99-0264 MOREPRESS RELEASE
PRESS/TPRB/101
22 January 1999
 TRADE POLICY REVIEW BODY
REVIEW OF ARGENTINA
TPRB'S EVALUATION
The Trade Policy Review Body of the World Trade Organization (WTO) concluded its
second review of Argentina's trade policies on 20 and 22 January 1999. The text of the Chairperson's
concluding remarks is attached as a summary of the salient points which emerged during the
discussion.  The review enables the TPRB to conduct a collective examination of the full range of
trade policies and practices of each WTO member country at regular periodic intervals to monitorsignificant trends and developments which may have an impact on the global trading system.
The review is based on two reports which are prepared respectively by the WTO Secretariat
and the government under review and which cover all aspects of the country's trade policies, including
its domestic laws and regulations, the institutional framework, bilateral, regional and otherpreferential agreements, the wider economic needs and the external environment.  A record of the
discussion and the Chairperson's summing-up together with these two reports, will be published in
due course as the complete trade policy review of Argentina and will be available from the WTO
Secretariat, Centre William Rappard, 154 rue de Lausanne, 1211 Geneva 21.
Since December 1989, the following reports have been completed: Argentina (1992 & 1999),
Australia (1989, 1994 & 1998), Austria (1992), Bang ladesh (1992), Benin (1997), Bolivia (1993),
Botswana (1998), Brazil (1992 & 1996), Came roon (1995), Canada (1990, 1992, 1994, 1996 & 1998),
Chile (1991 & 1997), Colombia (1990 & 1996), Cost a Rica (1995), Côte d'Ivoire (1995), Cyprus
(1997), the Czech Republic (1996), the Dominican Republic (1996), Egypt (1992), El Salvador(1996), the European Communities (1991, 1993, 1995 & 1997), Fiji (1997), Finland (1992), Ghana
(1992), Hong Kong (1990, 1994 & 1998), Hungar y (1991 & 1998), Iceland (1994), India (1993 &
1998), Indonesia (1991,1994 & 1998), Israel (199 4), Japan (1990, 1992, 1995 & 1998), Kenya
(1993), Korea, Rep. of (1992 & 1996), Lesotho (1998), Macau (1994), Malaysia (1993 & 1997),
Mauritius (1995), Mexico (1993 & 1997), Morocco (1989 & 1996), New Zealand (1990 & 1996),Namibia (1998), Nigeria (1991 & 1998), Norway ( 1991 & 1996), Pakistan (1995), Paraguay (1997),
Peru (1994), the Philippines (1993), Poland (1 993), Romania (1992), Se negal (1994), Singapore
(1992 & 1996), Slovak Republic (1995), the Solomon Islands (1998), South Africa (1993 & 1998),PRESS/TPRB/101
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MORESriLanka(1995),Swaziland (1998), Sweden (1990 & 1994), Switzerland (1991 & 1996), Thailand
(1991 & 1995), Trinidad and Tobago (1998), Tu nisia (1994), Turkey (1994 & 1998), the United
States (1989, 1992, 1994 & 1996), Uganda (1995),  Uruguay (1992 & 1998), Venezuela (1996),
Zambia (1996) and Zimbabwe (1994).PRESS/TPRB/101
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MORETRADE POLICY REVIEW BODY
REVIEW OF ARGENTINA
CONCLUDING REMARKS BY THE CHAIRPERSON
The second Trade Policy Review of Argentina was conducted by the TPR Body on 20 and
22 January 1999.  These remarks, prepared on my own responsibility, are intended to summarize the
main points of the discussion; they are not intended as a full report.  Further details of the discussion
will be fully reflected in the minutes.
The discussion developed under three main themes:  (i) economic environment;  (ii) trade
measures; and (iii) policies and measures by sector.
Economic environment
Members praised Argentina's economic performance since the last Review, due to
macroeconomic discipline, and wide-ranging struct ural adjustment, under the Convertibility Plan.
