industrial 2020. Cristina Fernández Casa, available at

http://www.youtube.com/watch?v=isYezuaQ0bA, speaking about the value of the PEI 2020.

http://www.youtube.com/watch?v=ZYhDt7glAM4

http://www.youtube.com/watch?v=isYezuaQ0bA



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Instead, the European Union has shown that in pursuing those objectives

Argentina has adopted the DJAI system and the RTR requirements which are in

breach of several covered agreements.

137. The European Union also wonders about statements contained in the Plan

Estratégico Industrial 2020 where the application of non-automatic import

licenses is mentioned as "one of the instruments that have allowed the sector to

substitute imports".116

The European Union disagrees with Argentina that the use

of non-automatic import licenses could be a legitimate instrument according to the

covered agreements to favour the replacement of imported products by domestic

products.

3.4.2. Question 8 – Objectives pursued by Argentina through its

managed trade strategy

138. Argentina rejects seeking to preserve the internal market for domestic products.

Argentina further rejects seeking a limitation on imports. The European Union

notes that Argentina does not provide any evidentiary support to those statements.

In contrast, the European Union has provided evidence, including the Exhibits

listed in the Panel's Question, showing that Argentina pursues those objectives. To

recall, there are multiple official statements heralding that Argentina has an import

substitution objective, with the ultimate goal of creating value locally through the

use of domestic products.117

There is also evidence that Argentina continues

seeking the same objectives and taking similar actions,118

sometimes even against

the wishes of its domestic producers, who suffer from the lack of key inputs119

and

have even left the country.120

116 See Plan Estratégico Industrial 2020 (Exhibit JE-749), pp. 148 and 223. See also the references

made in Exhibit EU-404, paras. 23 – 32 about the PEI 2020.

117 See e.g. Plan Estratégico Industrial 2020 (Exhibit JE-749), p. 152.

118 See footnote 109 above.

119 See e.g. Press Release from Cámara de Comercio Exterior de Córdoba, Cámara de Industriales

Metalúrgicos y de Componentes de Córdoba, and Unión Industrial de Córdoba, dated 3 June 2013,

available at http://www.uic.org.ar/pagina.asp?id=2499 (Exhibit EU–439) ("We value the intention

to defend the domestic industry and the need to secure a positive trade balance in the sector, but we

warn that the policy of restricting the importation of products which are not produced locally is

affecting more and more the manufacturing conditions and the normal development of our

business"); "Se duplicó el cepo a las importaciones y ya tiene impacto en el empleo", La Nacion,

dated 14 October 2013, available at http://www.lanacion.com.ar/1628859-se-duplico-el-cepo-a-las-

importaciones-y-ya-tiene-impacto-en-el-empleo (Exhibit EU–440); "Desbordado por el cepo a la

http://www.uic.org.ar/pagina.asp?id=2499





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139. Quite tellingly, Argentina does not deny having actively pursued a strategy of so-

called "managed trade" ("comercio administrado") since 2003.121

Contrary to what

Argentina asserts, such "managed trade" does not allow for a "virtuous

convergence" ("convergencia virtuosa") of public and private interests. The

European Union has provided abundant evidence of this to the Panel where, far

from willingly agree with the actions suggested by the Argentine authorities,

economic operators are forced to e.g. export unrelated products in order to even

out their trade balance, or use domestic products (instead of imported products) in

their production process. Argentina has not disputed these facts as presented by the

European Union.

3.4.3. Questions 13 and 14 - Value of certain evidence produced by

means of documents signed by a Notary Public, including

affidavits

140. Argentina considers that the statements made by Mr. Richard Rodriguez, a Notary

Public in Geneva, do not have any value if the Panel cannot verify the accuracy of

those statements. This is disingenuous, at least on two grounds. First, the Notary

Public is confirming the existence of agreements signed between economic

operators and the Argentine authorities and containing RTR requirements.

However, at the same time, Argentina refuses to provide those agreements and

importación", La Nacion, dated 9 September 2013, available at

http://www.lanacion.com.ar/1618064-desbordado-por-el-cepo-a-la-importacion (Exhibit EU–441).

