RESTRICTED  WORLD  TRADE  
ORGANIZATION  WT/TPR/S/176 
8 January 2007  
 
(07-0031) 
Trade Policy Review Body  
   
 
  
 
TRADE POLICY REVIEW 
 
Report by the Secretariat 
 
ARGENTINA 
 
  
 
This report, prepared for the Trade Polic y Review of Argentina, has been drawn 
up by the WTO Secretariat on its own responsibility.  The Secretariat has, as 
required by the Agreement establishing  the Trade Policy Review Mechanism 
(Annex 3 of the Marrakesh Agreement Establishing the World Trade 
Organization), sought clarification from Argentina on its trade policies and 
practices. 
 
Any technical questions arising from this  report may be addressed to Mr Angelo 
Silvy tel.:  (022) 739 52 49, Mrs Ulla Kask tel.:  (022) 739 56 27, or 
Mr Raymundo Valdés tel.:  (022) 739 53 46. 
 
Document WT/TPR/G/172 contains the policy statement submitted by 
Argentina. 
 
 
 
Note: This report is subject to restricted circ ulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review Body on Argentina. Argentina WT/TPR/S/176 
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CONTENTS 
 
  Page 
SUMMARY OBSERVATIONS vii 
 (1) I NTRODUCTION  vii 
 (2) ECONOMIC ENVIRONMENT  vii 
 (3) T RADE AND INVESTMENT POLICY FRAMEWORK  viii 
 (4) M ARKET ACCESS FOR GOODS  ix 
 (5) O THER MEASURES AFFECTING TRADE  x 
 (6) S ECTORAL POLICIES  xi 
I. ECONOMIC ENVIRONMENT 1 
 (1) O VERVIEW  1 
 (2) M ACROECONOMIC TRENDS  2 
 (i) Structure and evolution of the economy 2 
 (ii) Fiscal policy 5 
 (iii) Monetary and exchange rate policy 7  (iv) Balance of payments 9 
 (3) T
RADE AND INVESTMENT FLOWS  11 
 (i) Evolution of merchandise trade 11 
 (ii) Trade in services 12 
 (iii) Foreign investment 13 
 (4) O UTLOOK  14 
II. TRADE AND INVESTMENT REGIME 16 
 (1) O VERVIEW  16 
 (2) F RAMEWORK FOR TRADE POLICY AND INVESTMENT  17 
 (i) General institutional and legal framework 17 
 (ii) Trade policy objectives, formulation and implementation 19 
 (3) F OREIGN INVESTMENT REGIME  21 
 (4) I NTERNATIONAL RELATIONS  23 
 (i) World Trade Organization 23  (ii) Preferential trade agreements 25 
III. TRADE POLICIES BY MEASURE 30 
 (1) O
VERVIEW  30 
 (2) M EASURES DIRECTLY AFFECTING IMPORTS  31 
 (i) Procedures, documentation and registration 31 
 (ii) Customs valuation 34  (iii) Rules of origin 35 
 (iv) Tariffs 37 
 (v) Other charges affecting imports 44 
 
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   Page 
 
 (vi) Import prohibitions, restrictions and licensing 48 
 (vii) Contingency measures 52 
 (viii) Standards and technical regulations 57  (ix) Sanitary and phytosanitary measures 61 
 (3) M
EASURES DIRECTLY AFFECTING EXPORTS  66 
 (i) Procedures, documentation and registration 66  (ii) Export taxes and duties 67 
 (iii) Import prohibitions and rest rictions and licensing regimes 70 
 (iv) Tariff and tax concessions 72 
 (v) Financing, insurance and guarantees 76 
 (vi) Export promotion 77  (vii) Foreign exchange regulations 78 
 (4) O
THER MEASURES AFFECTING PRODUCTION AND TRADE  78 
 (i) Establishment and taxation of enterprises 78  (ii) Price controls and competition policy 80 
 (iii) Incentives 84 
 (iv) State-owned enterprises and privatization 94  (v) Government procurement 94 
 (vi) Intellectual property protection 97 
IV. TRADE POLICIES BY SECTOR 102 
 (1) O
VERVIEW  102 
 (2) A GRICULTURE , FORESTRY , FISHERIES AND RELATED  
  P ROCESSING ACTIVITIES  103 
 (i) Agriculture and food processing 103 
 (ii) Forestry 106 
 (iii) Fisheries 107 
 (3) M INING AND HYDROCARBONS  108 
 (i) Main features 108 
 (4) M ANUFACTURING  112 
 (i) Overview 112 
 (ii) Support measures 112  (iii) Motor vehicles 113 
 (5) E
LECTRICITY  116 
 (6) S ERVICES  119 
 (i) Main features and multilateral commitments 119 
 (ii) Telecommunications 120 
 (iii) Financial services 123  (iv) Air transport and airports 131 
 (v) Maritime transport 135 
 (vi) Professional services 137 
 
