WORLD TRADE  
ORGANIZATION  WT/WGTDF/W/33 
12 September 2005 
 
 (05-3957) 
Working Group on Trade, Debt and Finance Original:   Spanish 
  
 
 
SUBMISSION BY ARGENTINA ON  THE RELATIONSHIP BETWEEN  
TRADE, DEBT AND FINANCE  
 
MEETING OF THE WORKING GROUP ON TRADE, DEBT 
AND FINANCE (4 JULY 2005) 
  
I.  INTRODUCTION  
1. The benefits that derive from trade have a positive influence on the external financial position 
of the developing and least-developed countries, sin ce the revenue generated by  exports allows these 
countries to overcome external financial restrictions  and balance-of-payments difficulties.  The rules 
governing world trade should therefore ensure that trade contributes to dealing with the pressures created by problems associated with the high exte rnal indebtedness of the developing countries. 
 
2. The WTO Agreements currently allow deve loping countries experiencing difficulties with 
their external financial situations and balance-o f-payments problems to adopt measures to safeguard 
their external financial position and balance of pa yments, in order to ensure a level of reserves 
adequate for the implementation of their economic development programmes.  However, all of these 
measures are import-restricting measures: 
 
 (a) Article XII:1 of the GATT 1994 on restric tions to safeguard the balance of payments 
allows Members to restrict the quantity or value of imported goods, in order to safeguard their external financial pos ition and their balance of payments; 
  (b) Article XIV:1 of the GATT 1994 allows Me mbers to apply restrictions on payments 
and transfers for current international transactions; 
  (c) Article XVIII, Section B.9 of the GATT 1994 allows Members to control the general 
level of their imports by restricting the qua ntity or value of merchandise in order to 
safeguard their external financial position a nd ensure a level of reserves adequate for 
the implementation of their progr ammes of economic development; 
  (d) Article XII:1 of the GATS on restricti ons to safeguard the balance of payments 
allows Members to adopt or maintain restrictions on trade in services and on 
payments or transfers in the event of serious balance-of-payments and external 
financial difficulties or threat thereof; 
  (e) Article 4 of the TRIMs Agreemen t on developing country Members gives 
authorization to deviate temporarily from the prohibition to apply any trade-related investment measure in accordance with the relevant rules on the balance of payments. 
 WT/WGTDF/W/33 
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 3. Furthermore, the Understanding on the Bala nce-of-Payments Provisions of the General 
Agreement on Tariffs and Trade 1994 only sets forth procedures relating to co rrective measures that 
restrict imports.  4. These measures are not sufficient, since import restrictions can have a negative effect on a 
country's level of economic activity and, consequently, aggravate the situation of those countries that 
are not in the best position to deal with a declin e in their economic activity.  The multilateral trading 
system must therefore offer developing and l east-developed countries with external financial 
difficulties and high external debt other means and instruments to overcome such situations. 
 
5. Bearing in mind that increasing and generati ng a favourable balance of trade is extremely 
important to overcoming extern al financial difficulties, the WTO should establish appropriate 
instruments or mechanisms that allow devel oping and least-developed countries with difficulties 
relating to their external financial situations to  increase their exports a nd generate the balances 
necessary to maintain their financial stability. 
 
II. PROPOSAL FOR THE WORKING GROUP ON TRADE, DEBT AND FINANCE 
(WGTDF) 
 
6. In this context, the WTO provisions relati ng to external financial difficulties must be 
reinforced and supplemented with other provisi ons that aim to promote exports and their 
diversification.  To that end, the relevant pr ovisions of the WTO Agreements, including the GATT 
1994, the GATS and the TRIMs Agreem ent, should be revised in order to enable the developing 
countries to adopt measures that allow them to:  
(a) Generate an increase in exports of goods and services that would contribute to 
maintaining a steady flow of  transfers a nd payments, thus helping them to balance 
their external financial position; 
 
(b) diversify exports of goods and services by means of specific measures, particularly in 
sectors in which products are of high added va lue.  The fall in the profits, generated 
by primary export products from the developing countries must be addressed without 
delay with a view to eliminating its causes, such as the subsidies applied by 
developed countries.  
 7. The necessary instruments must be establishe d within the WTO to assist the developing 
countries with high external debt problems or ex ternal financial difficulties.  For example:  
 
(a) WTO Members should exercise due modera tion in challenging, under the dispute 
settlement system, measures adopted by deve loping countries to restrict imports, or 
other measures that aim to promote exports as a means of resolving the difficulties deriving from the country's external financia l position or high external indebtedness; 
 
(b) developed countries should improve mark et access conditions for the main export 
products of the countries facing such difficulties, for instance by granting duty-free and quota-free access, at least for as l ong as such difficulties are observed. 
  WT/WGTDF/W/33 
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 8. The consideration and proper handling of this  matter require the establishment of a suitable 
institutional forum within the WTO.  Argentina ther efore agrees with the proposal put forward by the 
ACP countries calling for the establishment of a regul ar Committee on Trade, Debt and Finance under 
the terms of reference proposed in communica tions WT/WGTDF/W30 and WT/WGTDF/W/32, both 
of which address the issue raised in this submission. 
 
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