GDP per capita had doubled, inflation drastically reduced and Argentina had become a major FDI
destination, although unemployment remained high.  In tribute to its sound fundamentals, Argentina
had weathered well the Asian financial crisis.  With Brazil the major export destination, there were
questions about the effect of the recent depreciation of the Brazilian Real, particularly with respect to
the currency board, the external accounts and further liberalization of the MERCOSUR market.
Participants welcomed Argentina's active participation in, and support of the WTO and
recognized the importance of the MERCOSUR proce ss.  Questions were asked on the nexus between
multilateral and regional trade objectives, trade diversion and progress on common régimes for sugar
and automobiles.
In reply, the representative of Argentina expressed confidence in the soundness of the
Argentinian economy and in its ability to deal with the potential effects of the recent economic
evolution in Brazil, which would be handled wi thin MERCOSUR and in a manner fully consistent
with the WTO.  Unemployment was down to around 12% and continued prudent fiscal and debt
management, improved levels of investment, and economic and export diversification shouldcontribute to lower rates;  in this context, tariffs on imports of capital goods from non-MERCOSUR
sources had yesterday been lowered from 14 to 6%.
He noted that MERCOSUR was built on the principle of open regionalism, and was
consistent with the process of multilateral liberalization, which was actively promoted.  No visible
trade distortions had emerged and both intra- and extra-regional trade had grown rapidly;  this alsoreflected the profound structural reform by the regional partners in recent years.  On 1 January 2001,
the CET would cover all tariff lines;  tariffs now affected only a minimal volume of intra-regional
trade.  MERCOSUR aimed to establish a comm on market by 2005, including the free movement of
production factors and the harmonization of national standards.
Trade measures
Members warmly commended Argentina's trade reforms, making it a considerably more
outward-oriented, secure market.  The tariff was bound and ceiling rates had been considerablyreduced;  progress was clear in the reduction of non-tariff measures;  and trade procedures had been
simplified.  Timely notification of measures to the WTO was encouraged.  Questions arose on a
number of issues including, preshipment inspection, price bands for customs purposes, non-PRESS/TPRB/101
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MOREpreferential rules of origin, the temporary 3 percentage point tariff increase, the implementation of
anti-dumping, countervailing and safeguard actions , fiscally-driven production and trade measures,
and plans to eliminate Argentina's two remaining export assistance schemes.
Noting the importance of the procurement market, some Members encouraged Argentina to
accede to the Government Procurement Agreement and asked, in particular, about contract procedures
and the participation of foreign firms.  Effo rts for harmonizing standards within MERCOSUR
attracted attention, as did matters such as certification arrangements and mutual recognitionagreements.  There were also inquiries about the legal framework for competition policy.  On
intellectual property rights, a number of Members expressed interest in the establishment of a
common regime for MERCOSUR and questions were raised in several areas including patents,
copyrights and enforcement.
In response, the representative said that Argentina attached great importance to its WTO
notifications requirements and the relevant authorities were periodically reminded of those
obligations.  Pre-shipment inspection aimed to deal with a number of issues including tax evasion,unfair trade practices, and improved compliance with standards;  the system was temporary.  Origin
certificates were used mainly for products subject to trade defence measures.  Price bands for customs
allowed price comparisons for goods from different sources.
The 3 percentage points increase in the CET would be phased out on 31 December 2000.  For
a small number of products bound rates had been exceeded and the list had been submitted to theWTO for negotiations.  The number of antidumping measures had increased only relative to the
limited measures in force under the earlier less open import regime.  Recent investigations had not
exceeded the 18 months time-limit.  A co mmon MERCOSUR anti-dumping regime would be
considered before the end 2000.  Argentina had notified its export incentive regimes in 1998:  benefits
under the Industrial Specialization Regime, which had been suspended in 1996, would end on 31December 1999.
On government procurement, Argentina was an observer to the GPA but had no plans to
accede to the Agreement;  it took part in regional initiatives within MERCOSUR and the FTAA.