REFERENCES   141 
 APPENDIX TABLES  145 
 
   
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TABLES 
 
    Page 
 
I. ECONOMIC ENVIRONMENT 
 
I.1 Sectoral structure of GDP, 1998-2005 2 I.2 Basic economic indicators, 1998-2005 3 
I.3 Non-financial public sector financial accounts, fiscal years 1998-2006 6 
I.4 Main monetary indicators, 1998-2006 9 
I.5 Balance of payments, 1998-2006 10 
I.6 Trade in services, 1998-2005 12 I.7 Foreign investment position, by investor and by activity, 1998-2004 13 
 
II. TRADE AND INVESTMENT REGIME  II.1 Framework and free trade agreements concluded by MERCOSUR, April 2006 28 
 
III. TRADE POLICIES BY MEASURE 
 
III.1 Summary of MFN tariff, 2006 38 III.2 MFN tariff structure, 2006 40 
III.3 Import prohibitions in force in May 2006 48 
III.4 Import licensing 50 III.5 Anti-dumping and countervailing measures, 1998-2005 53 
III.6 Safeguard investigations and measures notified to the WTO, 1999-June 2004 55 
III.7 Rates of export duties, mid-2006 68 III.8 Export duties as a percentage of exports 2002-2005 69 
III.9 Export duties:  Distribution of revenue collected, 2002-2005 70 
III.10 Principal taxes applicable to production and investment 79 III.11 Main horizontal tax incentives applicable to production and investment 
 at the national level 84 
III.12 Main financial incentives applicable to production and investment nationwide 89 III.13 Overview of the protection of intellectual property rights in Argentina, 2006 98 
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APPENDIX TABLES 
 
    Page 
 I. ECONOMIC ENVIRONMENT 
 
AI.1 Merchandise exports by product, 1998-2005 147 AI.2 Merchandise imports by product, 1998-2005 149 
AI.3 Merchandise exports by trading partner, 1998-2005 151 
AI.4 Merchandise imports by trading partner, 1998-2005 152  
II. TRADE AND INVESTMENT REGIME 
 AII.1 Summary of Argentina's most recent notifications to the WTO, September 2006 154 
 