120 See e.g. "En sólo dos años, más de 20 empresas extranjeras se fueron de la Argentina", El Cronista,

dated 3 October 2013, available at http://www.cronista.com/negocios/En-solo-dos-aos-mas-de-20-

empresas-extranjeras-se-fueron-de-la-Argentina-20131003-0018.html (Exhibit EU–442)

121 See e.g. EU's first written submission, para. 1. See also Palabras de la Presidenta de la Nación

Cristina Fernández con motivo de la inauguración de la fábrica de bicicletas "LÓPEZ HNOS", en

la provincia de Chaco, dated 17 July 2013, available at

http://www.presidencia.gob.ar/discursos/26588-inauguracion-de-la-fabrica-de-bicicletas-qlopez-

hnosq-en-chaco-palabras-de-la-presidenta-de-la-nacion (Exhibit EU-443) ("The Government is

paying the national debt with the positive trade balance. This is why we work so hard on managing

trade, because we have not had access to the capital markets. (…) When I took the decision to

recoup the sovereignty of fuels in the YPF, it was not arbitrary; it was because we had changed

from a situation where Argentina was a net exporter of fuels into a net importer of fuels and

because all that you pay to NAFTA was going abroad and did not stay here, nothing was reinvested

in the country"); Inauguración de nueva planta de Fiat Argentina en Córdoba: Palabras de la

Presidenta de la Nación, dated 4 June 2013, available at

http://www.presidencia.gob.ar/discursos/26464-inauguracion-de-nueva-planta-de-fiat-argentina-en-

cordoba-palabras-de-la-presidenta-de-la-nacion (Exhibit EU-444) ([FIAT's new factory] is also the

result of the public policy that we have carried out in the context of managed trade, which allows

and also suggests that what is consumed in Argentina will be much more consumed here and will

be made in Argentina as well").

http://www.lanacion.com.ar/1618064-desbordado-por-el-cepo-a-la-importacion









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commitments to the Panel. The fact that Argentina does not provide such

documents upon the Panel's request could be sufficient for the Panel to conclude

that the document produced by the Notary Public together with Argentina's refusal

confirm the existence of those agreements and commitments. Second, those

agreements and commitments have been heralded by the Argentine authorities

themselves in official press releases, as well as echoed by unofficial sources. This

may also provide the basis for the Panel to conclude that such documents, as

confirmed by the Notary Public, do exist.

141. Argentina appears to dismiss the value of the statements made by Mr. Richard

Rodriguez, a Notary Public in Geneva. As a Notary Public, Mr. Rodriguez has

given public faith ("foi publique") and thus certified that it has seen copies of the

agreements and commitments showing the existence and content of some RTR

requirements.122

The Notary Public provided a general timeframe where those

agreements and commitments were signed (in 2011 and 2012) since mentioning a

specific date per agreement could allow Argentina to identify the specific

companies cooperating with the European Union in these proceedings. As

mentioned in the EU's Response to Question 19, those companies have not

authorised the European Union to disclose those agreements in view of the risk of

retaliation. Only copies of those documents were provided to the Notary Public as

the originals were kept by the companies. The Notary Public could not either

disclose the names or origin of the companies providing those documents in order

to preserve their identity. However, the Notary Public specified the names of the

Argentine authorities signing the agreements as well as the addressees of the

commitments at issue. Thus, Argentina's observations with respect to the alleged

deficiencies contained in the document produced by the Notary Public are

explained because of the need to keep the identity of those companies confidential

in view of the risk to suffer from retaliation. In any event, the European Union

considers that the document contained in Exhibit EU-14 evidences the existence of

those agreements and commitments.

122 See Notaries de Geneve, "Activites du Notaire", available at http://www.notaires-

geneve.ch/fr/activites-notaire/generalites/l-acte-notarie/ (Exhibit EU–445).





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142. By its part, Argentina has not denied the existence of those agreements and

commitments. And indeed many have been heralded in official press releases.

