Brussels, 09/02/2016 (Agence Europe) - On Monday 8 February, the European Commission hailed the endeavours made since the end of 2015 by the new administration in Argentina, led by new President Mauricio Macri, to terminate or reduce the impact of several trade measures with a negative effect on trade. These measures had long been criticised by the EU and included a system of importer declarations for goods; several export taxes on agricultural and manufactured products; a luxury tax for vehicles, motorcycles and boats; and restrictions on access to foreign currencies.
Following the verdict of the WTO's dispute settlement body on the complaint initiated by the EU, US and Japan (see EUROPE 11139), Argentina abandoned its system of prior importer declarations in December 2015. This system remains in place for services, however, the Commission states in a flash note. The system of prior declaration for goods was replaced by the introduction of a new import monitoring system and licences for all product imports - automatic for the majority of them and non-automatic licences for around 1,500 tariff lines. The EU will remain vigilant to ensure that these new measures do not become restrictive measures, the Commission states.
Buenos Aires also adopted two decrees in December 2015 (133/2015 and 160/2015) which revised nearly all export taxes, and eliminated or reduced export taxes on agricultural and industrial products. “These export taxes were a long standing issue for the EU economy with regard to open and secure access to raw materials. This policy change of the new Argentine administration is a positive signal towards establishing a more liberalised economy and international trade”, the Commission states. The main exceptions are soybeans, where the rate was reduced by 5 percentage points to 30%, and soy by-products where the rate was reduced to 27%.
Through Decree 11/2016 adopted in January, Argentina has modified its luxury tax on vehicles, motorcycles and boats for the first half of 2016. The Commission says that a discriminatory tax against imported products was responsible for a strong reduction in the sales of European manufacturers of these products in the second half of 2015. The new tax rates of 10% and 20%, depending on sales price bands, on higher priced vehicles are applied “on a seemingly non-discriminatory basis”, although imported vehicles tend to be more expensive and may in fact fall more often into the 20% category than their local competition, the Commission nevertheless states.
In addition, Argentina has lifted its restrictions on access to foreign currencies. Lifting most currency exchange controls to allow the peso to trade freely on markets was one of the main measures taken by the Macri administration in mid-December 2015. The peso devalued immediately by about 30% to the rate of the parallel market. Operators are now free to transfer their benefits and pay for their imports (as well as the accumulated debt from past imports that would not yet have been paid). This enables increasing inflows of foreign currency and investment, helps strengthen reserves, and allows importers to pay suppliers without delays, the Commission states.
“Argentina is encouraged to liberalise its trade policy further to integrate more into international trade, build confidence among economic operators and attract new investments”, the Commission concludes. (Original version in French by Emmanuel Hagry)