IV. TRADE POLICIES BY MEASURE  
AIV.1 Quota-based preferential access to the Eu ropean Union and United States markets 157 
AIV.2 Summary of specific commitments under the GATS, 2006 159 
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SUMMARY OBSERVATIONS 
 (1) I
NTRODUCTION  
1. Argentina's economy has been 
growing at a fast pace since 2003, having 
overcome its major crisis in modern history.  The recovery has come hand-in-hand with the adoption a wide range of policy measures that have included the abandonment of a fixed 
exchange rate followed by a sharp currency 
depreciation, the renegotiation and reduction of the external debt, and government intervention in domestic price formation.  Trade-related measures have also come into play, notably a major increase in the use of 
export taxes.  Argentina's heterodox mix of 
measures has, arguably, underpinned its remarkable economic turnaround;  however, the systemic implications for the global economic system of such a strategy and 
whether it will prevent another boom-bust 
cycle in Argentina remain open questions.  A successful transition to a sustainable growth path calls for policy measures to avoid economic overheating and prevent market distortions from becoming entrenched.  
Attracting investment is important to address 
emerging supply constraints, and depends in part on enhancing investor confidence.  Also vital is the international economic environment, which Arge ntina can help shape 
by continuing to play an active role in the 
Doha Development Agenda (DDA) whose success is expected to be of considerable benefit for Argentina.  
(2) E
CONOMIC ENVIRONMENT  
2. Since its last Trade Policy Review in 
1999, Argentina has successfully emerged from one of the worst recessions in its history.  The downturn, which evolved mainly over 1999-2002, saw Argentina's GDP contract by some 20 per cent.  The recession was caused 
by a number of domestic and external factors, 
including the accumulation of public debt and a loss of external competitiveness.  Compounding this, a financial crisis unravelled in 2001 leading to an external debt 
payment moratorium, and the abandonment of the fixed exchange rate reg ime.  This in turn 
triggered a sharp depreciation of the peso in early 2002.  
3. As a reaction to the recession, 
Argentina applied a macroeconomic 
adjustment programme and measures to support the financial system.  After suspending payments for over three years, Argentina managed to renegotiate  about three-quarters 
of its public debt on very favourable terms, 
exchanging new for old obligations at a ratio of around 1:3.  Argentina has repaid its entire debt to the IMF but a settlement is still to be reached with private creditors on some US$20 billion of its debt.  Fiscal accounts 
have been in surplus since 2003, in part as a 
result of measures identified as temporary by the authorities, such as the widened use of export taxes.  Inflation has declined but, at over 11 per cent, controlling it remains the 
Government's main macroeconomic concern.  
Unemployment has fallen to some 11.4 per cent and the proportion of people living below the poverty line has dropped to 34 per cent from some 57 per cent in 2002. 
4. Since 2003, the Argentinean economy 
has been growing at a fast pace, reaching 
annual growth rates in excess of 9 per cent over 2004-2006.  The main impulse to growth has stemmed from st rong domestic demand, 
particularly investment, as well as from a 
favourable international context, facilitating a 
rapid expansion of exports.  Argentina has been posting high su rpluses in its current 
account of the balance of payments since 2002.  This has been mainly a result of lower 
external debt payments, growing exports and, 
initially, lower imports.  There has been a shift in trade patterns during the period under review, with exports being redirected to countries outside the MERCOSUR.  Argentina is an important exporter of agricultural goods 
and a growing exporter of manufactured 
products;  as such, according to a recent study, Argentina woul d benefit considerably 
from a positive outcome of the DDA negotiations.  WT/TPR/S/176 Trade Policy Review 
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5. To achieve its economic goals, the 
Government has made use of a range of instruments including the use of price moderation agreements to prevent price 
increases, the freezing of  prices for certain 
utilities and services previously granted in concession to the private sector, and the renegotiation of contracts with service concessionaires.  Some such measures have 
been taken under the Economic Emergency 
Law of 2002.  The Government has also reactivated part of a 1974 law that requires suppliers to furnish specified quantities to the domestic market. 
6. Direct State participation in the 
economy waned in the 1990s, and is now 
confined to 17 enterpri ses in sectors such as 
energy, transport and financial services.  Nevertheless, the degree of competition in some areas remains low.  Argentina has 
legislation on competition policy, but 
institutional enforcement capacity remains limited.  A new law and the establishment of a Competition Policy Tribunal have been under consideration in recent years.  Strengthening the competition policy framework and the 
capacity to apply it are pressing tasks, and 