143. With respect to affidavits, the European Union observes that affidavits signed by a

Notary Public are instruments regularly used in panel proceedings to adduce the

existence of facts. And indeed panels and the Appellate Body have regularly

accepted declarations contained in affidavits as evidence.123

3.4.4. Questions 16 to 17 – Argentina's refusal to provide certain

documents to the Panel

144. The European Union notes that Argentina's lack of response to these questions is

very telling. The Panel asked Argentina for very precise documents as evidenced

in numerous exhibits submitted by the European Union. However, Argentina does

not provide the requested information; rather, Argentina states that, even

acknowledging the facts as evidenced by the European Union, that would not be

sufficient to establish the existence of the RTR requirements as a single unwritten

overarching measure. In other words, Argentina goes as far as not contesting the

factual evidence adduced by the European Union and relies on a legal

characterisation of those facts as not showing the existence of the measure at issue

as described by the European Union. As explained before, such allegation must

fail.

145. As the Appellate Body has explained, in carrying out its mandate under Article 11

of the DSU a panel has the duty to examine and consider all the evidence before it,

not just the evidence submitted by one or the other party, and to evaluate the

relevance and probative force of each piece thereof. Article 11 requires a panel to

consider evidence before it in its totality, which includes consideration of

submitted evidence in relation to other evidence. A particular piece of evidence,

even if not sufficient by itself to establish an asserted fact or claim, may contribute

to establishing that fact or claim when considered in conjunction with other pieces

123 See e.g., Panel Report, US – COOL, paras 7.364 and 7.366 (where the panel came to a factual

conclusion on the basis of two affidavits. The Appellate Body confirmed that the panel in that case

had conducted an objective assessment of the matter in accordance with Article 11 of the DSU, see

Appellate Body Report, US – COOL, para. 310); Panel Report, US – Shrimp (Vietnam), para. 7.114;

Panel Report, EC – Selected Customs Matters, para. 7.255; and Panel Report, US – Tuna II

(Mexico), para. 7.290.



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of evidence. The Appellate Body has further explained that a prima facie case is

one which, in the absence of effective refutation by the defending party, requires a

panel, as a matter of law, to rule in favour of the complaining party presenting the

prima facie case.124

146. Therefore, the European Union considers that the Panel should also take into

account Argentina's lack of rebuttal of the facts as presented by the European

Union when weighing the totality of the evidence in this case. In the European

Union's view, the only conclusion that the Panel should reach when making an

objective assessment of the matter is that the European Union has demonstrated

the existence of the RTR requirements as an overarching measure.

3.4.5. Question 26 – Nota de Pedido

147. Once again, the European Union observes that Argentina does not rebut the

existence of the "Nota de Pedido" as described by the European Union in its

submissions.

148. As mentioned before, there is ample evidence that the generic "Nota de Pedido"

(i.e., the form that needed to be sent together with the DJAI request) as well as the

"Nota de Pedido DJAI Observada" (i.e., the information that was needed to be

provided to the Secretary for Domestic Trade once a DJAI had been "observed")

began in January and February 2012,125

as well as that such a mechanism still

exists. In addition, since December 2012, another "Note", this time referred to as

an "Export Declaration Form", was distributed to economic operators as proof of

complying with their trade balancing commitments. Even without a DJAI observed

an operator may be requested to fill in an "Export Declaration Form". "Export

Declaration Forms" are separate from the DJAI itself but are a condition sine qua

non to receive any DJAI, i.e. if an operator is requested to fill in "Export

Declaration Form" and does not do it, its DJAIs will never be cleared.126

124 See Appellate Body Report, US – Continued Zeroing, para. 331 (and the citations made therein).

125 See EU's first written submission, para. 66 and the citations provided therein. See also EU's

Response to Question 27.

126 See Samples of the Export Declaration Forms in Exhibit EU–446. The documents have been

redacted in order to preserve the identity of the economic operators involved (i.e. to avoid the

identification of the addressee).



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3.4.6. Question 42 – Value of unofficial press clippings

149. First, Argentina maintains that none of the evidence provided by the European

Union is relevant for the interpretation of the measures at issue. Argentina does not

support such a statement. Rather, it appears that Argentina confuses issues of

"interpretation" of the meaning of the measure at issue (i.e. its precise content)

with issues of proof (i.e., showing the existence of the RTR requirements as an

overarching measure). The evidence put forward by the European Union

demonstrates the existence of the RTR requirements as an overarching measure,127

as precisely identified by the European Union.

