Brussels / Geneva, 05/01/2001 (Agence Europe) - A panel of the World trade Organisation (WTO) issued a mitigated verdict in the dispute between the Union and Argentina over restrictions the latter applies in trade in cattle hides and finished leather. The three experts were indeed unable to confirm, for lack of sufficient evidence, that Buenos Aires maintained a de facto ban on the export of raw and semi-tanned hides, while admitting that: i) the application of customs laws is "intrinsically partial", given the possible access for Argentinean tanners to confidential trade information during the prior controls to dispatch; ii) the additional tax burden imposed on imported products is "discriminatory". This arbitration report will become official by the end of February, unless one or other of the parties decides to appeal.
In a complaint lodged in Geneva in May 1999 at the end of several unsuccessful months of consultations, the Union had denounced a "de facto prohibition" on the export of raw and semi-tanned hides implemented by the Argentinean tanning industry during dispatch operations, as well as the levy of an "additional VAT" of 9% on imports and an "anticipated tax on the turnover" of importers. Having analysed this complex affair, the special group considered that: i) there was nothing to prove the existence of a quantitative restriction, even de facto, on exports that could be attributed to a governmental will rather than to market conduct; it does not therefore dispute the legality of the measure, as restriction that would be implemented through an authorisation granted to the national branch to participate in the control procedures prior to the dispatch of the goods; ii) certain implementing measures of these rules however fall foul of GATT Article X.3 of 1994, as impartiality is not assured because the Argentinean tanning industry may obtain confidential trade information in the context of its participation in export operations; iii) anticipated payment of a part of the VAT and a down-payment on the tax on profits, which impose a heavier tax burden on importers (in the form of loss or additional payment of interests) are incompatible with GATT Article III.2, in that they give rise to "unjustifiable discrimination" between imported products and similar national products. The Argentinean authorities are therefore called on to review the situation, eliminating the partial and discriminatory aspects of the mechanism (the basic elements of which may be maintained) or take complementary measures along the same lines.