would boost public confidence on the capacity of the market to determine prices and allocate resources. 
(3) T
RADE AND INVESTMENT POLICY 
FRAMEWORK  
7. There have been no major changes to 
Argentina's basic legal framework since 1999, although reforms were introduced to the judiciary and in a number of activities under 
the Economic Emergenc y Law.  The latter 
grants the Executive extraordinary powers, scheduled to expire at end 2006, to fix prices and intervene in the economy when deemed necessary.  During the period under review, the President also made frequent use of his 
powers to issue, in exceptional circumstances 
and in agreement with ministers, decrees for 
reasons of necessity and urgency, which have the same hierarchy as laws adopted by the legislature. 8. Argentina considers regional and 
multilateral negotiations as tools to foster welfare and increase social equity.  Argentina is an original Member of the WTO and an 
active participant in the multilateral trading 
system, including the DDA negotiations in relation to which it has submitted numerous proposals.  The main area of interest for Argentina is agriculture, although it also gives 
high priority to the negotiations on services, 
market access for non-agricultural products, special and differential treatment for developing countries, and the reduction of barriers to the trade of environmental goods and services.   
9. Argentina has made several 
notifications to the WTO but, as at October 2006, a few were behind schedule.  Argentina has been an active user of the WTO's dispute settlement mechanism during the period under 
review, appearing in 9 cases as complainant, 
in 16 cases as respondent (nine concerning contingency measures) and in 15 cases as third party. 
10. Argentina follows an independent 
foreign trade policy within its obligations as 
member of the Southern Common Market 
(MERCOSUR).  As a part of MERCOSUR, Argentina has subscribed to preferential trade agreements with Bolivia, Chile Peru, and with members of the Andean Community.  
Individually, Argentina has also entered into 
several agreements with other Latin American Integration Association members, the most comprehensive of which, as regards product coverage, are those with the Andean 
Community and Mexico. 
11. Argentina's foreign investment regime 
is open with some exceptions.  Foreign participation is only restricted in fishing, domestic transport, the acquisition of real estate in security areas, and weapons and 
ammunition;  in 2003, legislation was adopted 
restricting foreign participation in certain media communication activities.  Foreign investment is not subject to prior authorization and receives national treatment.  Foreign 
 Argentina WT/TPR/S/176 
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 investors have, in principle, the right to 
repatriate their investment and profits, and, like other investors, may benefit from a number of incentives granted at both the 
federal and provincial levels.   
12. To encourage and provide security for 
investment, Argentina maintains bilateral investment treaties with 50 trading partners.  During the period under review, Argentina has 
faced numerous demands in international 
arbitral tribunals, several concerning emergency measures adopted in the context of the economic crisis.  As at January 2006, 43 cases were still being considered by the International Centre for Settlement of 
Investment Disputes.  Also in the midst of the 
crisis, foreign exchange restrictions were temporarily imposed on the repatriation of capital and profits.  Although foreign investment flows into Argentina have 
recovered since the crisis, enhancing investor 
confidence will be important to attract the investment necessary to sustain economic growth.  Argentina could enhance such confidence by broadening and deepening its WTO commitments in the context of the 
current DDA negotiations. 
(4) M
ARKET ACCESS FOR GOODS  
13. Since its last Review, Argentina has 
taken steps to simplify  customs procedures, 
including the elimination of the preshipment 
inspection requirement.  The average MFN 
tariff has fallen by just  over three percentage 
points, to 10.4 per cent.  Average tariff protection for agricultural products (WTO definition), at 9.9 per cent, is slightly lower 
than for non-agricultural products (10.5 per 
cent).  Tariffs take the form of ad valorem duties, except for some 8 per cent of lines which, since 2000, are subject to compound duties (ad valorem duties plus minimum specific import duties).  The tariff shows signs 
of escalation.  Argentina applies 
MERCOSUR's Common External Tariff with some exceptions. 
14. Argentina has bound its whole tariff in 
the WTO, thus enhancing the predictability of its trade regime.  However, there is a large 
gap between applied tariff levels and bound tariffs, with the average for the latter being 30.7 per cent.  Argentina bound "other duties 
and charges" at 3 per cent. 
15. Apart from tariffs, Argentina applies 
two charges exclusively on imports:  a statistical tax of 0.5 per cent on the majority of MFN imports, and levies that vary with world 
prices on sugar imports. 
16. In general, imports are granted 
national treatment for the application of internal taxes.  However, excise duties ("impuestos internos"), levied on products such as cigarettes, beverages and automobiles, 