150. Second, Argentina restates its argument that none of the journalistic material,

regardless of its source, can be considered to have any probative value. The

European Union already addressed this argument in its opening oral statement at

the first meeting with the Panel.128

Panels have been inclined to accept the

information provided by newspapers,129

and especially in cases like the present

one, where the respondent did not challenge the truth of the facts reported by those

newspapers.130

151. Third, Argentina rejects the recurrent use of print media linked directly or

indirectly to the monopolistic structure of Grupo Clarin SA, in partnership with the

newspaper La Nación. The European Union has already expressed its views about

this.131

The facts (regardless of any journalistic colouring of the facts) reproduced

by those media have been reported by many different media as being the same, and

Argentina has not disputed those facts.

152. Moreover, Argentina wrongly claims that the European Union recurrently

provided Grupo Clarin and La Nación press clippings. This is incorrect. Press

clippings from Clarin, La Nación and connected media are only a small part (less

than 25 %) of all written press clippings provided by the European Union in its

127 The European Union also notes that the evidence submitted by the European Union also shows the

existence of the 23 separate measures the European Union is challenging in the alternative.

128 See EU's opening oral statement at the first meeting with the Panel, paras. 42 – 43.

129 See e.g. Appellate Body Report, Canada – Dairy, para. 141, footnote 128; Panel Report, Indonesia

– Autos, para. 14.234; and Panel Report, Brazil – Aircraft, para. 7.84.

130 Panel Report, Australia – Automotive Leather II, para. 9.65, footnote 210.

131 See EU's opening oral statement at the first meeting with the Panel, para. 41.



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first written submission, and obviously an even smaller part (less than 10 %) of all

evidence submitted. More in detail, the press clippings from Clarín, La Nación and

other media directly controlled by them accounts for less than 10% of the total

submitted evidence. Those press clippings account for slightly less than 15% of all

evidence submitted coming from media sources (written, radio, TV, web and

foreign media). They account for only 25% of all evidence coming from the

printed press. And, on the contrary, almost 1/3 of submitted evidence comes from

official sources (31% - including +100 quotes from the Ministry of Industry

alone). Another 7% consists of either documents or statements from private

companies, business associations or other sources not related to media.132

153. In addition, the European Union would like to note that Argentine legislation

ensures press freedom. Although there is concentration in the written press sector

(smaller than in the audio-visual sectors), there are still sufficient newspapers to

guarantee access to information by the public. In fact, Argentine society still trusts

the press as a credible source of information (64% of the informed public trusted

the traditional information channels in 2013).133

154. Finally, the European Union observes that of the 24 different media listed in the

Panel's Question, Argentina has only provided evidence of its relationship with

Grupo Clarin SA (in the form of a property chart of Grupo Clarín SA as of

11/10/2007) with respect to two: Diario "Los Andes" and "La Voz del Interior".

Argentina has not supported its vague assertion ("etc") with respect to other media

that they are related to Grupo Clarin SA. The Panel should draw the pertinent

consequences accordingly.

3.5. EU'S COMMENTS ON THE PANEL'S COMMUNICATION DATED 6 NOVEMBER 2013

155. At the outset, the European Union would like to clarify that, as noted in the EU's

comments on the suggested special procedures, the adoption of such special

procedures under Article 13 of the DSU was not necessary in view of the

particular circumstances of this case.

132 See Overview of the evidence provided compared to statements taken from Clarin and La Nación

(Exhibit EU-447).

133 See Edelman Trust Barometer 2013, at slide 23 (available at http://edelman.com.ar/edelman-trust-

barometer-2013/) (Exhibit EU–448).





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156. On the one hand, the Panel already has on the record evidence showing the

existence of letters containing RTR requirements (e.g. the letter of four industry

associations of pork producers provided to Secretary Guillermo Moreno and

containing certain commitments to restrict their imports of certain pork

products).134

Furthermore, there is also evidence of the existence and content of

the agreements signed between private operators in Argentina and the Argentine

authorities, as heralded by the Argentine authorities themselves in numerous

official documents (and listed in Annex 1 of the Panel's first set of questions).