Aspects of Argentinian procurement were explained.  Argentina sought to improve international
cooperation in the area of sanitary and phytosanitary measures, having signed bilateral agreementswith a number of partners.  New competition statutes had been submitted to Congress in late 1998,
amending and expanding the existing legislation.
On intellectual property, patents submitted after 1 January 1995 were granted 20 years
protection;  problems were being handled by the judicial system.  Protection to software had been
granted in 1998 under copyright legislation.  Details were given on the link between marketingpermits and patents, exclusive marketing rights, the Confidentiality Law, and the protection of
vegetable varieties.  MERCOSUR was working on various regional protocols for the protection of
intellectual  property rights.
Policies and measures by sector
Members welcomed the fact that Argentina's trade policies were largely free of distortive
elements and that resource allocation was mainly market driven.  In this context, Argentina was asked
about its sectoral trade policy objectives.  The health, viability and efficiency of Argentine agriculturewas noted as was the suggestion that further multilateral trade liberalization would improve sectoral
prospects.  Improvements in Argentina's meeting of international sanitary requirements, opening
export markets for beef, were recognized.  Questions arose on variable import levies on sugar, price
support for tobacco, and export taxes on oilseeds, hides and skins.  In manufacturing, the automobile
sector came under some question, especially with respect to local-content requirements.  There werealso queries about protection for toys, textilesPRESS/TPRB/101
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ENDand clothing and particularly for footwear.  Argentina was encouraged to participate in the
Information Technology Agreement.  Members recognized and welcomed the openness of Argentina'sservices sector.  Information was requested on privatization in banking and on criteria for FDI in
financial services.  In telecommunications, the implementation by November 2000 of liberalization
commitments in basic services was noted, and questions arose about mobile telephone services and
personal communication systems.  Maritime and air services were of particular interest to some
Members, including cargo-sharing and rights for the national carrier, respectively.  Information wassought on Argentina's MFN exemptions under GA TS and on MERCOSUR negotiations in services.
In reply, the representative said that Argentina did not implement sectoral policies except for
automobiles.  He explained the operation of the import levy on sugar and noted that the export tax on
oilseeds compensated for tariff escalation on downstream products;  he confirmed that export taxes
were applied on hides and skins.  On the automobiles, he noted that the 1996 changes to its regime
had been notified to the TRIMs Committee;  the regime was transitory and would be replaced by a
common MERCOSUR policy in 2000, entailing free  intra-MERCOSUR trade, and common external
tariffs and export promotion policies.  Footwear measures were subject to dispute settlement, and any
provision on toys would meet WTO provisions.
In financial services, a regulation restricting market access in the insurance sector had been
eliminated in October 1998;  however, Argentina was not envisaging to modify its WTO schedule of
commitments.  The liberalization of basic telecommunication services was proceeding according toschedule;  Argentina complied with its specific commitments on mobile telephones.  There were no
restrictions on the supply of maritime transport services but Argentina had bilateral maritime
agreements containing cargo-sharing provisio ns.  Under MERCOSUR, negotiations had begun to
define sector-specific commitments.
*******
Conclusions
In conclusion, it is my feeling that this Body welcomed Argentina's robust macroeconomic
performance and structural reforms, including sustai ned trade liberalization efforts;  not only has GDP
per capita increased sharply but sound fundamentals have allowed Argentina to cope well with a
series of external shocks.  This bodes well for Argentina's capacity to deal with the recent depreciationof the Brazilian Real.  It is my feeling that de legations appreciate Argen tina's involvement in and
commitment to the multilateral trading system, and look forward to Argentina's constructive role in
the preparatory process for the upcoming negotiations.  Members encouraged Argentina to pursue the
liberalization of its economy, based on WTO principles and thus take steps to address allocative
distortions, including in sensitive manufacturing sectors.  It is also my sense that Members saw theimportance for further trade liberalization within  MERCOSUR to contribute to the strengthening of
the multilateral trading system.