are calculated by increasing the tax base for 
imports by 30 per cent.  In addition, Argentina's Value Added Tax regime includes a system of advance payments, which was modified after a WTO Panel found in 2002 
that, among other things, the regime resulted 
in a heavier fiscal burden for imports than for domestic products.  
17. Argentina has made active use of 
antidumping measures, especially during the years preceding the peso's devaluation in 
2002.  Argentina initiated 111 antidumping 
investigations between January 1999 and December 2005, adopting 62 provisional measures and 88 definitive measures during the same period.  As at December 2005, there 
were 35 product groups, all of them 
manufactures, subject to definitive antidumping duties.  The use of countervailing measures and safeguards has been, on the other hand, relatively limited:  Argentina 
adopted two safeguard measures between 
January 1999 and June 2004, concerning certain mopeds and motorcycles, and preserved peaches;  as at June 2006, only one safeguard measure, on colour televisions, remained in place.  Argentina adopted no new 
countervailing measures during the period 
under Review;  as at December 2005, there were three countervailing measures in place (one of them since 1996 and two since 1998).   WT/TPR/S/176 Trade Policy Review 
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18. Argentina applies import prohibitions 
on various products (such as used vehicles, auto-parts and tyres).  Since 1999, automatic import licences are required for all products.  
Additionally, a number of products are subject 
to non-automatic import licence requirements, or to pre-import authorization for sanitary or phytosanitary, safety and environmental protection reasons.  Argentina notified to the 
WTO 96 sanitary and phytosanitary measures 
and 247 technical regulations during the period under Review.    
(5) O
THER MEASURES AFFECTING 
TRADE  
19. In 2002, following the devaluation of 
the Argentinean peso, the scope of export taxes 
levied in Argentina was enhanced and rates were increased.  The declared objective of the taxes is to act as a buffer against the effect of exchange rate fluctuations on domestic prices 
and to boost fiscal revenue;  they were 
introduced as temporary measures, but no end date to their application has been announced.  Export taxes represented, on average, some 10 per cent of total fiscal revenue between 2002 and 2005.  As of mid 2006, the rates applied 
were 5, 10, 15, 20 and 25 per cent, depending 
on the product, calculated on FOB values.  Official FOB prices are fixed for several agricultural products subject to export taxes, to prevent under or over invoicing.  Argentina 
has also made use of export suspensions or 
volume restrictions, as in the case of aluminium and copper scrap, bovine cattle, and some bovine meat cuts. 
20. The use of export taxes and 
quantitative restrictions on exports in recent 
years has been instrumental in keeping the domestic prices of the products affected below world prices, discouraging the flow of Argentinean products into the world market.  In general, primary products have been 
particularly affected, since they represent the 
largest share of Argentina's exports and are subject to the highest tax rates.  Processors and other consumers, on the other hand, have benefited from the availability of inputs at 
prices below those that would prevail in the absence of taxes and other export restrictions.  
Exports of manufactures have also been encouraged through a number of tax incentives schemes such as special customs 
zones and the free zones regime, with the latter 
permitting production only for export. 
21. Argentina applies a number of 
horizontal investment incentives, complemented by a number of programmes 
targeted to specific activities.  Horizontal 
incentive schemes taking the form of fiscal relief are mainly geared to reducing initial investment costs, encouraging R&D, and fostering regional development.  Benefits on two of these schemes (concerning the 
importation of used machinery, and of goods 
for large investment projects) are contingent on the use of a certain percentage of domestic products.  Argentina also offers a number of schemes to offer financing, in some cases, such 
as the programme to develop micro, small and 
medium-size enterprises, at preferential interest rates.  Argentina has notified the WTO Subsidies and Countervailing Measures Committee that it offers subsidies through the free zones regime, through the regime for 
capital goods, informatics and 
telecommunications, and through support programmes for mining and forestry . 
22. Argentina is not a party to the WTO's 
Plurilateral Agreement on Government 
Procurement, to which it has been, however, 
an observer since 1997.  In 2001 Argentina reintroduced the use of preferences for domestic suppliers in public procurement in order to encourage domestic production.  
Preferential margins are between 5 and 7 per 
cent. 
23. The TRIPS Agreement came into effect 
for Argentina on 1 January 2000.  Argentina's legislation was examined by the TRIPS Council in November 2001.  Argentina notified 
to the DSB that agreed solutions had been 
found to the claims against it concerning its protection of pharmaceutical products, and undisclosed information. Argentina WT/TPR/S/176 