157. On the other hand, Argentina is in possession of such documents and is in a better

position to provide them to the Panel.135

However, Argentina has decided not to

provide such information to the Panel upon its request pursuant to a direct question

posed to Argentina. Further, Argentina has decided not to address the evidenced

produced by the European Union. In other words, Argentina does not dispute the

facts but takes issue with the characterisation of the facts as showing the existence

of the measure at issue as described by the European Union. Thus, the European

Union considers that the Panel is entitled to draw appropriate inferences from

Argentina's refusal to provide the requested information.

158. That being said, the European Union welcomes the Panel's initiative to propose the

suggested special procedures under Article 13 of the DSU.136

In this respect, the

European Union observes that the suggested procedures were similar to the steps

taken by the European Union to produce Exhibit EU-14. Through such a

procedure, and by guaranteeing that the document produced by the notary public

did not contain any information that could directly or indirectly disclose the

identity of the companies providing such documents, some (not all) companies

overcame their fears to suffer from retaliation by the Argentine authorities. In fact,

the special procedures suggested by the Panel resulted in more companies willing

to provide such information to the independent expert. The main concerned was,

however, to ensure that the responses provided by the independent expert did not

134 See EU' first written submission, paras. 171 – 174 and Exhibit EU-127.

135 Appellate Body Report, US – Large Civil Aircraft, paras. 1139 – 1140.

136 Appellate Body Report, US – Continued Zeroing, para. 347 ("[W]e see no indication that it got to

the heart of the matter concerning the probative value of evidence before it").



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reveal somehow the identity of the companies at issue. Hence, the European Union

provided its comments to that effect.

159. The European Union considers that, other than the special procedures suggested by

the Panel including all guarantees not to disclose any information relating to the

identity of the companies at issue, there may not be any alternative means for the

Panel to protect the requested information in a manner that would enable the

submission of such information. BCI or HSBI procedures are not adequate in the

present case. Indeed, it is peculiar to this case that the companies having the

documents in question have expressed their concerns with respect to the authorities

of the Member whose measures are subject in these proceedings. In other words,

since the Argentine authorities are part of these panel proceedings and fears of

retaliation by those authorities have been adduced to avoid disclosing such

documents to the Panel, the European Union is not in a position to provide them

directly to the Panel and Argentina. Providing such documents to the Panel would

also amount to ex-parte communication.137

Providing such documents only to

Argentina's external counsel does not ease the concerns of the companies either.

160. In sum, the European Union considers that it has produced sufficient evidence

about the existence and content of the RTR requirements as an overarching

measure (as well as the 23 cases the European Union challenges subsidiarily) to

make its prima facie case. Argentina has not contested these facts and evidence,

and has refused to provide any rebuttal, despite the Panel's requests to do so. This,

in the European Union's view, should be sufficient for the Panel to rule in favour

of the European Union's claims against the RTR requirements.

161. In any event, should the Panel have any particular doubt about the agreements and

commitments the Panel is asking for in Questions 16, 17 and 19, the European

Union would suggest that the Panel address those questions to the notary public

appointed by the European Union to produce Exhibit EU-14. Such a notary public

is bound by its obligations to provide accurate testimony (foi publique) of the

documents in his possession. Should the Panel have any particular question about

the existence and content of those documents which remains unanswered by

137 See EU's response to Question 19, para. 41.



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Exhibit EU-14, the Panel could ask them directly to such notary public under the

condition that the notary public will not disclose any information which may

reveal the identity of the companies providing such documents. The European

Union would need to agree on the question the Panel is asking to the notary public

and Argentina could also comment on the response. To this effect, the European

Union would be in a position to provide more documents to the notary public to

reply to the Panel's questions.

4. CONCLUSION

162. The European Union respectfully requests the Panel to find that the DJAI

Requirements and the RTR requirements are inconsistent with the covered

agreements and to recommend that Argentina brings itself into compliance with its

obligations under the covered agreements.

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