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(6) SECTORAL POLICIES  
24. Argentina has a strong revealed 
comparative advantage in agriculture, especially in cereals and livestock.  Exports of 
agricultural products (WTO definition) 
represented about 46 per cent of Argentinean exports in 2005.  Ag riculture recei ves less 
support than other sectors, and practically all the aid notified has been classified under the 
Green Box.  Minimum producer prices are 
only set for tobacco. 
25. The share of GDP of the 
manufacturing sector increased substantially during the period under Review, reflecting enhanced competitiveness following the 
devaluation of the peso in 2002, and strong 
domestic demand.  Special support schemes are applied for the automotive industry, including an incentive regime for auto-parts that makes the benefits conditional on the use 
of local components.  The bilateral automotive 
agreement with Brazil contains a provision that includes trade-balancing requirements. 
26. Argentina is the fourth largest crude 
petroleum producer in Latin America, and possesses the third largest natural gas 
reserves.  Exports of hydrocarbons are subject 
to a surcharge (additional to export duties of 25 per cent), which, depending on the international price of crude, can reach 20 per cent.  Natural gas prices were capped in 2002 
which, together with increased demand, have 
helped to trigger supply shortages and led the Government to adopt measures such as export restrictions.  Also to contend with shortages, since 2006 the Government establishes the 
volumes that refineries, wholesalers and 
retailers of diesel oil must supply to the market. 
27. The electricity sector experienced 
important reforms during the 1990s, which encouraged investment and contributed to 
maintain prices low.  However, in the context 
of the economic crisis, electricity tariffs were frozen and contracts declared under renegotiation, contributing to companies posting losses and investment reductions.  With the pickup of economic growth, supply 
has not kept pace with growing electricity demand. 
28. In services, Argentina undertook 
specific commitments in 6 of the 12 sectors 
specified in the GATS.  Argentina participated in the extended negotiation on telecommunications and ratified the Fourth Protocol;  it also participated in the extended 
negotiation on financial services but did not 
present an offer, in part because, with the exception of insurance, its GATS commitments in financial services were already broad.  In the framework of the DDA, Argentina presented an initial offer in services in 
April 2003. 
29. Argentina undertook new 
commitments as a result of its ratification of the Fourth Protocol.  Reflecting these, since November 2000 all telecommunications 
services have been provided under a regime of 
full competition.  Nevertheless, in practice fixed telephony continues to be dominated by the two "historical operators", for which tariffs were frozen and their contracts declared under renegotiation in 2002.  As at 
mid 2006, certain tariff adjustments had been 
allowed, but the ratification of new contracts was still pending. 
30. The financial sector underwent a 
major a crisis in 2001-02, which prompted the 
authorities to adopt measures such as more 
flexible regulatory principles, restrictions on the withdrawal of banks deposits, and the conversion to pesos of bank deposits and assets at asymmetric exchange rates.  
Insurance companies as a whole have been 
posting losses over most of the last 10 years.  There are no restrictions to the entry of new financial entities, and national treatment is granted to foreign capital, except that foreign insurance companies are granted national 
treatment based on the principle of 
reciprocity.  Moreover, to operate in the insurance market, a prior authorization is required which may depend on national convenience.  Risks occurring in Argentina 
must be insured through a company WT/TPR/S/176 Trade Policy Review 
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established in the country.  Insurance 
premiums are subject to a tax whose rate is higher for policies issued by firms established abroad.  Current bank transactions are subject 
to a special tax. 
31. Domestic air transport services 
(cabotage) are reserved to firms established in Argentina although waivers may be granted.  Similar restriction apply in maritime 
transport.  Airports are state-owned but the 
administration of several has been granted on concession to private operators.  Most ports are under private administration, but six of the main ones, including the port of Buenos Aires, remain under state administration.  The fees 
charged by ports under state administration differentiate between domestic and 
international trade, being lower for cabotage operations. 
32. Professional titles obtained abroad 
must be revalidated by a national university in 
Argentina to get the right to practice a profession.  Most professions are self-regulated but the State regulates a number of professions, generally those were there are 
health or safety considerations, such as 
medicine and engineering.  Argentina has made specific commitments regarding a number of professional services in the GATS, including legal, accounting, engineering and architectural services.